Securities Lawyers Blog

Rhett Bedwell Accused of Selling Ponzi Scheme Investments – Investor Recovery Options

October 19, 2021 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Rhett Bedwell (Bedwell) has been accused by clients of engaging in fraudulent investment activities including undisclosed outside business activities (OBAs) and private securities transactions. According to records kept by FINRA Bedwell was employed by LPL Financial LLC (LPL Financial) at the time of the activity. If you have been a victim of Bedwell’s alleged misconduct our firm may be able to assist you in recovering funds.

Rhett Bedwell is accused by investors and was investigated for unsuitably recommending investors to invest in a Ponzi scam involving Small World Capital and Graysail Capital. In March 2021 FINRA barred Bedwell after finding that Bedwell consented to sanctions and findings that he refused to produce information and documents requested by FINRA during the course of its review of an amended Form U5 filed by his former member firm. FINRA’s investigation stemmed from a disclosure that Bedwell had been identified in a pending customer arbitration alleging that he moved a client’s IRA to a different administrator and used forged documentation to invest the claimant’s money in a Ponzi scheme.

Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in receiving loans from clients or selling securities sales through OBAs. The sale of unapproved investment products – is a practice known in the industry as “selling away” – a serious violation of the securities laws. 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. Sometimes those investments have some legitimacy but often times these types of investments can end up being Ponzi schemes or the advisor can be engaging in the conversion of funds.

Raymond James Advisor Gregory Collier Has Investor Suitability Complaints

October 18, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Gregory Collier Sr. (Collier), currently employed by Raymond James Financial Services, Inc. (Raymond James Financial Services) has been subject to at least two customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Mr. Colliers’s customer complaints alleges that Mr. Collier recommended unsuitable investments in various investments among other allegations of misconduct relating to the handling of their accounts.

In December 2019, a customer complained that Mr. Collier violated the securities laws by alleging that Mr. Collier engaged unauthorized trading. The claim settled in the amount of $200,000.

In July 2019, a customer complained that Mr. Collier violated the securities laws by alleging that Mr. Collier engaged in unsuitable investment advice, and poor portfolio management. The claim requested $25,000 in damages. The claim was denied.

Advisor Russell Green Accused of Unsuitable Investments and Churning Client Accounts

October 18, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that advisor Russell Green (Green), currently employed by Cabot Lodge Securities LLC (Cabot Lodge) has been subject to at least five customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Mr. Green’s customer complaints alleges that Mr. Green recommended unsuitable investments, among other allegations, including: churning, and misconduct relating to the handling of their accounts.

In August 2017, a customer complained that Mr. Green violated the securities laws by alleging that Mr. Green engaged in excessive trading and unsuitable recommendations. The claim settled in the amount of $250,000.

In June 2014, Mr. Green was subject to a FINRA regulatory action. Mr. Green allegedly engaged in misconduct regarding necessary client information in connection with the deposit and sale of stock. Mr. Green consented to sanctions; he was faced with $5,000 in fines.

When brokers engage in excessive trading, sometimes referred to as churning, the broker will typically 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.

Andrew Grant Subject to FINRA Regulatory Action Over Discretionary Trading

October 16, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Andrew Grant (Grant), currently employed by Laidlaw & Company (UK) Ltd. (Laidlaw & Company) has been subject to at least one regulatory action and a customer complaint during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Mr. Grant’s customer complaints alleges that Mr. Grant recommended unsuitable investments, among other allegations of misconduct relating to the handling of their accounts.

In January 2020, FINRA initiated a regulatory action against Mr. Grant. Mr. Grant consented to the sanctions and findings. The findings involved Mr. Grant exercising discretionary trading in customers’ accounts, who did not give written authorization. Mr. Grant faced $5,000 in civil and administrative penalties/fines, along with suspension for 15 business days.

In August 2018, a customer complained that Mr. Grant violated the securities laws by alleging that Mr. Grant engaged in unsuitable investment advice for two years. The claim alleged $125,000 in damages and was closed-no action.

