Securities Lawyers Blog

FINRA bans Broker Christopher Jorgensen

November 1, 2017 | by Staff Attorney

The investment lawyers of Gana Weinstein LLP are investigating regulatory action brought by the Financial Industry Regulatory Authority (FINRA) against Christopher Stephen Jorgensen (Jorgensen). Jorgensen allegedly refused to appear for on-the-record testimony requested by FINRA resulting in a ban from the securities industry.

In April 2017, Jorgensen was terminated from his position at Summit Brokerage Services after “the firm received a verbal complaint from a customer who alleged that [he] instructed her not to respond to a FINRA inquiry.”

In 2012, he was terminated from his position at Raymond James Financial Services “due to client complaint and settlement relating to unauthorized discretion.”

Former LPL Financial Broker Daniel Pugel Subject to Multiple Customer Complaints

November 1, 2017 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints against former LPL Financial LLC (LPL Financial) Broker Daniel Pugel (Pugel). According to BrokerCheck records, in March 2017, Pugel was “permitted to resign” from Financial Advocates Investment Management after allegedly violating investment-related statutes, regulations, rules, and/or industry standards of conduct, including FINRA Rule 2310 (suitability). Pugel has received three customer complaints.

In 2016 a customer alleged Daniel Pugel, while employed at Financial Advocates Investment Management, made unsuitable investment recommendations, failed in his supervisory duties, breached his fiduciary duty, and violated blue sky laws. The complaint settled in 2017 for $215,000.

In 2004 a customer alleged Daniel Pugel, while employed at Morgan Stanley, breached of contract, breached his fiduciary duty, made unsuitable recommendations, and committed fraud in connection to a mutual fund investment. The complaint resulted in an award to the customer of more than $95,900.

Broker Dennis Rasmusson Subject to Customer Complaints

November 1, 2017 | by Staff Attorney

The investment lawyers of Gana Weinstein LLP are investigating claims against Dennis Rasmusson (Rasmusson). According to BrokerCheck records, Rasmusson has been subject to two customer disputes and regulatory action.

In 2014, a customer alleged that Rasmusson failed to follow instructions, traded excessively and breached his fiduciary duty. The damage amount requested was $500,000 and this dispute settled for $110,000. In 2013, a customer alleged mismanagement of portfolio. This dispute was settled for $34,000.

In 2011 the state of Nebraska sanctioned Rasmusson for failing to keep certain books and records and maintain policies and procedures manual.

$2 Billion EnerVest Private Equity Fund Collapses – Investor Recovery Options

October 30, 2017 | by Staff Attorney

According to multiple news sources, a private equity fund managed by firm EnerVest Ltd. has lost essentially all of its value. The $1.5 billion EnerVest Energy Institutional Fund XII closed in 2010 while the $2 billion EnerVest Energy Institutional Fund XIII closed in 2013 appear to be affected by the loss. The EnerVest Fund XIII fund raised billions and focused on oil and gas and then borrowed $1.3 billion leveraging up the fund at the height of the oil market. As oil prices declined from more than $100 in 2014 to a low of $26 the value of EnerVest’s assets, which served as collateral on the debt, fell precipitously.

The decline in asset value then triggered repayment demands from lenders that could not be met. EnerVest has its credit facilities with Wells Fargo for its funds. In 2015, after the valuation of EnerVest Fund XII fell, Wells Fargo accelerated EnerVest’s debt repayment to $125 million from $20 million. EnerVest also stated in 2016 that it expected Wells Fargo to require an even larger repayment of Fund XIII in May 2016.

According to sources, investors can expect to be left with at pennies on the dollar. A loss of this scale for a private equity firm of EnerVest’s size is highly unusual given that there are only a handful of private equity firms worth at least $1 billion that have lost money.

Advisor Lewis Robinson Sanctioned By FINRA

October 30, 2017 | by Staff Attorney

According to BrokerCheck records financial advisor Lewis Robinson (Robinson), currently associated with BB&T Securities, LLC (BB&T), has been subject to 10 customer complaints, one regulatory action, and one employment separation for cause. According to records kept by The Financial Industry Regulatory Authority (FINRA) Robinson has been accused by customers of unsuitable investment advice among other claims.

In August 2017, FINRA found that Robinson settled a customer’s complaint by issuing three checks in the total amount of $12,203.23 to the customer’s wife without the knowledge of his brokerage firm. FINRA determined that the customer complained on three separate occasions about the amount of commissions that he charged.

In August 2015, Morgan Stanley terminated Robinson for providing unapproved fee reimbursements to a client.

