Securities Lawyers Blog

Dana Hawkins Subject to Customer Disputes Over Structured Products

June 10, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Dana Hawkins (Hawkins), currently employed by Centaurus Financial, Inc. (Centaurus Financial) has been subject to three customer complaints. According to records kept by The Financial Industry Regulatory Authority (FINRA), most of Hawkins’ customer complaints allege that Hawkins made unsuitable recommendations in certain structured products.

Our firm has brought cases against brokers for misrepresenting the features of structured products or selling them as a bond alternative. Structured products are typically debt instruments where the payout is based on the underlying stock, equity index, currency, or any reference source. Many, but not all, structured products are advertised as having some principal protection component – meaning that the investor is guaranteed the return of some amount of their initial investment. However, studies have shown that structured products are often best used as a niche product for sophisticated investors employing complicated strategies. The typical investor cannot benefit from these products over traditional investments.

In February 2019 a customer filed a complaint alleging that Hawkins violated the securities laws by, among other things, that Hawkins sold unsuitable investments and several other allegations associated from activity in late 2013 to early 2019. The customer alleged $253,757 in damages. The claim is currently pending.

SEC Brings Action Against Christopher McClure Over Undisclosed Fees

June 7, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Christopher McClure (McClure), currently employed by Westport Capital Markets, LLC (Westport Capital) has been subject to at least two customer complaints and a regulatory action brought by the SEC during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), McClure’s customer complaints allege that McClure breached his fiduciary duty among other allegations.

In December 2017 The Securities and Exchange Commission (SEC) Connecticut-based investment advisory firm and its principal, McClure, with breaching their fiduciary duties and defrauding advisory clients by repeatedly purchasing securities that generated significant amounts of undisclosed compensation.

The SEC’s complaint filed in the U.S. District Court for the District of Connecticut alleged that Westport Capital and McClure invested advisory clients’ funds in risky securities that generated hundreds of thousands of dollars in undisclosed mark-ups for Westport and resulted in more than $1 million in losses for clients. The SEC found that Westport purchased securities from underwriters at a discount to the public offering price and then, acting as a principal for its own account, re-sold those same securities to its advisory clients at higher prices without disclosing the mark-up. The SEC further alleged that Westport and McClure defrauded a client by acting contrary to the client’s express objectives and instead repeatedly investing the client in risky offerings that generated hidden mark-ups. Moreover, the SEC also found that Westport and McClure made false and misleading representations to clients regarding the compensation that Westport would receive from their accounts.

Demos Argyros Subject to Investment Disputes

June 7, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Demos Argyros (Argyros), currently employed by Oppenheimer & Co. Inc. (Oppenheimer) has been subject to at least five customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Argyros’ customer complaints allege that Argyros recommended unsuitable securities recommendations in a variety of products including unsuitable equities and warrants among other allegations of misconduct in the handling of customer accounts.

In February 2019 a customer filed a complaint alleging that Argyros violated the securities laws by, among other things, that Argyros breached his fiduciary duty, negligence, breach of contract relating to unsuitable equities and warrants from May 2008 until November 2016 causing $100,000 in damages. The claim is currently pending.

In April 2017 a customer filed a complaint alleging that Argyros violated the securities laws by, among other things, that Argyros breached his fiduciary duty, churning, excessive fees and missing funds from January 2008 until December 2016 causing $900,000 in damages. The claim settled for $275,000.

Mitchell Black Has Several Variable Annuity Sales Practice Complaints

June 6, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Mitchell Black (Black), currently employed by Ameriprise Financial Services, Inc. (Ameriprise) has been subject to six customer disputes during his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), the majority of customer complaints against Black concerns allegations over variable annuity sales practices.

In March 2019 a customer filed a complaint alleging that Black violated the securities laws by, among other things, that Black recommended inappropriate variable annuities in 2013 and 2014 and misrepresented the associated provisions causing $1,000,000 in damages. The claim was denied by the firm.

In May 2014 a customer filed a complaint alleging that Black violated the securities laws by, among other things, that Black sold unsuitable variable annuities, REITs, and was charged excessive commissions and fees of $40,000. The claim was settled for $24,787.

In March 2011 a customer filed a complaint alleging that Black violated the securities laws by, among other things, that Black sold unsuitable variable annuities, insurance policies, and VULs causing $750,000 in damages. The claim was settled for $126,424.

Merrill Lynch Advisor Jeffrey Smith Subject to Multiple Investment Complaints

June 5, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Jeffrey Smith (Smith), currently employed by Merrill Lynch, Pierce, Fenner & Smith Incorporated (Smith) has been subject to at least eight customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Smith’s customer complaints allege that Smith recommended unsuitable securities recommendations in equity securities among other allegations of misconduct in the handling of customer accounts.

In April 2019 a customer filed a complaint alleging that Smith violated the securities laws by, among other things, that Smith made unsuitable investments and failed to follow instructions. The claim is currently pending.

In February 2019 a customer filed a complaint alleging that Smith violated the securities laws by, among other things, that Smith made unsuitable investments. The claim is currently pending.

