Securities Arbitration Lawyers Blog

Boca Raton Oppenheimer Employees Settle SEC Investigation

August 11, 2015 | Silver Law Group

Each faces a one-year suspension for alleged unregistered sale of penny stocks

On Thursday, the Securities and Exchange Commission announced settlements in the cases of three Oppenheimer & Co. employees in Boca Raton, Florida. Scott A. Eisler, Arthur M. Lewis and Robert Okin allegedly were involved in the unregistered sale of more than 2.5 billion shares of penny stocks for a customer in 2009 and 2010.

The investigation alleges that Eisler should have conducted an inquiry into the customer’s trading activity, as it raised red flags that could point to illegal activity. According to the SEC, the proceeds from these transactions amounted to about $12 million, with Oppenheimer making more than $588,000 in commissions.

UBS Puerto Rico Under Federal Investigation for Alleged Violations

August 10, 2015 | Silver Law Group

Investigation focuses on one UBS financial adviser in particular

In a securities filing on July 28, 2015, the Swiss banking giant UBS AG reported that federal authorities are investigating one of its financial advisers and some of its customers for allegedly violating loan agreements and bank policies in Puerto Rico.

According to a Law360 release, the bank’s “second-quarter report included the news that it is responding to requests from the U.S. Securities and Exchange Commission and was aware of a U.S. Department of Justice criminal inquiry into the practice of unnamed customers and a UBS financial adviser of using loans backed by securities to invest in more securities, which is prohibited by bank policy and regulation.”

SEC Charges 54Freedom, Inc. with Securities Fraud

August 10, 2015 | Silver Law Group

The Securities and Exchange Commission (SEC) had announced it has charged two individuals and eight companies with fraud in relation to company securities and what was described as “charitable gift annuities.” The complaint was filed in the U.S. district court in Syracuse, New York.

Allegations of Investment Fraud

One of the defendants is James P. Griffin, the founder and Chief Executive Officer (CEO) of 54Freedom Inc. (54Freedom). Both Griffin and the company are located in Cazenovia, New York. 54Freedom was initially formed to sell insurance products to Americans with disabilities. However, after several years, the defendants changed the company’s purported business plan to focus on the sale of its charitable gift annuities. Throughout the company’s existence, the SEC claims the defendants provided unrealistic financial projections to prospective investors.

AlphaBridge Capital Management Charged By SEC for Fraudulent Fund Valuation Scheme

August 5, 2015 | Silver Law Group

Hedge fund firm owners agree to $5 million combined settlement

On June 1, 2015 the Securities and Exchange Commission charged Greenwich, Connecticut-based AlphaBridge Capital Management and its two owners with fraudulently inflating the prices of securities in funds they managed. These inflated valuations caused the funds to pay higher management and performance fees to AlphaBridge.

According to the SEC news release, AlphaBridge Capital Management and its owners – Thomas T. Kutzen and Michael J. Carino – “told investors and its auditor that it obtained independent price quotes from broker-dealers for certain unlisted, thinly-traded residential mortgage-backed securities.” In fact, what the firm did was give “internally-derived valuations to broker-dealers to pass off as their own.”

Giovanni Acevedo, of Voya Financial Advisors, Inc., Accused of Converting Funds

August 4, 2015 | Silver Law Group

Disciplinary action pending against Wilton Manors, FL financial advisor

Giovanni Acevedo could be facing disciplinary action from FINRA after a complaint that he allegedly converted more than $160,000 in customer funds. According to the report, he allegedly told a customer he would invest a $68,000 check she wrote to the company according to her instructions. He allegedly told her to leave 21 blank signed checks with him, resulting in a total of $145,848.42 converted to what is purported to be his own personal account or one of which he is a beneficiary, according to FINRA.

The official complaint, which was filed on April 8, asks that upon the conclusion that the allegations are proven as fact Acevedo be subject to sanctions according to FINRA Rule 8310, namely disgorgement, but the FINRA manual also allows for suspension or expulsion of a member’s registration.