Advisor Doron Kochavi Has Unsuitable Investment Complaints

October 16, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that broker Doron Kochavi (Kochavi), currently employed by Western International Securities, Inc. (Western International) has been subject to at least six customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Western International’s customer complaints allege that Mr. Kochavi recommended unsuitable investments in various investments, among other allegations of misconduct relating to the handling of their accounts.

In October 2019, a customer complained that Mr. Kochavi violated the securities laws by alleging that Mr. Kochavi breached his fiduciary duty. The claim alleges $4,000,000.00 in damages and is currently pending.

In August 2002, a customer complained that Mr. Kochavi violated the securities laws by alleging that Mr. Kochavi engaged in the recommendation of unsuitable investments, breach of fiduciary duty, and a failure to disclose material information regarding the investments. Damages were granted in the amount of $35,000.

In addition, older claims also involved allegations of similar misconduct. Claims from 1997 and 1999 involved allegations that Mr. Kochavi engaged in the recommendation of unsuitable investments.

Financial Advisor David Bibo Has REIT Investor Complaints

September 22, 2021 | by Staff Attorney

Advisor David Bibo (Bibo), currently employed by brokerage firm Western International Securities, Inc. (Western International) has been subject to at least four customer complaints, one termination for cause, and two criminal matters during the course of his career. According to a BrokerCheck report several of the customer complaints concern alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.

In September 2020 a customer complained that Bibo violated the securities laws by alleging that Bibo made misleading recommendations and unsuitable recommendations in alternative investments. The claim alleges $300,000 damages, and is currently pending.

In December 2019 a customer complained that Bibo violated the securities laws by alleging that Bibo made unsuitable recommendations in alternative investments. The claim alleges $1,500,000 damages, and is currently pending.

In May 2019 a customer complained that Bibo violated the securities laws by alleging that Bibo made an unreasonable investment. The claim alleges $50,000 damages and was denied by the firm.

Financial Advisor Gregory Williams Subject to Nine Investment Complaints

September 21, 2021 | by Staff Attorney

Advisor Gregory Williams (Williams), formerly employed by brokerage firm Forta Financial Group, Inc. (Forta Financial) has been subject to at least nine customer complaints. According to a BrokerCheck report several of the customer complaints concern alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.

In April 2021 a customer complained that Williams violated the securities laws by alleging that Williams committed the following violations: breach of fiduciary duty, negligence and violation of state and federal securities laws between November 2013 and February 2021. The claim involves alternative investments and alleges $30,000 in damages and is currently pending.

In October 2020 a customer complained that Williams violated the securities laws by alleging that Williams committed the following violations: breach of fiduciary duty, negligence and violation of state and federal securities laws between November 2014 and September 2020. The claim involves alternative investments and alleges $250,000 in damages and is currently pending.

In October 2020 a customer complained that Williams violated the securities laws by alleging that Williams committed the following violations: breach of fiduciary duty, negligence and violation of state and federal securities laws likely between March 2012 and September 2020. The claim involves alternative investments and alleges $99,000 in damages and is currently pending.

Horizon Private Equity III Ponzi Scheme Victims – Investor Recovery

September 20, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are currently representing investors who have been the victim of the Horizon Private Equity III, LLC (Horizon) scam. Recently, the SEC has alleged that approximately 400 investors in Horizon were defrauded in a Ponzi scheme fashion out of over $110 million. A number of Oppenheimer & Co. Inc. (Oppenheimer) advisors were involved in the scam including Horizon’s chief architect and mastermind John J. Woods (CRD# 1949233) and his families members including broth James Wallace Woods Jr. (CRD# 734272), and cousin Michael Jeremiah Mooney (CRD# 4037101).