In October 2016 a customer filed a complaint alleging that Smith violated the securities laws by, among other things, that Smith made unsuitable recommendations from March 2015 until October 2016 causing damages. The claim settled for $50,000.

Peter Goffin Subject to Multiple Investment Complaints

June 5, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Peter Goffin (Goffin), currently employed by Newbridge Securities Corporation (Newbridge Securities) has been subject to at least nine customer complaints and one regulatory action during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Goffin’s customer complaints allege that Goffin recommended unsuitable securities recommendations in a variety of products including alternative investments among other allegations of misconduct in the handling of customer accounts.

In March 2019 a customer filed a complaint alleging that Goffin violated the securities laws by, among other things, that Goffin breached his fiduciary duty and was negligent in the sale of alternative investments causing $150,000 in damages. The claim is currently pending.

In January 2012 a customer filed a complaint alleging that Goffin violated the securities laws by, among other things, that Goffin made unsuitable investments in a variable annuity causing $30,000 in damages. The claim was denied.

Advisor Michael Lyle Has Annuity Complaints

June 4, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Michael Lyle (Lyle), currently employed by Transamerica Financial Advisors, Inc. (Transamerica) has been subject to four customer complaints and one tax lien during during his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), many of the customer complaints against Lyle concern allegations over variable annuity sales practices.

In January 2019 a customer filed a complaint alleging that Lyle violated the securities laws by, among other things, that the product was misrepresented in that she was told she would receive returns of $7,500 monthly but that Lyle had failed to inform her of the IRS penalties for early withdrawals causing $100,000 in damages. The claim is currently pending.

In June 2018 a customer filed a complaint alleging that Lyle violated the securities laws by, among other things, that the product was unsuitable and that Lyle failed to inform her of the IRS penalty for early withdrawals causing $73,594 in damages. The claim was denied.

Variable annuities are complex financial and insurance products. In fact, the Securities and Exchange Commission (SEC) released a publication entitled: Variable Annuities: What You Should Know encouraging investors to ask questions about the variable annuity before investing. Essentially, a variable annuity is a contract with an insurance company under which the insurer agrees to make periodic payments to you. The investor chooses the investments made in the annuity and value of your variable annuity will vary depending on the performance of the investment options chosen. The primary benefits of variable annuities are the death benefit and tax deferment of investment gains.

Advisor Alex Blanco Subject to Complaints Over Annuities and REITs

June 3, 2019 | by Staff Attorney

Advisor Alex Blanco (Blanco), currently employed by MML Investors Services, LLC (MML Investors) has been subject to at least three customer complaints during the course of his career. According to a BrokerCheck report some of the customer complaints concern variable annuities and 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 December 2018 a customer complained that Blanco violated the securities laws by alleging that the financial advisor made unsuitable investments as well as overstating assets and inadequate accounts to statement causing $315,000 in damages. The claim is currently pending.

In May 2018 a customer complained that Blanco violated the securities laws by alleging that the financial advisor recommended investments purchased in 2015 were not suitable and he is requesting to liquidate the account. The claim was denied by the firm.

Our firm often handles cases involving annuities and direct participation products, Non-Traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments. These products are almost always unsuitable for investors. In addition, the brokers who sell them are paid additional commission in order to hype inferior quality investments which provides a perverse incentives by brokers to create an artificial market for products that no honest advisor would sell.

Advisor Keith Kelt Subject to Complaints Over Alternative Investment Recommendations

June 3, 2019 | by Staff Attorney

Advisor Keith Kelt (Kelt), currently employed by Kovack Securities Inc. (Kovack Securities) has been subject to at least two customer complaints during the course of his career. According to a BrokerCheck report some of the customer complaints concern 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.

Kelt operates under the d/b/a name TKG Financial, LLC in Santa Barbara, California. In addition, Kelt has several other disclosed outside business activities including The Kelt Inc. and Kelt Osborne & Co.

In October 2018 a customer complained that Kelt violated the securities laws by alleging that the financial advisor from 2008 until 2016 made unsuitable investments and failed to supervise related to the sale of securities in their accounts. The claim is currently pending.

In September 2017 a customer complained that Kelt violated the securities laws by alleging that the financial advisor made unsuitable investments and was unhappy with her purchase of Hospitality Investors Trust REIT causing $30,000 in damages. The claim settled for $17,040.

SagePoint Advisor Marvin Fisher Subject to A Complaint and Tax Liens

June 2, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Marvin Fisher (Fisher), currently employed by SagePoint Financial, Inc. (SagePoint Financial) has been subject to at least one customer complaint, one employment termination for cause, and four tax liens or judgments during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Fisher’s customer complaints allege that Bernstein recommended unsuitable variable annuity among other allegations.

In October 2018 a customer filed a complaint alleging that Fisher violated the securities laws by, among other things, that the guaranteed minimum income benefit rider on variable annuity purchased in 2006 was misrepresented to the client. The claim alleges $5,000 in damages and settled for $25,000.

In July 2016 Fisher was subject to a tax lien of $107,674. Large tax liens on a broker’s CRD can be a red flag that the broker may be influenced to engage in high commission activity in order to satisfy personal debts. In addition, a broker’s inability to manage their own finances is relevant in a customer’s decision to use their services.