Securities Lawyers Blog

Advisor Christopher Bennett Alleged to Have Recommended Unsuitable Energy Securities

April 21, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Christopher Bennett (Bennett), formerly employed by J.J.B. Hilliard, W.L. Lyons, LLC (JJB Hilliard), has been subject to at least thirteen customer complaints and one regulatory action during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA) Bennett has been accused by multiple customers of unsuitable investment advice concerning various investment products including energy stocks most likely including master limited partnerships (MLPs). The law offices of Gana Weinstein LLP continue to report on investor related losses and potential legal remedies due to recommendations to investor in oil and gas and commodities related investments.

In February 2019 Bennett was sanctioned by FINRA after the regulator made allegations that Bennett consented to the sanctions and findings that he exercised discretionary trading authority in the accounts of several customers without written authorization from the customers and without obtaining his member firm’s prior written acceptance of the accounts as discretionary.

In February 2019 a customer filed a complaint alleging that Bennett violated the securities laws including the Securities Act of Kentucky, breach of fiduciary duty, and unsuitable investment recommendations causing $139,214 in damages. The claim is currently pending.

Broker Philip Sparacino Subject to Churning Complaint

April 16, 2019 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Philip Sparacino (Sparacino) has been subject to at least two customer complaints, three debt liens or judgements, and one criminal matter during his career. Sparacino is currently employed by First Standard Financial Company LLC (First Standard Financial) but has worked for a total of six firms during his 11 year career. One of the customer complaints against Sparacino concern allegations of high frequency trading activity also referred to as churning and unsuitable investments.

In December 2018 a customer filed a complaint alleging that Sparacino violated the securities laws including churning and unsuitable trading causing $90,198 in damages. The claim is currently pending.

In September 2016 a customer filed a complaint alleging that Sparacino violated the securities laws including unsuitable trading, breach of fiduciary duty, and unauthorized trading causing $38,084 in damages. The claim is currently pending.

Sparacino also has three debts including a $3,774 lien from March 2017. The fact that a broker cannot manage his own personal finances is material information for a client to consider. In addition, the types of products clients have alleged were unsuitable are high commission products that may be recommended to generate high profits for the advisor at the expense of the client.

Advisor Yousuf (Joe) Saljooki Subject to Multiple Churning Complaints

April 16, 2019 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Yousuf (Joe) Saljooki (Saljooki) has been subject to at least seven customer complaints, two regulatory actions, two employment terminations for cause, and one debt lien or judgement during his career. Saljooki is formerly employed by Worden Capital Management LLC (Worden Capital) but has worked for a total of nine firms during his 12 year career. The customer complaints against Saljooki concern allegations of high frequency trading activity also referred to as churning and unsuitable investments.

In July 2018 FINRA suspended Saljooki after he failed to respond to the regulator’s requests for information.

In April 2018 Saljooki was discharged from Worden Capital for failing to disclose and outstanding tax lien to the State of Arkansas during the application process for registration with the state.

In February 2018 a customer filed a complaint alleging that Saljooki violated the securities laws by engaging in churning, unsuitable investments, and fraud. The claim alleged $523,930 in damages. The claim settled for $50,000.

In December 2017 SW Financial discharged Saljooki after the firm alleged that Saljooki opened a branch office under another name without the permission of the firm in violation of FINRA Rule 3270. The firm also accused him of violating Reg S-P by obtaining client information.

Advisor Daniel Davila Subject to Complaint Over Alternative Investments

April 15, 2019 | by Staff Attorney

Advisor Daniel Davila (Davila), formerly employed by Purshe Kaplan Sterling Investments (Purshe Kaplan) and currently employed by advisory firm Austin Walth Management, LLC (Austin Wealth) has been subject to at least two customer complaints. According to a BrokerCheck report some of the customer complaints concern alternative investments and direct participation products (DPPs) such as 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 2017 a customer filed a complaint alleging that Davila violated the securities laws by recommending non-traded REIT and private placement investments that were unsuitable in 2010 through 2011. The claim alleged $1 million in damages and settled for $670,000

Our firm often handles cases involving 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 Raymond Menna Has Multiple Public Disclosures Including Regulatory Action

April 14, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Raymond Menna (Menna), currently employed by Planmember Securities Corporation (Planmember Securities) has been subject to at least two customer complaints and one regulatory complaint. According to records kept by The Financial Industry Regulatory Authority (FINRA), most of Menna’s customer complaints allege that Carver made unsuitable recommendations.

In August 2018 FINRA brought a complaint against Menna who consented to sanctions and to findings that he improperly shared in the losses of a customer. FINRA found that the value of the account of one of Menna’s customers declined to zero as a result of customer withdrawals and trading losses and Menna agreed to give the customer money on a monthly basis. Thereafter, FINRA found that Menna made monthly cash payments to the customer totalling approximately $15,000. FINRA found that Menna did not obtain prior written authorization from his member firm or the customer to make such payments.

Advisor Dean Grant Arrested On Charges of Defrauding His Investment Clients

April 13, 2019 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Dean Grant (Grant), formerly associated with M Holdings Securities, Inc. (M Holdings), and operating under the d/b/a name Dean Grant Financial and GFG Strategic Advisors was arrested in February 2019 on charges of fraud. Grant’s company purportedly offers financial and estate planning, life insurance, retirement planning, charitable giving, disability and long-term care. In addition, Grant has three tax liens totaling approximately $150,000.

Grant purportedly turned himself in after an investigation by the Georgia Insurance Commissioner’s Office showed he used nearly $600,000 from at least three clients for his personal gain. Yet, Grant apparently did not obtain any insurance investments with the money. Grant was charged with three counts of insurance fraud, three counts of theft by taking, one count of forgery and two counts of trafficking of an elder person. Authorities claim that clients made checks made out to Dean Grant Financial and then he made checks made out to Dean Grant himself taking the money.

