Securities Lawyers Blog

Nicolas Barrios Barred From Financial Industry Over Investment Fraud Allegations

September 8, 2019 | by Staff Attorney

The attorneys at Gana Weinstein LLP are currently investigating reports that advisor Nicolas Barrios (Barrios) engaged in undisclosed outside business activities (OBAs) that were not approved by his brokerage firm resulting in potential fraudulent investments. Barrios, formerly registered with UBS Financial Services Inc. (UBS) out of Winter Haven, Florida was barred from the financial industry according to records kept by The Financial Industry Regulatory Authority (FINRA). In addition, Barrios disclosed at least four customer complaints and one employment termination for cause.

In April 2019 UBS terminated Barrios for cause alleging that he was discharged after stating during a firm review: (1) he arranged for client to invest away from firm in private company; (2) he personally invested in that company without firm approval; and (3) he used personal email to communicate with client’s family in an attempt to evade firm detection. UBS claims to have subsequently learned that at least seven of Barrios’ clients moved money from UBS accounts to outside bank accounts from which they wrote checks to an entity with which Barrios is affiliated

In June 2019 FINRA found that Barrios consented to the sanctions and findings that he failed to provide FINRA with requested documents and information in connection with FINRA’s investigation into allegations that Barrios mismanaged and committed fraud with respect to a customer’s account. Accordingly, Barrios was automatically barred from the securities industry.

At this time it is unclear what OBA Barrios engaged in that FINRA was investigating. Barrios’s public disclosures state that he was involved in a auto boat broker dealer business. It is unclear if these OBAs were the subject of FINRA’s investigation.

Craig Siegel Has Excessive Trading Complaints – Suspended By Regulator

July 8, 2019 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Craig Siegel (Siegel) has been subject to at least four customer complaints and one regulatory action during his career. Siegel is formerly employed by Portfolio Advisors Alliance, LLC (Portfolio Advisors). The majority of the customer complaints against Siegel concern allegations of high frequency trading activity also referred to as churning.

In April 2019 Siegel failed to respond to requests by FINRA to provide documents and information and was suspended indefinitely.

In October 2018 a customer complained that Siegel made unsuitable investment recommendations, breach of regulatory requirements, breach of fiduciary duty, breach of contract, negligence, and churning from July 2013 to August 2017. The claim is currently pending.

In April 2018 a customer complained that Siegel violated the securities laws by alleging that the financial advisor engaged in excessive trading, churning, unsuitable transactions, failure to supervise, and respondeat superior. The claim seeks $99,300 in damages and is currently pending.

Alberto Sanchez Barred From the Securities Industry Over Undisclosed Activity

July 2, 2019 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Alberto Sanchez (Sanchez) engaged in undisclosed outside business activities (OBAs) that were not approved by his brokerage firm. Sanchez, formerly registered with SagePoint Financial, Inc. (SagePoint Financial) and MML Investors Services, LLC (MML Investors) out of Fort Lauderdale, Florida was barred from the financial industry according to records kept by The Financial Industry Regulatory Authority (FINRA). In addition, Sanchez disclosed at least two customer complaints.

In June 2019 FINRA found that Sanchez consented to the sanctions and findings that he did not provide documents as requested by FINRA in connection with an investigation concerning his involvement in a potential undisclosed outside business activity. Accordingly, Sanchez was automatically barred from the securities industry.

At this time it is unclear what OBA Sanchez engaged in that FINRA was investigating and whether or not that activity also involved private securities transactions. Sanchez’s public disclosures state that he was involved in a number of OBAs including rental property business, an insurance business, Creative Financial Network, and Health Insurance. It is unclear if these OBAs were the subject of FINRA’s investigation.

Matthew Crafa Has GPB Capital Investment Complaint

July 2, 2019 | by Staff Attorney

Our firm represents multiple clients who have been recommended GPB Capital Holdings (GPB Capital) related investments. GPB invests in a variety of businesses but primarily in auto dealerships and waste management businesses. However, over the past year controversy has embroiled GPB Capital in a saga including multiple regulatory investigations and even an FBI referral which has left investors clueless to the fate of their investments.