Woods and his cohorts used and abused their trusted positions as financial advisors to solicit Horizon to their clients making claims that Horizon was a safe investment that generated 6-7% guaranteed returns, had a guaranteed rate of return, carried little risk and were extremely safe and conservative, and that the Horizon investment was sponsored or offered by Oppenheimer. In reality, Horizon was a fraudulent venture that repaid old investors with funds raised from new investors. Horizon had few to no risk disclosures and failed to provide investors with information as to the nature of the funds’ holdings or other information that investors should have been provided with. When the SEC investigated Horizon III, the regulator found that by July 2021, Horizon III had liquid assets worth less than $16 million and had only invested $20 million in dubious small real estate projects.

Our firm is representing clients who have alleged that Oppenheimer permitted Woods and his co-conspirators to perpetrate this fraudulent scheme while turning a blind eye to numerous signs of fraud. Our firm’s investigation has revealed that Woods has been under almost continuous litigation concerning his outside business activities since at least 2007. Further, Oppenheimer was subpoenaed to produce documents and records relating to Woods’ outside business dealings in at least on litigation where Woods was accused of defrauding an investor to provide capital for one of Woods’ many businesses. In addition, court records reveal that Woods stated under oath that his failed business ventures left him personally liable for loans totaling over $6 million.

Seth Stewart Has Customer Complaints Over Alternative Investments

September 20, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that Seth Stewart, currently employed by Brookstone Financial and formerly employed by Center Street Securities, Inc. (Center Street), has been subject to at least two customer complaints during his career. According to records kept by the Financial Industry Regulatory Authority (FINRA), Stewart’s customer complaints allege that Stewart recommended unsuitable investments in illiquid alternative investments – a high risk investment category.

In February 2020, a customer complained that Stewart violated the securities laws by alleging that Stewart engaged in unsuitable investment advice. The claim alleges $200,000 in damages and is currently pending.

In December 2019, a customer complained that Stewart violated the securities laws by alleging that Stewart was unaware that certain investments he made were illiquid. The claim alleges $100,000 in damages and is currently pending.

DDPs include products such as non-traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments. These alternative investments virtually never profit investors and are almost always unsuitable for investors because of their high fee and cost structure. Brokers selling these products are paid additional commission in order to hype these inferior quality investments providing a perverse incentives to create an artificial market for the investments.

Several studies have confirmed that Non-traded REITs underperform publicly traded REITs with some showing that Non-Traded REITs cannot even beat safe benchmarks, like U.S. treasury bonds. Brokers selling these products must disclose to the investor that non-traded REITs provide lower investment returns than treasuries while being high risk and illiquid – but almost never do. Because investors are not compensated with additional return in exchange for higher risk and illiquidity, these kinds of alternative investment products are rarely, if ever, appropriate for investors.

Former Morgan Stanley Advisor Ken Hutkin Terminated For Undisclosed Activities

September 15, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that Kenneth Hutkin, currently employed by Wedbush Securities Inc., (Wedbush) has been subject to at least five customer complaints during his career. According to records kept by the Financial Industry Regulatory Authority (FINRA), Hutkin’s customer complaints allege that Hutkin recommended unsuitable investments, engaged in churning, overcharged certain corporate security debts, and engaged in unapproved outside business practices.

In February 2020, a customer complained that Hutkin violated the securities laws by alleging that Hutkin engaged in unsuitable investment advice. The claim does not specify any amount with respect to damages. However, the complaint was denied.

In September 2018, a customer complained that Hutkin violated securities laws by alleging that Hutkin engaged in unapproved outside business activities, including payments for some such activities. Hutkin was terminated by his employer, Morgan Stanley, for these allegations.

In October 2008, a customer complained that Hutkin violated securities laws by alleging that Hutkin overcharged certain corporate debt securities. The claim settled in the amount of $52,958.

In June 1993, a customer complained that Hutkin violated securities laws by alleging that Hutkin engaged in unsuitable investment advice and churning. The claim settled in the amount of $23,000.

In June 1992, a customer complained that Hutkin violated securities laws by alleging that Hutkin engaged in unsuitable investment advice and churning. The claim settled in the amount of $130,000.