Securities Arbitration Lawyers Blog

UBS Ordered to Pay $33.5M in Puerto Rico Bond Settlement

October 13, 2015 | Silver Law Group

UBS Ordered to Pay $33.5M in Puerto Rico Bond Settlement on silverlaw.com

SEC and FINRA allegations include supervisory failures

Both the Securities Exchange Commission (SEC) and the Financial Industry Regulatory Authority have handed a UBS affiliate in Puerto Rico orders to pay a settlement in the amount of $33.5 million, according to Law360.com. The charges against the bank include failure to supervise a representative who allegedly manipulated investors in order to used borrowed money to buy up closed-ended bond funds. Silver Law Group currently represents hundreds of families in Puerto Rico for their losses in UBS bond funds.

The SEC has recently sued Jose G. Ramirez Jr., based on allegations that he tricked a handful of investors into using lines of credit to purchase up to $50 million worth of closed-end mutual funds. These funds plummeted when Puerto Rico’s bond market dropped in 2013.

South Florida Broker Brian Michael Berger Permanently Barred by FINRA

October 12, 2015 | Silver Law Group

South Florida Broker Brian Michael Berger Permanently Barred by FINRA on silverlaw.com

Allegations include elder fraud, misappropriation and failure to provide requested information

Following a fifteen-year career in the securities industry, Boca Raton-based financial adviser Brian M. Berger has been permanently barred from the industry due to allegations of funds misappropriation as well as failing to respond to FINRA requests for information.

According to official documents filed with FINRA in July, Berger was the subject of an investigation by FINRA for misappropriating funds from elderly customers while registered with Wells Fargo, LLC and MetLife Securities, Inc. When FINRA requested documentation and information from Berger, along with on-the-record testimony, Berger reportedly refused, resulting in his exile from the industry.

Broker Paul G. Shea Permanently Barred by FINRA

October 10, 2015 | Silver Law Group

Broker Paul G. Shea (“Shea”)(CRD# 2868966) was permanently barred by FINRA commencing on July 16, 2015, for failing to respond to a FINRA request for information, pursuant to FINRA Rule 9552(d). Shea is barred from association with any FINRA member in any capacity. Shea failed to request termination of his suspension within 3 months of the date of his Notice of Suspension, and therefore, was automatically barred by FINRA (FINRA Rule 9552(h)).

Shea first became a registered securities broker in 1997 and was registered with Morgan Stanley DW Inc., from April 1997 – January 2006 (employed in Purchase, NY); and Wells Fargo Advisors, LLC from January 2006 – August 2014 (employed in Baltimore, MD).

According to FINRA, in 2014 a customer accused Shea of “investments that were an extreme departure from their investment directives” and “lack of contact from financial advisor, and financial losses.” Shea settled the claim with the customer in the amount of $25,000.

Silver Law Group Investigates Global Financial Fund 8 LLP and Transglobal Financial Services

October 10, 2015 | Silver Law Group

Silver Law Group is investigating Bruce Kane, 60, formerly of Ithaca, New York and currently residing in Fort Lauderdale, FL; Burton Greenberg, 75, of Plantation, Florida; and Senol Taskin, 50, of Ontario, Canada for their alleged involvement in an investment scheme that defrauded investors out of $10 milion. All three men have been indicted by a federal grand jury in upstate New York on wire fraud charges. Kane and Greenberg were both arrested by the Federal Bureau of Investigation (FBI) in Florida earlier this week, while Taskin remains at-large and is believed to be living in Turkey.

According to the federal indictment, Kane — an accountant and the principal of a Florida-based investment partnership named Global Financial Fund 8 LLP — conspired with Greenberg — the President and CEO of both Transglobal Financial Services and M&P Global Financial Services Inc. — and Taskin to solicit investment funds that investors were told would be safely invested and held in American, Canadian, and Italian banks where they would generate significant profits as high as a 960 percent return on investment. Instead of investing the money in secure investments, the trio allegedly used the funds to pay off personal debts, pay rent on a waterfront condominium in South Florida, buy a boat, and make separate investments of their own. To avoid detection, Kane and Greenberg purportedly sent investors phony “profit” payments which were nothing more than partial returns of their principal investments. Additionally, Kane and Greenberg repeatedly assured investors by e-mail between 2004 and 2013 that their investments were secure and profitable, despite Kane and Greenberg allegedly knowing those assurances to be false. To assist in the conspiracy, Taskin purportedly provided Kane and Greenberg a phony Canadian bank statement to use at a meeting with investors so the investors would be lulled into believing their investments were secure when those funds had actually been transferred to a company co-owned by Taskin and used for his own personal or corporate purposes.

