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Articles Posted in FINRA Arbitration

According to FINRA Disciplinary actions for July 2020, the following individuals were barred from FINRA and cannot currently work for a FINRA brokerage firm for failing to provide FINRA with information it requested or to keep information current with FINRA pursuant to FINRA rules:

NAME FORMER EMPLOYERS
  Joanna Abdelhadi   Wells Fargo Clearing Services, LLC
  Credit Suisse Securities (USA) LLC
  Kenneth Butschek   ProEquities, Inc.
  Securities Management & Research, Inc.
  Nathaniel Clay   Laidlaw & Company (UK) Ltd.
  National Securities Corporation
  Paula Collins   TIAA-CREF Individual & Institutional Services, LLC
  Oppenheimerfunds Distributor, Inc.
  Alan Lau   Wells Fargo Clearing Services, LLC
  Wells Fargo Investments, LLC
  Stanley Martin   Allstate Financial Services, LLC
  H&R Block Financial Advisors, Inc.
  Scott Mason   Voya Financial Advisors, Inc.
  Western Wealth Management, LLC
  John Santariello   Arive Capital markets
  Cape Securities Inc.
  Marc Winters   Wedbush Securities Inc.
  UBS Financial Services Inc.

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The Financial Industry Regulatory Authority (“FINRA”) provides an arbitration process for investors to resolve disputes with their securities advisors. Among other things, the FINRA arbitration process helps parties avoid the expenses and waiting periods associated with filing a case in state or federal court. FINRA also writes special rules and regulations specially tailored to these investment-related disputes. As commissions on trading stocks has gone to zero, Wall Street has replaced recommending stocks with a large number of high commission alternative investments or “products” which can be complex for the average investor but lucrative for Wall Street. Over the last decade, we have seen a substantial rise in product cases for the sale of investments which were sold without disclosure of the fees or risks or alternative investments which failed to perform the way the investment was designed. Frequently, risks and costs are buried deep in the paperwork and products are falsely sold as alternatives to the stock market with reduced risk. FINRA Provides Special Guidance For Arbitrations Concerning Bad “Products” Unfortunately, many investors suffer losses due to broker-dealer firms failing to conduct sufficient due diligence on investment products before recommending them to customers. These “products” include private placements, real estate investment trusts (“REITs”), and busines development companies (“BDCs”). It is often the case that the company managing the product pays the broker a high commission to recommend the investment, incentivizing broker-dealer firms to sell the product in high volumes to a multitude of customers, all without properly investigating the investment. When things fall apart and the value of the investment plummets, the investors are left alone to pick up the pieces, often suffering substantial losses and prolonged illiquidity.The Financial Industry Regulatory Authority (“FINRA”) provides an arbitration process for investors to resolve disputes with their securities advisors. Among other things, the FINRA arbitration process helps parties avoid the expenses and waiting periods associated with filing a case in state or federal court. FINRA also writes special rules and regulations specially tailored to these investment-related disputes. Continue reading ›

According to FINRA Disciplinary actions for June 2020, the following individuals were suspended from FINRA for failing to comply with a FINRA arbitration award or settlement agreement pursuant to FINRA rules:

NAME FORMER EMPLOYERS
  Eric Barbour   Wells Fargo Clearing Services, LLC
  J.P. Morgan Securities LLC
  David Cannata   Craig Scott Capital, LLC
  Brookstone Securities, Inc.
  Mark Garfinkel   Oppenheimer & Co. Inc.
  Raymond James & Associates, Inc.
  Jeffrey Hill   Wells Fargo Advisors
  Dougherty & Company LLC
  Tracy Kirby   Morgan Stanley
  Merrill Lynch, Pierce, Fenner & Smith Inc
  David Moxom   UBS Financial Services Inc.
  Wells Fargo Advisors, LLC
  Brent Porges   Meyers Associates, L.P.
  Newbridge Securities Corporation
  David Schrank   MML Investors Services, LLC
  Bankers Life Securities, Inc.
  Stephen Seglund   Kestra Investment Services, LLC
  LPL Financial LLC
  Kenneth Vaishville   Cantella & Co, Inc.
  Global Capital Strategies

