A new report from FINRA finds that some brokers and brokerage firms are not doing due diligence for their customers when it comes to illiquid securities such as variable annuities, REITs, and private placements.
This new report finds that some firms rely heavily on these types of securities, over-concentrating clients in non-traded investments, including sector-specific investments and complex structured notes. Continue reading
Leon Vaccarelli allegedly defrauded a total of nine clients out of more than $1 millionIn May, former financial advisor Leon Vaccarelli was charged with 12 counts of fraud and money laundering in a federal court in Connecticut. If convicted on all of them, he could receive a maximum penalty of 210 years in prison. After pleading not guilty, Vaccarelli was released on a $100,000 bond.
Vaccarelli is alleged to have stolen money from several clients between 2011 and 2017. During that time, he reportedly informed his clients that their money would be invested in different places, including money market accounts and retirement products. What Vaccarelli actually did, according to investigators, was put the money into his own account and use it to pay his own expenses. In addition, federal prosecutors also say that he also used client money to make interest payments to other investors.
How the company has violated or been accused of violating FINRA regulationsIt is always important for investors to have a good understanding of the financial professionals they work with. Before handing over money to anyone, brokers should be vetted properly. This is why the Financial Industry Regulatory Authority (FINRA) created its BrokerCheck reports.
Not only do these provide good information on where brokers are licensed and their work histories, but they also reveal customer disputes, discharges, and alleged improper activity. But these reports don’t just cover brokers – they also include their member firms.
These four brokers have been accused of numerous infractionsNational Securities Corporation has been operating for decades and has offices and brokers all over the U.S. Unfortunately, however, a significant percentage of their brokers have been involved in numerous customer complaints. Here are just a few examples of how National Securities employees have allegedly violated FINRA rules:
Several older investors reportedly fell victim to the scam, including a former police officerFrom 2013 to 2014, several senior citizens living in South Florida invested over $400,000 in Blue Ocean Farm, a fish farm company. Three purported financial professionals reportedly solicited funds for the farm – Rebecca Gonzalez and Matthew Braun of Boca Raton and Michael Creamer of St. Petersburg. There was just one problem: the Florida Department of Law Enforcement says that the company was completely bogus.
The scheme was allegedly spearheaded by Gonzalez, and now she, Braun, and Creamer are facing several charges, including fraud, selling unregistered securities, and the sale of securities by an unregistered person. The trio reportedly targeted six older investors, all of which handed over thousands of dollars.
According to some reports, nearly 1/3 of National Securities brokers have had regulatory issues, legal disputes, or personal financial problems that have been disclosed to investorsNational Securities Corporation is one of the oldest financial firms in the U.S., dating back over 70 years. Its the main office is in Seattle, Washington, but the company has licenses to operate in every state in the country, as well as the District of Columbia, Puerto Rico, and the Virgin Islands.
National Securities Corporation is registered with the SEC and three self-regulatory organizations: Nasdaq, Cboe BZX Exchanged, Inc., and the Financial Industry Regulatory Authority (FINRA) – and it is with the latter agency that the company has come under intense scrutiny over the last couple of decades.
The elder financial fraud allegations reportedly cost elderly investors over $1M of retirement savingsOnce a prominent Methodist pastor in Houston, Texas, Kirbyjon Caldwell is now charged by the SEC with numerous counts of money laundering and wire fraud. The charges are directly related to a scheme Caldwell and his partner, Gregory Alan Smith – a self-proclaimed financial advisor who was also charged – allegedly used to defraud elderly investors by selling them an interest in defunct, pre-Revolutionary Chinese bonds.
It is alleged that in 2013 and 2014, Caldwell and Smith singled out vulnerable investors to invest in bonds that had no more value than being collectible memorabilia – promising instead that they were worth millions.
Elder financial fraud continues to be a lucrative scheme in America, which is why seniors and their loved ones always need to keep their guard up. We have previously discussed how to spot fraud and what some financial institutions are doing to prevent it, and this piece serves as a guide on what to do about the fraud that has occurred.
Victims, their family members, or caregivers should follow these steps to help limit the damage:
Unfortunately, we become more susceptible to financial scams from a wide range of offenders as we age. These include trusted advisors such as lawyers, accountants, and financial managers – as well as healthcare providers, caregivers, and even close family members.
Recent studies show that as our brains age, we become less able to detect deception and focus more on the potential for positive outcomes, especially when it comes to trusting people in our own social environment.
The latest proof that elder financial fraud could affect anyone comes courtesy of 95-year-old comic book legend Stan Lee. The creator of such notable characters as Spider-Man, Thor, and the Hulk recently filed a lawsuit against Jerardo Olivarez, his former manager and a former business associate of Lee’s daughter. In addition to fraud and misappropriation of his name and likeness, Lee has accused Olivarez of elder financial abuse.
Lee’s lawsuit – which was filed in April – calls Olivarez one of several “unscrupulous businessmen, sycophants and opportunists” who tried to take advantage of Lee after his wife Joan died in 2017. The suit alleges that shortly after Joan’s death, Olivarez coerced Lee into firing his long-time banker and lawyer and signing power of attorney over to him. He also convinced Lee to hire his own son as Lee’s attorney.
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