Securities Lawyers Blog

Gana LLP Investigation: Broker Duane Smith

July 31, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Duane Smith (Smith) has been the subject of at least two customer complaint and one employment separation. The customer complaints against Smith allege a number of securities law violations including that the broker made unsuitable investments, negligence, fraud, and breach of fiduciary duty among other claims.

Smith entered the securities industry in 1995 and is both a licensed broker and a principal. From 1995, until September 2008, Smith was registered with Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch). Upon termination from Merrill Lynch the firm filed a Uniform Termination form (Form U5) stating that the reason for the firm’s termination of Smith was due to allegations by the firm that Smith violated the firm’s policies by facilitating a client investment in an account that was held outside of Merrill Lynch, recorded information on blank authorization forms previously signed by a client, and failed to obtain supervisory approval for correspondence that he sent to multiple clients. Thereafter, in March 2014, Smith became associated with Neidger, Tuck, and Bruner, Inc. in Englewood, Colorado.

It is important for investors to know that all advisers have an obligation and 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.

Gana LLP Investigation: Claims Against Broker George Lincoln

July 30, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker George Lincoln (Lincoln) has been the subject of at least three customer complaints, one regulatory action, and one employment separation. The customer complaints against Lincoln allege a number of securities law violations including that the broker made unsuitable investments among other claims.

Lincoln entered the securities industry in 1991. From November 2005, until January 2014, Lincoln was registered with CCO Investment Services Corp. (CCO Investment). In December 2013, CCO Investment filed a Uniform Termination form (Form U5) stating that the reason for the firm’s termination of Lincoln was due to a regulatory action by the state of Vermont alleging violations of the securities laws.

The state of Vermont’s action against Lincoln alleged that the broker altered material information of the books and records of his brokerage firm in order to suggest that his clients were more aggressive and risky investors than their actual circumstances and stated risk tolerances. According to the allegations, Lincoln made these alterations in order to concentrate his client’s investments in certain funds that were unsuitable.

Broker Spotlight: Churning Claims Against Advisor Jason Klabal

July 30, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Jason Klabal (Klabal) has been the subject of at least eight customer complaints six of which have been filed since 2014. The customer complaints against Klabal allege a number of securities law violations including that the broker made unsuitable investments, engaged in churning (excessive trading), misrepresentations, negligence, fraud, and breach of fiduciary duty among other claims.

Klabal entered the securities industry in 1997. From 1999 through October 2008, Klabal was associated with J.P. Turner & Company, L.L.C. (JP Turner). Thereafter from October 2008, until January 2010, Klabal was registered with Mercer Capital LTD. From there, Klabal was associated with Buckman, Buckman & Reid, Inc from January 2010, until August 2011. Finally, Klabal became associated with Legend Securities, Inc. in August 2011.

Pace’s employment separation involved allegations by Global Arena Capital claiming that Pace allowed client information to be taken from the office by another person. The information was later returned to the firm.

JP Turner Broker Homer Vining Suspended for Failing to Comply with an Arbitration Award

July 29, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Homer Vining (Vining) has been the subject of at least one customer complaint and three regulatory actions. The customer complaint against Vining alleges a number of securities law violations including that the broker made misrepresentations concerning penny stocks and a claim of investment sold away from the firm among other claims.

Vining entered the securities industry in 1991. From 2005 through August 2009, Vining was associated with Ameriprise Advisor Services, Inc. Thereafter, from August 2009, until March 2015, Vining was associated with J.P. Turner & Company, L.L.C. (JP Turner).

Vining has three regulatory actions against him. The first is a suspension by FINRA for failing to comply with an arbitration award. The second is also a suspension by FINRA for failing to comply with an arbitration award. The third regulatory action is by the state of Georgia which suspended Vining until the broker comes into good standing with FINRA.

Broker Spotlight: Alexander Capital Broker Anthony Pace

July 29, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Anthony Pace (Pace) has been the subject of at least six customer complaints and one employment seperation. The customer complaint against Pace allege a number of securities law violations including that the broker made unsuitable investments, engaged in churning (excessive trading), misrepresentations, negligence, fraud, breach of fiduciary duty, and failure to execute among other claims.

Pace entered the securities industry in 1994. From 2005 through May 2009, Pace was associated with J.P. Turner & Company, L.L.C. (JP Turner). Thereafter from May 2009, until September 2010, Pace was registered with vFinance Investments, Inc. From there, Pace was associated with Global Arena Capital Corp from September 2010, through April 2015. Finally, Pace became associated with Alexander Capital, L.P. in March 2015.

Pace’s employment separation involved allegations by Global Arena Capital claiming that Pace allowed client information to be taken from the office by another person. The information was later returned to the firm.

Thomas Buck Barred From the Securities Industry Over Unfair Commission Practices

July 28, 2015 | by Staff Attorney

Our firm has been tracking the developments related to Thomas Buck’s termination from Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch), now known as Bank of America, NA (Bank of America) under highly unusual circumstances. (See Top Merrill Lynch Broker Thomas Buck Terminated Under Unusual Circumstances; Update On Broker Thomas Buck Investigation). Now, according to records kept by FINRA, Buck has accepted a bar from the securities industry.

Buck’s downfall played out quickly. Buck was terminated from Merrill Lynch on March 6, 2015, shocking colleagues. At the time of his termination there was only one customer complaint against Buck steaming from a dispute in 2006. Now, over the past four months customers have filed 11 additional complaints against him. All of the complaints have similar allegations against Buck in that the customers allege that during a time period Buck engage in unauthorized trades in corporate debt and equities. Several of the complaints allege excessive trading and misrepresentations.