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Silver Law Group recently filed a FINRA arbitration claim against Madison Avenue Securities, LLC and registered representatives Angela Sloan, Robert Luley, Jr., and Katherine Spearman (a/k/a Katherine McConnell).  The investor’s claims arise out of recommendations to invest in GPB Automotive Portfolio, LP, a private placement managed by GPB Capital Holdings, LLC. Among other things, the investor alleges that Madison Avenue Securities and its registered representatives failed to conduct adequate due diligence on the GPB investment and that the recommendation to invest in GPB was unsuitable, negligent, and constituted a breach of fiduciary duty.Silver Law Group recently filed a FINRA arbitration claim against Madison Avenue Securities, LLC and registered representatives Angela Sloan, Robert Luley, Jr., and Katherine Spearman (a/k/a Katherine McConnell).  The investor’s claims arise out of recommendations to invest in GPB Automotive Portfolio, LP, a private placement managed by GPB Capital Holdings, LLC. Among other things, the investor alleges that Madison Avenue Securities and its registered representatives failed to conduct adequate due diligence on the GPB investment and that the recommendation to invest in GPB was unsuitable, negligent, and constituted a breach of fiduciary duty. Continue reading ›

Investors whose brokers or financial advisors recommended that they invest in Steepener Notes (a/k/a “Steepeners”) may have incurred losses due to the risky and complex nature of these products. Steepeners, which are tied to U.S. treasury interest rates, have left investors stuck in illiquid investments while receiving little to none of the regular income they were promised. What Is A Steepener Note? Steepener Notes are non-traditional and long-term investments that pay a quarterly or monthly interest payment that is tied to the yield curve, which measures the interest rates on U.S. Treasury securities. Steepener Notes are a type of “structured product”: for the first year or two, the issuer pays investors an above-average rate of interest (often referred to as “teaser” rate), and then, for the remainder of the note—often 15-30 years—the rate is determined by a complex formula.Investors whose brokers or financial advisors recommended that they invest in Steepener Notes (a/k/a “Steepeners”) may have incurred losses due to the risky and complex nature of these products. Steepeners, which are tied to U.S. treasury interest rates, have left investors stuck in illiquid investments while receiving little to none of the regular income they were promised.

What Is A Steepener Note?

Steepener Notes are non-traditional and long-term investments that pay a quarterly or monthly interest payment that is tied to the yield curve, which measures the interest rates on U.S. Treasury securities. Steepener Notes are a type of “structured product”: for the first year or two, the issuer pays investors an above-average rate of interest (often referred to as “teaser” rate), and then, for the remainder of the note—often 15-30 years—the rate is determined by a complex formula. Continue reading ›

Silver Law Group is currently investigating broker-dealer firms and financial advisors that improperly marketed and sold Steepener Notes, which are non-traditional, long-term, illiquid, and highly complex products that many brokerage firms have been selling to unsuspecting clients over the past decade. Steepener Notes are structured products that pay a regular interest payment that is tied to the yield curve, which measures interest rates on U.S. Treasury securities. The amount of the payment is calculated based on the difference between long-term and short-term interest rates. Thus, the “steeper” the curve, the better the investment performs. However, it means that Steepener Notes are risky. If the yield curve is flat, as it has been for much of the last decade, the payments to investors are minimal or zero. Similarly, if the yield curve is inverted, as it was in 2018, investors do not receive any interest payments.Silver Law Group is currently investigating broker-dealer firms and financial advisors that improperly marketed and sold Steepener Notes, which are non-traditional, long-term, illiquid, and highly complex products that many brokerage firms have been selling to unsuspecting clients over the past decade.

Steepener Notes are structured products that pay a regular interest payment that is tied to the yield curve, which measures interest rates on U.S. Treasury securities. The amount of the payment is calculated based on the difference between long-term and short-term interest rates. Thus, the “steeper” the curve, the better the investment performs. However, it means that Steepener Notes are risky. If the yield curve is flat, as it has been for much of the last decade, the payments to investors are minimal or zero. Similarly, if the yield curve is inverted, as it was in 2018, investors do not receive any interest payments. Continue reading ›

Jose Cornide (CRD#: 2785918), a currently-registered broker with UBS Financial Services (CRD#: 8174) in Coral Gables, Florida, is the subject of 12 disclosures on his publicly-available FINRA BrokerCheck report. All 12 disclosures are customer disputes. 11 of the customer disputes were filed in 2019 and 2020 and seem to involve investment in the UBS Yield Enhancement Strategy (YES), a complex options trading scheme that was marketed as safe, but actually involved significant risk and caused some investors to suffer considerable losses.Jose Cornide (CRD#: 2785918), a currently-registered broker with UBS Financial Services (CRD#: 8174) in Coral Gables, Florida, is the subject of 12 disclosures on his publicly-available FINRA BrokerCheck report. All 12 disclosures are customer disputes.

