Securities Lawyers Blog

Synery Investment Advisor Alan New Accused of Selling Fraudulent Woodbridge Mortgage Investments

August 22, 2018 | by Staff Attorney

The law offices of Gana Weinstein LLP continue to investigate the Woodbridge Group of Companies and the Woodbridge Mortgage Funds (Woodbridge). The Securities and Exchange Commission (SEC) has alleged that the Woodbridge operated a billion-dollar Ponzi scheme ensnaring about 8,400 investors. Woodbridge solicited hundreds of disreputable insurance agents and investment brokers to sell its false notes that the firm claimed to be backed by mortgages. In plain sight to regulators, Woodbridge engaged in a nationwide investment fraud by offering the sale of unregistered securities.

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) Alan New (New) appears to be an agent for Woodbridge fraudulent note sales. New was formerly associated with NYLife Securities LLC (NYLife Securities) out of the firm’s Fort Wayne, Indiana office location and is currently still registered with advisory firm Synery Investment Services LLC. At least six customers have accused New of selling them the fraudulent Woodbridge investment.

Federal securities laws and the FINRA rules require firms to monitor and supervise its employees, like New, in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including recommending fraudulent investments.

Gana Weinstein LLP Wins $5 Million FINRA Arbitration Award against a New York Broker-Dealer for Churning

August 13, 2018 | by Staff Attorney

A FINRA arbitration panel ordered Windsor Street Capital, to pay two customers more than $1.3 million in compensatory damages, interest, punitive damages of over $3,000,000, attorneys fees in the amount of $552,321 and sanctions in the amount of $44,450 for churning customer accounts. The total award will be in excess of $5,000,000.

The Claimants alleged that Windsor churned their accounts over a very short period of time and violated know-your-customer rules and misrepresented the investments Windsor recommended.

You can find the award here.

FINRA Bars Bradley Tennison for Alleged Selling Away Practices

August 3, 2018 | by Staff Attorney

The investment attorneys at Gana Weinstein LLP are currently investigating previously registered broker Bradley Tennison (Tennison). According to BrokerCheck Records, the Financial Industry Regulative Authority (FINRA) barred Tennison indefinitely from the financial industry for failing to appear to an on the record testimony regarding an investigation of Tennison’s outside business activities at Geneos Wealth Management, Inc. (Geneos Wealth Management). In addition, Tennison has been subject to three customer disputes, one of which is still pending. The majority of these disputes involve unsuitable limited partnerships and selling away. Tennison has also been subject to termination from two firms of employment.

In April 2018, a customer alleged that in 2016, Tennison recommended a former client to invest $300,000 in “The Joseph Project”, which he represented to be a 12 month investment with 5 % returns. The customer never received any statements or returns on her principal payment. The customer has requested $300,000 in damages. This dispute is currently still pending.

Subsequently, in April 2018, Tennison was terminated from Geneos Wealth Management for failing to be in compliance with the firm’s policies and regulations regarding outside business activities and selling away.

Financial Advisor Edward Klug Subject to Multiple Tax Liens

August 3, 2018 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) former Newbridge Securities Corporation (Newbridge Securities) broker Edward Klug (Klug) left the securities industry in May 2018 after disclosing several large tax liens in the prior years. Klug has made seven financial related disclosures and lists four customer complaints. The customer complaints against Klug allege churning or excessive trading.

In March 2018 Klug disclosed a $141,711 tax lien against him. In May 2017, Klug disclosed a $482,714 tax lien against him. Prior to that, in April 2016 Klug disclosed a $44,229 tax lien against him. Such disclosures on a broker’s record can reveal a financial incentive for the broker to recommend high commission products or services. FINRA discloses information concerning a broker’s financial condition because a broker’s inability to handle their own personal finances has also been found to be material information in helping investors determine if they should allow the broker to handle their finances.

When brokers engage in excessive trading, sometimes referred to as churning, the broker will typical trade in and out of securities, sometimes even the same stock, many times over a short period of time. Often times the account will completely “turnover” every month with different securities. This type of investment trading activity in the client’s account serves no reasonable purpose for the investor and is engaged in only to profit the broker through the generation of commissions created by the trades. Churning is considered a species of securities fraud. The elements of the claim are excessive transactions of securities, broker control over the account, and intent to defraud the investor by obtaining unlawful commissions. A similar claim, excessive trading, under FINRA’s suitability rule involves just the first two elements. Certain commonly used measures and ratios used to determine churning help evaluate a churning claim. These ratios look at how frequently the account is turned over plus whether or not the expenses incurred in the account made it unreasonable that the investor could reasonably profit from the activity.

