Securities Arbitration Lawyers Blog

Cetera Brokerage Firm Investors Capital Corp Fined $1.1 Million Over Sales of Unit Investment Trusts

March 14, 2017 | Silver Law Group

Cetera Brokerage Firm Investors Capital Corp Fined $1.1 Million Over Sales of Unit Investment Trusts

Silver Law Group is investigating investor claims against Cetera Financial Group-owned Investors Capital Corp. (CRD# 30613) after FINRA fined the firm and ordered it to pay restitution of over $1.1 million for allegations of short-term trading of unit investment trusts (“UITs”).

According to the Acceptance, Waiver & Consent (“AWC”) Investors Capital Corp. (“Investors Capital”) and FINRA entered into in October 2016, FINRA found that Investors Capital recommended unsuitable short-term trading of UITs and Steepener Notes (“Steepener Notes”) in 74 customer accounts. Additionally, Investors Capital failed to apply sales charge discounts to certain customers’ purchases of UITs, according to the AWC. The misconduct occurred between June 2010 and September 2015.

Las Vegas Broker Frank R. Underhill Under Jr Investigation After FINRA Permanently Bars Him

March 14, 2017 | Silver Law Group

Silver Law Group is investigating former Las Vegas, Nevada broker Frank R. Underhill Jr. (CRD# 4970331) after FINRA permanently barred him.

According to Underhill’s FINRA BrokerCheck report, Underhill who owned and operated his own brokerage firm, Underhill Securities Corp. (CRD# 148001), FINRA permanently barred Underhill from acting as a broker or otherwise associating with firms that sell securities to the public.

Underhill failed to respond to a FINRA request for information, according to his BrokerCheck report, which was the cause of his permanent bar.

Former Milestone Investments Broker Michael W. Miles Under Investigation After FINRA Suspension

March 14, 2017 | Silver Law Group

Silver Law Group is investigating former Charlotte, North Carolina-based Milestone Investments, Inc. (CRD# 47090) broker Michael W. Miles (CRD# 3206302) after FINRA suspended him for six months.

According to Miles’ FINRA BrokerCheck report, FINRA suspended Miles six months and fined him $10,000 in October 2016. According to the BrokerCheck report, Miles consented to the sanctions, without admitting or denying the findings, and to the entry of findings that he willfully failed to amend his Form U4 to report a Consent Judgment and Order he entered into with the United States Department of Labor (the “USDL”) in which he was permanently enjoined from acting as a fiduciary to any employee benefit plan.

The Acceptance, Waiver & Consent (“AWC”) entered into between FINRA and Miles references an additional disclosure on Miles’ BrokerCheck report that occurred in May 2014. According to Miles’ BrokerCheck report, the USDL alleged that Miles breached his fiduciary duty with respect to the Miles & Associates, Inc. 401(k) profit sharing plan by failing to discharge his duties under the plan and violating multiple ERISA rules.

Former LPL Financial Broker Michael Babyak Jr Under Investigation After FINRA Permanent Bar

March 14, 2017 | Silver Law Group

Silver Law Group is investigating former LPL Financial LLC (CRD# 6413) broker Michael Babyak Jr, II after FINRA permanently barred him.

According to Babyak’s FINRA BrokerCheck report, FINRA permanently barred Babyak from acting as a broker or otherwise associating with firms that sell securities to the public in October 2016.

Without admitting or denying the findings, FINRA found that Babyak had customers invest a total of $4.25 million into a limited liability company that he set up. Babyak, who had complete control over the LLC, then loaned the $4.25 million to a third party for the benefit of his customers. Further, Babyak arranged for the repaid funds to be loaned to two additional borrowers. Babyak failed to notify his employing firm he was participating in these additional transactions.

Former Las Vegas Wells Fargo Broker Donald S. Toomer Allegedly Received Kickbacks for Selling Microcap Stocks

March 14, 2017 | Silver Law Group

Silver Law Group is investigating former Las Vegas, Nevada-based Wells Fargo Advisors Financial Network, LLC (CRD# 11025) broker Donald S. Toomer (CRD# 2842723) after he was discharged by Wells Fargo and named in an SEC and criminal complaint over allegations that he sold microcap stocks to his customers in exchange for cash kickbacks.

