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Articles Tagged with FINRA

National Securities Corporation: Frequent Customer Disputes with FINRA on silverlaw.comHow the company has violated or been accused of violating FINRA regulations

It is always important for investors to have a good understanding of the financial professionals they work with. Before handing over money to anyone, brokers should be vetted properly. This is why the Financial Industry Regulatory Authority (FINRA) created its BrokerCheck reports.

Not only do these provide good information on where brokers are licensed and their work histories, but they also reveal customer disputes, discharges, and alleged improper activity. But these reports don’t just cover brokers – they also include their member firms.

In February 2017, after approval by the SEC, the Financial Industry Regulatory Authority (FINRA) put into effective two initiatives: a new rule and an amendment to an old one.

Rule 2165 (Financial Exploitation of Specified Adults) allows member financial professionals or firms to place temporary holds on securities or the disbursements of funds for customers who are believed to be victims of financial exploitation.

Amendments to Rule 4512 (Customer Account Information) now require members to make efforts to get the name and contact information for a trusted contact person pertaining to a customer’s account.


The broker is accused of violating FINRA rules by borrowing money from a client

In May of this year, the Financial Industry Regulatory Authority (FINRA) contacted broker Christopher Anthony Fernan to get information involving a customer dispute. Because he failed to respond to the agency, he received a three-month suspension, which was lifted on September 20.

Fernan has been accused of borrowing $11,500 from a customer and only paying back $4,000. When Fernan’s firm – Salomon Whitney Financial – learned about his actions from the client in February of 2017, Fernan was fired.


Allegations against the former broker include unauthorized trading, unsuitability, and fraud, among others

With 38 years of experience in the securities industry, Boca Raton-based Stoever, Glass & Company, Inc. broker Larry Charles Wolfe has a total of 14 disclosures listed on his Financial Industry Regulatory Authority (FINRA) BrokerCheck report.

Most recently, in June 2017, Wolfe received a $5,000 fine and 15-day suspension from participating in the securities industry for allegedly exercising discretion in the accounts of customers. He is reported to have submitted sell orders to sell one particular security in each customer account without obtaining prior written authorization from the customers or written approval of the accounts as discretionary from his member firm.


Schaedler is alleged to have exercised undue influence with elderly client owning $2.3 million-dollar estate.

After 16 years in the securities industry, Wells Fargo Clearing Services broker James R. Schaedler is now indefinitely barred by the Financial Industry Regulatory Authority (FINRA). According to his FINRA BrokerCheck report, Schaedler was discharged by Wells Fargo Clearing Services in January 2017 for allegedly allowing his daughter to receive funds via check from a client, the majority of which were subsequently received by Schaedler himself.

Then in June 2017, a FINRA disciplinary action was filed which stated, “FINRA commenced an investigation in January 2016 into allegations that Schaedler exercised influence over a former elderly client, who ultimately amended her trust making Schaedler a partial beneficiary and the residual beneficiary of her $2.3 million-dollar estate. The investigation was later expanded to include allegations that Schaedler also improperly received a $200,000 gift from a second elderly client.”


The New York broker has been charged with numerous violations, including misappropriation

Though he’s currently not registered with a firm, Demitrios Hallas may never be allowed to work as a broker again. According to the SEC, from March 2014 to May 2016, Hallas violated a variety of anti-fraud provisions by recommending unsuitable investments, not performing his due diligence on these products, and misappropriating thousands of dollars.

The SEC complaint alleges that Hallas bought and sold daily leveraged Exchange-Traded Funds and Notes for several customers, even though they weren’t suitable investments. In addition, Hallas did not fully understand how these products worked or the risks involved. While accumulating $128,000 in fees and commissions for himself and his firm, his customers lost around $150,000 in total.


Outside business activities involving elderly clients cost him his career

As of April 2017, Timothy David Ballard is no longer allowed to act as a broker or have anything to do with firms that sell securities to the public. It was then that he was permanently barred by the Financial Industry Regulatory Authority (FINRA).

Ballard had three months to appeal a suspension from FINRA, but because he failed to do so, the agency had no choice but to bar him. The suspension and subsequent barring were related to Ballard’s outside business activity. For a year, Ballard worked at Sunrise Senior Living in Danville, CA, while reportedly also selling securities to residents of the center through his firm, Securities America, Inc. out of Livermore, CA.


Failure to respond to regulatory agency requests ends the securities industry career of this New Jersey-based broker

According to the Financial Industry Regulatory Authority (FINRA), David Aaron Seigerman failed to respond to the agency’s requests for information concerning his compliance with arbitration awards or settlement agreements with his customers.

In two separate complaints, Seigerman’s customers filed claims against the broker for allegedly executing unauthorized transactions within their accounts, failing to follow instructions, and breach of fiduciary duty. Allegations against Seigerman also include “selling away,” which is when a broker recommends outside investments that are not authorized by his member firm.


The Clearwater, FL broker reportedly failed to disclose his Power of Attorney over an elderly customer

For a decade, John Patrick Wheeler reportedly acted as Power of Attorney for an elderly client. In that time, he is reported to have received over $7,000 for his services, obtained via checks he wrote against the client’s checking account. And because the Financial Industry Regulatory Authority (FINRA) states he didn’t tell his firm about this, a couple of things happened.

First, in June of 2015, Wheeler was fired from his job at Raymond James Financial Services, Inc. His reported actions – which included writing a check to himself after the client died – were clear violations of firm policy.


In April, we brought you the story of Kelly Althar, a broker who received a permanent ban from the Financial Industry Regulatory Authority (FINRA). Here is additional information that explains why FINRA made this ruling.

While working for the Financial West Group, Althar reportedly began making investments for an elderly client who started with $308,000. Between April of 2011 and March of 2014, FINRA states that Althar made several investments for the express purpose of generating commissions. This unethical practice is known as churning. In fact, Althar is reported to have bought, sold, and then repurchased the same security in just a small timeframe.

In December of 2012, Althar reportedly bought 700 shares of a real estate investment trust (REIT) and then just two months later, sold them for a loss of $261. After another two months, almost 800 shares of the same REIT were repurchased. Six weeks later, FINRA reports that Althar sold them, this time for a loss of over $8,100. Those trades netted Althar more than $3,000 in commissions.

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