11 of the customer disputes were filed in 2019 and 2020 and seem to involve investment in the UBS Yield Enhancement Strategy (YES), a complex options trading scheme that was marketed as safe, but actually involved significant risk and caused some investors to suffer considerable losses. Continue reading ›

GPB Capital Holdings, LLC is accused by Massachusetts securities regulators of violating state laws by misleading investors about its finances. GPB is now the subject of an administrative enforcement action from the Massachusetts Secretary of the Commonwealth Securities Division.  The action against the troubled New York-based alternative asset management firm was announced on May 27, 2020 and comes after GPB took in more than $14 million from over 180 investors in the state.  GPB raised at least $1.3 billion by paying high commissions to broker-dealers such as Sagepoint Financial for selling private placements in GPB’s funds to investors who were promised high dividend payments in return for their investment.GPB Capital Holdings, LLC is accused by Massachusetts securities regulators of violating state laws by misleading investors about its finances. GPB is now the subject of an administrative enforcement action from the Massachusetts Secretary of the Commonwealth Securities Division.

The action against the troubled New York-based alternative asset management firm was announced on May 27, 2020 and comes after GPB took in more than $14 million from over 180 investors in the state.

GPB raised at least $1.3 billion by paying high commissions to broker-dealers such as Sagepoint Financial for selling private placements in GPB’s funds to investors who were promised high dividend payments in return for their investment. Continue reading ›

According to FINRA Disciplinary actions for January 2020, the following individuals were suspended from FINRA for failing to comply with a FINRA arbitration award or settlement agreement pursuant to FINRA rules:

NAME FORMER EMPLOYERS
  Callagy, Christopher   Aegis Capital Corp
  Oppenheimer & Co Inc
  Costanzo, Anthony   AXA Advisors, LLC
  Dininno, Matthew   Morgan Stanley
  Merrill Lynch, Pierce, Fenner & Smith Inc
  Dow, Rodrick   Securities America, Inc
  Cetera Financial Specialists LLC
  Eckstein, Matthew   Sisk Investment Services, Inc
  Gould, Ambroson & Associates LTD
  Fleming, David Jr.   Stifel, Nicolus & Company, Inc
  Sterne, Agee & Leach, Inc
  Kievman, Cary   Ameriprise Financial Services, Inc
  Morgan Stanley Smith Barney
  Krupnick, Jeffrey   Ameriprise Financial Services, Inc
  JHS Capital Advisors, LLC
  Lake, Jonathan   Wells Fargo Clearing Services, LLC
  Morgan Stanley
  McCutchen, Jerry Sr.   Berthel, Fisher & Company Financial Services
  Next Financial Group, Inc
  Roveccio, Rocco   First Standard Financial Company LLC
  Alexander Capital, LP

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Silver Law Group recently filed a FINRA arbitration claim against The O.N. Equity Sales Company (a/k/a ONESCO) (CRD# 2936) based on the recommendation of improper whole life insurance policies to a customer. The broker, Richard Michael Wesselt (CRD# 2195569), has five other pending customer disputes disclosed on his FINRA BrokerCheck Report, several of which mention insurance products as the basis of the allegations. ONESCO has already settled eight other customer disputes involving Wesselt. Wesselt has since left ONESCO and has been registered with Fortune Financial Services, Inc. (CRD# 42150) since September of 2017. Silver Law Group previously blogged about issues involving Wesselt.Silver Law Group recently filed a FINRA arbitration claim against The O.N. Equity Sales Company (a/k/a ONESCO) (CRD# 2936) based on the recommendation of improper whole life insurance policies to a customer. The broker, Richard Michael Wesselt (CRD# 2195569), has five other pending customer disputes disclosed on his FINRA BrokerCheck Report, several of which mention insurance products as the basis of the allegations. ONESCO has already settled eight other customer disputes involving Wesselt. Wesselt has since left ONESCO and has been registered with Fortune Financial Services, Inc. (CRD# 42150) since September of 2017.

Silver Law Group previously blogged about issues involving Wesselt. Continue reading ›

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