Securities Lawyers Blog

Broker Samuel Koltun Accused of Selling Unsuitable Puerto Rico Bonds

January 30, 2017 | by Staff Attorney

Our securities fraud attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Samuel Koltun (Koltun) currently associated with RBC Capital Markets, LLC (RBC) alleging unsuitable investments in Puerto Rico municipal bonds among other claims. According to brokercheck records Koltun has been subject to six customer complaints and one regulatory action.

Puerto Rico municipal bonds are speculative investments based upon the deteriorating finances of the island. Many brokers have been accused of peddling these bonds in large concentrations to clients. In September 2016 a customer filed a complaint against Koltun alleging over concentration in Puerto Rico bonds from 2012 through 2015. The claim alleges $80,000 in damages and is currently pending. In another complaint filed in April 2016, the customer alleges $260,000 caused by overconcentration in Puerto Rico municipal bonds. The claim is currently pending.

Brokers in the financial industry have the fundamental responsibility to treat investors fairly. This obligation includes making only suitable investments for their client. The suitable analysis has certain requirements that must be met before the recommendation is made. First, there must be reasonable basis for the recommendation for the investment based upon the broker’s and the firm’s investigation and due diligence. Common due diligence looks into the investment’s properties including its benefits, risks, tax consequences, the issuer, the likelihood of success or failure of the investment, and other relevant factors. Second, if there is a reasonable basis to recommend the product to investors the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives. These factors include the client’s age, investment experience, retirement status, long or short term goals, tax status, or any other relevant factor.

FINRA Bars Joseph Likens Over Private Securities Sales

January 30, 2017 | by Staff Attorney

Our firm is investigating claims made by The Financial Industry Regulatory Authority (FINRA) against broker Joseph Likens (Likens). According to brokercheck, in Likens failed to respond to FINRA’s requests for information resulting in a bar. FINRA stated that Likens refused to appear for on-the-record testimony related an investigation into allegations that he may have engaged in private securities transactions. At this time the scope of Likens activities and the specific investments are not reported. However, Likens disclosed outside business activities involving PWA Network.

The FINRA investigation followed Likens’ termination from his previous employer LPL Financial LLC (LPL) in May 2016. Likens worked out of a d/b/a Cornerstone Wealth Management. At that time, Likens was terminated after allegations were made that he engaged in trading away from the firm. In November 2016, a customer alleged that Likens sold away from the firm an investment made in 2011 causing $120,000 in damages. The claim is currently pending.

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”. Often times brokers who engage in this practice use outside businesses in order to market their securities.

Broker Bryon Glime Barred From Financial Industry

January 29, 2017 | by Staff Attorney

Our securities fraud attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Bryon Glime (Glime) formerly associated with Capital Investment Group, Inc. (Capital Investment) alleging unsuitable investments and unauthorized trading among other claims. According to brokercheck records Glime has been subject to three customer complaints, one criminal matter, three judgments or liens, one employment termination for cause, and one regulator action.

In September 2015 Glime was terminated by Capital Investment after the firm alleged that Glime failed to timely report a criminal disclosure to the firm. The criminal disclosure disclosed includes allegations of theft, embezzlement, and misappropriation.

Brokers in the financial industry have the fundamental responsibility to treat investors fairly. This obligation includes making only suitable investments for their client. The suitable analysis has certain requirements that must be met before the recommendation is made. First, there must be reasonable basis for the recommendation for the investment based upon the broker’s and the firm’s investigation and due diligence. Common due diligence looks into the investment’s properties including its benefits, risks, tax consequences, the issuer, the likelihood of success or failure of the investment, and other relevant factors. Second, if there is a reasonable basis to recommend the product to investors the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives. These factors include the client’s age, investment experience, retirement status, long or short term goals, tax status, or any other relevant factor.

FINRA Bars Broker Brian Sak Over Private Securities Sales

January 28, 2017 | by Staff Attorney

Our firm is investigating claims made by The Financial Industry Regulatory Authority (FINRA) against broker Brian Sak (Sak). According to brokercheck, Sak consented sanctions and an entry of findings that he failed to provide documents and information requested by FINRA during the course of its investigation into allegations that he solicited a client to invest in an outside business. FINRA’s investigation followed Morgan Stanely’s termination of Sak in May 2016 after the firm stated that it had concerns related to outside real estate investment with a client that was not appropriately disclosed to the firm.

At this time it is unclear the total scope and extent of these outside business activities and private transactions but according to Sak’s disclosures he is involved in Southside Holdings which is engaged in real estate rentals. To date five customers have come forward to complaint about investment losses related to Sak’s real estate transactions.

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”. Often times brokers who engage in this practice use outside businesses in order to market their securities.

Broker Charles Sorensen Receives Customer Complaints Over Unsuitable Trades

January 27, 2017 | by Staff Attorney

Our securities fraud attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Charles Sorensen (Sorensen) currently associated with Allegis Investment Services, LLC (Allegis Investment), d/b/a Soresnsen Financial, Inc., alleging unsuitable investments, unauthorized trading, and misrepresentations among other claims. Some of the complaints involve securities including mutual funds and options. According to brokercheck records Sorensen has been subject to four customer complaints.

In August 2016 a customer brought a complaint against Sorensen alleging that Sorensen made transactions without authorization in or around August 2015. The complaint alleges $100,000 in damages. The complaint is currently pending.

In June 2016 another customer filed a complaint alleging that the options strategy in which the account was invested in August of 2015 was not suitable causing $94,133.36 in damages. The complaint is currently pending.