According to our investigation Royal Alliance Associates, Inc. (Royal Alliance) and its brokers including Matthew Crafa (Crafa) have recommended GPB Capital private placements to investors.

As a background, financial advisers sold $1.5 billion of these high-risk private placements offered by GPB Capital Holdings. However, GPB Capital told investors in 2018 that virtually none of the firm’s financial reports could be trusted and that in fact the offering had no accurate financial information. Recently, GPB Capital released its own internal analysis and valuation of its funds without providing any evidence to support its findings. As reported by InvestmentNews, the two largest funds offered GPB Holdings II and GPB Automotive Portfolio have declines of 25.4% and 39%. However, some of the other funds, like Armada Waste, faired much worse declining to only 32% of their original value. Again these valuations are provided by GPB Capital and only after a year of accounting mishaps.

Our firm’s investigation has found that brokerage firms failed to conduct due diligence and investigate multiple aspects of GPB Capital’s business including its senior management, fantastical business claims, and intra-fund lending practices. For instance, with respect to GPB Capital’s senior management the company was founded by David Gentile (Gentile). Had brokerage firms investigated GPB Capital’s senior manager it would have found that prior to founding GPB Capital, Gentile’s experience was as a CPA and company advisor with the accounting practice his family ran at Gentile Pismeny & Brengel, LLP (GP&B) in New York. Nonetheless, GPB’s PPMs claimed expertise in these areas. See GPB Holdings II, LP, PPM, pg. 9 (Apr. 13, 2015) (“GPB’s senior management have a great deal of experience investing in the Automotive Retail, Managed IT Services and Life Sciences sectors.”). Any investigation would have revealed that GPB Capital is merely the private equity investment arm of a plain vanilla accounting practice. There is no evidence that GPB Capital’s senior management had the knowledge, industry experience, or investment experience to run the operations of a $1.8 billion dollar mult-asset strategy private equity fund and should not have been entrusted with investor funds.

Benjamin Bourgeois Terminated Over Converting Client Funds – Investor Recovery

July 1, 2019 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Benjamin Bourgeois (Bourgeois) has taken funds from clients and engaged in certain business activities not approved by his brokerage firm. Bourgeois, formerly registered with Commonwealth Financial Network (Commonwealth Financial) out of Metairie, Louisiana has been barred by The Financial Industry Regulatory Authority (FINRA) for failing to answer questions concerning his conduct. In addition, Bourgeois disclosed at least three customer complaints and one termination for cause.

In May 2019 FINRA found that Bourgeois consented to sanctions and findings that he failed to produce documents and information requested by FINRA during the course of an investigation into allegations reported that he borrowed money from a customer, converted customer funds, and committed fraud.

In April 2019 a customer alleged that Bourgeois engaged in conversion of customer funds made by personal check purportedly for investment purposes; employing devices, schemes or artifices to defraud; making untrue statements of material facts; fraud beginning around 2016. The claim alleged $519,500 in damages and is currently pending.

Bourgeois’ CRD disclosures states that Bourgeois has an outside business activity through which he engages in fixed insurance sales.

James Booth Being Investigated For Taking Money From Clients – Investor Recovery

June 30, 2019 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor James Booth (Booth) has taken funds from clients and engaged in certain business activities not approved by his brokerage firm. Booth, formerly registered with LPL Financial, LLC (LPL Financial) out of Norwalk, Connecticut has left LPL Financial and is under investigation by securities regulators. In addition, Booth disclosed at least four customer complaints.

Our firm has been contacted by Booth clients who have been informed that certain funds of clients that they believed were invested with Booth could no longer be located. Upon information and belief, investors have been asked to write out checks to Insurance Trends to invest with Booth and now these funds cannot be located. If you have had this experience with Booth we encourage you to contact our firm for a free consultation.

Booth’s CRD disclosures state that Booth has an outside business activity called Booth Financial Associates and John M Glover Agency.

Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in receiving loans from clients or selling fraudulent securities sales. Booth’s activities in the sale of unapproved investment products – is a practice known in the industry as “selling away” – a serious violation of the securities laws. In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm. Sometimes those investments have some legitimacy but often times these types of investments can end up being Ponzi schemes or the advisor can be engaging in the conversion of funds.

