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Adviser Stuart Henley Sanctioned by Regulator Over Trading Activity

April 9, 2021 | by Staff Attorney

Adviser Stuart Henley, previously employed at Calton and Associates, Inc. (Calton), has been subject to a customer complaint, discharged for his handling of client accounts, and was suspended and fined by the Financial Industry Regulatory Authority (FINRA). Additionally, Henley has also been subject to a tax lien. His most recent customer complaint alleges churning, excessive trading, and unsuitable trading.

According to a BrokerCheck report, in September 2016, a customer alleged that Henley excessively traded their account to gain commission. The matter was settled for $800,000. Moreover, in March 2018, Morgan Stanley discharged Henley for engaging in unauthorized trading. Thereafter, FINRA sanctioned Henley and he consented to findings that he exercised discretion in an elderly customer’s account without receiving acceptance of the account as discretionary by his member firm. Further, FINRA stated that although Henley had been given express or implied authority to exercise discretion in the account, the customer did not provide written authorization for Henley to exercise discretion. Moreover, according to FINRA Henley provided inaccurate responses on annual compliance questionnaires submitted to the firm by falsely indicating that he not exercised discretion in any customer account.

Gregory P. Washington of Merrill Lynch Has an Investment Complaint

January 12, 2021 | by Staff Attorney

Gregory P. Washington (CRD # 5420613) is a financial advisor at Merrill Lynch in Washington, DC. Gregory Washington has 10 years of experience and started in the securities industry in 2009 and has previously worked for such companies as Aegis Capital Corp, Spartan Capital Securities and Maxim Group.

In March of 2011 Mr. Washington was part of a civil judgement which resulted in a tax lien of $57,739 and in August of 2007 he had a civil lien for $1,612.64. His criminal record consists of one count Petit Larceny which is a class A misdemeanor, Disorderly conduct which came with a $250 fine and a $100 surcharge fee.

In September of 2018, Financial Industry Regulatory Authority (FINRA) released information about a dispute between Mr. Washington and one of his clients in the sum of just over $6.5 million dollars. Investor allegations include claims of churning, unsuitable investments, misrepresentation and breach of fiduciary duties. All of this information can be found on Finra.org/brokercheck. A $6.5 million claim is very significant and the types of claims presented are discussed below.

FS Energy & Power Fund Investor Losses – Recovery Options Update

November 30, 2020 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP represent investors who have lost millions in are investigating investor losses in Franklin Square Energy & Power Fund (FS Energy & Power) a business development company (BDC). When our firm first reported on this fund back in 2018 the FS Energy & Power fund was priced at $5.12 per share based on a tender offer down from its $10 offering. Now secondary market sources price FS Energy & Power at $1.10 while the sponsor claims the fund is worth $3.32. Oftentimes the sponsor value significantly lags the secondary market value.

According to the firm’s website, FS Energy is designed to provide income and growth. It invests primarily in the debt and, to a lesser extent, equity securities of private U.S. energy and power companies.

Our firm often handles cases involving direct participation products (DPPs), private placements, Non-Traded REITs, and other alternative investments. These products are almost always unsuitable for middle class investors. In addition, the brokers who sell them are paid additional commission in order to hype inferior quality investments providing perverse incentives for brokers to sell high risk and low reward investments.

Advisor Todd Esh Barred By SEC Over BirdDog Investment Fraud – Investor Recovery Options

June 21, 2020 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Todd Esh (Esh) has been accused by a financial regulator of engaging in the fraudulent sale of securities among other allegations. According to records kept by The Financial Industry Regulatory Authority (FINRA) Esh was employed by his prior employer LPL Financial LLC (LPL Financial) prior to being investigated concerning his activities. If you have been a victim of Esh’s alleged misconduct our firm may be able to assist you in recovering funds.

In April 2020, The SEC brought an action in the U.S. District Court for the Western District of Missouri, Western Division against Todd Esh and others. The SEC alleges that the defendants engaged in a fraudulent securities offering orchestrated by Phillip Hudnall, with help from Esh, operating through BirdDog Business, LLC and BirdDog Oil Equipment entities that Hudnall and Esh founded and controlled. According to the SEC, Hudnall and Esh raised more than $3.6 million by selling promissory notes issued by BirdDog to investors. Esh and other allegedly promised that they would use investor funds to buy and refurbish used oil and gas equipment which BirdDog would then resell at a profit. However, the SEC claims that Hudnall misappropriated most of investors’ money and squandered the rest on a bogus equipment deal.

