Gilford Securities

Gana LLP Investigates Investor Losses In Star Scientific / Rock Creek Pharmaceuticals (RCPI)

July 22, 2015 | by Staff Attorney

The law offices of Gana Weinstein LLP are investigating investor losses in Star Scientific, Inc. / Rock Creek Pharmaceuticals (Star Scientific) on the heels of a Financial Industry Regulatory Authority (FINRA) investigation into alleged false and misleading research reports issued by Oits Bradley (Bradley) presumably made about the company. Although FINRA only refers to Star Scientific in its complaint against Bradley as the “Pharmaceutical Company” we believe that the referenced report citations refer to Star Scientific.

According to FINRA, Bradley was an equity research analyst with Gilford Securities, Inc. (Gilford), who authored eight research reports containing false, misleading and unwarranted statements concerning Star Scientific. During the relevant time period Bradley was associated with Gilford from February 2012 until his termination from the firm in October 2014. FINRA alleged that Bradley’s research reports on the Star Scientific were distributed to Gilford’s brokers as well as various financial media outlets, investment research firms, firm clients and others.

FINRA found that Bradley falsely claimed that a prominent medical research university was conducting clinical trials on humans to study the effects of one of the Star Scientific’s dietary supplements on thyroid disorders. Additionally, FINRA alleged that Bradley made unwarranted and misleading statements concerning Star Scientific’s financial prospects based on his inaccurate claim that the university was conducting clinical trials on humans, and made false, misleading and unwarranted claims regarding the company’s announcement of preliminary results of its clinical trials on humans.

Former Merrill Lynch Broker Kwok Chiu Sanctioned Over Unauthorized Discretionary Trading

March 10, 2015 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) has sanctioned broker Kwok Chiu (Chiu) concerning allegations that between March and June 2013, while associated with Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch), Chiu exercised discretionary power in two customer accounts with only oral authorization by making 162 transactions without obtaining prior written authorization from the customers. Under NASD Conduct Rule 2510(b) Chiu was required to provide written authorization to his firm in order to engage in discretionary trading activity.

Chiu entered the securities industry in 1996. In 2005 he was became registered through Merrill Lynch until October 14, 2013, at which time Merrill Lynch filed a Uniform Termination Notice stating that Chiu was discharged for conduct involving the exercise of discretion in non- discretionary customer accounts. Thereafter, in October 2013, Chiu has become registered as a broker with Gilford Securities Incorporated.

In addition to FINRA’s claims, Chiu’s public disclosures reveal that the broker has been subject to at least four customer complaints. These statistics are troubling because so many customer complaints are rare. According to InvestmentNews, only about 12% of financial advisors have any type of disclosure event on their records. These disclosures do not necessarily have to include customer complaints but can include IRS tax liens, judgments, and even criminal matters. The number of brokers with multiple customer complaints is far smaller. In Chiu’s case, all of the customers complaints involve allegations of unauthorized trading or failing to follow instructions of the client.

Gilford Securities Fined by FINRA Over Deficient Supervisory Procedures

July 1, 2014 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) recently sanctioned brokerage firm Gilford Securities, Inc. (Gilford Securities) concerning allegations that from April 2010 through March 2012, Gilford Securities failed to: (i) make certain disclosures in research reports; (ii) have approval of certain research reports; (iii) implement written supervision policies reasonably designed to comply with NASD Rule 2711; (iv) establish and enforce written supervisory control policies concerning the supervision of producing managers; and (v) implement a reasonably designed Anti-Money Laundering Compliance Program (AMLCP).

Gilford Securities has been a FINRA member since January 1980, has eight branch offices, and 78 registered representatives. Gilford Securities’ principal place of business is New York, New York.

FINRA rules require disclosure of any material conflict of interests of the research analyst of which the research analyst knows or has a reason to know in the publication of the research report. FINRA found that from April 2010, through March 2012, Gilford Securities published 503 research reports. FINRA found that each of those reports failed to disclose that the research analyst received compensation of commissions on transactions the analyst’s customers made in the securities covered in violation of the FINRA Rules.