As set forth in court documents, Kane, Greenberg, and Taskin used over $6.1 milion of the funds for their own benefit — over $4.4 million of the money was diverted to bank accounts and companies controlled by Greenberg or his close relatives; approximately $1.6 million of the money went to Kane’s personal accounts and to pay for personal expenses of his such as credit cards, automobile and lease payments, and a boat and waterfront condominium he owned; and at least $240,000 of the victim investors’ funds were transferred to bank accounts in Turkey controlled by Taskin.

New York Broker Paul Padovani Suspended by FINRA

October 9, 2015 | Silver Law Group

New York broker and financial advisor Paul Padovani (CRD# 2688559) was suspended by FINRA (Financial Industry Regulatory Authority) for four months from associating with any FINRA firm in any capacity, for borrowing $75,000 from a customer. Padovani’s actions violated FINRA Rules 3240 and 2010. According to his Letter of Acceptance Waiver and Consent, Padovani repaid the loan but did not obtain approval prior to his taking the funds from his employer, Metlife Securities Inc. Padovani consented, without admitting or denying the allegations made against him by FINRA, to a four-month suspension in resolution of his disciplinary proceeding. The suspension is in effect from May18, 2015, through September 17, 2015.

Padovani began his employment with MetLife Securities in 2012. He was previously employed by Morgan Stanley & Co. from 2009-2012, and Wachovia Securities LLC from 2003-2009.

If you invested money with Paul Padovani, Metlife Securities, Inc., Morgan Stanley, or Wachovia Securities and suffered losses, you may be entitled to recover some or all of those investment losses. Please call our securities law firm toll free at (800) 975-4345 to speak with an experienced attorney, and to find out how we may be able to help you to regain some or all of your losses. Most cases are handled on a contingent fee basis, meaning that you do not pay legal fees unless we are successful in your lawsuit.

SEC Reiterates Oil and Gas Fraud Investor Alert

October 9, 2015 | Silver Law Group

Alert lists red flags and best practices for avoiding fraud

A relatively recent increase in fraud schemes involving oil and gas ventures has caused the Securities and Exchange Commission to issue an investor alert that educates investors by bringing to their attention the possibility of fraudulent endeavors and the warning signs they should be aware of.

The alert, originally posted in May 2013, is still relevant today, as the SEC recently announced charges in regards to an oil and gas scheme in California involving upwards of $12 million from more than 300 investors nationwide. <This would be a good place for an internal link to the other blog on Schumacher>

Antonio Costanzo Permanently Barred by FINRA After Alleged Churning in Customer Accounts

October 9, 2015 | Silver Law Group

Broker failed to respond to FINRA information requests after allegations of excessive trading in numerous customer accounts

After 19 years in the securities industry, Antonio Costanzo has received a permanent bar from FINRA from acting in the capacity of a broker or other financial adviser, according to the FINRA website. The sanction, levied in May, came after a 2014 allegation that Costanzo was involved in churning, or excessive trading, in several customers’ accounts while employed at Newport Coast Securities.

Churning is, unfortunately, a common form of stockbroker misconduct in which a financial adviser makes excessive trades in an account in an effort to generate greater commissions without actually benefiting the customer. In fact, the buying and selling activity involved in churning is unsuitable to the investor’s goals and serves no practical purpose to the investor but generates substantial commission for the stockbroker.

Stifel Nicolaus & Co.’s Michigan Broker Kenneth Hornyak Permanently Barred By FINRA

October 9, 2015 | Silver Law Group

Michigan broker Kenneth Hornyak (“Hornyak”)(CRD# 2990144), was permanently barred by the Financial Industry Regulatory Authority (“FINRA”) and is no longer licensed to act as a broker, or otherwise associate with firms that sell securities to the public. Hornyak is barred from association with any FINRA member in any capacity.