The SEC claims that the defendants promised that the notes would pay a 30% return after just nine months to investors and also emphasized the safety of the investment, promising investors that their principal would be secured by a first priority security interest in specific oil and gas equipment. Hudnall and BirdDog further assured investors, according to the SEC, that they had experience and had done these sorts of transactions before. In offering materials provided to investors the defendants highlighted two purportedly profitable equipment transactions that they had already completed. But the SEC determined that these representations regarding previous deals were lies and, the two completed transactions described in BirdDog’s term sheet were fake. In addition to misrepresenting their experience, the SEC found that defendants were not using investor funds as promised. In fact, the SEC claims that defendants made only one attempt at investing BirdDog’s funds as promised ending in a spectacular failure.

Advisor Robert Buffington Accused of Churning by Multiple Clients

May 26, 2020 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Robert Buffington (Buffington), formerly associated with Aegis Capital Corp. (Aegis Capital), has been subject to at least four customer complaints during his career. Several of those complaints against Buffington concern allegations of high frequency trading activity also referred to as churning or excessive trading among other securities laws violations.

In March 2020 a customer complained that Buffington violated the securities laws by alleging that Buffington engaged in sales practice violations related to unsuitability, breach of contract, and breach of fiduciary duty. The claim is currently pending and seeks $642,224 in damages.

In January 2020 a customer complained that Buffington violated the securities laws by alleging that Buffington engaged in sales practice violations related to unsuitability, churning, common law fraud, breach of contract, and breach of fiduciary duty. The claim is currently pending.

In January 2020 a customer complained that Buffington violated the securities laws by alleging that Buffington engaged in sales practice violations from November 2018 through the date of filing related to unsuitability, churning, common law fraud, breach of contract, and breach of fiduciary duty. The claim is currently pending.

Advisor Marc Linsky Accused of Recommending GPB Capital

May 15, 2020 | by Staff Attorney

Advisor Marc Linsky (Linsky), currently employed by ProEquities, Inc. (ProEquities) has been subject to at least one customer complaint during the course of his career. According to a BrokerCheck report one of the customer complaints appears to concern fraudulent GPB Capital Holdings (GPB Capital) related investments.

GPB Capital is facing multiple accusations of being a Ponzi scheme, an ongoing U.S. Securities and Exchange Commission (SEC) and FBI investigations, and even GPB’s chief compliance officier being indicted for illegally obtaining information on the SEC’s investigation. Now even Volkswagen and Toyota are threatening to pull the plug on GPB Capital auto dealerships. While advisors have been telling investors to do absolutely nothing and just hang in there – this is nothing more than just additional poor advice. In November 2019 GPB Capital’s admitted that no financial audit would occur anytime in the near future. The firm has admitted that it has never been profitable and has merely returned investor capital in the past in order to fake a successful business model. In sum, investors now know there is nothing to hang onto. By the day, advisor recommendations to do nothing appear to be completely self-serving, out of the loop, and not in the interest of the investor.

In January 2020 a customer complained that Linsky violated the securities laws by alleging that Linsky engaged in sales practice violations related to negligence, breach of fiduciary duty, violation of Pennsylvania Securities Act, violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, and breach of contract in relation to investment recommendation in GPB Auto made by representative in October of 2016. The claim alleges $80,000 in damages and is currently pending.

Our firm has analyzed the GPB Capital offerings and believe that brokerage firms did not review GPB Capital offerings in any significant detail. Any serious due diligence would have revealed that GPB Capital was a dubious offering destined to fail. In complaints filed with The Financial Industry Regulatory Authority (FINRA) our clients have alleged that GPB Capital’s scam was highly predictable and easy to spot. Nearly every aspect of the offering raised unanswerable questions from GPB Capital’s senior management, fantastical business claims, and intra-fund lending practices.

Rena Morris Has Complaints Over Tenant-In-Common (TIC) Real Estate Sales Practices

May 6, 2020 | by Staff Attorney

Advisor Rena Morris (Morris), currently employed by Lighthouse Capital Group, LLC (Lighthouse Capital Group, LLC), has been subject to at least two customer complaints during the course of her career. According to a BrokerCheck one of the customer complaints concerns private placement sales of Tenant-in-Common (TIC) real estate products. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high-risk products.

In December 2019 a customer complained that Morris violated the securities laws by alleging that Morris engaged in sales practice violations by conducting limited due diligence regarding a DST investment in 2015. The claim alleges $798,350 and is currently pending.

TIC investments have led to devastating investor losses and are in almost all cases unsuitable products. The near certainty of failure of investing in TICs as a whole has led to the product virtually disappearing as an offered investment from most reputable brokerage firms. According to InvestmentNews “At the height of the TIC market in 2006, 71 sponsors raised $3.65 billion in equity from TICs and DSTs…TICs now are all but extinct because of the fallout from the credit crisis.” In fact, TICs recommendations have been a major contributor to bankrupting brokerage firms. For example, 43 of the 92 broker-dealers that sold TICs sponsored by DBSI Inc., a company whose executives were later charged with running a Ponzi scheme, a staggering 47% of firms that sold DBSI are no longer in business.

