Securities Lawyers Blog

Broker Investigation: Customer Complaints Against Advisor William Baumner

April 11, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker William Baumner (Baumner). According to BrokerCheck records Baumner has been subject to at least seven customer complaints and five judgements or liens. The customer complaints against Baumner allege securities law violations that including unsuitable investments, breach of fiduciary duty, and misrepresentations among other claims. According to the disclosures, many of the complaints involve private companies, private placements, penny stocks, and one complaint mentions a recommendation for CTX Virtual.

In December 2015 a customer filed a complaint alleging $100,000 in damage stemming from misrepresentations for a stock between February 2014 and January 2016. The complaint has been denied. Baumner has disclosed several large tax liens including a $5,825 lien in January 2015. Substantial judgements and liens on a broker’s record can reveal a financial incentive for the broker to recommend high commission products or services. A broker’s inability to handle their personal finances has also been found to be relevant in helping investors determine if they should allow the broker to handle their finances.

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.

Investors File Excessive Trading Complaints Against Broker James Hayne

April 4, 2016 | by Staff Attorney

The securities fraud lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker James Hayne (Hayne). According to BrokerCheck records Hayne has been the subject of at least six customer complaints and one Judgement or lien. The customer complaints against Hayne allege a number of securities law violations including that the broker made unsuitable investments, unauthorized trading, fraud, misrepresentations, and churning (excessive trading) among other claims.

The most recent complaint was filed in February 2016 and alleged that from September 2013 until June 2014 the customer’s account was traded negligently causing $200,000. The complaint is currently pending. In October 2015 another customer alleged that between 2008 and 2013, excessive trading occurred in in the customer’s family trust account. The customer also alleged that the investments were unsuitable and caused $750,000. The claim is currently pending.

When brokers engage in excessive trading, sometimes referred to as churning, the broker will typical trade in and out of securities, sometimes even the same stock, many times over a short period of time. Often times the account will completely “turnover” every month with different securities. This type of investment trading activity in the client’s account serves no reasonable purpose for the investor and is engaged in only to profit the broker through the generation of commissions created by the trades. Churning is considered a species of securities fraud. The elements of the claim are excessive transactions of securities, broker control over the account, and intent to defraud the investor by obtaining unlawful commissions. A similar claim, excessive trading, under FINRA’s suitability rule involves just the first two elements. Certain commonly used measures and ratios used to determine churning help evaluate a churning claim. These ratios look at how frequently the account is turned over plus whether or not the expenses incurred in the account made it unreasonable that the investor could reasonably profit from the activity.

Investors File Unauthorized Trading Complaints Against Broker Lance Shaw

April 4, 2016 | by Staff Attorney

The securities fraud lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Lance Shaw (Shaw). According to BrokerCheck records Shaw has been the subject of at least eight customer complaints and one criminal matter. The customer complaints against Shaw allege a number of securities law violations including that the broker made unsuitable investments, unauthorized trading, and churning (excessive trading) among other claims.

The most recent complaint was filed in August 2015 and alleged that the customer’s account was traded without authority. The complaint is currently pending. Also in August 2015 another customer complained that unauthorized trading occurred causing $26,874 in damages. The complaint is pending. A third complaint also filed in August 2015 makes similar allegations that allegedly caused $56,166. This complaint has been settled.

When brokers engage in excessive trading, sometimes referred to as churning, the broker will typical trade in and out of securities, sometimes even the same stock, many times over a short period of time. Often times the account will completely “turnover” every month with different securities. This type of investment trading activity in the client’s account serves no reasonable purpose for the investor and is engaged in only to profit the broker through the generation of commissions created by the trades. Churning is considered a species of securities fraud. The elements of the claim are excessive transactions of securities, broker control over the account, and intent to defraud the investor by obtaining unlawful commissions. A similar claim, excessive trading, under FINRA’s suitability rule involves just the first two elements. Certain commonly used measures and ratios used to determine churning help evaluate a churning claim. These ratios look at how frequently the account is turned over plus whether or not the expenses incurred in the account made it unreasonable that the investor could reasonably profit from the activity.

Customers File Complaint Against Broker Charles Geraci Over Alternative Investment Recommendations

April 4, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Charles Geraci (Geraci). According to BrokerCheck records Geraci is subject to six customer complaints. The customer complaints against Geraci allege securities law violations that including unsuitable investments, breach of fiduciary duty, fraud, misrepresentations, and negligence among other claims. Most of the claims appear to largely relate to allegations regarding the inappropriate sale of direct participation products such as limited partnerships, equipment leasing, oil & gas investments, and non-traded real estate investment trusts (Non-Traded REITs) and also variable annuities. The complaints specify certain oil & gas programs and United Mortgage Trust (UMT).

Our firm has represented many clients in these types of products. All of these investments come with high costs and historically have underperformed even safe benchmarks, like U.S. treasury bonds. For example, products like Non-Traded REITs, equipment leasing, variable annuities, and oil & gas private placements are only appropriate for a narrow band of investors under certain conditions due to the high costs, illiquidity, and huge redemption charges of the products. However, due to the high commissions brokers earn on these products they sell them to investors who cannot profit from them. Further, investor often fail to understand that they have lost money until many years after agreeing to the investment. In sum, for all of their costs and risks, investors in these programs are in no way additionally compensated for the loss of liquidity, risks, or cost.

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 Investigation: VSR Financial Broker Timothy Hobbs

April 4, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Timothy Hobbs (Hobbs). According to BrokerCheck records Hobbs is subject to three customer complaints. The customer complaints against Hobbs allege securities law violations that including unsuitable investments and breach of fiduciary duty among other claims. One of the most recent claims appear to largely relate to allegations regarding the inappropriate sale of direct participation products such as limited partnerships, equipment leasing, oil & gas investments, and non-traded real estate investment trusts (Non-Traded REITs) and also variable annuities.

