investment fraud attorney

Customers File Complaints Against Charles Obryant Over Unsuitable Investments

October 19, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating a customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Charles Obryant (Obryant) alleging unsuitable investments, negligence, breach of fiduciary duty, and unauthorized trading. According to brokercheck records Obryant has been subject to four customer complaints and one employment separation for cause.

A customer complaint filed in October 2015 alleged negligence and suitability violations causing damages in the amount of $630,000. The claim was settled for $632,298.

In January 2016, Stifel Nicolaus discharged Obryant alleging a loss of confidence after settlement of complaint. The broker commented on the discharge stating that the equity concerning the dispute was a Stifel buy recommended security that went bankrupt and the broker made no personal contribution to the settlement.

Ameriprise Financial Advisor Kim Isaacson Subject to Fraud Complaints

October 17, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating a customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Kim Isaacson (Isaacson). According to BrokerCheck records Isaacson has been subject to at least four customer complaints, one employment termination, and one regulatory investigation. The customer complaints against Isaacson allege securities law violations that including unsuitable investments and misrepresentations among other claims.

In April 2016, FINRA opened an investigation for potential violations of industry rules for making verbal misrepresentations to a firm customer about the customer’s account values and performance.

In February 2016 a customer filed a complaint alleging unsuitable investments and misrepresentations with respect to equity investments in account and providing inaccurate information about the accounts performance from 2008 through 2014.

Broker Investigation: Advisor Bassam Salem

September 21, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating a customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Bassam Salem (Salem). According to BrokerCheck records Salem has been subject to at least two customer complaints. The customer complaints against Salem allege securities law violations that including unsuitable investments, unauthorized trading, and breach of fiduciary duty among other claims. The most recent claim involves allegations over oil and gas investments and UITs and was filed in May 2016 seeking $281,000 in damages.

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.

Salem entered the securities industry in 1986. From 1992 through January 2011 Salem was registered with UBS Financial Services, Inc. Finally, from January 2011 until August 2016 Salem was associated with Wunderlich Securities, Inc. out of the firm’s Birmingham, Michigan office location.

FINRA Bars Financial Advisor Douglas Simanski Over Converting Client Funds

September 17, 2016 | by Staff Attorney

The investment fraud lawyers of Gana Weinstein LLP are investigating the regulatory investigation filed by The Financial Industry Regulatory Authority (FINRA) against broker Douglas Simanski (Simanski). According to BrokerCheck records Simanski is subject to five customer complaints one FINRA matter and one employment separation for cause. The FINRA regulatory matter concerns the agencies attempt to investigate the circumstances surrounding alleged sales of private securities transactions and client fund conversion. (FINRA No. 2016049621301). When Simanski refused to cooperate with the investigation, FINRA automatically barred Simanski from the industry.

According to FINRA, Simanski consented to the sanction and findings related to an investigation into allegations for conversion of funds. 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”. At this time it unclear the nature and scope of Simanski’s outside business activities and private securities transactions. Often times, brokers sell promissory notes and other investments through side businesses as accountants, lawyers, or insurance to clients of those side practices.

Simanski entered the securities industry in 1995. From 1999 until June 2016 Simanski was registered with Next Financial Group, Inc. out of the firm’s Altoona, Pennsylvania office location. At that time Simanski was terminated over allegations that he sold fictitious investments and converted the funds for his own personal use and benefit.

Gana LLP Investigates Customer Complaints Against Merrill Lynch Broker Jacquin Fink

May 18, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Jacquin Fink (Fink). According to BrokerCheck records Fink has been subject to at least six customer complaints. The customer complaints against Fink allege securities law violations that including unsuitable investments, misrepresentations, excessive trading, and unauthorized trading among other claims.

In April 2016, a customer complained that unsuitable investments were made and excessive trading occurred from October 2013 to January 2016 causing $581,144 in damages. The claim is pending. Also in April 2016, another customer alleged that unsuitable investment recommendations and misrepresentation occurred in August 2015. The claim is pending. In November 2015 a customer alleged unsuitable investment recommendations from October 2012 to August 2014 causing $106,092 in damages. The claim settled.

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.

FINRA Sanctions Broker Kevin Murphy Over Selling Away Allegations

March 9, 2016 | by Staff Attorney

The securities fraud lawyers of Gana Weinstein LLP are investigating a regulatory complaint (Disciplinary No. 2015043159501) filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Kevin Murphy (Murphy). FINRA alleged that in or about November 2013, Murphy sold $1.2 million of shares and warrants in a private placement to four individuals and one limited partnership without his firm’s knowledge.

According to FINRA, in August and September, 2013, Murphy made a $1.2 million investment in a private placement for which TGP Securities, Inc. (TGP), Murphy’s brokerage firm, was providing brokerage services. In return for his investment, FINRA found that Murphy received two stock certificates totaling 600,000 Series F shares and two warrants exercisable for 300,000 common shares. On November 29, 2013, FINRA alleged that Murphy resold the Series F shares and the warrants to four individuals and one limited partnership for $1.2 million without the permission of TGP.

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.

