Securities Lawyers Blog

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”.

Raymond James Advisor Maria Hendershott Subject to Several Complaint Disclosures

December 21, 2018 | by Staff Attorney

According to BrokerCheck records financial advisor Maria Hendershott (Hendershott), currently employed by Raymond James & Associates, Inc. (Raymond James) has been subject to four customer complaints during her career. According to records kept by The Financial Industry Regulatory Authority (FINRA), the complaints against Hendershott concern allegations of unsuitable investments and allegations of overconcentration.

In November 2018 a customer complained that Hendershott recommended investments that violated the securities laws including breach of contract, violation of provisions of The Texas State Securities Statutes, Ann. Tx Civil Statutes Art. 581-33, violation of The Texas Deceptive Trade Practices Act Bc. Code Ann. § 17.46 and Tex Bc. Code Ann. § 17.50, breach of fiduciary duty that took place from 01/15/2015 until 09/12/2016. The customer alleges $500,000 in damages and the claim is currently pending.

In October 2017 a customer complained that Hendershott recommended investments that violated the securities laws including during 06/30/2014 until 07/31/2015 claiming gross mismanagement of accounts, investor abuse, churning, breach of fiduciary duty, negligence, and violation of industry rules. The customer claimed $100,000 in damages. The case settled for $75,000.

Investors File Complaints Against Reid & Rudiger Advisor Elvis Parkes Over Investment Suitability

December 20, 2018 | by Staff Attorney

According to BrokerCheck records financial advisor Elvis Parkes (Parkes), currently employed by Reid & Rudiger LLC (Reid & Rudiger) has been subject to 10 customer complaints, two regulatory actions, and one termination for cause during his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), many of the complaints against Parkes concern allegations of unsuitable investments.

In February 2007 Parkes was terminated by First Republic Group, LLC over allegations of unsuitable transactions by the firm. Thereafter, in June 2008 the state of Illinois fined Parkes and denied his registration in the state.

In September 2018, a customer complained that Parkes engaged in excessive and reckless trading. The claim is currently pending.

In July 2018, a customer complained that Parkes engaged in unsuitable investments causing $79,000 in damages. The claim is currently pending.

Former Morgan Stanley Advisor John Buck Accused of Selling Unapproved Securities

December 20, 2018 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) former advisor John Buck (Buck), formerly associated with Morgan Stanley in Boston, Massachusetts has been accused by his former firm and barred by FINRA over unapproved securities.

In January 2018 Morgan Stanley terminated Buck stating that there were allegations about the timing and completeness of disclosures to the firm regarding involvement in private investments outside of the firm.

Thereafter, in October 2018 Buck was terminated by FINRA and consented to the sanction that he failed to provide FINRA with requested documents and information in connection with its investigation concerning his potential involvement in certain unapproved private securities transactions.

At this time it is unclear the nature or scope of the alleged outside business activities (OBAs) and private securities transactions. Buck’s public disclosures only state that he is an investor in Gemini Partners – a venture fund.

Advisor Judith Bufis Accused of Engaging in Unapproved Securities

December 19, 2018 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) former advisor Judith Bufis (Bufis), formerly associated with Kovack Securities Inc. (Kovack Securities) in East Brunswick, New Jersey has been accused by FINRA over private securities transactions.

In October 2018 Bufis consented to the sanction and to the entry of findings that she failed to provide documents and information requested by FINRA in connection with potential private securities transactions. In so doing she accepted a bar from the securities industry.

At this time it is unclear the nature or scope of the alleged outside business activities (OBAs) and private securities transactions. Bufis public disclosures state that she engaged in the sale of insurance and annuities but discloses not other activities.