Advisor Shimshon Plotkin Has Complaints Over Alternative Investments

June 28, 2019 | by Staff Attorney

Advisor Shimshon Plotkin (Plotkin), currently employed by Independent Financial Group, LLC (Independent Financial) has been subject to at least seven customer complaints during the course of his career. According to a BrokerCheck report the customer complaints mostly concerns alternative investments such as direct participation products (DPPs) like non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs. The attorneys at Gana Weinstein LLP have extensive experience handling investor losses caused by these types of products.

In June 2016 a customer complained that Plotkin violated the securities laws by alleging that the financial advisor breached their fiduciary duty, negligence, misrepresentations, and breach of contract among other allegations associated non-traded REITs and other DPPs causing $1,000,000 in damages. The claim was settled for $250,000.

In January 2016 a customer complained that Plotkin violated the securities laws by alleging that the financial advisor breached their fiduciary duty among other allegations associated with alternative investments causing. The claim was denied by the brokerage firm.

Stephen Whittaker Discharged By Multiple Firms Over Business Practices

June 27, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Stephen Whittaker (Whittaker), formerly employed by First Financial Equity Corporation (First Financial) and previously with Morgan Stanley has been subject to at least 2 customer complaints, one bankruptcy filing, and two terminations for cause during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Whittaker’s customer complaints allege that Whittaker recommended unsuitable securities recommendations among other allegations of misconduct in the handling of customer accounts.

In May 2012 Whittaker was forced to resign from Morgan Stanley after the firm found that Whittaker communicated with third parties regarding two client accounts without written authorization and his potential involvement in unapproved outside business activities (OBAs).

In April 2015 Whittaker declared bankruptcy. FINRA discloses information concerning a broker’s financial condition because a broker’s inability to handle their own personal finances has also been found to be material information in helping investors determine if they should allow the broker to handle their finances.

In April 2019 Whittaker was terminated by First Financial after the firm found out that Whittaker was engaged in undisclosed business activities including tax planning for firm clients.

Advisor Richard Pittman Has Complaints Over Alternative Investments

June 26, 2019 | by Staff Attorney

Advisor Richard Pittman (Pittman), currently employed by Cetera Advisors LLC (Cetera) has been subject to at least three customer complaints during the course of his career. According to a BrokerCheck report the customer complaints mostly concerns alternative investments such as direct participation products (DPPs) like non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs. The attorneys at Gana Weinstein LLP have extensive experience handling investor losses caused by these types of products.

In October 2018 a customer complained that Pittman violated the securities laws by alleging that the financial advisor made unsuitable investment starting in 2008 among other allegations associated non-traded REITs and other DPPs causing $300,000 in damages. The claim is currently pending.

In August 2018 a customer complained that Pittman violated the securities laws by alleging that the financial advisor made unsuitable investment starting in 2008 among other allegations associated non-traded REITs and other DPPs causing $736,000 in damages. The claim is currently pending.

DDPs such as non-traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments virtually never profit investors. These products are almost always unsuitable for investors because of their high fee and cost structure. Brokers sell these products are paid additional commission in order to hype these inferior quality investments providing a perverse incentives to create an artificial market for products that no honest advisor would sell.

Debra Bourne Has Excessive Trading Customer Complaints

June 25, 2019 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Debra Bourne (Bourne) has been subject to at least five customer complaints during her career. Bourne is formerly employed by First Standard Financial Company LLC (First Standard Financial) and National Securities Corporation (National Securities). The majority of the customer complaints against Bourne concern allegations of high frequency trading activity also referred to as churning.

In April 2019 a customer complained that Bourne violated the securities laws by alleging that the financial advisor engaged in unsuitable and excessive trading causing $2,000,000 in damages. The claim is currently pending.

In March 2019 a customer complained that Bourne violated the securities laws by alleging that the financial advisor engaged in unsuitable trading, excessive trading, breach of fiduciary duty, and negligence among other claims alleged. The claim seeks $300,000 in damages and is currently pending.

In February 2019 a customer complained that Bourne violated the securities laws by alleging that the financial advisor engaged in unsuitable and unauthorized trading causing $668,000 in damages. The claim is currently pending.