NetWork 1 Financial Securities Broker Mark Miranda Subject to Multiple Churning Complaints

January 27, 2017 | by Staff Attorney

According to records kept by The Financial Industry Regulatory Authority’s (FINRA) customers have filed complaints against broker Mark Miranda (Miranda). Our attorneys have been reviewing records that Miranda has been the subject of at least seven customer complaints, one bankruptcy filing, and one tax lien in September 2012 for $39,000. The customer complaints against Miranda allege a number of securities law violations including that the broker made unsuitable investments, unauthorized trading and churning (excessive trading) among other claims.

The most recent complaint was filed in September 2016 and unsuitable investments causing $49,797.17 in damages. The complaint is currently pending. In April 2016 another investor filed a complaint and alleged excessive fees causing $47,620 in damages. The complaint is currently pending.

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.

Wunderlich Securities Broker Howard Brous Has 14 Regulatory Sanctions

January 26, 2017 | by Staff Attorney

Our securities fraud attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Howard Brous (Brous) currently associated with Wunderlich Securities, Inc. (Wunderlich) alleging unsuitable investments, common law fraud, and breach of fiduciary duty among other claims. According to brokercheck records Brous has been subject to six customer complaints, 14 regulatory sanctions, and one employment separation for cause. The majority of Brous’ regulatory sanctions involve multiple state regulators seeking heightened supervision plans and otherwise restricting Brous’ activities.

In August 2016 a customer filed a complaint stating that they had maintained an account with Brous for over 10 years and that his accounts were over concentrated in unsuitable securities. The customer alleged damages of $2,500,000. The claim is currently pending.

Brokers in the financial industry have the fundamental responsibility to treat investors fairly. This obligation includes making only suitable investments for their client. The suitable analysis has certain requirements that must be met before the recommendation is made. First, there must be reasonable basis for the recommendation for the investment based upon the broker’s and the firm’s investigation and due diligence. Common due diligence looks into the investment’s properties including its benefits, risks, tax consequences, the issuer, the likelihood of success or failure of the investment, and other relevant factors. Second, if there is a reasonable basis to recommend the product to investors the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives. These factors include the client’s age, investment experience, retirement status, long or short term goals, tax status, or any other relevant factor.

Brian Egan Barred By FINRA for Trading in Accounts Away From His Firm

January 25, 2017 | by Staff Attorney

Our securities fraud attorneys are investigating a complaint filed by The Financial Industry Regulatory Authority (FINRA) against Brian Egan (Egan) formerly associated with Independent Financial Group LLC (Independent Financial) alleging that the broker failed to disclose his trading activity in client accounts away from the firm. According to brokercheck records Egan has been subject to one employment termination for cause by Independent Financial in July 2015 for failing disclose personal trading in accounts away from the firm.

In August 2016 FINRA sanctioned Egan alleging that he consented to the entry of findings that Egan maintained and/or held trading authority in a total of 87 brokerage accounts for himself and over 60 customers at another brokerage firm. The customer accounts over which he held trading authority included both Egan’s family members and customers of his CPA business. FINRA found that Egan did not notify Independent Financial of his involvement in these accounts when he became associated with the firm, or at any other time. FINRA found that Egan exercised his trading authority in the accounts at the other firm to execute trades and to transfer funds and securities from certain of the customer accounts to his own accounts.

In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm. However, even though when these incidents occur the brokerage firm claims ignorance of their advisor’s activities the firm is obligated under the FINRA rules to properly monitor and supervise its employees 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. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.

Douglas Studer Barred By FINRA Over His Business Practices

January 25, 2017 | by Staff Attorney

Our securities fraud attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Douglas Studer (Studer) formerly associated with Kovack Securities Inc. (Kovack) alleging unauthorized trading among other claims. According to brokercheck records Studer has been subject to two customer complaints, one bankruptcy in 2010, and one regulatory sanction resulting in a permanent bar from the securities industry.

In September 2016 FINRA sanctioned Studer alleging that he consented to the entry of findings that he refused to appear for testimony concerning an investigation into whether he had violated his employing member firm’s policy by being named in an elderly customer’s estate documents to inherit the customer’s waterfront condominium.

Brokers in the financial industry have the fundamental responsibility to treat investors fairly. This obligation includes making only suitable investments for their client. The suitable analysis has certain requirements that must be met before the recommendation is made. First, there must be reasonable basis for the recommendation for the investment based upon the broker’s and the firm’s investigation and due diligence. Common due diligence looks into the investment’s properties including its benefits, risks, tax consequences, the issuer, the likelihood of success or failure of the investment, and other relevant factors. Second, if there is a reasonable basis to recommend the product to investors the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives. These factors include the client’s age, investment experience, retirement status, long or short term goals, tax status, or any other relevant factor.

FINRA Bars Perry De Leeuw Over Private Securities Sales

January 21, 2017 | by Staff Attorney

Our firm is investigating claims made by The Financial Industry Regulatory Authority (FINRA) against broker Perry De Leeuw (De Leeuw) – a/k/a Perry De Leeun, Perry Deleeuw. According to brokercheck, in June 2016 De Leeuw failed to respond to FINRA’s requests for information resulting in a bar.

The FINRA investigation followed De Leeuw’s termination from his previous employer, PFS Investments Inc. (PFS Investments) in April 2016. At that time, PFS Investments terminated De Leeuw alleging that he engaged in unapproved outside business activities and failed to adequately cooperate with the firm in investigating a customer complaint.

That customer complaint filed in April 2016 alleged that in 2015 the customer invested $163,350 with De Leeuw to become a distributor for a company called Waterbos. In total De Leeuw has been subject to at least four customer complaints concerning outside business activities and private securities transactions.