Stephen Holt Has Complaints Over Tenant-In-Common (TIC) Real Estate Sales Practices

May 4, 2020 | by Staff Attorney

Advisor Stephen Holt (Holt), currently employed by Lighthouse Capital Group, LLC (Lighthouse Capital Group, LLC), has been subject to at least two customer complaints during the course of his career. According to a BrokerCheck those customer complaints concern private placement sales of Tenant-in-Common (TIC) real estate products. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high-risk products.

In February 2020 a customer complained that Holt violated the securities laws by alleging that Holt engaged in sales practice violations by conducting limited due diligence regarding a DST investment in 2015. The claim alleges $227,847 and is currently pending.

In December 2019 a customer complained that Holt violated the securities laws by alleging that Holt engaged in sales practice violations by conducting limited due diligence regarding a DST investment in 2015. The claim alleges $168,370 and is currently pending.

TIC investments have led to devastating investor losses and are in almost all cases unsuitable products. The near certainty of failure of investing in TICs as a whole has led to the product virtually disappearing as an offered investment from most reputable brokerage firms. According to InvestmentNews “At the height of the TIC market in 2006, 71 sponsors raised $3.65 billion in equity from TICs and DSTs…TICs now are all but extinct because of the fallout from the credit crisis.” In fact, TICs recommendations have been a major contributor to bankrupting brokerage firms. For example, 43 of the 92 broker-dealers that sold TICs sponsored by DBSI Inc., a company whose executives were later charged with running a Ponzi scheme, a staggering 47% of firms that sold DBSI are no longer in business.

Advisor Darren Oglesby Has Potential Complaint Regarding GPB Capital

April 12, 2020 | by Staff Attorney

Advisor Darren Oglesby (Oglesby), currently employed by Money Concepts Capital Corp. (Money Concepts) has been subject to at least four customer complaints during the course of his career. According to a BrokerCheck report one of the customer complaints that may concern fraudulent GPB Capital Holdings (GPB Capital) related investments.

GPB Capital is facing multiple accusations of being a Ponzi scheme, an ongoing U.S. Securities and Exchange Commission (SEC) and FBI investigations, and even GPB’s chief compliance officier being indicted for illegally obtaining information on the SEC’s investigation. Now even Volkswagen and Toyota are threatening to pull the plug on GPB Capital auto dealerships. While advisors have been telling investors to do absolutely nothing and just hang in there – this is nothing more than just additional poor advice. In November 2019 GPB Capital’s admitted that no financial audit would occur anytime in the near future. The firm has admitted that it has never been profitable and has merely returned investor capital in the past in order to fake a successful business model. In sum, investors now know there is nothing to hang onto. By the day, advisor recommendations to do nothing appear to be completely self-serving, out of the loop, and not in the interest of the investor.

In August 2019 a customer complained that Oglesby violated the securities laws by alleging that Hoidas engaged in sales practice violations related to a claim with FINRA that an investment was an unsuitable product, breach of contract and breach of fiduciary duty. The claim alleges $100,000 in damages and is currently pending.

Advisors Beg Clients to Wait it Out While GPB Capital Collapses

December 16, 2019 | by Staff Attorney

Our firm has been contacted by hundreds of clients that have been defrauded in GPB Capital Holdings (GPB Capital) related investments. One common element in our firm’s contact with GPB Capital investors is the advisor’s recommendation to victims – do absolutely nothing. The advisors recommendation is expressed in phrases like “the audits will come out”, “GPB Capital is a completely transparent company and not a scam”, and sometimes “just hang in there.”

However, in November GPB Capital’s patience game crumbled and the firm admitted that no financial audit would occur anytime in the near future. In sum, investors now know there is nothing to hang onto. Advisors have no counter talking points to weigh against multiple accusations of being a Ponzi scheme, the ongoing U.S. Securities and Exchange Commission (SEC) and FBI investigations, and even GPB’s chief compliance officer being indicted for illegally obtaining information on the SEC’s investigation. Now even Volkswagen and Toyota are threatening to pull the plug on GPB Capital auto dealerships. By the day, advisor recommendations to do nothing appear to be completely self-serving, out of the loop, and not in the interest of the investor.

Our firm has analyzed the GPB Capital offerings and believe that brokerage firms did not review GPB Capital offerings in any significant detail. Any serious due diligence would have revealed that GPB Capital was a dubious offering destined to fail. In complaints filed with The Financial Industry Regulatory Authority (FINRA) our clients have alleged that GPB Capital’s scam was highly predictable and easy to spot. Nearly every aspect of the offering raised unanswerable questions from GPB Capital’s senior management, fantastical business claims, and intra-fund lending practices.