Securities Arbitration Lawyers Blog

Summit Equities Broker Rembert McNeer is Given a 1-Year Suspension from FINRA

March 15, 2017 | Silver Law Group

Summit Equities Broker Rembert McNeer is Given a 1-Year Suspension from FINRA on silverlaww.com

The Parsippany, New Jersey broker was also hit with a $10,000 fine

Up until recently, Rembert McNeer had a clean record with the Financial Industry Regulatory Authority (FINRA). A broker for over 30 years, McNeer worked for three firms: E.F. Hutton & Company Inc.; G.A. Michele, Inc. in New York City; and Summit Equities, Inc. located in Parsippany, NJ.

But in October of 2016, FINRA found that McNeer failed to supervise the private securities transactions of one of his representatives. McNeer was the representative’s immediate supervisor, as well as the member firm’s chief compliance officer.

Catalyst Hedged Futures Strategy Fund (HFXIX) Under Investigation Over Recent Drop in Value and Misclassification

March 15, 2017 | Silver Law Group

Silver Law Group is investigating Catalyst Capital Advisors LLC (CRD# 139895/ SEC# 801-66886) (“Catalyst”) and one of its mutual funds, Catalyst Hedged Futures Strategy Fund Class I (“HFXIX”) after the fund lost approximately 30 percent of its value in the span of three months.

HFXIX is a fund that seeks to provide positive returns in all market conditions with low volatility and low correlation to the equity markets by investing in option strategies on equity index futures contracts, according to the fund’s fact sheet. The fund primarily invests in long and short call and put options on U.S. Stock Index Futures contracts, and lists the primary reason for investing as capital appreciation and preservation.

The fund has performed well relative to other managed futures funds, which fell 2.8 percent. But according to an InvestmentNews report, the fund is actually an options writing fund, which opens up arguments of misclassification against Catalyst.

Douglas Wayne Studer : Elder Financial Fraud Alert

March 14, 2017 | Silver Law Group

An alleged inheritance of a client’s condo led to the Florida broker’s downfall

In 2001, Douglas Studer started working for Prime Capital Services, Inc. in Port Richey, Florida, which began his 15-year career. That career ended in September of 2016 after an investigation by the Financial Industry Regulatory Authority (FINRA). FINRA found that Studer had violated his firm’s policy by being named in a client’s estate documents to inherit the client’s waterfront condominium.

Studer didn’t admit or deny the allegations against him, but he did agree to the sanctions, which make him ineligible to act as a broker or have anything to do with firms that sell securities to the public.

FINRA Tips for Spotting and Preventing Elder Financial Abuse

March 14, 2017 | Silver Law Group

FINRA Tips for Spotting and Preventing Elder Financial Abuse

Elder financial abuse is a subject that has increasingly drawn scrutiny by regulatory bodies. The Financial Industry Regulatory Authority (“FINRA”) and the Securities Exchange Commission (the “SEC”) have published numerous investor alerts, regulatory guidance, and primers on the elder financial abuse. FINRA has even hosted panels to educate elderly investors and financial representatives on how to combat elder financial abuse. Our firm has launched a website targeting elder financial abuse as well at www.elderfinanci alfraudattorneys.com.

Most recently, as part of FINRA’s 2017 Regulatory and Examination Priorities Letter, the regulatory body announced its focus on senior investors. Among other things, FINRA will focus on the suitability of speculative and/or complex investment products recommended to elderly investors. But a big question for most elderly individuals and their loved ones is how they can avoid elder financial abuse in the first place. An SEC guide for seniors to protect themselves from elder financial abuse lists the following among other items to protect elderly investors:

Meyers Associates Changes Name to Windsor Street Capital

March 14, 2017 | Silver Law Group

Meyers Associates, L.P. changed its name in 2016 from “Meyers Associates, L.P.” to “Windsor Street Capital, LP.”

Under the moniker Meyers Associates (CRD# 34171), the firm was known for hiring brokers whose FINRA BrokerCheck reports were riddled with disclosures. According to an InvestmentNews report in 2014, Meyers Associates “stands out as a haven for registered representatives with black marks on their employment histories.”

According to that InvestmentNews report, about 12% of registered securities professionals have some type of disclosure event on their records. The percentage of registered representatives with disclosure events at Meyers Associates was five times higher than the industry average. Additionally, according to the report, of the 63% of the firm’s brokers with disclosure on their BrokerCheck reports, the average amount of disclosures was 4.5 per broker.

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”).