Our firm has represented many clients in these types of products. All of these investments come with high costs and historically have underperformed even safe benchmarks, like U.S. treasury bonds. For example, products like variable annuities are only appropriate for a narrow band of investors under certain conditions due to the high costs, illiquidity, and huge redemption charges of the products. However, due to the high commissions brokers earn on these products they sell them to investors who cannot profit from them. Further, investor often fail to understand that they have lost money until many years after agreeing to the investment. In sum, for all of their costs and risks, investors in these programs are in no way additionally compensated for the loss of liquidity, risks, or cost.

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 Investigation: Ameriprise Financial Broker William Utanski

April 4, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker William Utanski (Utanski). According to BrokerCheck records Utanski is subject to three customer complaints. The customer complaints against Utanski allege securities law violations that including unsuitable investments and churning (excessive trading) among other claims. The claims appear to largely relate to allegations regarding the inappropriate sale of Dendreon Corporation stock.

One claim that was filed in October 2015 claimed that Utanski made unsuitable investment recommendations in 2011, that included closed-end funds and Dendreon stock. The customer also allege Utanski churned their account suffered compensatory damages of $200,000. The claim is currently pending.

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 Investigation: VSR Financial Broker Robert Hardcastle

March 31, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Robert Hardcastle (Hardcastle). According to BrokerCheck records Hardcastle is subject to 11 customer complaints. The customer complaints against Hardcastle allege securities law violations that including unsuitable investments, misrepresentations, and breach of fiduciary duty among other claims. The claims appear to largely relate to allegations regarding the inappropriate sale of direct participation products such as limited partnerships, equipment leasing, and non-traded real estate investment trusts (Non-Traded REITs) and also variable annuities.

Our firm has represented many clients in these types of products. All of these investments come with high costs and historically have underperformed even safe benchmarks, like U.S. treasury bonds. For example, products like variable annuities are only appropriate for a narrow band of investors under certain conditions due to the high costs, illiquidity, and huge redemption charges of the products. However, due to the high commissions brokers earn on these products they sell them to investors who cannot profit from them. Further, investor often fail to understand that they have lost money until many years after agreeing to the investment. In sum, for all of their costs and risks, investors in these programs are in no way additionally compensated for the loss of liquidity, risks, or cost.

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.

FINRA Bars Broker Wayne Schultz Over Private Securities Transactions

March 31, 2016 | by Staff Attorney

The investment lawyers of Gana Weinstein LLP are investigating a regulatory action brought by the Financial Industry Regulatory Authority (FINRA) against Wayne Schultz (Schultz) (FINRA No. 2015044640601) of Branchburg, New Jersey. According to the FINRA action, Schultz consented to a bar from the securities industry after he failed to provide documents and information requested by FINRA during its investigation concerning certain notes that Schultz had issued to an elderly client. The selling of notes and other investments outside of a brokerage firm constitutes impermissible private securities transactions – a practice known in the industry as “selling away”.

At this time it unclear the nature and scope of Schultz’s outside business activities and private securities transactions. However, according to Schultz’s public records his outside business activities include a law practice. Often times, brokers sell promissory notes and other investments through side businesses as accountants, lawyers, or insurance to clients of those side practices.

Schultz was associated with brokerage firm TFS Securities, Inc. from September 2008 until December 2010. From January 2011 until June 2013 Schultz was registered with Sterne Agee Financial Services, Inc. Finally, from June 2013 until February 2016 Schultz was registered with Adirondack Trading Group LLC.

Securities Investigation: Broker Gregg Templeton

March 31, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Gregg Templeton (Templeton). According to BrokerCheck records Templeton is subject to six customer complaints and one employment separation. The recent customer complaints against Templeton allege securities law violations that including misrepresentations, breach of fiduciary duty, and negligent supervision among other claims. The claims appear to largely relate to allegations regarding promissory notes and penny stocks.

The most recent complaint filed in January 2016 alleges that between December 2013 and May 2015 the customer claims to have been defrauded out of $6,750,000 through misrepresentations in what appear to be penny stocks while Templeton was associated with Oppenheimer & Co. Inc. (Oppenheimer) out of the firm’s New York, New York office location. The dispute is currently pending.

Our firm has represented many clients in who have suffered losses due to inappropriate penny stock trading and manipulation claims. Penny stocks and low priced securities are favorite targets for investment fraud because they are easily manipulated and allow schemers to profit from their victims investments.

FINRA Bars Broker Robert Cross Over Private Securities Transactions

March 31, 2016 | by Staff Attorney

The investment lawyers of Gana Weinstein LLP are investigating a regulatory action brought by the Financial Industry Regulatory Authority (FINRA) against Robert Cross (Cross) (FINRA No. 2014041637201) of Rome, Georgia. Since August 2006, Cross was registered with Allstate Financial Services, LLC, where he resigned on June 28, 2013. On June 19, 2014, Allstate Financial Services filed a Form U5 amendment disclosing that a customer complaint had been filed against Respondent regarding Cross.

Thereafter, FINRA investigated Cross on the grounds that Allstate Financial Services’ Form U5 amendment stated that a customer complained of breach of contract, fraud, conversion, and negligence related to a collateralized bond obligation. FINRA’s investigation involved Cross’ outside business activities, financial reporting obligations, and whether Cross accepted unapproved loans from a customer while engaging in a private securities transaction – otherwise known in the industry as “selling away”. Thereafter, Cross refused to appear on the record to give testimony drawing an automatic bar from the financial industry.

At this time it unclear the nature and scope of Cross’ outside business activities and private securities transactions. However, according to Cross’ public records his outside business activities include Cross, Cross & Sims, Inc. and CCS Property.