FINRA Sanctions Broker James Nixon Over Promissory Note Sales

March 7, 2016 | by Staff Attorney

The securities fraud lawyers of Gana Weinstein LLP are investigating a regulatory complaint (Disciplinary No. 1013038289101) filed with The Financial Industry Regulatory Authority’s (FINRA) against broker James Nixon (Nixon). FINRA alleged that Nixon failed to provide prior written notice to Bridge Capital Associates, Inc. (Bridge Capital), his then employing brokerage firm, before selling $600,000 of convertible promissory notes – practice referred to as “selling away” in the industry. FINRA found that Nixon provided detailed written notice to Bridge Capital only after he had already disseminated investor presentations to approximately 40 potential investors and completed sales to three accredited investor. In addition, FINRA alleged that Nixon provided investor presentations that contained exaggerated and misleading statements about the issuer of the promissory notes, by the initials BRT, and failed to include a meaningful risk disclosure.

Nixon entered the securities industry in 1987. Nixon was registered with Bridge Capital Associates since December 2007 until September 2013, when Bridge Capital discharged Nixon in connection with the conduct concerning FINRA’s allegations. Shortly after Bridge Capital terminated his registrations Nixon became registered with a different firm, Source Capital Group, Inc. out of the firm’s Westport, Connecticut office location.

FINRA found that the promissory notes were offered without a PPM and that instead the notes were offered through an investor PowerPoint presentation that Nixon prepared in conjunction with the issuer. FINRA found that the investor presentation was devoid of any cautionary language specific to the promissory notes and that the prospects for notes were presented in very optimistic terms and stated financial projections at aggressive multiples without sources or support for such representations. FINRA found these representations to violate its communications rules.

FINRA Sanctions Broker Carlos Benavidez Jr Over Unauthorized Trades in 80 Customer Accounts

March 7, 2016 | by Staff Attorney

The securities fraud lawyers of Gana Weinstein LLP are investigating the regulatory action filed (Disciplinary Action No. 2014043025701) by The Financial Industry Regulatory Authority’s (FINRA) against broker Carlos Benavidez Jr (Benavidez). According to the allegations, between January 2013 and January 2015, Benavidez exercised discretion in 80 customer accounts without obtaining prior written authorization from the customers while with brokerage firm Waddell & Reed.

FINRA found that beginning in or about December 2009, Benavidez and two other representatives registered with Waddell & Reed, formed RBR Group and shared a customer base for their securities business. Between January 2013 and January 2015, FINRA found that Benavidez exercised discretion in effecting hundreds of securities transactions in approximately 80 customer accounts without obtaining written authorization from his customers or Waddell & Reed’s approval.

Also according to FINRA, Benavidez tried to hide the evidence of unauthorized trading by falsifying documents. FINRA found that on or about September 9, 2014, Benavidez and another individual with the firm backdated approximately 26 customer notes that had been created in the firm’s computer program in order to falsely reflect that Benavidez or another member of the RBR Group had conversed with those customers on before the trades were effected when, in fact, it was not until six days later when Benavidez or another individual talked with the 26 customers about the trades that had been effected in their accounts.

Broker Investigation: Customer Complaints Against Advisor Paul Blum

March 7, 2016 | by Staff Attorney

The securities fraud lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Paul Blum (Blum). According to BrokerCheck records Blum has been the subject of at least eight customer complaints three of which have been filed since 2015. The customer complaints against Blum allege a number of securities law violations including that the broker made unsuitable investments, and excessive trading among other claims.

The most recent customer complaint filed in December 2015 and alleged negligence in recommending the purchase of bonds that defaulted from February 2009 until April 2014 claiming $450,000 in damages. The claim is still pending. In November 2015, another client filed a complaint alleging Blum invested in high yield bonds without consultation between May 2013 and May 2014 resulting in $133,000 in damages. The dispute is currently pending. In a third complaint filed in November 2015, an investor claimed that Blum invested in appropriate bonds from 2005 through 2015 causing $140,000 in damages. The claim was settled.

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.

FINRA Sanctions Finance 500 Over Penny Stock Sales Practices

February 27, 2016 | by Staff Attorney

The investment attorneys of Gana Weinstein LLP are investigating regulatory complaints filed by The Financial Industry Regulatory Authority’s (FINRA) against brokerage firm Finance 500, Inc. (Finance 500) and its employees including William Watson, Robert Hicks, Geoffrey Schiffrin, Paul Savage (Disciplinary Proceedings Nos. 2013038091902, 2013036837802). The complaints largely focus on allegations that the firm failed to supervise the issuance, sales, and trading of various low-priced securities or penny stocks.

According to one of the complaints, FINRA alleged that Finance 500 raised millions for four different penny stock issuers. FINRA alleged that from June 2012 to June 2014 Finance 500 failed to enforce a reasonable supervisory system to review and monitor sales of private placements by its investment banking department in the areas of due diligence, suitability, and marketing materials provided to customers. In addition, FINRA alleged that from March 2013 through June 2014, the firm used or permitted issuers to use, private placement marketing materials that were not fair and balanced and made misleading unsupported statements.

While FINRA’s investigation focused on many areas of securities issuance, one area focused on was the firm’s suitability procedures for private placements which were found to be not reasonable. FINRA stated that Finance 500 did not have an adequate procedures regarding how it would collect the suitability documents from each customer and in some cases the documents that it did collect were incomplete and did not include all requested information. In addition, FINRA found that the firm lacked procedures regarding how and when supervisory approval would be given for a particular customer and at times allowed its supervisory system to be evaded by permitting customers solicited by the firm’s registered representatives to make investments directly with the issuer.