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Articles Tagged with securities violations

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According to FINRA Disciplinary actions for October 2015, the following individuals were suspended from FINRA for failing to comply with a FINRA arbitration award or settlement agreement pursuant to FINRA rules:

NAME

FORMER EMPLOYERS

  James Curtis Ackerman   Sloan Securities Corp
  Aplan Securities, Inc.
  Robert Joseph Altemus   Merrill Lynch, Pierce, Fenner & Smith Inc
  Citigroup Global Markets Inc.
  John Francis Clancy   UBS Financial Services Inc.
  BB&T Investment Services, Inc.
  Scott Alan Dascani   Ameriprise Financial Services, Inc.
  GunnAllen Financial, Inc.
  Matthew DiGregorio   Aegis Capital Corp.
  J.D. Nicholas & Associates, Inc.
  Hugh Monroe Dyson Jr.   Ameriprise Financial Services, Inc.
  Ameriprise Advisor Services, Inc.
  Peter Alex Gouzos   Hunter Scott Financial LLC
  Dawson James Securities
  William Albert Hansen   Wells Fargo Advisors, LLC
  Chase Investment Services Corp.
  Donna Marie Jenkins   International Assets Advisory, LLC
  Anderson & Strudwick, Inc.
  Jason Eric Mininger   Kovack Securities Inc.
  Wedbush Securities Inc.
  Scott Cameron Nicol   L.M. Kohn & Company
  Merrill Lynch, Pierce, Fenner & Smith Inc.
  John Morgan Pickens Jr.   United Brokerage Services, Inc
  Edward Jones
  Francisco Xavier Savigne   Wells Fargo Advisors, LLC
  Morgan Stanley Smith Barney
  Michael Edward Wallace   PreferredTrade, Inc.
  Montrose Capital Management Ltd.

Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

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According to FINRA Disciplinary actions for October 2015, the following individuals were suspended from FINRA and cannot currently work for a FINRA brokerage firm for failing to provide FINRA with information it requested or to keep information current with FINRA pursuant to FINRA rules:

NAME FORMER EMPLOYERS
  Modesto Biney   Wells Fargo Advisors, LLC
  Michael Joseph Cassano   Metlife Securities Inc.
  Eduardo Jhonattan Chacon Melgarejo   J.P. Morgan Securities LLC
  Alisha Chahal
  Johnnie L. Christopher Jr.   J.P. Morgan Securities LLC
  Chase Investment Services Corp.
  Ina E. Collazo   J.P. Morgan Securities LLC
  Chase Investment Services Corp.
  Stephen Anthony Dalla Torre   PNC Investments
  Wachovia Securities, LLC
  Andrea Lynn Fayette
  Alain J. Florestan   Caldwell International Securities
  Brookstone Securities, Inc.
  Ricardo Francois   Caldwell International Securities
  PHD Capital
  Honetta C. Kao   Meyers Associates, L.P.
  Caldwell International Securities
  Sean Thomas Lopez   J.P. Morgan Securities LLC
  Albert Manzo   J.P. Morgan Securities LLC
  Andrew Marzec   Newbridge Securities Corporation
  Global Arena Capital Corp
  Richard Allen McGuire   Newport Coast Securities, Inc.
  Financial West Group
  Frederick Eugene Monroe Jr.   Voya Financial Advisors, Inc.
  Northwestern Mutual Investment Services
  Mary Pearl Reed   Wells Fargo Advisors, LLC
  Morgan Stanley DW Inc.
  Jessica Claire Sampel
  Matthew J. Semetulskis   J.P. Morgan Securities LLC
  Grace W. Smith   TIAA-CREF Individual & Institutional         Services, LLC
  Wells Fargo Advisors, LLC
  Michael Terrence Snedeker   Investors Capital Corp.
  Banc of America Investment Services, Inc.
  James Coleman Starks   Caldwell International Securities
  PHD Capital
  Marat Zeltser aka Matt Zeltser   Meyers Associates, L.P.
  Caldwell International Securities

Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

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According to FINRA Teutonico failed to observe high standards of commercial honor.

Patrick Teutonico

According to the Financial Industry Regulatory Authority (FINRA) Broker Check website, broker Patrick Teutonico is once again in the spotlight. Over the course of 17 years in the securities industry, Teutonico has 10 disclosures to report.

To provide some background, brokers are required by FINRA – known as the industry watchdog – to disclose different types of events, from customer complaints to IRS tax liens, judgments and even criminal matters. As such, Teutonico has 10 on his record, many of which involve allegations of unsuitable and unauthorized transactions. According to InvestmentNews, only about 12% of financial advisors have any type of disclosure event on their records. Therefore, it would seem the number of disclosures by Teutonico is relatively high.

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Last week, the Financial Industry Regulatory Authority (FINRA) filed charges against Newport Coast Securities, Inc. (“Newport Coast”) and some of its current and former registered representatives, accusing them of using margin and risky securities to artificially generate huge commissions for themselves while wiping out most of their customers’ investment capital.

