Securities Lawyers Blog

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.

Advisor Kari Bracy Accused of Selling Future Income Payments Investment Fraud

December 29, 2018 | by Staff Attorney

According to BrokerCheck records financial advisor Kari Bracy (Bracy), currently employed by NYLife Securities LLC (NYLife Securities) has been subject to one customer complaint during his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), the complaint against Bracy concerns allegations of unsuitable investments in Future Income Payments, Inc. (FIP). Bracy has several disclosed outside business activities including Amani Properties, LLC and his d/ba/a name Mahoney Financial Organization, LLC and Wahby Financial Group LLC.

In July 2018 a customer complained that Bracy recommended an investment in Future Income Payments, Inc. a private securities transaction, was misrepresented as a conservative and safe investment with a 7.5% annual return for ten years. The claim alleged $142,697.27 in damages and settled for $80,000.

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.

Charla Kabana Barred From the Securities Industry Over Variable Annuity Sales Practices

December 29, 2018 | by Staff Attorney

According to BrokerCheck records financial advisor Charla Kabana (Kabana), formerly employed by SagePoint Financial, Inc. (SagePoint) has been subject to one regulatory action, one one employment termination for cause, and multiple financial disclosures during her career. According to records kept by The Financial Industry Regulatory Authority (FINRA), the regulatory action against Kabana concern allegations over variable annuity sales practices.

In August 2018 Kabana consented to sanctions and to the entry of findings that she failed to provide FINRA with the documents and information requested in connection with its investigation concerning the reasons for her termination including concerns regarding her practices in respect to variable annuity business and related responses to compliance. Because Kabana refused to appear for FINRA and provide on-the-record testimony FINRA automatically barred her from the industry.

In July 2016, LPL Financial LLC (LPL Financial) discharged Kabana claiming that the firm had concerns regarding the Representative’s practices in respect to variable annuity business and related responses to compliance.

Cetera Advisor Donna Hines Subject to Complaints Over REITs and Alternative Investments

December 29, 2018 | by Staff Attorney

Advisor Donna Hines (Hines), currently employed by Cetera Advisors LLC (Cetera) has been subject to at least four customer complaints. According to a BrokerCheck report 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 June 2018 a customer filed a complaint alleging that Hines violated the securities laws by alleging unsuitable investments from 2005 through 2018 and negligence, breach of fiduciary duty, misrepresentations, and common law fraud concerning alternative investments. The claim alleged $142,026 in damages and the claim is currently pending.

In December 2015 a customer filed a complaint alleging that Hines violated the securities laws by alleging negligence, misrepresentations, concerning alternative investments. The claim alleged $340,000 in damages and settled for $100,000.

Westminster Financial Broker Peter Bittermann Subject to Regulatory Complaint

December 28, 2018 | by Staff Attorney

According to BrokerCheck records financial advisor Peter Bittermann (Bittermann), currently employed by Westminster Financial Securities, Inc. (Westminster Financial) has been subject to three customer complaints, one employment termination for cause, and one regulatory action. According to records kept by The Financial Industry Regulatory Authority (FINRA), most of Bittermann’s customer complaints allege that Bittermann made unsuitable recommendations.

In July 2018 the Wisconsin Division of Securities alleged that Bittermann was delinquent on certain taxes causing his registration to be revoked.

In February 2011 RBC Capital Markets Corporation, LLC (RBC) terminated Bittermann over allegations that he sold a security without prior verbal knowledge and consent by the client.

In August 2009 a client complained that Bittermann misrepresented the risks of an investment and it was unsuitable causing $1,619,634 in damages. The claim was settled for $750,000.

Former Cetera Advisors Broker Scott Kozak Accused of Selling Unapproved Securities

December 24, 2018 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) former advisor Scott Kozak (Kozak), formerly associated with Cetera Advisors LLC (Cetera) in Highlands Ranch, Colorado has been accused by his former firm and barred by FINRA over unapproved securities. In addition, Kozak has four customer complaints on his record.

In May 2018 FINRA filed a notice of investigation stating that FINRA has made a preliminary determination to recommend disciplinary action be brought against Kozak for potential violations of engaging in private securities transactions and outside business activities for the period July 2011 to March 2017, without prior notice to or approval from his member firm, Cetera Advisors.

Thereafter, in July 2018 Cetera terminated Kozak stating that he violated policies concerning personal securities transactions.

At this time it is unclear the nature or scope of the alleged outside business activities (OBAs) and private securities transactions. Kozak’s public disclosures list several OBAs including Kozak & Associates – his securities d/b/a, K&A Charities – a charitable arm of Kozak & Associates, IGC, LLC – a manufacturing company that he owns, and Dominican Home Health agency – where Kozak serves as a board member. It is unknown if FINRA’s claims relate to any of these entities.

Investor Recovery – Advisor Sean Kelly Accused of Stealing More than $1 Million From Clients

December 22, 2018 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Sean Kelly (Kelly), in October 2018, was accused by the Securities and Exchange Commission (SEC) of stealing more than $1 million from his clients.

According to the SEC, Sean Kelly used his companies, Lion’s Share Financial of East Cobb, Inc., Lion’s Share & Associates, Inc., and Lionsshare Tax Services, LLC, (Lion Share) to raise at least $1 million from 12 investors, including elderly retirees. Kelley is accused of promising that he would invest investor funds in a variety of investment products including private placements and real estate funds. However, the SEC determined that Kelly just spent the money on his own personal expenses including Super Bowl tickets, luxury vacations, and cash withdrawals. Apparently, even after he received an SEC subpoena Kelly continued to just steal money from investors. Instead, the SEC alleged that Kelly continued to dodge the agency and did not show up for his scheduled testimony after informing the SEC’s staff that he would show up and “come clean.” In a separate action, the U.S. Attorney’s Office for the Northern District of Georgia filed criminal charges against Kelly and arrested him.

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”.