Securities Lawyers Blog

Advisor Noel Carino Barred by Regulator Over Unapproved Products

January 12, 2019 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Noel Carino (Carino), formerly associated with General Securities Corp., in November 2018, was sanctioned and barred from the securities industry by FINRA over accusations of potentially selling unapproved products.

In November 2018 FINRA alleged that Carino consented to the sanction and bar from the industry after he refused to provide documents and information requested by FINRA in connection with its investigation into whether he engaged in outside business activities without written notice to his member firm, whether he engaged in private securities transactions without written notice to or approval from the firm, and whether he reported all outside brokerage accounts in which he had an interest to the firm.

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”.

At this time it is unclear the nature and scope of Carino’s activities. Carino’s disclosures include outside business activities (OBAs) including B & N Investments, LLC and Fidelity Wealth Management LLC. At this time it is unclear whether the unapproved products involve any of these entities.

Advisor David Phillips Accused of Selling Future Income Payments Investment Fraud

January 12, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor David Phillips (Phillips), formerly employed by Moloney Securities Co., Inc. (Moloney Securities) has been subject to one customer complaint and one tax lien during his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), the complaint against Phillips concerns allegations of unsuitable investments in Future Income Payments, Inc. (FIP).

In October 2018 a customer complained that Phillips recommending an investment in Future Income Payments, Inc. that was misrepresented and improperly recommended. The claim alleges $106,368 in damages and is currently pending.

The law offices of Gana Weinstein LLP have been investigating investor recovery options due to the alleged pay advance fraud scheme orchestrated by Future Income Payments, LLC (Future Income Payments) also known as Pensions, Annuities, and Settlements, LLC, and its owner Scott Kohn (Kohn). Future Income Payment is an unregistered and illegal security offering. Numerous state and local regulators and agencies also have concluded that FIP product violates a host of laws including securities, loan laws, usury laws, elder abuse, and consumer protection laws.

At the heart of the alleged scheme is the misrepresentation that Future Income Payments engages in agreements that are sales of pensions and not loans. However, regulators have claimed that the company misstates the effect of the contract and that in fact pensioners are entering into a consumer loan and not a sale. The purpose of the misrepresentations are to try to exempt Future Income Payments loans from consumer lending laws and regulations and to collect interest on loans at illegal rates.

IFS Securities Advisor Thomas Williams Subject to Churning Claims

January 10, 2019 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Thomas Williams (Williams) has been subject to five customer complaints and one termination for cause during his career. Williams is currently employed by IFS Securities. Several of the the customer complaints against Williams concern allegations of high frequency trading activity also referred to as churning and unsuitable investments.

In October 2018 a customer filed a complaint alleging their account was excessively traded, churning, and unsuitable investments. The claim alleged $50,000 in damages and is currently pending.

In August 2010 Williams was terminated by First Allied Securities, Inc. (First Allied) in connection with allegations that a customer complained over unsuitable investments, misrepresentation, and breach of fiduciary duty.

David Lerner Broker Scott Mass Subject to Suitability Complaints

January 9, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Scott Mass (Mass), currently employed by David Lerner Associates, Inc. (David Lerner) has been subject to five customer complaints. According to records kept by The Financial Industry Regulatory Authority (FINRA), most of Mass’ customer complaints allege that Mass made unsuitable recommendations in a variety of investments including REITs, Puerto Rico bonds, and mutual funds.

In July 2018 a customer complained that Mass violated the securities laws by recommending unsuitable investments, breach of fiduciary duty, negligence, fraud and breach of contract in connection with the sale of Puerto Rico Bonds. The customer alleges $500,000 in damages. The claim is currently pending.

In December 2016 a customer complained that Mass violated the securities laws by recommending unsuitable investments from June 2007 through July 2015 causing $90,000 in damages. The claim settled for $15,000.

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.