Securities Arbitration Lawyers Blog

Paul Murans Settles $250K Customer Dispute, Fights Unsuitability Allegations

February 19, 2019 | Silver Law Group

Have-You-Lost-Money-Investing-With-Bennett-Broad-300x225 Paul William Murans (CRD #3266607, aka “Peace Murans”) is a registered broker and investment advisor currently employed with Thurston Springer Financial (CRD #8478) of Indianapolis, IN. His previous employers include UBS Financial Services Inc. (CRD #8174) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (CRD #7691), also of Indianapolis, and UBS Painewebber Inc. (CRD #8174) of Weehawken, NJ. He has been in the industry since 1999.

Murans is the subject of six disclosures, two of which are employment separations. His most recent disclosure was filed on 11/18/2018, carried over from his previous employment with UBS Financial Services. The client claims that from 12/2/2013 through 10/20/2017, Murans misrepresented a “life settlement contract” that was ultimately unsuitable, and unauthorized trading of “structured products.” The client also alleged that she was completely unaware that she was borrowing from her loan account. Murans denies the allegations, and has requested copies of the complaint, as has Thurston Springer Financial, but UBS has not supplied the requested information to verify the complaint. The case was settled for $250,000.

A customer dispute filed on 5/16/2018 is currently listed as “pending.” The customer alleges “Unsuitable investments, unauthorized credit line agreement, unauthorized trades, uninvested funds, lost market opportunity,” and requests damages of $183,000. Murans denies the allegations.

Broker Erik Pica Subject Of Four Disclosures Totaling Over $900K

February 19, 2019 | Silver Law Group

Boca-Raton-Financial-Advisor-Robert-Child-Faces-Yet-Another-Customer-Dispute-300x199 Erik Patrick Pica (CRD #4829533) is a currently registered broker employed with Joseph Stone Capital L.L.C. (CRD #159744) of New York, NY. His previous employers include Global Arena Capital Corp (CRD #16871, expelled by FINRA on 4/1/2016), First Midwest Securities, Inc. (CRD #21786), Chicago Investment Group, LLC (CRD #11853, expelled by FINRA on 9/14/2010) and Eastbrook Capital Group LLC (CRD #39781, expelled by FINRA on 9/23/2009), all of New York City. He has been in the industry since 2004.

Pica is the subject of seven disclosures, all customer disputes. The first one was filed on 5/10/2018, alleging “unauthorized trade of 6000 shares Rite Aid Corp unauthorized trade of 550 shares Valeant Pharmaceutical.” The client requests damages of $7,613.65. This case is currently pending.

The next customer dispute was filed on 5/4/2018, with allegations of negligence, over-concentration and suitability.” This client requests damages of $293,000. This case is also currently “pending.”

Katherine Nishnic

February 19, 2019 | Silver Law Group

Are-or-Were-Unsuitable-Non-Traded-REITs-in-Your-Portfolio-300x224-300x224 Katherine Greer Nishnic (CRD #2499553, a/k/a Katherine Greer Martinson, Katherine Diane Nishnic, Katherine G. Nishnic) is a currently registered broker employed with Centaurus Financial, Inc. (CRD #30833) of Lexington, SC. Her previous employers include J.P. Turner & Company, L.L.C. (CRD #43177), Gunnallen Financial, Inc (CRD #17609) and First Allied Securities, Inc. (CRD #32444), also of Lexington, SC. She has been in the industry since 1994.

Nishnic is the subject of three disclosures, all recent customer disputes. The first was filed on 11/18/2018, alleging that Nishnic made unsuitable recommendations as well as “other allegations” that were not disclosed. The client is asking for damages of $100,000. Nishnic denies the allegations, and indicates that this may be a client’s family creating the dispute. This case is currently “pending.”

The next customer dispute was filed on 8/21/2017, alleging that the products sold to the client while she and her late husband were customers of Nishnic’s at a different brokerage were unsuitable. This client requests damages of $95,000. Nishnic also denies these allegations. The case was ultimately closed without any action.

JPMorgan Hit With Class Action Over Spoofing Allegations

February 19, 2019 | Silver Law Group

Class-Action-1-300x150-300x150 A putative class of investors sued JPMorgan Chase & Co. and a group of precious metals traders employed by the bank in New York federal court Wednesday, saying they manipulated futures contracts through spoofing, days after the U.S. Department of Justice announced a former trader had pled guilty to his role in the alleged scheme.

The complaint accuses JPMorgan and its employees of manipulating the prices of precious metals futures contracts on the New York Mercantile Exchange and Commodity Exchange Inc. through a spoofing scheme where its traders would place orders for futures contracts with the intent to cancel those orders before execution, which would cause investors to buy and sell at artificial prices.

According to the complaint, JPMorgan, Edmonds and several unnamed employees orchestrated a scheme “to inject materially false and illegitimate signals of supply and demand into the market and … to induce other market participants to trade against” the orders that were placed by the defendants, which resulted in the investors trading at prices, quantities and times that they may have not traded at or during that timeframe.

New York’s Regulation 187 May Cause Problems For Insurance Agents, Brokers And Their Clients

February 11, 2019 | Silver Law Group

When you purchase insurance from a broker, investment advisor or insurance agent, shouldn’t they have your best interests at heart?

Proposed-Fiduciary-Duty-Rule-Poised-to-Pass-Leaves-Brokers-Seething-300x199 New York’s Regulation 187 was designed to do just that, and could take effect as early as August of 2019. In it, agents and brokers are required to have the “best interest” of the consumer in mind when offering recommendations for their life insurance policies and annuities. Agents and brokers are not to consider any financial incentives or compensation that they might receive as a result of the financial products they offer while discussing different options for annuities and policies.

