Securities Arbitration Lawyers Blog

FINRA Alleges Broker Gopi Vungarala Charged $11 million in Commissions for nontraded REITs and BDCs and Lied About it

February 15, 2016 | Silver Law Group

The Financial Industry Regulatory Authority Inc. (“FINRA”) charged a broker for lying to a Native American tribe about $11 million in commissions he accumulated when he sold the tribe $190 million in nontraded real estate investment trusts and business development companies.

According to the complaint, Gopi Krishna Vungarala (CRD# 4856193), the broker, served as the unnamed tribe’s registered representative as well as its treasury investment manager. Vungarala used his position to fraudulently induce the tribe to invest hundreds of millions of dollars in nontraded REITs and BDCs and repeatedly lied about whether he and his firm received commissions for the sales.

The complaint alleges that Vungarala falsely represented to the tribe that he would not receive any commissions on purchases of the non-traded REITs and BDCs made in the tribe’s accounts in order to induce the tribe to make the purchases.

James Michael Johnson Made Big Promises, No Return

February 12, 2016 | Silver Law Group

James Michael Johnson Made Big Promises, No Return on silverlaw.com

Broker James Michael Johnson faces a two-year suspension and $50,000 fine for negligent misrepresentations and omissions.

In November 2015, James Michael Johnson agreed to FINRA sanctions and the entry of findings that he made negligent misrepresentations and omissions regarding securities investments to customers of his member firm without the firm’s knowledge.

Johnson allegedly approached firm customers, a married couple, offering them a 10-percent interest in a land development company in West Virginia. The company, West Virginia Farm Properties, LLC (WVFP) was formed to develop rural land into a residential neighborhood. In his discussion with the couple, he led them to believe:

Glenn Moffitt Barred By FINRA For Alleged Elder Fraud

February 12, 2016 | Silver Law Group

Glenn Moffitt Barred By FINRA For Alleged Elder Fraud on silverlaw.com

Nevada financial broker permanently barred from all FINRA activity after taking advantage of elderly clients

Henderson, NV broker Glenn Moffitt was permanently barred from all FINRA activity for allegedly misappropriating funds from elderly clients between 2011-2014. According to his FINRA report, Moffitt is accused of misappropriating at least $370,000 and failing to cooperate with the FINRA investigation into these charges. Moffitt was registered with First Allied Securities Inc. of Las Vegas, NV during this time period.

The elderly victim alleges that Moffitt misappropriated more than a total of $400,000 from multiple accounts. This client also reports that Moffitt admitted the wrongdoing but did not repay the funds as promised. He allegedly pressured the client and steered them toward investments that were high risk and not in line with the client’s goals.

Former HD Vest Investment Services and LPL Financial Advisor Daniel Kasbar Under Investigation

February 12, 2016 | Silver Law Group

Silver Law Group is investigating allegations made by the Financial Industry Regulatory Authority (“FINRA”) against former Hollywood, Florida broker Daniel G. Kasbar (CRD# 5869994).

FINRA barred Kasbar from the securities industry for failing to respond to FINRA’s requests for documents and information. FINRA was investigating Kasbar for allegedly engaging in outside business activities beyond the scope of the approval provided by his FINRA member firms, HD Vest Investment Services (“HD Vest”) and LPL Financial, LLC (“LPL”), between 2010 and 2015.

Kasbar entered the securities industry in February 2011 when he became registered with HD Vest. In March 2014, Kasbar voluntarily resigned from HD Vest and became registered with LPL as a General Securities representative. On May 29, 2015, LPL discharged Kasbar alleging the same conduct in the FINRA investigation.

Former West Palm Beach broker Paul V. Blum Under Investigation

February 12, 2016 | Silver Law Group

Silver Law Group is investigating claims related to West Palm Beach, Florida broker Paul V. Blum (CRD # 735003).

We have recently been retained to pursue a securities arbitration claim against RBC Capital Markets, LLC (“RBC”), Blum’s former brokerage firm, alleging, amongst other issues, that RBC and Blum engaged in an unsuitable bond trading program which caused losses in energy companies and other investments.

Blum has two recent complaints pending against him. The two complaints, similar to our client’s, allege unsuitable recommendations for the purchase of bonds that have since defaulted and the unauthorized purchase of high-yield bonds.

Alain Florestan Guilty of Putting Profits Before Customers

February 11, 2016 | Silver Law Group

New York broker Alain Florestan faces allegations of misconduct and unsuitable trading.

