Securities Lawyers Blog

Ken Balser Barred by FINRA Over Allegations of Private Securities Transactions

January 16, 2017 | by Staff Attorney

Our firm is investigating claims made by The Financial Industry Regulatory Authority (FINRA) when the regulator barred broker Ken Balser (Balser). According to FINRA settlement, Balser consented to sanctions that he refused to appear for testimony and provide documents and information to FINRA concerning allegations that he engaged in private securities transactions.

In July 2016, Cetera Advisors LLC (Cetera) discharged Balser for cause alleging that Balser engaged in private securities transactions.

According to Balser’s brokercheck records Balser has at least three disclosed outside business activities. These activities include a d/b/a Secure Wealth Management. In addition, Balser disclosed a fixed insurance business and Dave Ramsey Radio Show Sponsor. 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.

Tye Williams Barred by FINRA Over Allegations of Converting Customer Funds

January 16, 2017 | by Staff Attorney

Our firm is investigating claims made by The Financial Industry Regulatory Authority (FINRA) when the regulator barred broker Tye Williams (Williams). According to FINRA settlement, Williams consented to sanctions that he failed to produce documents and information to FINRA. In addition, FINRA stated that the documents and information requested related to an investigation regarding a customer complaint alleging that Williams converted over $1,000,000 from customers’ accounts, made unsuitable investment recommendations, and engaged in unauthorized transactions and mismanaged assets.

The complaint made in April 2016 alleged that from mid 2004 until 2015, Williams mismanaged their finances by exceeding the scope of his authority and recommended unsuitable investments in ventures like Smashburger. The complaint alleges damages of $1,000,000. The claim is currently pending.

According to Williams’ brokercheck records Williams has at least six disclosed outside business activities. These activities include DC Rightside, LLC which is involved with Smashburger franchise. Also disclosed is Tye Williams Financial Services, Inc., Gold Star Equestrian, LLC, One Source Advisors Group, LLC, and Fellowship of Christian Athletes dfw. 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.

Gana LLP Files Complaint on behalf of Client Defrauded by Dean Mustaphalli

January 14, 2017 | by Staff Attorney

The securities fraud attorneys at Gana Weinstein LLP have recently filed a complaint on behalf of a client alleging that Dean Mustaphalli (Mustaphalli) engaged in securities fraud. The claim was brought against brokerage firms Sterne Agee Financial Services, Inc. (Sterne Agee) and Interactive Brokers LLC (Interactive Brokers) alleging that the firms failed to supervise Mustaphalli’s misconduct.

The complaint alleges that starting in December 2009, Mustaphalli established a securities related outside business activity (OBA) in the form an advisory firm and a hedge fund. Mustaphalli registered the investment advisor with the SEC under the name Mustaphalli Advisory Group, LLC (MAG) until December 2014. Subsequently, Mustaphalli filed a From D with the SEC in January 2011 for a hedge fund called Mustaphalli Capital Partners Fund, L.P. (MCPF) and opened an account for the fund.

The complaint alleged that Mustaphalli failed to inform Sterne Agee of his transactions through MCPF although Mustaphalli did disclose the MAG RIA. The complaint also alleges that in or around mid-2014 Mustaphalli transferred MAG’s accounts and the MCPF account to Interactive Brokers. Also around May 2013 FINRA began investigating Mustaphalli’s, MAG’s, and MCPF’s activities. In December 2014, FINRA suspended Mustaphalli for two years and imposed a fine and disgorgement for engaging in private securities transactions through MCPF without notifying Sterne Agee. Dep’t of Enforcement v. Dean Mustaphalli, AWC No. 2013036880302 (Dec. 15, 2014).

Financial Advisor Cary Kievman Subject to Multiple Customer Complaints

December 9, 2016 | by Staff Attorney

Our investment attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against financial advisor Cary Kievman (Kievman) alleging unsuitable investments and over concentrated positions among other claims. According to brokercheck records Kievman has been subject to five customer complaints.

In August 2016 a customer filed a complaint involving Kievman alleging that from April 2013-October 2014, and from September 2015-December 2016, respondent recommended unsuitable short-term equities, over-concentrated the account in equities, and that he did not receive advice regarding his 2015 required minimum distribution which caused him to miss the RMD and suffer a penalty of $6,000. The claim is current pending.

In a complaint filed in March 2016, a customer alleged that Kievman recommended unsuitable investments that were over-concentrated and did not code her risk tolerance correctly or fully disclose the risks of the investments. The customer is claiming $143,394 in damages. The claim is currently pending.

Broker Ralph Fetrow Discharged Over Allegations of Outside Business Activities

December 7, 2016 | by Staff Attorney

Our firm is investigating claims made by Castleview Partners, LLC (Castleview Partners) when the firm terminated broker Ralph Fetrow (Fetrow). According to the firm, Fetrow was discharged in September 2016 after allegation were made that Fetrow violated firm policies and was under investigation for possible violations of firm policies and procedures prohibiting trading away and outside business activities.

