investment management attorney

Broker Investigation: Customer Complaints Against Jeremy Monte

December 10, 2015 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints against Jeremy Monte (Monte). According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) Monte has been the subject of at least 3 customer complaints and 3 judgment or liens. The customer complaints against Monte allege a number of securities law violations including that the broker made unsuitable investments among other claims.

The most recent customer complaint was filed in April 2015 and alleges unsuitable investments in non-traded real estate investment trusts (Non-Traded REITs) and variable annuities by charging advisory fees on these investments in addition to commissions. Another complaint filed in February 2013 alleges unsuitable recommendations from 2005 through 2009 leading to $61,000 in damages.

Monte also has three liens listed. In March 2013, a tax lien of $83,199 was filed. In May 2012, a tax lien of $13,999 was filed. Finally, in April 2010, a tax lien of $24,394 was filed against the broker. A broker with large liens are an important consideration for investors to weigh when dealing with a financial advisor. An advisor may be conflicted to offer high commission investments to customers in order to satisfy liens and debts that may not be in the client’s best interests.

FINRA Sanctions Braymen, Lambert and Noel Securities and Shannon Braymen Over Private Placement Supervisory Failures

December 9, 2015 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) brought an enforcement action (FINRA No. 2011025610501) against brokerage firm Braymen, Lambert and Noel Securities, Ltd. (BLNS) and the firm’s Chief Executive Officer, Chief Operating Officer, Chief Financial Officer and Chief Compliance Officer (CCO) Shannon Braymen (Braymen) resulting in a monetary sanction. FINRA’s allegations were that from April 2007 to November 2011 BLNS, acting through Braymen, failed to supervise its private placement securities business and the activities of brokers located in two offices. The firm was also accused of failing to register those two branch office locations. In addition, FINRA found that BLNS failed to conduct or to adequately document branch office inspections, and had inadequate supervisory systems and written supervisory procedures for non-branch office locations. Finally, FINRA found that BLNS and Braymen failed to capture and retain certain email correspondence.

BLNS is a member of FINRA and registered as a broker-dealer since March 2003, as a full-service broker-dealer. BLNS currently employs approximately 24 brokers and operates out of 4 branch offices. The firm conducts a securities business in corporate debt securities, over-the-counter equity securities, US government securities, mutual funds, options, private placements and variable contracts. BLNS is also authorized to underwrite corporate securities, proprietary trading and investment advisory services. Braymen entered the securities industry in February 1995. During Braymen’s career she has obtained various securities licenses and had supervisory responsibility for each of the supervisory areas complained of by FINRA.

FINRA’s findings highlighted supervisory deficiencies in a number of areas. One of FINRA’s findings was that BLNS and two brokers located in an unregistered branch office in San Antonio, Texas participated in nine private placement offerings. BLNS and Braymen were accused of failing to adequately supervise the firm’s participation in these nine offerings. FINRA found that the firm had no documentation of principal review and approval of any of the private placement documents, no documentation that a principal of the firm had conducted due diligence, and no documentation of principal review and approval of customer subscription documents. Review of subscription documents are required to determine the suitability of the investments for customers.

Broker Investigation: Customer Complaints Against Frank Marinelli

December 8, 2015 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints against Frank Marinelli (Marinelli). According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) Marinelli has been the subject of at least 3 customer complaints, 1 employment termination, 2 judgment or liens, and 1 criminal matter. The customer complaints against Marinelli allege a number of securities law violations including that the broker made unsuitable investments, churning (excessive trading), misrepresentations, negligence, fraud, and unauthorized trading other claims.

The most recent customer complaint was filed in March 2014 and alleges unsuitable investments and churning causing $120,000 in damages. Another complaint filed in March 2012 alleges high pressure sales tactics unauthorized trading and mismanagement of the client’s account leading to $200,000 in damages.

Marinelli also has two liens listed, both filed in 2010 related to taxes. One lien is for $123,240 and the other is for $41,306. A broker with large liens are an important consideration for investors to weigh when dealing with a financial advisor. An advisor may be conflicted to offer high commission investments to customers in order to satisfy liens and debts that may not be in the client’s best interests.

FINRA Sanctions Joseph Daigneault Over False Account Statements

December 7, 2015 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) brought an enforcement action (FINRA No. 2013038133001) against broker Joseph Daigneault (Daigneault) resulting in a monetary sanction and a suspension. In addition, according to the BrokerCheck records kept by FINRA, Daigneault has been the subject of at least 1 customer complaint. The customer complaint against Barthole allege unsuitable investments concerning alternative investments and claims $1,000,000 in damages.