After 16 years in the securities industry, New York financial broker Alain Florestan is no longer registered to act as a financial advisor or representative in the securities industry. During his career, Florestan experienced 10 disclosure events reported on his FINRA BrokerCheck.

The most recent allegation against Florestan names him as a respondent in a case involving $1.1 million in customer trading losses while these same customers paid over $1 million in commissions and fees. The disciplinary action alleges that during his time with Caldwell International Securities Corporation (CISC), Florestan and his colleagues “put profits before customers, growth before compliance, and subterfuge before transparency.”

Failure to Adequately Supervise Prompts FINRA Suspension of Roman Luckey

February 11, 2016 | Silver Law Group

Failure to Adequately Supervise Prompts FINRA Suspension of Roman Luckey on silverlaw.com

Ineffective supervision leads to FINRA suspension of financial services provider

Roman T. Luckey, formerly registered with Newport Coast Securities Inc., was fined $15,000 and also suspended for 14 months by the Financial Industry Regulatory Authority (FINRA) in August 2015 for failure to appropriately supervise his staff, who were taking advantage of clients by excessive trading, churning and making unsuitable financial recommendations.

The FINRA report maintains that Luckey failed to act on numerous obvious red flags concerning five of the financial representatives he supervised that impacted 24 client accounts between 2008 and 2013.

SEC Alleges New York-Based Lending Company and its Placement Agent Raise $8.6 million by Lying to Investors

February 9, 2016 | Silver Law Group

The Securities and Exchange Commission announced fraud charges against a Manhattan-based lending company and its placement agent for falsely stating that its financial statements were being audited and lying about the returns on the loans.

The SEC filed a complaint in federal district court in Manhattan against lending company American Growth Funding II LLC (“AGF II”) and brokerage firm Portfolio Advisors Alliance (“PAA”), as well as two of its executives, for promising investors 12-percent annual returns and concealing pertinent details about the deteriorating loan values that could jeopardize full payment of the promised returns to investors. PAA and its owner Howard Allen and president Kerri Wasserman allegedly knew the offering documents were inaccurate yet continued using them to solicit sales of AGF II securities.

The SEC’s complaint states that AGF II raised approximately $8.6 million from investors in a private placement offering from March 2011 to December 2013 and the company represented in offering documents that its financial statements had been audited and would continue to be audited each fiscal year. It further states that Ralph Johnson, AGF II’s sole managerial employee and 51 percent owner, knew AGF II’s financial statements had not been audited and would not continue to be audited each fiscal year but still caused AGF II to send out monthly account statements to investors that concealed the precariousness of its business.

Silver Law Group Investigates the Ivy Asset Strategy and Waddell & Reed Asset Strategy Funds for Potential Securities Law Violations

February 9, 2016 | Silver Law Group

Silver Law Group is currently investigating possible securities law violations and breaches of fiduciary duties against Ivy Asset Strategy Fund (WASAX) and Waddell & Reed Asset Strategy Fund (UNASX), both wholly-owned subsidiaries of Waddell & Reed Financial, Inc. (NYSE: WDR).

On May 15, 2014, Ryan C. Caldwell, a co-portfolio manager for both Funds, resigned. Since his resignation, the Ivy Asset Strategy Fund has fallen by more than 30% in value and has lost billions of dollars in assets. The fund is currently trading at $21 per share, down from $30 per share in 2014. Most recently, Waddell & Reed shares plunged upon the announcement of Michael L. Avery’s, co-manager of the Ivy Asset Strategy Fund, retirement on February 2, 2016.

Silver Law Group represents the interests of investors who have been the victims of investment fraud. If you have questions about your legal rights pertaining to these Funds, please contact Scott Silver of the Silver Law Group for a free consultation at ssilver@silverlaw.com or toll free at (800) 975-4345.

Margin Account Guidelines

February 8, 2016 | Silver Law Group

Margin Account Guidelines on slverlaw.com

Key Information to know before you get started.

While the potential gains associated with securities trading in a margin account may be substantial, so can the potential losses. This is critical for investors to understand, along with the facts and risks associated with this type of trading.

Simply put, a margin account is an account offered by brokerage firms that allows investors to borrow money to buy securities. The investor typically deposits 50 percent of the value of the purchase and the brokerage firm loans the investor the rest of the money, using the securities as collateral.