Newport Coast, a New York-based broker-dealer, by and through brokers Douglas Leone, Andre LaBarbera, David Levy, Antontio Costanzo, and Donald Bartlet, allegedly churned the accounts of twenty four customers — many of whom are retirees — causing more than $1,000,000 in losses to the investor-clients.  “Churning,” as it is known in the industry, is the act of a broker who excessively and needlessly engages in trading in a client’s account primarily to generate commissions for the broker on each trade without regard for the client’s financial well-being.  Churning is an illegal and unethical practice that violates SEC rules and securities laws.  The brokers are also purported to have created new account forms for their victimized clients that misstated the clients’ net worth, investment experience, and objectives; and two of the brokers (Levy and Costanzo) attempted to dissuade several customers from cooperating with FINRA’s investigation into the matter — all of which was done to cover up the illegality of the brokers’ excessive activity in the client accounts.

According to FINRA, former Newport Coast supervisors Marc Arena and Roman Luckey saw what was transpiring but took no meaningful steps to curtail the misconduct.  To the contrary, the firm’s managers, supervisors, and the former President of the company allegedly profited through overrides on the churned accounts.

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According to the Sun Sentinel, the Palm Beach County Sheriff’s Office has charged Sultaine Valcius of Boynton Beach with fraud after taking $1.4 million from a 93 year-old man that hired her as a medical aide.

The Sun Sentinel reports Sultaine Valcius, 48, is charged with organized scheme to defraud for taking the money from her employer for at least five years.  Ms. Valcius requested the money for various reasons, including, nursing school tuition, purchasing a home as an investment property, repairing a home in Haiti that had been destroyed by an earthquake and for general financial assistance due to her husband purportedly losing his job.  However, Ms. Valcius was allegedly never enrolled in school, the house that was purchased was used as the primary residence by Ms. Valcius and her husband was never laid off from the job she claimed he had.

Ms. Valcius convinced the elderly gentleman to write her numerous checks ranging from a couple of hundreds of dollars to tens of thousands of dollars from two of his brokerage accounts maintained at two national broker/dealers.    However, even if convicted, it is unlikely that Ms. Valcius will have the adequate resources to repay the victim.

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Silver Law Group settles a Class Action Complaint on behalf of a group of investors which generally alleged Regions Bank assisted U.S. Pension Trust Corp (“USPT”) in the sale of unregistered securities and failed to properly disclose the high fees and costs of the program. Plaintiffs pursued a class action because many investors were located internationally and a class action was an appropriate vehicle to pursue damages.  The SEC had previously charged USPT with violating the federal securities laws and entered judgment against USPT in September 2010.  Plaintiffs alleged Defendants violated the Florida Securities and Investor Protection Act and aided and abetted the unregistered sale of securities, amongst other claims.

The victims were primarily from Latin America and over 5,000 investors were identified as potential class members.  A United States District Court Judge in Miami appointed Silver Law Group and its co-counsel as attorneys to represent the Plaintiffs.  The Plaintiffs further alleged Regions advised USPT on the design and content of marketing materials, had a role in drafting documents, participated in sales conventions and was paid as the trustee on USPT trust accounts.  The class action ultimately settled for approximately $13 million.  The case was reported by the Daily Business Review.

If you have questions about your legal rights, or have been the victim of investment fraud, please contact Scott Silver of the Silver Law Group for a free consultation at ssilver@silverlaw.com or Toll Free at (800) 975-4345.

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The Financial Industry Regulatory Authority (FINRA) has recently sponsored a new securities industry rule that makes the information included on customer account statements more transparent.  Transparent commissions will likely lower the total up-front commissions a broker can collect on certain popular securities as investors realize the steep fees they are paying.

Nontraded real estate investment trusts (REITs) are among the most popular investment products sold by registered representatives and their broker-dealers.  Typically sold for less than $10 per share, the commission to a rep and the firm in this $1.4 billion “alternative investment” sector of the retail investment market is 7%, though the amount that goes toward the total upfront commission is split amongst several different players involved in selling the REIT.  A problem for investors is that their account statements do not clearly show the breakdown of those commissions or the estimated per-share valuation of their investment — something that the current rules do not require be revealed to them until 18 months after the REIT sponsors stop raising funds.

Under FINRA’s proposed new rule, the time frame in which broker-dealers will have to show investors a true valuation of such purchases will be drastically sped up.  By accelerating that timetable, investors will be provided quicker and much greater transparency in seeing the commissions being charged to them; and industry experts anticipate that broker-dealers are likely to lower the fees they assess to investors on such alternative investments.  Both nontraded REITs and illiquid private placements known as “direct participation programs” (DPPs), which would also fall directly under this new rule, have frequently been criticized for high commissions.