Advisor Jonathan Iraggi Terminated Over Unauthorized Trading

October 26, 2017 | by Staff Attorney

According to BrokerCheck records financial advisor Jonathan Iraggi (Iraggi), currently associated with National Securities Corporation (National Securities), has been subject to two customer complaints and one employment separation for cause. According to records kept by The Financial Industry Regulatory Authority (FINRA) Iraggi has been accused by customers of unauthorized trading among other claims.

In July 2017, Iraggi was permitted to resign from Garden State Securities, Inc. (Garden State) after allegations were made that the broker engaged in unauthorized trading. Also in July 2017 a customer filed a complaint against Iraggi stating damages of $22,000 caused by unauthorized trades. The claim was denied by the firm. In 2015 another customer filed a complaint also claiming unauthorized trading.

Advisors are not allowed to engage in unauthorized trading. Such trading occurs when a broker sells securities without the prior authority from the investor. All brokers are under an obligation to first discuss trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b). These rules explicitly prohibit brokers from making discretionary trades in a customers’ non-discretionary accounts. The SEC has also found that unauthorized trading to be fraudulent nature because no disclosure could be more important to an investor than to be made aware that a trade will take place.

Advisor Jeffrey Smith Sanctioned Over Forged Account Documents

October 26, 2017 | by Staff Attorney

According to BrokerCheck records financial advisor Jeffrey Smith (Smith), formerly associated with Accelerated Capital Group (Accelerated Capital), has been subject to five customer complaints and two regulatory actions. According to records kept by The Financial Industry Regulatory Authority (FINRA) Smith has been accused by customers of unsuitable investment advice, securities fraud, and excessive trading among other claims.

The most recent regulatory action occurred in September 2017. FINRA found that Smith maintained and utilized pre-signed and altered forms to conduct his securities business. FINRA determined that Smith’s conduct caused his brokerage firm to have inaccurate books and records. FINRA alleged that Smith had three customers sign blank forms and then made photocopies of some of the blank-signed forms so that he could reuse the customers’ signatures. FINRA found that Smith then utilized these blank-signed forms to effect transactions.

In 2011 FINRA sanctioned Smith for failing to supervise brokers and enforce the firm’s supervisory procedures.

American Finance Trust REIT Investment Loss Options

October 26, 2017 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating investor losses in American Finance Trust, a non-traded real estate investment trust (Non-Traded REIT). According to the firm’s website, American Finance Trust is designed to protect shareholder capital and produce stable cash distributions through the acquisition and management of diversified portfolio of commercial properties leased to investment grade tenants. The portfolio consists of core retail properties such as power centers and lifestyle centers.

According to a secondary market providers which allow investors to bid and sell illiquid products such as Non-Traded REITs, American Finance Trust sells for just under $15.50 per share – a significant loss on the original purchase price of $25.00.

Our firm often handles cases involving 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.

Seniors Continue to Be At High Risk of Financial Exploitation

October 26, 2017 | by Staff Attorney

There is a need for strong protection of the elderly investing population. About one out of every five Americans 65 years and older has been a victim of financial abuse. The elderly are estimated to lose up to $2.9 billion per year from scams. In fact, these figures are likely lower than the actual incidence of fraud since only reported accounts of frauds are considered and seniors are “less likely” to report being scammed.

Elders are abused by a variety of persons including family members, caregivers, scam artists, financial advisers, fiduciaries (such as agents under power of attorney and guardians), and others. Usually the person is already in a position of trust or is able to acquire a high level of trust due to the diminished capacity of the victim.

Now a new survey of state securities regulators by the North American Securities Administrators Association (NASAA), released on National Senior Citizens Day, shows that more need to be done in order to protect seniors from financial fraud. The NASAA’s polled its members and represents the views of securities regulators who are local state regulators of investment advisors.

Look out for the Top 10 Types of Investment Scams

October 24, 2017 | by Staff Attorney

The financial advisor rating firm Paladin Research & Registry assembled a list of the top 10 investment scams investors are facing today. If you are involved in any of these potential scams, the investment attorneys at Gana Weinstein LLP may be able to help you.

1. Ponzi Schemes

Ponzi schemes came in first-place for having stolen more money than any other type of scam. A Ponzi scheme is a fraudulent investment scam where the scammer promises a high rate of return with little or no risk to investors. Ponzi schemes generate returns for investors by acquiring new investors. This is similar to a pyramid scheme in that both are based on using new investors’ funds to pay the earlier backers. The Ponzi scheme unravels when no more new investors are willing to invest and older investors demand the return of their money. The nature of Ponzi schemes (or pyramid schemes) requires investors (who believe they have a strong investment) to tell friends, family and associates about the investments. The influx of new investors provides scam operators with the assets needed to meet the withdrawal requests of the early investors.