The law offices of Gana Weinstein LLP are announcing their investigation into potential securities claims against brokerage firms over sales practices related to the recommendation of exchange traded notes (ETNs) and other structured notes linked to oil & gas and commodities. These products are issued by UBS (NYSE:UBS) under the name ETRACS.
List of Commodity and Oil & Gas releated ETNs
Symbol Fund Name
According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Luigi Mancusi (Mancusi) has been the subject of at least 4 customer complaints. The customer complaints against Mancusi allege securities law violations that claim unauthorized trading, unsuitable investments, misrepresentations, failure to supervise, and breach of fiduciary duty among other claims. The most recent complaint was filed in July 2015, and alleged $250,000 in losses due to unauthorized trading from November 2012 through November 2014. Another complaint was filed in July 2013 where the client alleged fraud and unsuitable investments given the client’s age, risk tolerance, and income need. The claimant alleged $322,000 in damages.
Mancusi entered the securities industry in 1992. From November 2002, until October 2012, Mancusi was associated with Wayne Hummer Investments L.L.C. From September 2012, onward Mancusi has been associated with Oppenheimer & Co. Inc. Mancusi is also associated with David A. Noyes & Company out of the firm’s Lake Forrest, Illinois branch office location.
All advisers have a fundamental responsibility to deal fairly with investors including making suitable investment recommendations. In order to make suitable recommendations the broker must have a reasonable basis for recommending the product or security based upon the broker’s investigation of the investments properties including its benefits, risks, tax consequences, and other relevant factors. In addition, the broker must also understand the customer’s specific investment objectives to determine whether or not the specific product or security being recommended is appropriate for the customer based upon their needs.
The Securities and Exchange Commission issued a press release announcing securities fraud charges against a Florida based purported “investment adviser” Arthur F. Jacob (Jacob) and his firm, Innovative Business Solutions LLC (IBS), for allegedly deceiving clients over a period of at least five years. According to the SEC, the unregistered investment adviser had about 30 client households and approximately $18 million under management.
In the SEC order the agency alleges that from at least mid-2009 through July 2014 Jacob and IBS misrepresented the risks and profitability of investments he purchased for advisory clients. The SEC alleged that Jacob was informed of investment risks of certain exchange traded funds but failed to disclose these risks to clients and told them that the investment strategy he was using was safe, carried low or no risk, and would produce predictable profits when in fact it was not.
For instance, the SEC alleged that Jacob bought and held for long term a highly volatile exchange-traded product (ETP) called the Barclays Bank PLC iPath S&P 500 VIX Short-Term Futures ETN (VXX). The VXX is designed to provide exposure to stock market volatility through futures contracts on the CBOE Volatility Index. However, importantly the VXX does not track the performance of the VIX Index because of the use of futures causes the investment to drift significantly from its benchmark and is therefore inappropriate for long-term holding. Nonetheless, the SEC alleged that Jacob purchased VXX in clients’ accounts in March 2010, and again in the May through July 2010 time period and held the VXX positions in clients’ accounts for years causing steady declines until the investors lost almost all of their investment.
The attorneys at Gana Weinstein LLP are interested in speaking with investors of broker Mark Hughes (Hughes) According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) Hughes has been the subject of at least 7 customer complaints, and 1 regulatory action over the course of his career. The customer complaints against Hughes allege securities law violations that claim excessive trading, unsuitable investments, and unauthorized trading among other claims. The most recent complaint was filed in November 2011, and alleged $500,000 in losses due to unsuitable variable annuities.
The most recent regulatory action was taken by the state of Virginia in 2010, when the state alleged that Hughes violated the states laws by offering and selling leveraged exchanged traded funds (Non-Traditional ETFs) to two Virginia residents when the investment was not suitable for them given their investment objectives, financial situation, risk tolerance, experience, and investment needs. The allegations were settled with the state and resulted in sanctions of $620,000 and the imposition of heightened supervision.
Hughes entered the securities industry in 1993. From June 2004, until November 2007, Hughes was associated with Suntrust Investment Services Inc. From October 2007, until November 2014, Hughes was associated with UBS Financial Services Inc. Presently, Hughes is associated with Oppenheimer & Co. Inc. out of the firm’s Washington, DC branch office location.
The law offices of Gana Weinstein LLP are currently investigating investor losses stemming from brokerage firm recommendations that placed their clients in oil and gas related investments such as partnerships (private placements), master limited partnerships (MLPs), leveraged ETFs, mutual funds, and even individual stocks.
Our offices continue to report on investment losses suffered by investors in energy and oil and gas related investments that become increasingly common recommendations to retail investors in recent years. In a recent Associated Press article, common stories of how investors are pitched by their financial advisors on oil and gas private placements were reported on. Often times these products are pitched as ways to ride the boom in U.S. oil and gas production and receive steady streams of income.
However, most of these investments do not succeed and the promised payments come to a crawl and then cease altogether in a relatively short amount of time. In fact, oil and gas partnerships are created to benefit banks and issuers, not investors. In the case of oil and gas private placements, between 30-35 cents of every dollar invested typically goes towards management fees, syndication fees, and profits to the promoter as general contractor. Any investment where only 65-70% of your money is working for you is lose-lose proposition under anything other than booming market conditions.
The attorneys at Gana Weinstein LLP are interested in speaking with investors of broker Kenneth Bolton. According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) Kenneth Bolton (Bolton) has been the subject of at least 10 customer complaints, and 1 regulatory action, and one employment separation for cause. The customer complaints against Bolton allege securities law violations that including unsuitable investments, fraud, misrepresentations, failure to perform due diligence, violation of federal and state securities laws, and breach of fiduciary duty among other claims.
