Securities Attorney

Jeanette Adcock Sanctioned by FINRA

December 21, 2017 | by Staff Attorney

According to BrokerCheck records kept by the Financial Industry Regulatory Authority (FINRA), broker Jeanette Adcock (Adcock) has been sanctioned for allegedly not complying with Illinois Securities Law.

Additionally, Adcock has been subject to three customer disputes in 2017. Moreover, In April 2017, Adcock was “permitted” to resign from Wayne Hummer Investments because she “failed to forward a written customer complaint to her supervisor or compliance department as required.”

In November 2017, a customer alleged that Adcock made misleading statements regarding a risky investment. The customer is requesting $25,000 in damages in this pending dispute.

Broker George Warner Sanctioned Over Altering Client Records

December 8, 2017 | by Staff Attorney

According to BrokerCheck records financial advisor George Warner (Warner), currently associated with Chelsea Financial Services (Chelsea Financial), has been subject to one customer complaint, one regulatory action, and two terminations for cause. According to records kept by The Financial Industry Regulatory Authority (FINRA), in June 2013, LPL Financial LLC (LPL Financial) terminated Warner for cause alleging that he obtained client signatures on black account transfer forms. Thereafter, Warner was terminated from NFP Advisors Services (NFP Advisors) under similar circumstances. NFP Adviosrs claimed in November 2014 that Warner corrected client documents after the client had signed them.

In April 2017, FINRA sanctioned Warner stated that Warner altered various customer documents on at least five occasions after the documents had already been signed by the customers. FINRA found that Warner corrected or included the customer’s anticipated liquidity needs, net worth, liquid net worth, and/or annual income on new account forms, alternative investment disclosure forms, and an IRA application.

Often times, brokers change client information or have clients sign documents in blank in order to use false information to purchase products that the client is otherwise not qualified to purchase.

Advisor Jeffrey Smith Sanctioned Over Forged Account Documents

October 26, 2017 | by Staff Attorney

According to BrokerCheck records financial advisor Jeffrey Smith (Smith), formerly associated with Accelerated Capital Group (Accelerated Capital), has been subject to five customer complaints and two regulatory actions. According to records kept by The Financial Industry Regulatory Authority (FINRA) Smith has been accused by customers of unsuitable investment advice, securities fraud, and excessive trading among other claims.

The most recent regulatory action occurred in September 2017. FINRA found that Smith maintained and utilized pre-signed and altered forms to conduct his securities business. FINRA determined that Smith’s conduct caused his brokerage firm to have inaccurate books and records. FINRA alleged that Smith had three customers sign blank forms and then made photocopies of some of the blank-signed forms so that he could reuse the customers’ signatures. FINRA found that Smith then utilized these blank-signed forms to effect transactions.

In 2011 FINRA sanctioned Smith for failing to supervise brokers and enforce the firm’s supervisory procedures.

Susan Welo Sanctioned By the State of North Dakota Over Securities Advice

October 12, 2017 | by Staff Attorney

Former Cetera Advisor Networks LLC (Cetera) broker Susan Welo (Welo) has been subject to nine customer complaints, one employment separation for cause, and one regulatory action. According to a BrokerCheck report Welo was terminated by Cetera after the firm alleged that Welo failed to disclose to firm that Welo provided a loan to a client while at a prior broker-dealer. In addition, Cetera claimed that Welo violated firm policies by accepting blank signed forms from clients and permitting assistant to sign representative’s name to various documents.

In addition, the State of North Dakota alleged that Welo acted as an unregistered securities agent by handling client funds and make investment recommendations.

Many of the complaints concern alternative investments, private placements, and direct participation products (DPPs) such as non-traded real estate investment trusts (REITs). Our firm has experience handling investor losses caused by these products.

Broker Investigation: Financial Advisor James Dresselaers

October 3, 2017 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker James Dresselaers (Dresselaers) is under FINRA investigation and subject to one customer complaint. Dresselaers is currently employed by H. Beck, Inc. (H. Beck). The FINRA investigation is looking into potential violations of NASD Rules 2310 and 2110 or Rules 2111 and 2010 relating to the suitability of recommendations to purchase securities made to one customer. In December 2015 a customer filed a complaint alleging Dresselaers that recommended unsuitable investments in exchange traded funds and equity securities.

A common problem with exchange traded funds is a subset of investments called leveraged exchanged traded funds (Non-Traditional ETFs). As a background, Non-Traditional ETFs behave drastically different and have different risk qualities from traditional ETFs. While traditional ETFs seek to mirror an index or benchmark, Non-Traditional ETFs use a combination of derivatives instruments and debt to multiply returns on underlining assets, often attempting to generate 2 to 3 times the return of the underlining asset class. Non-Traditional ETFs are also used to earn the inverse result of the return of the benchmark.