FINRA’s findings stated that from October 2005 through September 2013, Daigneault provided consolidated statements to at least eight customers that included misleading information regarding the customers’ financial holdings. According to FINRA, Daigneault manually created the consolidated statements using a spreadsheet program. However, many of the statements that Daigneault created included values for non-traded, illiquid assets that Daigneault listed the value of the customer’s initial investment regardless of the current actual value of the investment. In addition, FINRA found that several statements had a death benefit column where investment values were listed even where the securities in question did not have death benefits.

A consolidated report is a single document that combines financial information regarding a customer’s financial holdings on one statement. Consolidated reports are supplements but do not replace customer account statements. Due to the increasing complexity of investments offered by brokers from multiple different issuers and platform FINRA issued Regulatory Notice 10-19 reminding brokers and brokerage firms that consolidated report are communications with the public that must be must be clear, accurate, and not misleading. The valuations and values provided on the statements must be consistent with the customer’s official account statement. When creating consolidated account statements broker must take reasonable steps to accurately report information.

FINRA Sanctions Daniel Barthole Over Attempt to Privately Settle a Customer Complaint

December 7, 2015 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) brought an enforcement action (FINRA No. 2012034393401) against broker Daniel Barthole (Barthole) resulting in a monetary sanction and a suspension. In addition, according to the BrokerCheck records kept by FINRA, Barthole has been the subject of at least 2 customer complaints. The customer complaints against Barthole allege unsuitable investments, churning (excessive trading), misrepresentations, fraud, and unauthorized trading among other claims. The most recent complaint against Barthole alleged $227,632 in damages concerning unauthorized ETF trading and churning from February 2012 through September 2014. The claim was later withdrawn.

FINRA’s findings stated that Barthole consented to a finding that he together with two other brokers attempted to settle a customer complaint away from their brokerage firm by agreeing to pay $4,000 to a customer and by sending $1,500 in cash to the customer.

Barthole entered the securities industry in 2009. From April 2009 until February 2015, Barthole was associated with Woodstock Financial Group, Inc. Since February 2015, Barthole has been registered with National Securities Corporation out of the firm’s New York, New York office location.

FINRA Bars Broker Daniel Kasbar In Connection With Undisclosed Outside Business Activities

December 6, 2015 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating Daniel Kasbar (Kasbar) bar from the securities industry. The Financial Industry Regulatory Authority (FINRA) recently brought an enforcement action (FINRA No. 2015045744901) against Kasbar alleging that between 2010 and 2015, Kasbar engaged in an outside business activity beyond the scope of the approvals provided by his FINRA member firm – also referred to as “selling away” in the industry – HD Vest Investment Services (HD Vest) and LPL Financial, LLC (LPL). On September 17, 2015 FINRA requested that Kasbar provide documents and information. Kasbar did not provide any of the requested documents and information drawing an automatic bar from the industry.

Kasbar entered the securities industry in February 2011. Between February 2011 and March 2014, Kasbar was associated with HD Vest. From March 2014 until June 2015, Kasbar was associated with brokerage firm LPL until he was discharged from the firm.

It is unclear from the regulatory filings what the nature of the outside business activities were but from publicly available information, Kasbar’s brokercheck disclosures reveal several outside business activities including Kasbar Financial, Daniel G. Kasbar & Company, Inc. – a general contracting company, Emerald Village Professional Plaza, Kasbar Consulting – a tax prep, accounting, bookkeeping firm, and A R K Construction Company, Inc.

FINRA Sanctions David Khezri Over Unauthorized Trading

December 4, 2015 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) brought an enforcement action (FINRA No. 2015044589701) against broker David Khezri (Khezri) resulting in a monetary sanction and suspension. In addition, according to the BrokerCheck records kept by FINRA, Khezri has been the subject of at least 1 customer complaint. The customer complaints against Khezri alleges excessive trading among other claims.

FINRA’s findings stated that Khezri consented to sanctions that he improperly exercised discretion by effecting around 100 trades for six customers without obtaining written authorization from the customers. The firm also did not accept the accounts as discretionary. FINRA alleged that Khezri exercised discretion by executing trades days after his customers provided him oral authority. However, FINRA found that Khezri’s firm did not permit discretionary trading except for registered investment advisors (RIA) trading in the accounts of their advisory clients and Khezri was not an RIA.

