Securities Lawyers Blog

Advisor Michael Olinde Discharged Over Unapproved Business Activities

April 25, 2019 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Michael Olinde (Olinde), currently associated with Capital Financial Services, Inc. (Capital Financial), in May 2017, was discharged from his employer LPL Financial LLC (LPL) due to allegations that he violated the firm’s policies regarding outside business activities. Thereafter, according to Olinde’s BrokerCheck, Olinde has been subject to a FINRA investigation regarding his outside business activity.

Engaging in undisclosed outside business activities represents a risk to brokerage firms that the advisor may be engaging in unmonitored securities related businesses. 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”.

In this case it is unclear what sort of business activities Olinde was engaged in. However, his disclosures include many businesses including: 1) Olinde Brothers Properties – a commercial building partnership; 2) Olinde Financial Group – his d/b/a for brokerage activity; 3) Olinde Investment Holdings LLC; 4) The Massad Olinde Group; 5) Alpha Consulting Group; 6) Prciniple Matters, LLC – a radio program; 7) Avive Nutraceuticals, LLC – partner and board member; 8) Olinde Management, LLC – resendential properties rentals; 9) K & M Olinde Farms; 10) M202 – real estate business.

John Spach Barred Over Securities Laws Violations

April 25, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor John Spach (Spach), formerly employed by Kestra Investment Services, LLC (Kestra) has been subject to at least one customer complaint, one regulatory action, and one employment termination for cause. According to records kept by The Financial Industry Regulatory Authority (FINRA), Spach’s customer complaint alleges that Spach introduced a client of his independent advisory firm to an outside investor. The client allegedly invested $475,000 and received a promissory note that defaulted.

Thereafter, in July 2018 NFP Retirement Inc. (NFP) discharged Spach claiming violations of the Investment Advisers Act of 1940 including co-mingling client assets with his own personal assets, breach of fiduciary duty, unsuitable investment advice, material misstatements, failure to disclose material conflicts of interest, circumvention of compliance policies and procedures, and affirmative misrepresentations to the firm.

Finally, in February 2019 FINRA sanctioned Spach alleging Spach consented to the sanction and findings that he refused to produce documents and information requested by FINRA in connection with its investigation into potential violations relating to a customer complaint. FINRA found that his former firm disclosed that he had been permitted to resign while under internal review relating to the potential violation of various firm policies while attempting to settle a customer complaint with a client of his registered investment advisor.

Broker Ronald Rothchild Has Multiple Customer Investment Complaints

April 23, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Ronald Rothchild (Rothchild), currently employed by National Securities Corporation (National Securities) has been subject to at least four customer complaint, two financial disclosures, and an employment termination for cause. According to records kept by The Financial Industry Regulatory Authority (FINRA), most of Rothchild’s customer complaints allege that Rothchild made was negligent, breached his fiduciary duty, made unsuitable investments, and made misrepresentations.

In July 2018 a customer filed a complaint alleging that Rothchild violated the securities laws including negligence, breach of fiduciary duty, and unsuitable investments causing $100,000 in damages. The claim is currently pending.

In March 2018 a customer filed a complaint alleging that Rothchild violated the securities laws including that investments were misrepresented to her and were unsuitable based on her investment objectives and risk tolerance which were also incorrectly stated on new account paperwork. The claim is currently settled.

In December 2016 a customer filed a complaint alleging that Rothchild violated the securities laws including negligence, breach of fiduciary duty, and misrepresentations causing $170,000 in damages. The claim is settled for $48,000.

Advisor Alan Dole Subject to Complaints Over Alternative Investments

April 23, 2019 | by Staff Attorney

Advisor Alan Dole (Dole), currently employed by Cambridge Investment Research, Inc. (Cambridge) 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 December 2018 a customer filed a complaint alleging that Dole violated the securities laws including the Virginia Securities Act, breach of fiduciary duty, negligence, negligent supervision, breach of contract and violation of FINRA rules by recommending oil & gas and insurance related investments causing $348,366 in damages. The claim is currently pending.

In December 2018 another customer filed a complaint alleging that Dole violated the securities laws including the Virginia Securities Act, breach of fiduciary duty, negligence, negligent supervision, breach of contract and violation of FINRA rules by recommending oil & gas and insurance related investments causing $497,691 in damages. The claim is currently pending.

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”.