The providing of loans or 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”.

Former Advisor Kristian Gaudet Criminally Charged For Stealing Client Funds

April 2, 2019 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) former advisor Kristian Gaudet (Gaudet), formerly associated with Ameritas Investment Corp. (Ameritas) in Cut Off, Louisiana has been terminated by the firm for using client funds for personal use. Thereafter, in January 2019, Gaudet consented to the sanction and findings that he refused to appear for and provide FINRA on-the-record testimony concerning the internal investigation by Ameritas that Gaudet was found to have utilized client funds for personal use. Accordingly, Gaudet was barred by FINRA from the securities industry.

According to newsources, Gaudet arrested for stealing nearly $1 million from his clients. Gaudet was a former vice president of the Greater Lafourche Port Commission and owner of Kris Gaudet Insurance and Financial Services. Authorities received a complaint form a couple that found issues with a $350,000 investment made to “Winston Financial” in 2012. Authorities claim that the money was used for purposes other than the investment purposes for which it was intended. Authorities also accused Gaudet of using funds received in May from another couple to buy a home in Larose. Gaudet has been accused of frequently using money he received from investors for personal gain including using money clients paid for insurance to buy real estate.

Is GBP Capital A Ponzi Scheme? – FBI Now Investigating Firm

March 31, 2019 | by Staff Attorney

The law offices of Gana Weinstein LLP continue to report and update investors on their investigation into GPB Capital Holdings (GPB Capital). The firm currently represents multiple clients who have been recommended GPB Capital by brokers who were paid large commissions to sell the investment.

GPB Capital has been plagued with issues since last year when the firm stopped raising new money, lost an auditor, and engaged in a lawsuit with a former business partner Patrick Dibre (Dibre). GPB Capital complained that Dibre reneged on the sale to GPB Capital of certain auto dealerships causing the fund to lose $40 million according to GPB’s complaint. Dibre counterclaimed that GPB Capital is nothing more than “a very complicated and manipulative Ponzi scheme.” Then it was reported that the Financial Industry Regulatory Authority Inc. (FINRA) and the Securities and Exchange Commission (SEC) launched investigations in to GPB Capital.

Now, according to newsources, GBP Capital is being investigated by the FBI who made an unannounced visit to GPB Capital’s offices in early March 2019. None of this information is good news for investors who relied upon the due diligence efforts of their brokers in agreeing to invest in GBP Capital offerings.

Brokerage firms are unfortunately all too willing to subject their clients to the risks of investing in GPB due to the hefty fees and commissions these firms earn. When GPB Capital’s Automotive portfolio raised a total of $369.2 million from more than 3,800 investors it paid out $43.4 million, or 11.75%, in commissions. 7% of that amount goes directly to the recommending broker’s pocket. There are as many as 60 brokerage firms that sold these funds and among the largest of those firms are Royal Alliance Associates Inc., Sagepoint Financial Inc., FSC Securities Corp. and Woodbury Financial Services Inc.

Gana Weinstein LLP Files Complaint on Behalf of Client Related to Laidlaw & Company’s Offering of 5G Investment

March 18, 2019 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP recently filed a complaint on behalf of a client alleging that Laidlaw & Company (UK) Ltd. (Laidlaw) recommended the investor purchase a micro cap stock underwritten by the firm in violation of the securities laws. According to newsources and public filings Laidlaw has been involved in the fraudulent promotion of numerous small and micro cap stocks to their clients in violation of their duties to their clients to disclose conflicts of interests. These violations also include potentially facilitating pump-and-dump schemes.

Recently, one of Laidlaw’s clients, Barry Hoing (Hoing), was charged by The Securities and Exchange Commission (SEC) for generating $27 million through a “classic pump-and-dump scheme.” The SEC’s allegations focus on stocks including BioZone Pharmaceuticals (now Cocrystal Pharma) (COCP), MGT Capital (OTC: MGTI), and MabVax Therapeutics (OTC: MBVX). However, other public filings reveal Hoing was also involved in other stocks including Riot Blockchain (RIOT), PolarityTE (PTE formerly COOL), and Marathon Patent Group (MARA). In addition, Laidlaw was involved in other securities offerings including Aethlon Medical, Actinium, Boston Therapeutics, 5G Investment, Alliaqua, Aspen Group, Brazahav Resources, Fusion Telecoms International, Protea Biosciences Group, Aeolus Pharmaceuticals, Medovex Corp, Relmada Therapeutics, Sevion Therapeutics, Spectrascience, and Spherix.

Raymond James Advisor George Mathis Has Five Investment Complaints

March 18, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor George Mathis (Mathis), currently employed by Raymond James & Associates, Inc. (Raymond James) has been subject to at least five customer complaints and one termination for cause. According to records kept by The Financial Industry Regulatory Authority (FINRA), most of Mathis’ customer complaints allege that Mathis made unsuitable recommendations in a variety of securities.

In May 2018 a customer brought a complaint against Mathis alleging the broker violated the securities laws by breaching his fiduciary duty, negligence, and fraud from 2014 through September 2016. The claim alleged $65,000 in damages and is pending.

In August 2016 a customer brought a complaint against Mathis alleging the broker violated the securities laws by breaching his fiduciary duty, negligence, and and violation of the FINRA Rules from September 2013 through January 2016. The claim alleged $190,000 in damages and settled.

In August 2015 a customer brought a complaint against Mathis alleging the broker violated the securities laws by making misrepresentations. The claim alleged $17,946 in damages and was closed.