While Regulation 187 is intended to supplement New York’s existing consumer protection laws and “fill in the gaps” of regulations, it isn’t being met with resounding applause by Wall Street. According to one trade industry group, a number of issues exist with the new law that can be problematic.

LPL Financial Fined $2.75M For AML And Complaint Failures

February 11, 2019 | Silver Law Group

FINRA recently fined LPL Financial (CRD #6413) for failing to disclose customer complaints and for failures in the firm’s anti-money laundering (AML) program.

David-Levy-of-Titus-Rockefeller-LLC-Permanently-Barred-from-Broker-Activity-After-Long-Career-of-Suspicious-Activity-300x200 A misunderstanding with FINRA’s rule caused LPL to ignore dozens of customer complaints. The firm incorrectly failed to file and/or update registered representatives U4 or U5 forms to disclose dozens of reportable customer complaints that should have been filed. These claims requested compensatory damages of $5,000 or more. A representative for FINRA stated, “LPL incorrectly construed this phrase to mean that the firm was not required to report any complaint that did not expressly request compensation, even when the customer alleged a sales practice violation that caused a loss of $5,000 or more, and the complaint, when viewed as a whole, made clear that the customer was seeking compensation.” LPL has been the subject of multiple customer complaints frequently filed as securities arbitration claims, claiming significant damages.

LPL also failed to file suspicious activity reports related to its AML program. Because of inaccurate guidance in the firm’s internal processes, including a “fraud case chart,” employees failed to investigate unauthorized attempts to access customer accounts. More than 400 “hacking” attempts of customer accounts went unreported.

FINRA and SEC Follow Massachusetts in GPB Capital Investigations

February 11, 2019 | Silver Law Group

After the state of Massachusetts began an investigation into 63 brokers selling private placements into GPB after the company stopped selling them, The SEC and FINRA have followed suit. Both agencies have launched their own investigations into the company and its practices.

The SEC Has Proposed New Regulations for Fiduciaries on silverlaw.com GPB announced in August that they would cease finding new investment money in order to focus on compliance and straightening out their accounting and financial statements for their two biggest funds. The SEC is, according to one executive, interested in seeing how accurate GPB’s disclosures are that were given to investors. The SEC also wants to review fund performances and distribution of the company’s capital to their investors, as well as broker-dealers who sold these private placements to investors.

Launched in 2013, GPB Capital became one of the fastest growing private placement firms selling shares of their funds through independent broker-dealers. Promoting themselves as offerors of alternative investment assets, New York-based GPB uses the business model of “acquiring income-producing private companies,” primarily auto dealerships. The company has raised $1.8 billion of investor funds.

Five Year Sentence For Former Morgan Stanley Broker James Polese

February 11, 2019 | Silver Law Group

In September, we told you about Morgan Stanley brokers James Polese and 29-year-old Cornelius Peterson, who were found guilty of financial charges ranging from conspiracy to aggravated identity theft. They have both been sentenced in the case.

How to Report Elder Financial Fraud on elderfinancialfraudattorneys.com James Polese has been sentenced to 60 months (five years) in prison after pleading guilty to one count of conspiracy, one count of investment adviser fraud and eight counts of bank fraud as well as a charge of aggravated identity theft. The government originally requested 75 months, and the federal guidelines indicate a minimum sentence of 87 months. Polese’s attorney argued for a shorter sentence of 40 months.

Polese was ordered to pay $462,000 in restitution plus a $30,000 fine. After his release from prison, he will be supervised for three years. He will be restricted from working in financial services, and prohibited from drinking alcohol beyond a blood alcohol content (BAC) of 0.10. The judge recognized Polese’s work towards rehabilitation, which included speaking with two ministers who offered letters of support.

Scott Kaup

February 8, 2019 | Silver Law Group

Scott Vincent Kaup (CRD #1002907) is a registered broker and investment advisor currently employed with Summit Brokerage Services, Inc. (CRD #34643) of Stuart, NE. His previous employers include VSR Financial Services, Inc. (CRD #14503), also of Stuart, NE and American General Securities Incorporated (CRD #13626) of Phoenix, AZ. He has been in the business since 1981.

Lawrence-LaBine-Under-Fire-for-Alleged-Unsuitable-Recommendations-and-More-300x200 Kaup has two disclosures on his record. The first one, filed on 7/13/2018, alleges “unsuitable investment recommendations, material misrepresentations and omissions, and supervisory due diligence failures.” The client is requesting damages of $2,600,000.00. No additional information is available.

The second dispute was filed on 4/25/2016. This claim alleges that Kaup, from 3/30/2001 to 6/14/2010, breached his fiduciary duty, violated common law fraud regulations, made unsuitable recommendations for investments and committed negligence. The claim was settled for $173,000. Kaup denied all claims.

New Customer Disputes For Broker Cindy Chiellini Total $348K In Damages

February 8, 2019 | Silver Law Group

Back in August, we told you about broker Cindy Lucille Porto Chiellini (CRD #1015592) who had three customer disputes on file in her record. Chiellini is still employed with Centaurus Financial, Inc. (CRD #30833) of Lexington, SC.

Lawrence-LaBine-Under-Fire-for-Alleged-Unsuitable-Recommendations-and-More-300x200 Since our last report, four customers have filed additional disputes against Chiellini for various complaints and allegations. All four are currently listed as “pending,” and Chiellini denies the allegations in all four disputes.

The most recent dispute was filed on 9/12/2018, with the customers alleging that their investments were “inappropriate and unsuitable based on their investment objectives.” The clients are requesting damages of $150,000.