Securities Arbitration Lawyers Blog

Two Customer Disputes Filed Against Wenjinn James Chang Worth $125K

February 8, 2019 | Silver Law Group

Wenjinn James Chang (CRD #4536266) is a registered broker and investment advisor currently employed with Independent Financial Group, LLC (CRD #7717) of Rockville, MD. His previous employers include Ameritas Investment Corp. (CRD #14869), also of Rockville, AXA Advisors, LLC (CRD #6627) of New York, NY, and PFS INVESTMENTS INC. (CRD #10111) of Duluth, GA. He has been in the industry since 2002.

Are-or-Were-Unsuitable-Non-Traded-REITs-in-Your-Portfolio-300x224 Two customer disputes were filed this year against Chang. The most recent was filed on 10/15/2018, requesting damages of $50,000. The customer alleges that Chang over-concentrated in non-traded REITS that were unsuitable and caused losses to the account. Chang denies the allegations, and the firm plans to defend the claim.

His prior dispute was filed on 9/11/2018, alleging that Chang “failed to advise of the risks of the investments made and that the Claimant has suffered losses as a result of the investments made.” Although the client requested damages of $75,000, the firm settled the claim for $10,000 to avoid the costs of litigation. The firm also stated that the settlement was neither an admission of guilt or liability, and there were no facts to support the allegations.

Broker John Cutshall Under Investigation By FINRA For Misappropriation

February 7, 2019 | Silver Law Group

John William Cutshall (CRD #874352) is a registered broker and former registered investment advisor currently employed with Lombard Securities Incorporated (CRD #27954) of Woodsboro, MD. His previous employers include Morgan Stanley (CRD #149777), RBC Capital Markets, LLC (CRD #31194) and Ferris, Baker Watts, LLC (CRD #285), also of Frederick, MD. He has been in the industry since 1979.

Three Individuals Charged by the SEC for Defrauding Elderly Clients on elderfinancialfraudattorneys.com Cutshall has four recent disclosures in his record. The most recent is a pending FINRA disciplinary complaint filed by their Department of Enforcement on 8/10/2018 (the full complaint is available here.) His actions are described in detail regarding the misappropriation of trusts that he was administering for three individuals. Between 2012 and 2014, Custshall abused his position for these trusts (for one elderly woman and a now-deceased married couple), converting and improperly using funds from the trusts.

The trust provided for the couple’s disabled daughter, who was in a residential facility for intellectually disabled individuals. When the daughter died in 2012, Cutshall used his position as a trustee to write 34 checks from the trust for a total of $400,000. These checks were deposited into his own bank account. Cutshall then presented an unwitnessed handwritten note that was allegedly written by the deceased husband, but not the wife. The note named Cutshall as a 50% beneficiary, defending his converting of funds from the trust. He took a total of $463,000, which was more than he was entitled to, assuming the note was genuine. Cutshall never disclosed this note until 2013, and failed to disclose to two firms that he was a client’s trustee.

FINRA Suspends Robert White For Accepting Cash Gifts From Customer

February 6, 2019 | Silver Law Group

Robert Edward White (CRD #3077959) is a former registered broker whose last employer was Raymond James Financial Services, Inc. (CRD #6694) of East Hampton, NY. His previous employer was 1^st Global Capital Corp. (CRD #30349) of Dallas, TX. No current employment information is available. He has been in the industry since 1998.

White was discharged from the Raymond James Financial Services on 4/3/2017 after it was discovered he had accepted cash gifts from a customer, and failed to disclose the gift to the firm. The firm’s policies prohibited registered representatives from accepting gifts over $100 per year from the firm’s customers. White accepted a total of $58,000 from a single firm customer, after certifying that he understood the policies on annual compliance questionnaires.

After an investigation, FINRA suspended White on 8/10/2018 for four months, effective 8/20/2018. White was also fined $10,000, and signed an Acceptance, Waiver & Consent (AWC) letter, agreeing to all sanctions. His suspension is scheduled to end on 12/19/2018. It is generally against a brokerage firm’s rules for a financial advisor to borrow money from a customer or otherwise accept cash gifts.