Class Action Suit Sheds Light on Alleged NSC Negligence

August 3, 2015 | Silver Law Group

NSC listed as defendant after misinformation allegedly harms investors

A class action lawsuit filed in October 2014 seeks to right the wrongs done to investors when an Australian energy company went public last June. The suit also names National Securities Corporation (NSC), as one of the defendants listed in the suit, which served as the book-writing manager and underwriter of CBD Energy’s public offering.

To set the scene, it is important to have an understanding of the parties involved. CBD Energy (CBDE), a Sydney-based corporation, provides “clean, renewable and cost-effective sources of energy,” according to the suit. CBD Energy went public in June 2014 with 1.81 million shares valued at $4 per share, for a total sum of $7.24 million. This public offering was based primarily on the work done by NSC by preparing the corporation to go public.

Christopher Veale Under Investigation From FINRA After Churning Allegations

July 31, 2015 | Silver Law Group

Disciplinary action Pending

In April, FINRA initiated a regulatory investigation after Christopher Frederic Veale, most recently employed by Legend Securities, Inc., allegedly refused to provide documents requested by the agency in response to alleged rule violations. The purported violations involve business and outside business activities, as well as a potential violation of FINRA disclosure requirements in regard to outstanding liens, of which he has a great sum, according to FINRA.

Veale’s 18-year career in the securities industry has been fraught with dispute, both with FINRA and with customers. He has been employed by 18 firms, seven of which have since been expelled by FINRA, according to its website. Amongst other firms, Veale has been employed at John Thomas Financial, Meyers Associates, LP, and Blackwall Capital Markets, Inc.

Silver Law Group Investigates FINRA-Barred Broker Thomas Buck

July 30, 2015 | Silver Law Group

Silver Law Group is investigating Indiana-based stockbroker Thomas Buck, who earlier this week was barred by the Financial Industry Regulatory Authority (FINRA) from associating with any FINRA member firm and was accused by FINRA of improperly charging customers and engaging in unauthorized trading. Mr. Buck, a former top broker for Bank of America Merrill Lynch from 1981 until early-2015, was most recently employed by RBC Wealth Management.

According to FINRA, Buck oversaw $1.3 billion in assets while at Merrill Lynch, which made him Merrill’s top broker in Indiana. Buck is alleged to have almost exclusively steered his clients into using commission-based accounts since at least 2009 despite the fact that it would have been less expensive for the clients to remain in fee-based accounts. In addition, Buck is believed to have placed trades on behalf of clients without obtaining proper authorizations, something that is prohibited under FINRA standards.

“He at times unilaterally placed trades in customer accounts without getting the customers’ acquiescence in advance, or even after placing the trade,” FINRA wrote. “In other instances, customers explicitly or implicitly allowed him to place trades in their account without prior discussion. Buck did not obtain written authorization to do so from either the customers or Merrill Lynch.”

Jon Cox Barred From Securities Industry After FINRA Launches Investigation

July 28, 2015 | Silver Law Group

Investigation follows termination from LPL Financial

Jon Lawrence Cox, who has been in the securities industry since June 1990, according to FINRA documents, has been barred as of April 29 after allegedly failing to respond to three written requests from FINRA to provide information to aid an investigation into allegations against him.

Cox was discharged from LPL Financial after allegedly violating policies about outside business activities, according to a disclosure made by the firm. After receiving this information, FINRA launched its own investigation into whether those activities violated its rules as well. FINRA requested information from Cox, who allegedly did not provide it, leading to his barring.

Two LPL Financial LLC Brokers, Thomas Caniford and Andrew Carter, Permanently Barred by FINRA

July 27, 2015 | Silver Law Group

Both brokers barred following termination from same firm

One broker had over 30 years’ experience in the securities industry. One broker had only one year of experience in the securities industry. Yet both brokers were terminated from LPL Financial LLC within a month of each other.

According to the FINRA BrokerCheck website, both Thomas H. Caniford and Andrew M. Carter were terminated earlier this year from the firm for what seem to be fairly similar reasons.