The most recent complaint was filed in January 2015, and alleged $413,000 in losses due to an unsuitable investment strategy. Another investor in May 2014, claimed $2,700,000 in damages. Some of the customer complaints appear to be in connection with in connection with the sales of tenants-in-common (TICs).
Bolton entered the securities industry in 1983. From March 1995, until August 2007, Bolton was associated with First Montauk Securities Corp. From August 2007, until December 2009, Bolton was associated with National Securities Corporation. Presently, Bolton is associated with Sandlapper Securities, LLC out of the firm’s Greenville, South Carolina branch office location.
The Financial Industry Regulatory Authority (FINRA) brought and enforcement action against broker Tracy Wengert (Wengert) (FINRA No. 2015044289201) resulting in a bar from the securities industry alleging that Wengert failed to provide FINRA staff with information and documents requested. The failure to provide those documents and information to FINRA resulted in an automatic bar from the industry. FINRA’s document requests related to the regulators investigation into claims in February 2015, FINRA enforcement began investigating allegations of misconduct by Wengert in that he opened brokerage accounts outside of the Transamerica Financial Advisors, Inc. (Transamerica) on behalf of customers and placed unsuitable trades in these accounts.
FINRA’s investigation appears to stem from Wengert’s termination from Transamerica in January 2015. At that time Transamerica filed a Form U5 termination notice with FINRA stating in part that the firm discharged Wengert under circumstances where there was allegations that Wengert was alleged to have managed a client account on a discretionary basis without approval or oversight through the firm.
Wengert entered the securities industry in 1999. From April 2002 until January 2012, Wengert was associated with World Group Securities, Inc. Thereafter, from January 2012 until February 2015, Wengert was associated as a registered representative with Transamerica.
According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Robert Yasnis (Yasnis) has been the subject of 3 customer complaints, and 3 regulatory actions. The customer complaints against Yasnis allege securities law violations that claim unauthorized trading among other claims. The most recent complaint was filed in June 2015, and alleged $34,350 in losses due to unauthorized trading in May 2011.
The most recent regulatory action was taken by the state of Florida in 2013, when the state alleged that a material false statement was made on an application for registration resulting in a denial of registration. In 1997, the state of Virginia alleged that Yasnis offered unregistered securities in the state and received a fine. Finally in 1994, the state of Texas revoked Yasnis’ securities license in the state due to allegations that he misled the state concerning the status of registration within the state.
Yasnis entered the securities industry in 1993. From February 2007, until July 2009, Yasnis was associated with Hallmark Investments, Inc. From November 2009, until April 2010, Yasnis was associated with Stephen A. Kohn & Associates, Ltd. Thereafter, from April 2010, until October 2012, Yasnis was associated with Buckman, Buckman & Reid, Inc. From October 2012, until January 2014, Yasnis was associated with Meyers Associates, L.P. Presently, Yasnis is associated with Laidlaw & Company (UK) Ltd. out of the firm’s New York, New York branch office location.
According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Joseph Fedorko (Fedorko) has been the subject of an astonishing 16 customer complaints. The customer complaints against Fedorko allege securities law violations that claim churning and excessive trading, unsuitable investments, unauthorized trading, fraud, misrepresentations, and breach of fiduciary duty among other claims. The most recent complaint was filed in March 2014, and alleged $292,771 in losses due to an unsuitable investment strategy from 2011 until 2013. The case settled for $120,000. Another complaint filed in November 2012, alleged $400,000 in damages stemming from trading that began in 2011. Other complaints against Fedorko when combined allege millions in investor losses.
Fedorko entered the securities industry in 1989. From January 2002, until May 2009, Fedorko was associated with with Oppenheimer & Co. Inc. Presently, Fedorko is associated with Laidlaw & Company (UK) Ltd. out of the firm’s Stamford, Connecticut branch office location.
All advisers have a fundamental responsibility to deal fairly with investors including making suitable investment recommendations. In order to make suitable recommendations the broker must have a reasonable basis for recommending the product or security based upon the broker’s investigation of the investments properties including its benefits, risks, tax consequences, and other relevant factors. In addition, the broker must also understand the customer’s specific investment objectives to determine whether or not the specific product or security being recommended is appropriate for the customer based upon their needs.
According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Timothy Wynne (Wynne) has been the subject of at least 5 customer complaints. The customer complaints against Wynne allege securities law violations that claim churning and excessive trading, unsuitable investments, unauthorized trading, fraud, misrepresentations, and discretionary trading among other claims. The most recent complaint was filed in October 2014, and alleged $500,000 in losses due to churning and excessive commission charges from February 2012 through October 2014. Another complaint filed in July 2014, alleged over $3.3 million in damages caused by unsuitable discretionary trading. Another complaint also filed in July 2014 alleged unsuitable investments in Monticello MN Telecommunication municipal bonds.
Wynne entered the securities industry in 1986. From January 2002, until February 2012, Wynne was associated with with Oppenheimer & Co. Inc. Presently, Wynne is associated with Feltl & Company out of the firm’s Minneapolis, Minnesota branch office location.
Churning is investment trading activity in the client’s account that serves no reasonable purpose for the investor and is transacted solely to profit the broker. The elements to establish a churning claim, which is considered a species of securities fraud, 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.
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