Buck’s team managed nearly $1.5 billion in investor assets and was one of the Merrill Lynch’s largest producers. According to FINRA, Buck engaged in misrepresentations and other misconduct in the handling of customer accounts. FINRA alleged that beginning by at least 2009, Buck used unethical and improper business practices to generate increased commissions and enhance his status as a top-producing broker. According to FINRA, Buck held customer assets in commission-based accounts instead of fee-based accounts for the sole purpose of generating higher revenues even though he knew that some customers would have paid substantially lower fees by using fee-based accounts. In fact, FINRA goes on to allege that Buck misled customers about the relative costs of fee-based or commission-based trading for their accounts. In addition to these claims FINRA alleged that Buck exercised discretion in customer accounts without written or oral authorization, and made unauthorized trades in certain accounts.

Gana LLP Investigation: Broker James Connors

July 28, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker James Connors (Connors) has been the subject of at least two customer complaints. The customer complaints against Connors allege a number of securities law violations including that the broker made unsuitable investments and engaged in churning (excessive trading) among other claims.

Connors entered the securities industry in 1995. From August 2006 through October 2009, Connors was associated with J.P. Turner & Company, L.L.C. (JP Turner). Thereafter from October 2009, until November 2010, Connors was registered with Brookstone Securities, Inc. Brookstone Securities was thereafter expelled from the industry by FINRA. From there, Connors was associated with Meyers Associates, L.P. Finally, Connors became associated with First Standard Financial Company LLC.

Some of these firms Connors has been associated with have been known to house troublesome brokers. For instance, Meyers Associates has an unusually high number of brokers with complaints on their records. According to FINRA, approximately twelve percent of registered representatives have some form of disclosure on their record. However, as we have previously reported, forty seven out of seventy five, or nearly sixty-three percent of the brokers employed by Meyers Associates, have a marked-up history as revealed by BrokerCheck. Even more disturbing is the fact that of those forty seven brokers have on average of 4.5 disclosure events per broker.

Broker Spotlight: Broker Clarence Patton Jr

July 27, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Clarence Patton Jr (Patton) has been the subject of at least four customer complaints. Customers have filed complaints against Patton alleging a number of securities law violations including that the broker made unsuitable investments, misrepresentations, negligence, fraud, breach of fiduciary duty, unauthorized trading, churning (excessive trading), and failure to execute among other claims.

Patton entered the securities industry in 1991. From 1999 to present Patton has been registered with J.P. Turner & Company, L.L.C. (JP Turner).

It is important for investors to know that all advisers have an obligation and 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.

Gana LLP Investigation: Legend Securities Broker Peter Girgis

July 27, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Peter Girgis (Girgis) has been the subject of at least three customer complaints, several unreported judgement or liens, one employment separation following allegations by his brokerage firm, and two regulatory actions taken by FINRA. Customers have filed complaints against Girgis alleging a number of securities law violations including that the broker made unsuitable investments, fraud, churning (excessive trading), breach of fiduciary duty, and unauthorized trading among other claims.

Bergen entered the securities industry in 2002. From August 2006 until November 2009, Girgis was registered with J.P. Turner & Company, L.L.C. (JP Turner). From there, Girgis was associated with Brookstone Securities, Inc. until June 2012. Thereafter, Girgis was a registered representative of Joseph Gunnar & Co. LLC from June 2012 until June 2013. Finally, Girgis is currently registered with Legend Securities, Inc.

In one of the FINRA actions, FINRA alleged that, while registered through Joseph Gunnar, Girgis caused a violation of Regulation S-P of the Securities Exchange Act of 1934 on the part of his employer firm by sending nonpublic personal information about a customer to an unauthorized individual. In the second FINRA action, the regulator alleged that between February 2011 and January 2013, Girgis failed to disclose and/or timely disclose on his Form U4 four unsatisfied judgments and/or liens including a January 2011 New York income tax warrant of approximately $4,488; a January 2011 New York income tax warrant of approximately $13,418; a November 2011 New York income tax wan-ant of approximately $2,524; and a March 2011 federal income tax warrant of approximately $30,635. Subsequent to these allegations Joseph Gunnar terminated Girgis alleging that the broker violated the conditions of the FINRA action.

New York Attorney General Arrests Advisor Frederick Monroe On Charges of Running a Ponzi Scheme

July 25, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Frederick Monroe (Monroe) has been the subject of at least three customer complaints alleging that the broker misappropriated funds. In total the customers complaint that over $2 million has been taken by the broker. Subsequently, Monroe’s brokerage firm, Voya Financial Advisors (Voya Financial), terminated Monroe due to the allegations. Monroe had been associated with Voya Financial since 2006.

On June 10, 2015, Attorney General Eric T. Schneiderman announced the arrest of Monroe and charging him with stealing over $1 million from investors by fraudulently soliciting them to reinvest their retirement monies in what essentially was a Ponzi scheme. Monroe was accused of luring clients that he provided services to as a financial planner by diverting their monies for his own personal use and paying back earlier investors he had defrauded. Monroe faces up to 25 years in prison.

The New York Attorney General also stated that while the current charges pertain to three victims the investigation has identified at least a dozen individuals who Monroe allegedly defrauded. According to the Attorney General’s felony complaint, Monroe’s fraud was carried by instructing investors to write checks to him personally and then deposited them into his personal operating account. Monroe is alleged to have advertised his services on the Capital Financial Planning, LLC website to “clients who have amassed a significant level of assets and seek to take advantage of advance advisory programs.”