Securities Arbitration Lawyers Blog

James E. Scott Permanently Barred from Securities Industry by FINRA

August 24, 2015 | Silver Law Group

Barred for allegedly aiding and abetting violation of federal securities law

After 16 years in the securities industry, James E. Scott has been permanently barred from acting as a broker or otherwise associating with firms that sell securities to the public. Scott was most recently registered with International Assets Advisory, LLC.

According to the FINRA BrokerCheck website, Scott worked as a long-time sales assistant for an individual broker referred to in the disciplinary action as “RO.” From April 2012 through December 2012, Scott allegedly aided and abetted RO to continue acting as a broker – engaging in the recommendation and sale of securities transactions – in the state of Texas.

Broker Focus: Broker Peter Yao Permanently Barred from Securities Industry

August 24, 2015 | Silver Law Group

Failure to respond to FINRA request for information ends Yao’s securities career

After only 8 years in the securities industry, broker Peter Yao, most recently registered with Morgan Stanley out of Seattle, Washington, has been permanently barred by FINRA. In short, this action by FINRA means Peter Yao may no longer act as a broker or otherwise associate with firms that sell securities to the public.

Why was he barred? According to the FINRA BrokerCheck website, Yao failed to respond to a regulatory agency request for information. This follows a customer dispute from July 21, 2014 in which the customer alleged that Yao abused his relationship by convincing the customer to make a loan to another customer and made false promises of repayment. In that claim, the customer requested $120,000 in damages. This dispute is still pending.

1st Discount Brokerage, Inc., Mark Miller, Alan Miller Censured and Fined by FINRA

August 24, 2015 | Silver Law Group

Failed to follow Securities Act requirements

Lake Worth, Florida-based 1st Discount Brokerage, Inc along with Naples, Florida-based Alan Miller and Overland Park, Kansas-based Mark Miller are all players in a FINRA disciplinary action, according to the June 2015 FINRA Disciplinary Action Report.

Both Alan Miller and Mark Miller consented to the sanctions and entry of the findings, without admitting or denying the findings, that their firm did not follow appropriate Securities Act requirements when executing sales of large blocks of low-priced securities frequently referred to as penny stocks.

Alleged Manipulative Trading of Securities Lands Firm and Brokers in FINRA Complaint

August 24, 2015 | Silver Law Group

Meyers Associates, L.P., George Johnson, Joseph Mahalick and Christopher Wynne all named in FINRA complaint

In the June 2015 FINRA Disciplinary Actions report, one firm and three brokers were named in a FINRA complaint alleging numerous violations that include manipulative trading of securities.

According to the complaint, Meyers Associates, L.P., George Johnson, Joseph Mahalick and Christopher Wynne were all named as respondents. The report alleges that Johnson willfully violated SEC rules by soliciting some customers to buy stocks while at the same time soliciting others to sell the same stock, all at inflated prices. As part of this scenario, both Johnson and Wynne allegedly provided firm customers with information regarding the stocks that contained misleading information. The stock was a penny stock called Ice Web, Inc. (OTCBB.IWEB)

FINRA Warns Investors About Utilizing Automated Investment Tools

August 23, 2015 | Silver Law Group

Earlier this year, the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) released an investor alert related to automated investor tools. While these types of tools provide benefits to investors, they also come with certain risks and limitations.

What are the Risks and Benefits?

Automated investment tools have been utilized by financial professionals for several decades. They include, but are not limited to, personal financial planning tools, portfolio selection or asset optimization services, and online investment management programs. Professionals in the financial industry use them to help build and manage the portfolios of customers.

Investors should be Aware of Bond Liquidity

August 22, 2015 | Silver Law Group

Recently, the Financial Industry Regulatory Authority (FINRA) published an alert for investors relating to bond liquidity. For most individuals who have bonds as part of their portfolio of investments, the liquidity of those bonds is not usually an issue that is considered. But, understanding bond liquidity can be important, particularly in times of market volatility.

What is Bond Liquidity?

Liquidity relates to the ease or difficulty of selling an investment with minimal impact on the price. The easier it is to buy and sell an investment, the more liquid it is. The most liquid assets are considered to be similar to cash because their prices maintain relative price stability when sold on the market. Some of the ways liquidity can be decreased is where there is an imbalance between the number of buyers and sellers or price volatility.

Mutual Fund Sales Violations

August 21, 2015 | Silver Law Group

Improper mutual fund switching and failing to provide mutual fund sales breakpoints can constitute violations of the Financial Industry Regulatory Authority (FINRA). These violations can lead to FINRA arbitration claims, which can result in significant damages being assessed against stockbrokers and financial advisors. Further, these violations can lead to financial loss for investors.

Switching and Breakpoint Violations

Mutual funds are an investment made up of funds that are collected from several investors that are used in order to invest in securities such as stocks, bonds, money market instruments, and similar assets. They are operated by money managers who invest the fund’s capital with the goal of producing capital gains for the investors of the funds. Mutual funds provide investment diversity for an investor, without having to purchase stock from several companies.

J. P. Turner Associates Turning Elsewhere After Firm Closure

August 19, 2015 | Silver Law Group

Cetera Financial Group is placing advisers at Summit and other firms

Independent financial adviser network Cetera Financial Group has taken steps toward relocating advisers at J. P. Turner & Co. after making the decision to close the firm. According to Investment News, about 50 percent of its current advisers have been invited to join Summit Brokerage Services Inc. while the remainder are reportedly being redistributed elsewhere among the firms under Cetera’s umbrella.

The firm’s closure may come as little surprise to those who are aware of its reputation. Investment News InvestmentNews reports Pershing LLC did not want to allow J.P. Turner on its platform. Pershing provides “global financial solutions” to advisers and broker-dealers, according to its website.

Douglas William Finlay Jr. Suspended and Fined by FINRA

August 19, 2015 | Silver Law Group

Allegations include falsifying documents

Douglas William Finlay Jr. is facing an 18-month suspension and fine of more than $15,000 to be paid later, according to FINRA.

According to the disciplinary action documents, Finlay allegedly falsified a customer’s forms by claiming her net worth was more than $1.3 million, when in fact it was about $135,000. On the same form, he allegedly claimed the customer’s income was $150,000 when it was actually $70,000. These alleged falsifications resulted in the firm having inaccurate forms and led to another allegation of recommending an unsuitable transaction.

Class Action Suit Against Citigroup Results in $13.5 Million Settlement

August 17, 2015 | Silver Law Group

Bank accused of misleading investors in proprietary alternative investments

A settlement has been reached in a class action against Citigroup, Inc. resulting in a $13.5 million payout by the banking giant. According to Law360, papers filed August 10, 2015 indicate Citigroup allegedly misled investors by allowing them to buy into the bank’s Corporate Special Opportunities fund without disclosing risky debt – debt that resulted in losses over $400 million.

In the October 2012 complaint filed by plaintiffs David Beach and Christopher Kelly, Citigroup is accused of misleading investors about trades made in the debt of ProSeiben, a German media company. According to the suit, Citigroup was to govern the fund, but violated scaling and concentration restrictions on investments.