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In July 2013, the U.S. Securities and Exchange Commission (“SEC”) issued a lifetime ban upon Carl Birkelbach, the founder and principal of Birkelbach Investment Securities (headquartered in Chicago, Illinois), which prevents him from participating in any working capacity in the securities industry.  Mr. Birkelbach appealed the SEC’s ban, claiming in part that the SEC exceeded its authority in imposing such a severe penalty upon him.  Earlier this month, the U.S. Court of Appeals for the Seventh Circuit in Chicago denied his appeal and upheld the SEC ban, stating that Mr. Birkelbach’s offenses were sufficiently egregious to warrant the sanction imposed by the SEC.

As the head of Birkelbach Investment Securities, Mr. Birkelbach was required to supervise the trading activities of the company’s registered representatives, including William Murphy.  According to the SEC, Mr. Murphy engaged for years in unauthorized conduct, steering clients into unsuitable investments, and churning in client accounts — all of which Mr. Birkelbach was purportedly aware of.  Despite Mr. Birkelbach’s alleged knowledge of the wrongdoing taking place at his company, he imposed no discipline upon Mr. Murphy, never disapproved of a single trade by Murphy, and never contacted the most egregiously harmed customer to discuss the high volume of trading in the customer’s account.  During the years in question, the revenues from Mr. Murphy’s trading in that account, according to SEC calculations, represented nearly 20% of Birkelbach Investment Securities’ total revenue.  Even when the Financial Industry Regulatory Authority (FINRA) requested that Mr. Birkelbach place Mr. Murphy on heightened supervision, Mr. Birkelbach failed to comply.  As a result, FINRA imposed upon Mr. Birkelbach a punishment that ultimately became a lifetime ban from the securities industry in any capacity, which the SEC subsequently affirmed in its July 2013 ruling.

If you have questions about your legal rights, or have been the victim of investment fraud, please contact Scott Silver of the Silver Law Group for a free consultation at ssilver@silverlaw.com or Toll Free at (800) 975-4345.

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The Financial Industry Regulatory Authority (FINRA) announced a fine against Merrill Lynch, Pierce, Fenner & Smith, Inc. for $8 million for charging excessive mutual fund sales charges for retirement accounts. FINRA also ordered Merrill Lynch to pay $24.4 million in restitution to damaged customers on top of $64 million Merrill Lynch has already compensated damaged investors. According to the FINRA decision, mutual funds offer several classes of shares, each with different sales charges and fees and many mutual funds waive their initial charges for retirement accounts.  However, Merrill Lynch failed to pass these savings on to the investors.

Merrill Lynch’s retail platform frequently offered such discounts to retirement plan accounts and disclosed those waivers in their prospectuses. However, Merrill Lynch failed to frequently pass these savings on to the investors including retirement accounts.  Accordingly, about 41,000 small business retirement plan accounts, and approximately 6,800 charities and 403(b) retirement accounts available to ministers and employees of public schools, either paid sales charges when purchasing Class A shares, or purchased other share classes that unnecessarily subjected them to higher ongoing fees and expenses. Incredibly, in 2006, Merrill Lynch learned its small business retirement plan customers were overpaying, but continued to sell them more costly shares and failed to report the issue to FINRA for more than five years.

If you believe your portfolio was improperly managed or was charged excessive fees or costs, Silver Law Group will analyze your portfolio at no charge.   Additionally, if you have questions about your legal rights, or have been the victim of investment fraud, please contact Scott Silver of the Silver Law Group for a free consultation at ssilver@silverlaw.com or Toll Free at (800) 975-4345.

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The U.S. Securities and Exchange Commission (“SEC”) continued its onslaught against Scott Rothstein associates earlier this month when it filed suit in federal court against Barry R. Bekkedam (“Bekkedam”), Chairman and Chief Executive Officer of investment advisory firm Ballamor Capital Management (“Ballamor”).  The SEC suit follows a growing number of SEC actions against individuals and corporations accused of providing investor funds and assistance to convicted South Florida Ponzi-schemer Scott Rothstein.

The SEC alleges that Bekkedam, through Ballamor, solicited his clients and other prospective investors to invest $100 million into the Banyon Income Fund (“Banyon Fund’”), an enormous hedge fund that primarily financed Rothstein’s Ponzi-scheme operations.  The Banyon Fund was created by Bekkedam and Rothstein investor George Levin to solicit additional funds for Rothstein and, the SEC alleges, bolster Ballamor’s business and protect Levin’s multi-million dollar investments with Rothstein.

In seeking disgorgement and civil penalties against Bekkedam, the SEC details allegations of Bekkedam’s material misstatements and omissions to his customers in connection with the Banyon Fund, as well as misrepresentations about his dealings with George Levin, which the SEC alleges were quid pro quo for Bekkedam’s securing investments in the Banyon Fund.  The SEC also alleges numerous securities law violations.

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