SII Investments Terminates Frank Cuenca Over Variable Annuity Practices

August 3, 2018 | by Staff Attorney

The securities attorneys at Gana Weinstein LLP are currently investigating former International Assets Advisory, LLC (International Assets) broker Frank Cuenca. According to BrokerCheck records, in December 2017, Cuenca was terminated by SII Investments, Inc. (SII investments) for failing to follow his firm’s procedures regarding submitting variable annuity transactions. He also failed to submit a customer complaint and unapproved email in a timely manner. In addition, Cuenca has been subject to five customer disputes, the majority alleging failure to follow customer instructions.

In March 2009, a customer alleged that in 2008, Cuenca failed to follow customer instructions to liquidate the account and to move $12,000 back into the market. The customer requested $12,000 in damages.

In December 2008, a customer alleged that Cuenca liquidated the customer account without the customer knowledge or permission. The customer requested $5,000 in damages.

Gregory Hill Subject to Pending Complaint Over Annuity Sales

August 2, 2018 | by Staff Attorney

The securities attorneys at Gana Weinstein LLP are currently investigating Royal Alliance Associates, Inc. (Royal Alliance) broker Gregory Hill (Hill). According to BrokerCheck Records, Hill has been subject to one pending customer dispute and tax lien. In addition, Hill has been subject to termination from employment. The majority of these concerns allege the firm’s failure to supervise.

In August 2017, a customer alleged that Hill’s firm of employment failed to supervise Hill’s inappropriate sale of a variable annuity to the customer. The client has requested $1,185,056 in damages. This dispute is currently still pending.

In addition, in December 2010, ING Financial Partners, Inc. terminated Hill for failing to report his three tax liens on the U4 form. Hill has also been subject to a tax lien. In June 2010, Hill incurred a tax lien of $86,263.

Advisor Richard Minichino Subject to Customer Complaints Over Annuities

August 2, 2018 | by Staff Attorney

The securities attorneys at Gana Weinstein LLP are currently investigating previously registered broker Richard Minichino (Minichino). According to BrokerCheck Records, Minichino has been subject to a pending customer dispute concerning roll-over annuities. In addition, Minichino has been subject to 4 tax liens and termination from employment at Next Financial Group, Inc. (Next Financial).

In April 2018, a customer alleged that Minichino unsuitably recommended the customer to roll over IRA annuities into other investments multiple times. The customer is requested $70,000 in damages. This dispute is currently still pending.

In February 2018, Minichino was terminated from Net Financial for trading customer’s accounts in an unsuitable manner that did not match with the investor’s needs or objectives.

Broker Miguel Murillo Subject to Pending Complaint Alleging Unsuitable Investments

July 31, 2018 | by Staff Attorney

The securities attorneys at Gana Weinstein LLP are currently investigating Joseph Stone Capital L.L.C. (Joseph Stone) broker Miguel Murillo (Murillo). According to BrokerCheck Records, Murillo has been subject to three customer disputes, one of which is still pending. In addition, Murillo has been sanctioned by the Financial Industry Regulatory Authority (FINRA) for being in violation of various securities laws.

In September 2017, a customer alleged that Murillo engaged in recommending unsuitable investments, executing unauthorized transactions, excessively trading the account, and security fraud. The customer has requested $800,000 in damages. This dispute is currently still pending.

In August 2008, a customer alleged that Murillo failed to follow customer instructions and engaged in unauthorized trading and false representation of the nature of the investments recommended. The case settled at $35,000.

Paul Dangelo Subject to Customer Complaint Alleging Unsuitable Puerto Rico Bond Investments

July 31, 2018 | by Staff Attorney

The securities attorneys at Gana Weinstein LLP are currently investigating previously registered broker Paul Dangelo (Dangelo). According to BrokerCheck Records, Dangelo has been subject to six customer disputes, the majority concerning unauthorized trades and unsuitable investment recommendations in Puerto Rico bonds. In addition, Dangelo has been subject to termination from two firms of employment.

In January 2017, a customer alleged that from March 2005 to January 2017, Dangelo placed the customer in high-risk, uninsured Puerto Rico bonds that were unsuitable for the customer’s investment needs and objectives considering the customers old age of 70 years old and retiree status.

In addition, in September 2016, a customer alleged that from March 2005 to February 2015, Dangelo placed the customer in unsuitable bonds that did not match the customer’s objectives of safe, passive income investments.

Joseph Pratte Barred By Financial Regulator Over Unapproved Business Activities

July 31, 2018 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Joseph Pratte (Pratte), formerly associated with Signator Investors, Inc. (Signator Investors) in Riverside, California was terminated by his firm concerning allegations he engaged in prohibited outside business activity (OBA) and failed to submit the activity to the firm for approval as required.

Thereafter, in May 2018 FINRA sought to question Pratte concerning his OBA. FINRA found that Pratte failed to cooperate with the investigation. Accordingly, FINRA determined that Pratte consented to the sanction and to the entry of findings that he refused to provide information in response to FINRA requests made to review Pratte’s outside business activities.

At this time it is unclear the extent of Pratte’s outside business activities or if private securities transactions were involved. However, Pratte disclosed that he was engaged in a rental property business.