However, the risks of holding Non-Traditional ETFs go beyond merely multiplying the return on the index. Instead, Non-Traditional ETFs are generally designed to be used only for short term trading as opposed to traditional ETFs. The use of leverage employed by these funds causes their long-term values to be dramatically different than the underlying benchmark over long periods of time. For example, between December 1, 2008, and April 30, 2009, the Dow Jones U.S. Oil & Gas Index gained two percent while the ProShares Ultra Oil and Gas, a fund seeking to deliver twice the index’s daily return fell six percent. In another example, the ProShares UltraShort Oil and Gas, seeks to deliver twice the inverse of the index’s daily return fell by 26 percent over the same period.

Advisor Todd Ryman Subject to Multiple Customer Complaints

September 20, 2017 | by Staff Attorney

According to BrokerCheck records Todd Ryman (Ryman), now associated with SunTrust Investment Services, Inc. (SunTrust), has been subject to six customer complaints and one regulatory action in his career. According to records kept by The Financial Industry Regulatory Authority (FINRA) Ryman has been accused by customers of unsuitable investment advice in a variety of securities including equities, private equity investment funds, and other types of investment vehicles. Some customers have also alleged unauthorized trading, misrepresentations and failure to follow instructions, among other claims.

One customer complaint filed in November 2016 alleged an unsuitable investment in a private equity fund resulting in $250,000 in damages. The claim was settled for $205,193.

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.

Broker David Silberg Subject to Multiple Customer Complaints

July 24, 2017 | by Staff Attorney

The investment fraud lawyers of Gana Weinstein LLP are examining multiple customer disputes filed with the Financial Industry Regulatory Authority (FINRA) against broker David Silberg (Silberg). According to BrokerCheck, Silberg has a multitude of disclosures concerning: churning, excessive trading, unauthorized trading, unsuitability, and breach of fiduciary duty. His BrokerCheck records also show 2 disclosures concerning an employment separation after allegations.

The most recent customer complaint filed against Silberg occured in August 2016. The customer alleged that Silberg made unsuitable recommendations to the client’s account. Additionally, the broker allegedly misrepresented and omitted material facts regarding an investment in a corporate debt security. The alleged damages were worth $100,000 and the case was settled for $29,750.00.

In November 2009, another customer complaint was filed against Silberg alleging that during his employment at Gunnallen Financial, the broker failed to supervise, engaged in unauthorized trading, and made unsuitable investments to their account. The alleged damages were worth $375,000 and the case was settled for $50,000.

Broker Clay Hoffman Barred by FINRA

July 21, 2017 | by Staff Attorney

The investment lawyers of Gana Weinstein LLP are investigating the allegations made by The Financial Industry Regulatory Authority (FINRA) against barred broker Clay Hoffman. In June 2016, Hoffman was suspended by FINRA for his alleged failure to respond to FINRA’s request for information. Hoffman was later barred in November 2016 for his alleged failure to respond to multiple requests for documents and information related to an investigation.

Prior to the most recent suspension, Hoffman’s license as a broker was revoked and suspended, according to BrokerCheck. During May 2016, Hoffman alleged failed to pay a $5,000 fine for a previous case, which resulted in the revocation of his license. Additionally, Hoffman’s broker license was suspended during February 2016 due to the findings that allege that Hoffman engaged unauthorized business practices. Allegedly, Hoffman executed discretionary transactions in a customer’s account without any written authorization from the customer or firm.

In April 2015, a customer complaint was filed against Hoffman for alleged misrepresentation, unsuitability, and unauthorized trading. During his employment at SunTrust Investment and Summit Brokerage Services, Hoffman allegedly caused a loss for his client due to the misrepresentation of Mutual Funds. The alleged damages were $234,697.00 and the case settled at $90,000.

Broker Louis Frederick Scherschel Subject To Customer Complaint

May 23, 2017 | by Staff Attorney

The securities and investment lawyers of Gana Weinstein LLP are investigating a customer complaint and an employment separation after allegations filed with the Financial Industry Regulatory Authority (FINRA) again broker Louis Frederick Scherschel (Scherschel). According to FINRA’s BrokerCheck records for Scherschel, there is a disclosure on his record for a customer complaint that resulted in arbitration. In October 2015, a customer complaint alleged that Scherschel made unsuitable sales of leveraged EFTs and failed to follower the customer’s instructions to implement sell stops. The original requested damages amount was $500,000 and the case was settled in September 2016 for $295,000.

In September 2015, Scherschel was discharged from his position at Sigma Financial Corporation for failing to comply with the company’s correspondence policy for leveraged ETFs.

Scherschel entered the securities industry in 2009. He was previously registered with:

Broker Investigation: Claims Against Broker Swan Sihua Shen

April 25, 2017 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Swan Sihua Shen (Shen) also known as Swan Sihua Zhang. According to BrokerCheck records there are at least six disclosures on Shen’s record including customer complaints, multiple regulatory actions, and one employment separation from CUNA Brokerage Services.

The most recent regulatory action against Shen was filed by the Maine office of Securities in October 2016 alleging that she failed to disclose history records so as a result was ordered for heightened supervision for 2 years.

In February 2015, the State of Massachusetts filed a claim against Swan Shen alleging that she repeatedly violated firm policies by copying and pasting client signatures, and altering forms which was precipitated by her termination from CBS in August 2013.