Securities Lawyers Blog

Garden State Securities Advisor Christhian Palacios Subject to Churning Claims

January 9, 2019 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Christhian Palacios (Palacios) has been subject to two customer complaints and four tax liens during the course of his career. Palacios is currently employed by Garden State Securities, Inc. (Garden State Securities). One of the customer complaints against Palacios concern allegations of high frequency trading activity also referred to as churning and unsuitable investments.

In June 2018 a customer filed a complaint alleging their account was excessively traded and unsuitable from January 2009 until March 2016. The claim alleged $298,109 in damages and is currently pending.

In July 2016 Palacios disclosed a tax lien of $140,000. Tax liens can be sign that a broker may have a conflict of interest to recommend or engage in high risk trades and improper recommendations due to the need to obtain funds. FINRA discloses tax liens information because it is important for investors to know whether or not a broker can manage their own finances.

Thurston Spinger Advisor Paul Muran Subject to Customer Complaints

January 9, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Paul Muran (Muran), currently employed by Thurston Spinger Financial (Thurston Spinger) has been subject to four customer complaints during his career. In addition, Muran has been twice terminated for cause. According to records kept by The Financial Industry Regulatory Authority (FINRA), the complaints against Muran concern allegations of unsuitable investments and allegations of overconcentration involving equities, oil and gas, life settlement contracts, and structured products.

In March 2011, Muran was terminated by Merrill Lynch Pierce, Fenner and Smith, Inc. (Merrill Lynch) over allegations that he participated in an outside investment without the firm’s approval. Thereafter, in October 2017 Muran was then terminated by UBS Financial Services, Inc. (UBS) on similar charges that Muran facilitated client purchases of life-settlement products not listed on firm platform, failing to escalate a client complaint, responding to the complaint without managerial approval, and failing to disclose a client’s subsequent investment in an outside passive investment.

In November 2018 a customer complained that Muran recommended investments that violated the securities laws by recommending a life settlement contract that was misrepresented and unsuitable. The client further alleges unauthorized trading of structured products and that the client had no idea she was borrowing from her loan account. The customer alleges an unknown amount of damages but the claim is currently settled for $250,000.

In May 2018 a customer complained that Muran recommended investments that violated the securities laws including unsuitable investments, unauthorized credit line agreement, unauthorized trades, uninvested funds, and lost market opportunity. The customer claimed $183,000 in damages and is currently pending.

Kovack Securities Advisor Barbara Ralston Subject to Investor Complaints

January 4, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Barbara Ralston (Ralston), currently employed by Kovack Securities Inc. (Kovack Securities) has been subject to at least eight customer complaints and one bankruptcy discharge during her career. According to records kept by The Financial Industry Regulatory Authority (FINRA), the complaints against Ralston concern allegations of unsuitable investments.

In October 2018 a customer complained that Ralston recommended investments that violated the securities laws from 2008 through 2016 by making unsuitable investments and failed to supervise the sale of securities in their accounts. The complaint is currently pending.

In April 2010 Ralston declared bankruptcy.

Centaurus Financial Broker Ricky Mantei Subject to Complaints Over Unsuitable Investments

January 4, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Ricky Mantei (Mantei), currently employed by Centaurus Financial, Inc. (Centaurus Financial) has been subject to eight customer complaints. According to records kept by The Financial Industry Regulatory Authority (FINRA), most of Mantei’s customer complaints allege that Mantei made unsuitable recommendations in certain corporate debt or other securities.

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 November 2018 a customer alleged that the financial advisor recommended unsuitable investments and several other allegations. The complaint alleges $100,000 in damages and is currently pending.

In October 2018 a customer filed a complaint alleging that their investments were unsuitable based on their investment objectives. The claim alleges $233,238,000 in damages and is currently pending.

In May 2018 the beneficiaries of a deceased customer allege that the Mantei recommended the client make unsuitable investments. The claim alleges $100,000 in damages and is currently pending.

NYLife Broker Ronald Walker Subject to Complaints Over Annuity Practices

January 4, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Ronald Walker (Walker), currently employed by NYLife Securities LLC (NYLife) has been subject to five customer complaints during his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), many of the customer complaints against Walker concern allegations over variable annuity sales practices.

In June 2018 a client complained that Walker violated the securities laws because a client claimed she was not aware that she would be subject to a new surrender period when she agreed to move funds from one variable annuity to another in February 2017. The customer also alleged that being invested in 100% high yield bond funds does not match her risk tolerance. The customer alleged $13,000 in damages. The claim is currently pending.

In November 2017 a client complained that Walker violated the securities laws because a client claimed that the firm approved modifications to two variable annuity contracts. The firm denied the claim.

In October 2017 a client complained that Walker violated the securities laws alleging that he recommended a rider to his variable annuity contract purchased in September 2005 that was unnecessary and expensive. Customer alleges that he did not need the rider because he does not intend to withdraw from the variable annuity. The claim settled for $11,020.58.