Disgraced Broker Kyusun Kim Terminated By Sandlapper

February 6, 2019 | Silver Law Group

Back in October, we told you about Kyusun Kim (CRD #2864085), a broker who was barred by FINRA after it was discovered he approached individuals who were near or at retirement age, and urged them to liquidate their pensions to invest in “alternative investments.” These investments included risky, non-traded real estate investment trusts (REITs.)

Are-or-Were-Unsuitable-Non-Traded-REITs-in-Your-Portfolio-300x224-300x224 BrokerCheck now reports that Sandlapper Wealth Management, LLC has discharged him from their employment as of 8/31/2018 after he was barred by FINRA.

The allegations against Kim included wrongful conduct, breaches of fiduciary duty, contract and conduct, violations of securities laws, fraud, financial elder abuse, negligent misrepresentation, inappropriate investments and unsuitable recommendations, as well as one allegation of forged signatures.

FINRA Bars Broker Mohamed Yassin

February 6, 2019 | Silver Law Group

Mohamed Racheed Yassin (CRD #1673281) is a previously registered broker and investment advisor whose last employer was National Securities Corporation (CRD #7569) of Westbury, NY. His previous employers include Morgan Stanley (CRD #149777) of Garden City, NY, UBS Financial Services Inc. (CRD #8174) of Uniondale, NY and Prudential Securities Incorporated (CRD #7471) of New York, NY. He has been in the industry since 1990.

David-Sullivan-Accused-of-Excessive-Trading-on-More-Than-One-Occasion-300x200-300x200 Yassin is the subject of two FINRA disciplinary actions. The first, filed on 10/29/2018, suspends Yassin indefinitely for failure to comply with an arbitration award in a case of breach of promissory notes.

The earlier FINRA action on 8/21/2018 bars Yassin from any and all association with a FINRA member after he failed to respond to a request for information. FINRA then barred Yassin indefinitely from affiliation with any FINRA member effective 11/26/2018.

FINRA Suspends Jeffrey Offen

February 6, 2019 | Silver Law Group

Jeffrey Lance Offen (CRD #2893980) is a former registered broker whose last employer was Craft Capital Management LLC (CRD #171350) of Garden City, NY. His previous employers include Salomon Whitney Financial (CRD #145012) of Farmingdale, NY, Network 1 Financial Securities Inc. (CRD #13577) of Syosett, NY, and Laidlaw & Company (UK) LTD. (CRD #119037) of Melville, NY.

Failure-to-Adequately-Supervise-Prompts-FINRA-Suspension-of-Roman-Luckey-300x200 Seven of Offen’s previous employers have been expelled from FINRA:

Obsidian Financial Group, LLC (CRD#:104255), Woodbury, NY, expelled on 10/16/2013

Justin Lopez Subject of Two Customer Disputes totaling over $5M

February 6, 2019 | Silver Law Group

Justin William Lopez (CRD #5162263) is a currently registered broker employed with J.P. Morgan Securities LLC (CRD #79) of Mineola, NY. His previous employers are Craig Scott Capital, LLC (CRD #155924, expelled by FINRA on 9/7/2017), Brookstone Securities, Inc. (CRD #13366, expelled by FINRA on 10/9/2012), both of Uniondale, NY, and JHS Capital Advisors, Inc. (CRD #112097) of Tampa, FL. He has been in the industry since 2006.

David-Sullivan-Accused-of-Excessive-Trading-on-More-Than-One-Occasion-300x200-300x200 Lopez has two customer disputes in his FINRA record, the first of which was filed on 7/13/2018, alleging “unauthorized, unsuitable and excessive trading regarding the Equity Listed and Equity OTC investments.” This client requests damages of $5,563,792.00.

