Securities Lawyers Blog

GPB Capital Investor Recovery Options

June 27, 2018 | by Staff Attorney

The law offices of Gana Weinstein LLP are investigating GPB Capital Holdings (GPB Capital) and its dispute with a former business partner Patrick Dibre (Dibre) who allegedly reneged on the sale to GPB Capital of certain auto dealerships causing the fund to lose $40 million according to GPB’s complaint. The complaint alleged that between December 2013 and April 2015 GPB Capital advanced Dibre $42 million for auto dealerships he then failed to deliver. The lawsuit claims that Dibre failed to provide required notices to start the sales process of five dealerships.

Dibre owned auto dealerships in the New York area and purportedly held himself out to the GPB Capital as the person who could build out GPB Capital’s auto dealership business. Instead of that happening, the complaint alleges that Dibre informed automobile manufacturers that they should withhold their approval of GPB Capital owning and operating dealers because of claimed malfeasance. However, GPB Capital alleges that Dibre is negotiating for the sale of the same dealerships to an investment fund.

At this time it unclear the ultimate financial impact this failed transaction will have on GPB Capital Holding’s funds which include:

Michael Resciniti Suspended by FINRA for Executing Unauthorized Transactions

June 25, 2018 | by Staff Attorney

The investment lawyers of Gana Weinstein LLP are investigating the regulatory action brought by the Financial Industry Regulatory Authority (FINRA) against Michael Resciniti (Resciniti). According to BrokerCheck records, Resciniti was suspended by FINRA in December 2017 for seven months. In addition, Resciniti has been subject to five customer disputes and three regulatory orders. Three of the customer disputes are still pending. Many of the claims allege churning and unauthorized trading.

In November 2017, FINRA found that Resciniti executed 31 unauthorized transactions in two of his customer’s accounts. The duration of his suspension is 7 months.

In addition, in February 2016, Resciniti resolved a bankruptcy filing and has a tax lien of over $115,000. Bankruptcies and large tax liens are a potential sign that the advisor has difficulty managing their own finances. FINRA provides this information to the public because it is material for consumers to know whether or not their advisor’s financial situation influences the advisor’s recommendations.

Jorey Bernstein Subject to a Pending Customer Complaint Alleging $3,000,000 in Damages

June 25, 2018 | by Staff Attorney

The securities attorneys at Gana Weinstein LLP are investigating claims against Western International Securities, Inc. (Western International) broker Jorey Bernstein (Bernstein). According to BrokerCheck records, Bernstein has been subject to one pending customer complaint regarding excessive trading.

In August 2018, a customer alleged that from 2009 to 2014, Bernstein excessively traded their account. The customer requested damaged of $3,000,000. This dispute is currently still pending.

In addition, Bernstein has been subject to resignation from Morgan Stanley in 2015 due to customer allegations regarding Bernstein’s illegal interactions and outside business activities with a third-party. A broker’s outside business activities with a third-party can create a conflict of interest with the firm. Therefore, firms are required to monitor such activities through supervision that is in compliance with securities laws and regulations.

David Ferwerda and Sandra Ferwerda Accused of Selling Woodbridge Mortgage Fraudulent Investments

June 25, 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 public filings two of Woodbridge’s agents appears to be David and Sandra Ferwerda (Ferwerda). David Ferwerda was formerly associated with Signator Investors, Inc. (Signator Investors) out of the firm’s Grand Rapids, Michigan office location. In March 2018 Ferwerda was terminated from Signator Investors for involvement in the sale of unapproved outside investments in violation of firm policy.

Federal securities laws and the FINRA rules require firms to monitor and supervise its employees, like Ferwerda, 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.

Is Hector May Your Financial Advisor? – Investor Recovery Options

June 24, 2018 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Hector May (May), formerly associated with Securities America, Inc. (Securities America) in New York, New York is under criminal investigation by the U.S. Department of Justice (DOJ) for investment fraud. At the same time, May was terminated by Securities America on concerns that the advisor misappropriated client assets.

Investors who have come forward concerning May’s fraud claim that he sold what now appear to be fake tax-free corporate bonds. It is doubtful that these investments ever existed. Instead, the allegations claim that May most likely pocketed client funds and paid other clients funds with the proceeds from other investors – a classic Ponzi-scheme. As with all Ponzi schemes this one collapsed when May could not make promised payments.

It appears that May conducted his alleged scheme through a disclosed outside business activity called Executive Compensation Planners, Inc. May may have used this company to handle client investments and distribute fake returns to investors. Outside business activities such as Executive Compensation Planners should have caused concern at May’s brokerage firm because these separate corporate entities are frequently used by unscrupulous advisors to conceal and commit frauds. According to news sources, Executive Compensation Planners’ website in 2016 stated the firm was registered to sell securities and insurance but has since been taken down. Further, May disclosed to clients in a brochure from Executive Compensation Planners that the firm handled more than $18 million in assets.

Sean Brady Barred By FINRA Over Complaints Concerning Alternative Investment Sales Practices

June 24, 2018 | by Staff Attorney

Former First Allied Securities, Inc. (First Allied) broker Sean Brady (Brady) has been subject to at least six customer complaints, one employment termination for cause, and one regulatory action resulting in a bar from the industry. 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). The attorneys at Gana Weinstein LLP have extensive experience handling investor losses caused by these types of products.

In October 2017 First Allied terminated Brady on allegations that he violated the firm’s policies pertaining to client falsification of signature on documents, text messaging, and consolidated account reports. Thereafter, Brady was subject to a FINRA investigation concerning his sales practices. FINRA found that Brady failed to provide the regulator with information and documents requested resulting in a automatic industry bar.