Advisors are not allowed to engage in unauthorized trading. Such trading occurs when a broker sells securities without the prior authority from the investor. All brokers are under an obligation to first discuss trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b). These rules explicitly prohibit brokers from making discretionary trades in a customers’ non-discretionary accounts. The SEC has also found that unauthorized trading to be fraudulent nature because no disclosure could be more important to an investor than to be made aware that a trade will take place.

FINRA Bars Broker Jeffrey Snyder Over Failure to Respond to Regulator Requests

December 3, 2015 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) brought and enforcement action (FINRA No. 2015045289901) against broker Jeffrey Snyder (Snyder) resulting a permanent bar from the securities industry. In addition, according to the BrokerCheck records kept by FINRA, Snyder has been the subject of at least 6 customer complaints, and 1 regulatory event. The customer complaints against Snyder allege a number of securities law violations including that the broker made unsuitable investments, engaged in churning (excessive trading), misrepresentations, negligence, fraud, and unauthorized trading other claims.

FINRA’s findings stated that although Snyder appeared for an on-the-record interview, he refused to respond to certain questions concerning allegations that he paid a customer compensation for investment losses without the knowledge or authorization of his member firm. Snyder’s refusal resulted in an automatic bar.

An examination of Snyder’s employment history reveals that Snyder moves from troubled firm to troubled firm. The pattern of brokers moving in this way is sometimes called “cockroaching” within the industry. See More Than 5,000 Stockbrokers From Expelled Firms Still Selling Securities, The Wall Street Journal, (Oct. 4, 2013). In Snyder’s 12 year career he has worked at 6 different firms. Snyder entered the securities industry in 2003. From February 2006, through June 2008, Snyder was associated with New Castle Financial Services LLC. Thereafter from June 2008 until August 2008, Snyder was a registered representative of The Concord Equity Group, LLC. From August 2008, until April 2012, Snyder was registered with Spartan Capital Securities, LLC. From April 2012 until April 2015, Snyder was associated with Rockwell Global Capital LLC. Finally, in March 2015, Snyder was registered with Network 1 Financial Securities Inc. until September 2015 out of the firm’s Danbury, Connecticut office location.

Advisor John McKinstry Jr. Discharged After Customer Complaints

December 1, 2015 | by Staff Attorney

The securities and investment attorneys of Gana Weinstein LLP are interested in speaking with clients of John McKinstry Jr. (McKinstry). According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) McKinstry has been the subject of at least 5 customer complaints, 2 regulatory actions, and two employment terminations. The customer complaints against McKinstry allege securities law violations that claim unsuitable investments and churning among other claims.

The most recent complaint was filed in July 2015, and alleged $11,400 in damages due to claims that the broker made unsuitable investments and recommendations considering the age and risk tolerance of the client. Also in July 2015, another customer filed a complaint alleging that McKinstry made unsuitable investment recommendations causing alleged damages of $216,000.

In addition, in August 2015, McKinstry’s brokerage firm Moloney Securities Co., Inc. (Moloney Securities) terminated McKinstry concerning allegations that the firm had conducted an internal review concerning customer complaints and a FINRA exam.

Advisor Investigation: Morgan Stanley Broker Kirk Gill

December 1, 2015 | by Staff Attorney

The securities and investment attorneys of Gana Weinstein LLP are interested in speaking with clients of Kirk Gill (Gill). According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) Gill has been the subject of at least 7 customer complaints. The customer complaints against Gill allege securities law violations that claim unsuitable investments, misrepresentations, unauthorized investments, and breach of fiduciary duty among other claims.

The most recent complaint was filed in July 2015, and alleged $300,000 in damages due to claims that the broker, from 2007 to November 2014 made unsuitable investments and recommendations to the client. In April 2015, another customer filed a complaint alleging that Gill, from October 2011, until November 2014, made unsuitable investment recommendations causing alleged damages of $450,000. Gill denied the claims made by this investor and seeks an expungement of this case from his record. In December 2013, a customer filed a complaint against Gill alleging that the client was not properly advised concerning high risk and volatile stocks causing losses of $100,000.

Gill entered the securities industry in 1992. From July 2007 onward Gill has been associated with Morgan Stanley out of the firm’s Tucson, Arizona branch office location.