The second disclosure, filed on 5/09/2017, has similar allegations of “suitability and excessive trading regarding equity OTC and equity listed investments.” This client requests damages of $55,855.00.

FINRA Bars Broker Mitchell Kurtz For Violations Including Selling Away

February 5, 2019 | Silver Law Group

Mitchell Alan Kurtz (CRD #2437746) is a former registered broker and investment advisor whose last employer was Henley & Company LLC (CRD #131453) of Roslyn Heights, NY. His previous employers are Raymond James Financial Services, Inc. (CRD #6694), also of Roslyn Heights, and Advest, Inc. (CRD #10) of Hartford, CT. He has been in the industry since 1994.

FINRA-Permanently-Bars-Barry-Hartman-From-Securities-Activity-for-Alleged-“Selling-Away”-Activities-300x209 FINRA recently barred Kurtz “indefinitely,” effective 12/3/2018, after he declined to provide information requested in conjunction with an investigation. He is barred from any association with a FINRA member firm, and signed an Acceptance, Waiver & Consent (AWC) letter agreeing to the sanctions.

The investigation came after Kurtz was discharged from his last employer, Henley & Company on 7/30/2018. Kurtz violated both FINRA and SEC policies with regards to “outside business activities, selling away, fiduciary duty obligations, violation of professional standards and the Firm’s Code of Ethics.” This discharge led to the FINRA investigation, in which he declined to participate.

SEC Halts Trading On Petrotech Oil & Gas, Inc.

February 5, 2019 | Silver Law Group

Petrotech Oil & Gas Inc. (PTOG) is a company based in Bedford, TX, and claims it is involved in petroleum recovery from oil wells that are considered “empty.” Using their own extraction technology with CO2 and N2 called “Gas-Injection EOR” (Enhanced Oil Recovery), Petrotech is able to recover 20% or more than previously thought possible.

The SEC Has Proposed New Regulations for Fiduciaries on silverlaw.com On February 19, 2014, the company announced that it would also be entering the legal cannabis market in Washington and Colorado, causing their stocks to surge. Petrotech’s deal created subsidiary Legalizepot.us Management Group, Inc. (the site is now a blank page.) LP.US Management was intended to manage the growing companies where cannabis became legal, starting with Washington and Colorado.

On March 14, 2014, the SEC suspended trading for the company “because of questions that have been raised about the accuracy and adequacy of publicly disseminated information concerning, among other things, the company’s operations.” Trading resumed on March 28, 2018. The company was in the process of completing a 2-year audit to comply with SEC reporting standards to achieve full reporting status.

Silver Law Group Files FINRA Arbitration Claim Against Arete Wealth Management

February 5, 2019 | Silver Law Group

Silver Law Group filed a claim against Arete Wealth Management, LLC alleging Arete’s broker recommended numerous unsuitable non-traded REITs and leveraged ETNs and ETFs to our elderly client.

Are-or-Were-Unsuitable-Non-Traded-REITs-in-Your-Portfolio-300x224 According to the FINRA arbitration complaint, the elderly Claimant entrusted the entirety of her retirement portfolio to Arete Wealth Management and its broker. The broker proceeded to recommend the senior Claimant invest approximately half a million dollars in various illiquid, non-traded REITs. Among other non-traded REITs, the Arete Wealth Management broker recommended the Claimant invest in American Finance Trust, Hospitality Investors Trust, benefit Partners Realty Trust, and FS Energy and Power Fund, according to the FINRA arbitration complaint.

In addition to Arete Wealth Management’s unsuitable recommendations to invest in non-traded REITs, the Arete Wealth Management broker also invested the elderly Claimant’s brokerage account in risky investments such as leveraged ETFs and ETNs, according to the securities arbitration claim. These leveraged ETFs and ETNs are typically meant to be held for no more than one day. The FINRA arbitration complaint alleges the Arete Wealth Management broker held them for far longer than one day – in some cases months. Claimant, according to the securities arbitration claim, lost a significant amount of money in her Arete Wealth Management brokerage accounts.