According to FINRA, while employed as a broker at member firm Stifel, Nicolaus & Co., Inc. (“Stifel Nicolaus”), Hornyak exercised discretion in a client’s account without written authorization from the client. In January 2014, Stifel Nicolaus discharged Hornyak based on those allegations for violating firm policy. FINRA further alleged that Hornyak engaged in unauthorized trading and unsuitable short-term trading in Unit Investment Trusts (“UIT”). FINRA requested on-the-record testimony from Hornyak, however, Hornyak refused to comply and failed to appear for that questioning. As a result of his failing to cooperate with an investigation, FINRA permanently barred Hornyak from the financial industry. Hornyak consented to FINRA’s findings while neither admitting nor denying the allegations against him.

Hornyak was employed as a registered representative by Stifel Nicolaus from March 2006 through January 2014. Prior to that, Hornyak was employed in Purchase, New York by Morgan Stanley, Inc., from January 1998 through March 2006. According to FINRA, Hornyak’s CRD shows several customer complaints against him accusing Hornyak of securities violations including excessive trading (“churning”), unsuitable investments and unauthorized trading. He was also the subject of two employment terminations for cause (one as noted above). Furthermore, customers have settled disputes against Hornyak in the amounts of $90,000, $50,000 and $10,000.

Silver Law Group Investigates Arthur Jacob, CPA and Innovative Business Solutions, LLC

October 8, 2015 | Silver Law Group

According to recent SEC allegations, from approximately mid-2009 through at least July 2014, Jacob and Innovative Business Solutions, LLC (“IBS”), which Jacob owns and controls, engaged in a fraudulent scheme involving material misrepresentations and omissions and other deceptive devices and practices. Jacob engaged in this scheme in order to obtain and retain investment advisory clients and thereby collect advisory fees.

For at least five years, Jacob (alone and acting through IBS) routinely made false statements and omissions to current clients, prospective clients, and others, where he:

concealed his 2003 disbarment by the State of Maryland for misappropriating client funds, making false statements under oath, making numerous false statements to Bar Counsel, filing false tax returns on behalf of a client, willfully violating a court order, and

Palm Beach Gardens Broker Ralph Oelbermann Permanently Barred by OFR And FINRA

October 7, 2015 | Silver Law Group

Broker Ralph Oelbermann (CRD# 1962900) was permanently barred by the Florida Office of Financial Regulation (“OFR”) and fined $110,000 by state regulators commencing on October 24, 2014, for failing to respond to a Complaint by the OFR . He was terminated after customers allegedly reported unauthorized trading in their accounts. The Complaint that was brought by the OFR alleged that Oelbermann falsified customer account documents and conducted fraudulent securities transactions. Furthermore, Oelbermann was permanently barred by FINRA commencing on May 20, 2015, for failing to respond to a FINRA request for information, pursuant to FINRA Rule 9552(d). Oelbermann is permanently barred from association with any FINRA member in any capacity. He failed to request termination of his suspension within 3 months of the date of his Notice of Suspension, and therefore, was automatically barred by FINRA (FINRA Rule 9552(h)).

Oelbermann first became a registered securities broker in 1989 and was registered with the following securities firms from 1989-2013: Hibbard Brown & Co., Inc. (New York, NY ), Corporate Securities Group, Inc. (St. Louis, MO), Investors Associates, Inc. (Hackensack, NJ), Worthington Capital Group, Inc. (Garden City, NY), First Union Securities Financial Network, Inc. . (St. Louis, MO), Gunnallen Financial, Inc. (Palm Beach Gardens, FL), National Securities Corp. (Boca Raton, FL), Securities America, Inc. (Palm Beach Gardens, FL), LPL Financial LLC (Palm Beach Gardens, FL), and J.W. Cole Financial, Inc. (Palm Beach Gardens, FL).

According to FINRA, in September, 2013, Oelbermann was discharged by his employer, LPL Financial, for unauthorized trading involving mutual funds. He also had additional customer complaints filed against him in 2001 and 2002 for allegations concerning misrepresentation, fraud, excessive and unauthorized trading, and unsuitability. In these cases, the customers were awarded reparations.