Advisor Steven Reznik Subject to Numerous Suitability Complaints

January 3, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Steven Reznik (Reznik), formerly employed by Raymond James Financial Services, Inc. (Raymond James) has been subject to twelve customer complaints during his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), the complaints against Reznik concern allegations of unsuitable investments and allegations of overconcentration involving equities and options.

In November 2018 a customer complained that Reznik recommended investments that violated the securities laws including suitability, overconcentration, unauthorized trading, negligence, violation of FINRA Rules, breach of contract, negligent supervision, and breach of fiduciary duty from 9/26/16 – 10/31/18. The customer alleges $125,000 in damages and the claim is currently pending.

In September 2017 a customer complained that Reznik recommended investments that violated the securities laws misrepresentations and omissions relating to unauthorized trades, fraud, breach of fiduciary duty, failure to supervise, negligence, gross negligence, negligent retention, negligent misrepresentation, concentration, and respondeat superior liability occurring from 3/25/15 to 9/13/18. The customer claimed $2,000,000 in damages and is currently pending.

Network 1 Financial Advisor Wesley Clinton Subject to Several Unsuitable Investment Complaints

January 3, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Wesley Clinton (Clinton), currently employed by Network 1 Financial Securities Inc. (Network 1 Financial) has been subject to eight customer complaints during his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), the complaints against Clinton concern allegations of unsuitable investments among other allegations.

In August 2018 a customer complained that Clinton recommended investments that violated the securities laws including unsuitable investments and failure to supervise. The customer alleged $145,000 in damages. The claim is currently pending.

In January 2017 a customer complained that Clinton recommended unsuitable investments leading to $50,000 in damages. The claim is currently pending.

In June 2015 a customer complained that Clinton recommended unsuitable investments and engaged in fraud and churning leading to $250,000 in damages. The claim settled for $30,000.

Cetera Broker Travis Hughes Subject to A Dozen Customer Complaints

December 31, 2018 | by Staff Attorney

According to BrokerCheck records financial advisor Travis Hughes (Hughes), currently employed by Cetera Advisors LLC (Cetera) has been subject to twelve customer complaints and one employment termination for cause during his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), the many of the customer complaints against Hughes concern allegations over variable annuity sales practices and non traded real estate investment trusts (Non-Traded REITs).

In August 2008 Hughes was terminated by AXA Advisors, LLC (AXA) after the firm alleged that Hughes failed to follow compliance procedures and policies after the broker was placed on enhanced supervision by the firm.

In August 2018 a client complained that Hughes violated the securities laws by recommending Non-Traded REITs. The customer alleged $18,253 in damages. The claim is currently pending.

In January 2017 a client complained that Hughes violated the securities laws by recommending unsuitable investments between 2011 and 2013. The customer alleged $85,000 in damages. The claim settled for $37,500.

Advisor Michael Heath Subject to Regulator Complaint and Employment Terminations

December 31, 2018 | by Staff Attorney

According to BrokerCheck records financial advisor Michael Heath (Heath), currently employed by Infinity Financial Services (Infinity Financial) has been subject to one regulatory action, two employment terminations for cause, and one civil lien during his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), the regulatory action against Heath concern allegations of unsupervised record activity.

In October 2018 FINRA alleged that Heath consented to the sanctions and findings that he regularly communicated with his customers through an unapproved personal email account about member firm business and circumvented the firm’s supervision. FINRA found that in these emails Heath sent account documents, discussed account performances, and discussed specific investments with his customers. FINRA further found that the firm’s supervisory procedures required electronic business-related correspondence to be sent through firm issued or firm approved email accounts so that the firm could monitor such communications for recordkeeping and compliance purposes. FINRA determined that by using unapproved personal email account Heath caused his firm to fail to maintain all business-related communications. In addition, FINRA also found that Heath failed to comply with FINRA rules on communications with the public in that he created account performance summaries that he used in meetings with clients that failed to provide a sound basis for customers to evaluate the facts.

In March 2016 Heath was discharged by Securities America, Inc. (Securities America) on allegations that he failed to disclose internal investigation with previous broker dealer on his CRD update.

That disclosure followed Heath’s termination from First Allied Securities, Inc. (First Allied) where the firm terminated him for failing to comply with the firm’s email policies.

Advisor Samuel Monchik Subject to Complaints Over Alternative Investments

December 31, 2018 | by Staff Attorney

Advisor Samuel Monchik (Monchik), currently employed by Geneos Wealth Management, Inc. (Geneos Wealth) has been subject to at least two customer complaints. According to a BrokerCheck report many 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 August 2018, a customer filed a complaint alleging that Monchik made unsuitable recommendations, breach of fiduciary duty, and failure to adequately disclose the risks in REITs and direct investments – DPP & LP interests purchased between March of 2008 and November of 2015. The complaint is currently pending.

In July 2017 a customer filed a complaint alleging that Monchik made unsuitable recommendation of an oil & gas investment in June 2008. The complaint was denied by the firm.

In September 2008 FSC Securities Corporation terminated Monchik’s alleging that he violated the firm’s policies with respect to transactions in Non-Traded REITs.