According to Fetrow’s brokercheck records Fetrow disclosed outside business activities including Painted Hill Farms, Financial Planning Association, Shippensburg University, RAMS 88 Inc, and Ralph Fetrow Consulting. At this time it is unclear whether the allegations stem from one of these disclosed entities or another business practice. 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.

Fetrow entered the securities industry in 1999. From October 2008 through December 2015 Fetrow was associated with Invest Financial Corporation. Since February 2016, Fetrow has been registered with Kovack Securities Inc. out of the firm’s Lemoyne, Pennsylvania office location.

New York Times Investigates Broker Walter Marino’s Annuity Sales

December 7, 2016 | by Staff Attorney

Our firm’s investment attorneys are investigating reports in a New York Times article and customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Walter Marino (Marino) currently associated with Benjamin Securities, Inc. (Benjamin Securities) alleging unsuitable recommendations to invest in variable products such as variable annuities and equity indexed annuities. According to brokercheck records Marino has been subject to seven customer complaints and three employment separations for cause.

According to the New York Times, Marino solicited teachers to invest in high cost low quality annuities with their retirement savings. The Legend Group was alleged to be the provider of the investments all these teachers held. The firm fired Marino on grounds other than the investment fee issue. According to Marino’s brokercheck records the cause of the separation was that Marino represented to the firm that an annuity investment was not a replacement when in fact the firm determined it was. Legend has stated that their investments and charges “were consistent with the firm’s policies.”

Variable annuities and equity indexed annuities are complex financial and insurance products. In fact, recently the Securities and Exchange Commission (SEC) released a publication entitled: Variable Annuities: What You Should Know encouraging investors to ask questions about the variable annuity before investing. Essentially, a variable annuity is a contract with an insurance company under which the insurer agrees to make periodic payments to you. The investor chooses the investments made in the annuity and value of your variable annuity will vary depending on the performance of the investment options chosen. The primary benefits of variable annuities are the death benefit and tax deferment of investment gains.

Financial Advisor Guy Deemer Subject to Multiple Regulatory Actions

December 5, 2016 | by Staff Attorney

Our investment attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against financial advisor Guy Deemer (Deemer) currently registered with IFS Securities, alleging excessive trading or churning and unauthorized trading among other claims. According to brokercheck records Deemer has been subject to six customer complaints, two regulatory actions, and one employment termination for cause.

In September 2015 Oppenheimer & Co. Inc. (Oppenheimer) terminated Deemer after alleging that he failed to follow management’s directions when he failed to move accounts from transaction based to fee based.

In July 2014 a customer filed a complaint alleging excessive trading activity from July 2009 through December 2013. The customer alleged $300,000 in damages. The claim was settled for $115,000.

TradingBlock Financial Advisor Joshua Arnold Subject to Multiple Customer Complaints

December 5, 2016 | by Staff Attorney

Our investment attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against financial advisor Joshua Arnold (Arnold) currently registered with TradingBlock, alleging negligence, unsuitable recommendations, negligent supervision, breach of fiduciary duty, and breach of contract among other claims. According to brokercheck records Arnold has been subject to ten customer complaints and three regulatory actions.

In September 2016 a customer filed a complaint alleging negligence and unsuitable recommendations that caused $250,000 in damages. The broker denied all claims. The claim is current pending.

In November 2015 another customer filed a complaint that Arnold failed to handle the account properly causing a tax penalty. The claim was resolved for $37,500.

Financial Advisor John Crook Subject to a $4.8 Million Customer Complaint

December 3, 2016 | by Staff Attorney

Our investment attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against financial advisor John Crook (Crook) currently registered with Prospera Financial Services, Inc. (Prospera), alleging unsuitable investments, fraud, breach of fiduciary duty, negligence, churning, and unauthorized trading among other claims. According to brokercheck records Crook has been subject to two customer complaints and one employment separation for cause.

In July 2015 Crook was discharged by Raymond James & Associates, Inc. (Raymond James) after the firm stated that it lost confidence in Crook after an internal review into a client compliant lead the firm to believe that Crook did not provide plausible explanations to the investigation.

In August 2016 a customer filed $4.8 million complaint involving Crook’s conduct and alleging violations of the securities law. The claim is still pending.

Broker Investigation: Victor Lambert

December 2, 2016 | by Staff Attorney

Our investment attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against financial advisor Victor Lambert (Lambert) currently not registered with any firm, alleging unsuitable investments among other claims. According to brokercheck records Lambert has been subject to seven customer complaints and two judgement/liens.

In January 2016 Lambert disclosed a tax lien of $46,706. A broker’s inability to handle their personal finances has also been found to be relevant in helping investors determine if they should allow the broker to handle their finances.

In October 2015 a customer filed a complaint alleging that Lambert purchased two equities that were inappropriate for the client causing damages. The claim was resolved for $85,000.