Securities Lawyers Blog

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.

Energy 11 and Energy Resources 12 Oil and Gas Private Placements – Investor Recovery Options

December 19, 2018 | by Staff Attorney

The investment attorneys at Gana Weinstein LLP are investigating various potentially unsuitable sales of oil and gas private placements. These investments include those being underwritten and offered by David Lerner Associates, Inc. (David Lerner) – Energy 11 and Energy Resources 12.

Energy 11 was formed to enable investors to invest in oil and gas properties located onshore in the United States. The funds’ stated primary objectives are to acquire producing and non-producing oil and gas properties with development potential, and to enhance the value of those properties through drilling and other development activities. The fund plans to after five to seven years to engage in a liquidity transaction in which they will sell properties and distribute the net sales proceeds to investors, merge with another entity or list common units on a national securities exchange.

Investors often do not understand the substantial risks of oil and gas private placements. As reported in Reuters, when offerings by Atlas Energy LP, another issuer of oil and gas private placements were analyzed, investors only get to see 65-70% of their capital actually put to work on oil and gas projects. Further, the returns on these projects had more in common with running profitable casinos than investments. Reuters found that slightly more than half of 43 private placements Atlas issued over the past three decades investors lost money or just broke even. While investors lost in more than half of the deals in 29 or 67% of those deals, Atlas actually out-performed their own investors.

Gana Weinstein LLP Files Complaint Related to Granite Retirement, Andrew Long, and Adam “Craig” Hendrix’s Alleging Violations of the Securities Laws

December 19, 2018 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP recently filed a complaint on behalf of a client alleging that Kalos Capital, Inc. (Kalos Capital) and Andrew C. Long (Long) failed to supervise Long’s recommendations and investment activity through his d/b/a business Granite Retirement & Tax (Granite Retirement). The complaint alleges that Long, a partner of Granite Retirement, along with others in the organization such as Adam Craig Hendrix (Hendrix), constructed an investment plan for the Claimant that violated multiple securities laws.

The complaint alleges that the Claimant successfully sold his business, was 71 years, and sought investment advice from Long and Hendrix. The Granite Retirement partners recommended that Claimant invest nearly $7 million or over 90% of his savings in illiquid investments. In some cases these investments turned out to be investment frauds. The Claimant alleged that the sole purposes of the investments was to enrich the partners of Granite Retirement to the detriment of Claimant. In total, the claimant alleged that Long and Granite Retirement sought to profit by over $400,000 from the investments recommended while the Claimant lost millions.

Astonishingly, the outrageous commissions charged to Claimant were not sufficient for Long. The Claimant alleged that Granite Retirement entered into a promissory note in order to extract another $300,000 in the form of a promissory note from Claimant in violation of the securities laws. The remaining investments were in a numerous annuities, non-traded real estate investment trusts (Non-Traded REITs), private placements, equipment leasing, and oil and gas private placement programs.

First Capital REIT Investment Loss Options

December 16, 2018 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP continue to report on non-traded real estate investment trust (Non-Traded REIT) and investor loss recovery options. According to First Capital REIT’s website the fhe company claims that “when you invest with First Capital Real Estate Trust Incorporated you join those investors who benefit from the dual strategy that makes our REIT stand out from our competitors. We focus on acquiring existing stabilized cash-flowing assets to support stable, consistent distributions to our stockholders.”

However, the company has subsequently reported that multiple investments that First Capital REIT made have filed a voluntary petition for relief in Bankruptcy Court. Thereafter, the company in November 2016, sought to protect cash. It’s been reported that First Capital REIT was failing to pay employees on time and missed filing financial statements with the SEC for more than a year. According secondary market estimates on the value of First Capital REIT the company’s shares have traded at just $4.90/share or over a 50% loss from the $10.00/share offering price.

Our firm handles where brokers recommend investments in direct participation products (DPPs), private placements, Non-Traded REITs, and other alternative investments. These products are almost always unsuitable for middle class investors. In addition, the brokers who sell them are paid additional commission in order to hype inferior quality investments providing perverse incentives for brokers to sell high risk and low reward investments.

Former Morgan Stanley Advisor Michael Ralby Barred by Securities Regulator and Subject to Complaints

December 16, 2018 | by Staff Attorney

According to BrokerCheck records former financial advisor Michael Ralby (Ralby), formerly employed by Morgan Stanley has been subject to eight customer complaints and one regulatory matter in his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), many of the complaints against Ralby concern allegations of unsuitable investments.

In March 2018, Ralby entered into a consent agreement with FINRA where Ralby consented to the sanction and to the entry of findings that he refused to appear for a FINRA on-the-record testimony for the regulator’s investigation into whether Ralby had accepted loans from a customer in violation of FINRA rules.

In July 2018, a customer filed a complaint alleging that Ralby engaged in unsuitable investments in structured products from March 2016 until August 2016. The client alleged $37,170 in damages and the case was resolved.

Ponzi Scheme Investment Attorney – Recovery Options

December 16, 2018 | by Staff Attorney

The securities attorneys of Gana Weinstein LLP are experienced in helping investors recover investment losses due to various investment fraud schemes including Ponzi schemes, investment value manipulation, and outright theft and conversion of funds.

Unfortunately, the vast majority of investment fraud victims do not receive any recovery for a variety of reasons. First, many victims are embarrassed and feel a sense of guilt over having been deceived and prefer not to talk about the experience. Second, many victims believe that investor recovery is conducted by regulators and if a regulator such as the Securities and Exchange Commission (SEC) or Financial Industry Regulatory Authority (FINRA) take action investors are entitled to those funds. The truth is regulators rarely compensate victims for their losses and if they do the process can take years, in some cases around a decade, during which time investors may loss their legal rights to pursue additional avenues of recovery.

Often time the best, and in many instances the only avenue of recovery, is by hiring a private attorney to investigate and pursue your claim. The SEC has stated on its website that “It is important to understand that not all harmed investors will be able to recover money. Investors who do recover money may receive substantially less than their losses. In addition, even when harmed investors are able to recover money, the process for distributing the money to harmed investors may take a long time.”

Advisor William Hightower Indicted On Charges of Securities Fraud – Investor Recovery Options

December 15, 2018 | by Staff Attorney

According to the Department of Justice (DOJ) William Hightower, a 60-year-old resident of Bellaire was charged with a 13-count indictment charging him with wire fraud, mail fraud and money laundering. The charges claim that he was the president of Hightower Capital Group (HCG) founded it in 2010 and held himself out to be an investment advisor. The charges outline that Hightower took money from clients from 2013-2018 and made false promises as to their investments when in reality he was conducting a Ponzi Scheme.

Hightower would allegedly tell investors their money was being invested in various projects, such as restaurants, movies, insurance contracts. However, DOJ alleges that none of these projects existed and that instead Hightower received more than $10 million from investors and used investor funds to pay earlier investors in a Ponzi Scheme and to pay himself and fund his lifestyle.

The DOJ also charges that Hightower also concealed from his clients that the Financial Industry Regulatory Authority (FINRA) had barred him in October 2015. The DOJ stated that if convicted, Hightower faces up to 20 years in federal prison for each count as well as possible fines.

According to BrokerCheck records kept by FINRA Hightower has six customer complaints – most of which relate to the alleged securities fraud activities.