On December 21, 2015, a criminal charge was filed against Toomer charging him with conspiracy to commit securities fraud and investment adviser fraud, investment adviser fraud, and securities fraud. The same day, the SEC announced civil charges against Toomer when it amended its initial complaint. Wells Fargo subsequently allowed Toomer to resign following the allegations, according to Toomer’s FINRA BrokerCheck report.

According to the SEC amended complaint (the “Complaint”), the SEC alleges Toomer abused his role as financial advisor to help create the false appearance of market demand in four microcap stocks: BioNeutral Group, Inc. (“BONU”); NXT Nutritionals Holdings, Inc. (“NXTH”); Mesa Energy Holdigns, Inc. (“MSEH”); and Clear-Lite Holdings, Inc. (“CLRH”) (collectively, the “Issuers”).

Former Broker Christopher Paul is Banned from Selling Securities

March 13, 2017 | Silver Law Group

Former Broker Christopher Paul is Banned from Selling Securities on silverlaw.com

The broker had been involved in several customer disputes

Christopher Paul’s 14-year career as a broker is over. In November of 2016, the Financial Industry Regulatory Authority (FINRA) permanently banned him because he did not respond when the agency contacted him for information. Paul has had many customer complaints against him dating back to 2008.

Paul began his career at S.W. Bach & Company out of Port Washington, NY, in 2001. In 2005, he moved on to Granite Associates, Inc. in Melville, NY, followed by Whitaker Securities LLC, also in Melville.

Matthew Christopher Maczko Permanently Barred from Practicing as a Broker

March 10, 2017 | Silver Law Group

Matthew Christopher Maczko Permanently Barred from Practicing as a Broker on silverlaw.com

The former Wells Fargo broker was banned after allegations of unsuitable trading for elderly client

On February 9, 2017, Matthew Christopher Maczko was permanently barred by the Financial Industry Regulatory Authority (FINRA) after Maczko consented to the sanction and FINRA’s findings.

FINRA found that between January 2009 and April 2016, Maczko made excessive and unsuitable trades on behalf of his elderly client, now 93 years old. FINRA also reported that Maczko inaccurately testified before FINRA that he had not spoken with other clients, also senior citizens, since his termination. However, telephone records revealed that he had in fact spoken with these clients several times in that period.

New York Broker Christopher Vincent Paul Permanently Barred by FINRA

March 7, 2017 | Silver Law Group

New York Broker Christopher Vincent Paul Permanently Barred by FINRA on silverlaw.com

An assortment of charges, firings, and settlements have followed the broker for the last decade

Christopher Vincent Paul’s 14-year career has come to an end. After failing to give the Financial Industry Regulatory Authority (FINRA) information it was looking for, the agency permanently barred him from acting as a broker.

From May of 2001 to August of 2015, these are the firms with which Paul was associated, all of them in New York:

New York Broker Stanley Niekras Under Investigation for Elder Fraud

March 6, 2017 | Silver Law Group

FINRA allegations include billing elderly clients $70,000 in false fees to make up lost commissions

Former Purshe Kaplan Sterling Investments and MML Investors Services, LLC adviser Stanley Clayton Niekras is under investigation by the Financial Industry Regulatory Authority (FINRA) for allegedly taking advantage of elderly clients.

In its complaint, FINRA alleges that Niekras billed two elderly customers more than $70,000 for both estate and financial planning services that he was not entitled to, in addition to the fact that Niekras did not receive his firm’s approval for such billing.

Broker Jeffrey Alan Hill Gets 15-Month Suspension for Allegedly Bilking Elderly Customers

March 6, 2017 | Silver Law Group

The broker was also fined and fired from Wells Fargo

Broker Jeffrey Alan Hill has been suspended by the Financial Industry Regulatory Authority (FINRA) for all of 2017 and will not be allowed to sell securities again until March of 2018. He was also fined $50,000.

FINRA’s investigation reported that Hill made hundreds of trades for two elderly clients, only contacting them about half of the time. In addition, he recommended many investments that were “qualitatively or quantitatively unsuitable or lacked a reasonable basis.”