The most recent customer complaint alleges Brady misrepresented her net worth, made an unsuitable recommendation, and made misrepresentations and omissions with respect to her investment from 2017 causing $265,000. The claim is currently pending.

ARO Equity and Thomas Renison Investor Recovery Options

June 24, 2018 | by Staff Attorney

The law offices of Gana Weinstein LLP are investigating the Massachusetts Securities Division’s enforcement action and administrative complaint against ARO Equity, LLC (ARO Equity), Thomas David Renison (Renison), and Timothy James Allcott (Allcott). The complaint alleges that ARO Equity is Ponzi-scheme. This is not Renison’s first securities offense. In 2014, the Securities and Exchange Commission (SEC) issued an order permanently barring Renison from the securities industry. The SEC’s order was the result of Renison’s role in a 2008 scheme to defraud one of his former advisory clients through the sale of a promissory note. A year after the SEC issued its permanent bar, Renison established ARO Equity which is a self-described “private investment fund” claiming to invest in various business ventures throughout Massachusetts and New England.

The state of Massachusetts has claimed that Allcott was the manager of ARO Equity and together with Renison took $5.8 million of investor funds since August 2015. The complaint alleges that these funds were raised through the sale of unsecured promissory notes promising 8-12% annual returns over three to five-year terms. The complaint alleges that investors made significant investments from their retirement accounts by transferring qualified retirement assets to a self-directed IRA to invest in ARO Equity.

The state of Massachusetts alleges that ARO Equity and its members made material misstatements or omissions of material fact to investors in the sale of its securities. ARO Equity is alleged to have failed to inform note holders of Renison’s criminal and disciplinary history. Further, it was alleged that ARO Equity assured investors that their money is generally safe or somehow guaranteed but have failed to truthfully inform investors of the fund’s past or present performance. Critically, the complaint alleges that ARO Equity principals have received undisclosed and excessive commission payments and executive compensation for soliciting investments and bears the hallmarks of a Ponzi scheme.

Defrauded Investors: SEC Accused First Nationle Solution, United RL Capital, and Percipience Global of Being a $102 million Ponzi Scheme

June 23, 2018 | by Staff Attorney

The law offices of Gana Weinstein LLP are investigating the Securities and Exchange Commission’s (SEC) charges and asset freeze against several individuals and companies behind what the agency calls a $102 million Ponzi scheme that defrauded investors throughout the country. According to the SEC’s complaint, the defendants misled 600 investors through sales of securities in issuers First Nationle Solution LLC (First Nationle), United RL Capital Services (United RL), and Percipience Global Corp. (Percipience Global). The so-called advisors involved charged by the SEC include Perry Santillo, Christopher Parris, Paul LaRocco, John Piccarreto, and Thomas Brenner (the Advisors).

The SEC alleged that investors were solicited by the Advisors after they had acquired the brokerage practices from retiring investment advisors or through a sale of their business. After the business was acquired investors were told that their funds would be invested in companies with guaranteed dividends returns. However, the SEC alleges that the defendants stole $20 million of investor funds, paid $38.5 million in Ponzi payments to other investors, and transferred the remainder in transactions that the SEC believes was unrelated to the companies’ claimed businesses.

The SEC provides an example of the Advisors use of stolen investor funds. The SEC alleges that Santillo used stolen money to fund a jet-setting lifestyle including paying for housing in multiple states, car leases, expenditures at a country club and a Las Vegas resort and casino. The SEC alleged that Santillo at a nightclub in Las Vegas commissioned a song about himself where the lyrics refer to (Perry) Santillo as “King Perry.” The song also allegedly contained lyrics concerning Santillo’s lifestyle with his stolen funds as: “pop the champagne in L.A., New York to Florida; buy another bottle just to spray it all over ya.”

Dennis Travis Subject to Customer Disputes Over Unsuitable Variable Annuity Practices

June 22, 2018 | by Staff Attorney

Securities attorneys at Gana Weinstein LLP are investigating The O.N. Equity Sales Company (O.N. Equity Sales) broker Dennis Travis (Travis). According to BrokerCheck records, Travis has been subject to 6 customer disputes, one of which is still pending. The majority of these customer disputes involve the unsuitable recommendations of variable annuities. In addition, Travis has been subject to a regulatory action by The Financial Industry Regulatory Authority (FINRA) in which FINRA sanctioned Travis for various violations of the securities laws.

In November 2017, a customer alleged that Travis placed customer into a variable universal life (VUL) insurance policy that was unsuitable to customer investment needs. The customer has alleged $57,643.65 in damages. This dispute is currently still pending.

In addition, in November 2011, FINRA found that Travis placed discretionary trades in the subaccounts of his customers’ variable annuities without the written authorization or knowledge of his customers or his member firm. Travis did this in an attempt to “balance” the allocation of investments. Without admitting or denying the findings, Travis consented to the described sanctions and entry findings. He was fined $5,000 and suspended on December 2011 for 10 days.

Justin Vaccaro Subject to Multiple Customer Disputes for Alleged Committed Fraud

June 22, 2018 | by Staff Attorney

The securities attorneys at Gana Weinstein LLP are investigating claims against J.W. Cole Financial, Inc. (J.W. Cole Financial) broker Justin Vaccaro (Vaccaro). According to BrokerCheck records, Vaccaro has been subject to three customer complaints, one of which is still pending.

In September 2017, a customer alleged that Vaccaro engaged in Breach of Fiduciary duty, unsuitable investments, fraudulent misrepresentations, and failure to supervise. The case settled at $70,000.

In September 2017, a customer alleged that Vaccaro had advised for unsuitable investments, violated the Oregon Securities Law, breached fiduciary duty, and committed fraud and deceit. The client has requested $195,000 in damages. This dispute is still pending.