LPL Financial

Leon Rehak Subject to Customer Complaints For Excessive Trading

November 11, 2017 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Leon Rehak (Rehak) has been subject to two customer complaints. Rehak is currently registered with LPL Financial LLC (LPL Financial). In November 2016 a customer filed a complaint alleging a number of securities law violations including that the broker made engaged in churning (excessive trading), unauthorized trading, and breach of fiduciary duty among other claims. The claim alleged $600,000 in damages and is currently pending.

In October 2017, another customer filed a complaint alleging Common Law Fraud, Common Law Negligent Misrepresentation, Breach of Fiduciary Duty, Negligence, Suitability, and Excessive Trading from May 2011 through September 2017. The claim alleged $499,000 in damages and is currently pending.

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

Dennis McMurray Barred Over Claims of Private Securities Transactions

November 9, 2017 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Dennis McMurray (McMurray), in August 2017, was terminated by his firm, Girard Securities, Inc. (Girard Securities) based on allegations that McMurray violated the firm’s policy on selling away and private securities transactions. The firm also alleged that McMurray used a non-approved email address. In addition, McMurray was barred from the industry by FINRA after FINRA requested documents and information related to an investigation into the circumstances surrounding his termination from Girard and McMurray refused to provide documents.

At this time it is unclear the extent and scope of McMurray’s private securities activities. McMurray’s CRD lists that he is engaged in several outside business activities including 2 Truths – a mobile application development company, and is a part owner of Veritas IQ – a marketing, networking and personal development company. At this time it is unclear whether or not McMurray’s private securities activities involve these entities or one that is not listed.

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”.

Jonathan Freeze Barred By FINRA Over Variable Annuity Practices

November 9, 2017 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Jonathan Freeze (Freeze), in August 2017, was accused by FINRA of failing to cooperate in an investigation into the circumstances surrounding Freeze’s alleged sale of variable annuities. Freeze is formerly associated with Fortune Financial Services, Inc. (Fortune Financial). According to the FINRA action, Freeze was barred by the regulator after the broker failed to respond to requests for documents and information during the investigation.

In 2015, Feeze was also sanctioned by FINRA concerning allegations that he borrowed $20,000 from his customer and failed to provide the firm with prior notice of the loan and failed to obtain prior written pre-approval for the loan. Freeze has also been subject to two terminations for cause and multiple financial disclosures.

Variable 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.

Former LPL Financial Broker Daniel Pugel Subject to Multiple Customer Complaints

November 1, 2017 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints against former LPL Financial LLC (LPL Financial) Broker Daniel Pugel (Pugel). According to BrokerCheck records, in March 2017, Pugel was “permitted to resign” from Financial Advocates Investment Management after allegedly violating investment-related statutes, regulations, rules, and/or industry standards of conduct, including FINRA Rule 2310 (suitability). Pugel has received three customer complaints.

In 2016 a customer alleged Daniel Pugel, while employed at Financial Advocates Investment Management, made unsuitable investment recommendations, failed in his supervisory duties, breached his fiduciary duty, and violated blue sky laws. The complaint settled in 2017 for $215,000.

In 2004 a customer alleged Daniel Pugel, while employed at Morgan Stanley, breached of contract, breached his fiduciary duty, made unsuitable recommendations, and committed fraud in connection to a mutual fund investment. The complaint resulted in an award to the customer of more than $95,900.

Former LPL Broker Jason Anderson Sued by Elderly Customers

October 12, 2017 | by Staff Attorney

The investment attorneys at Gana Weinstein LLP are investigating claims against former LPL Financial Broker Jason Anderson (Anderson). A pair of elderly customers are suing Anderson and alleging churning and inflated mutual fund charges.

According to news sources, A pair of elderly customers of LPL Financial are suing the firm and Anderson.

The customers, each of whom are over 65, claim to have suffered a combined $630,000 loss in retirement accounts that were originally valued at $3.5 million.

LPL Financial Advisor Sonya D. Camarco Accused by SEC of Misappropriating over $2.8 Million of Client Funds

September 5, 2017 | by Staff Attorney

The investment lawyers of Gana Weinstein LLP are investigating allegations by the Securities and Exchange Commission (SEC) finding that LPL Financial LLC (LPL) advisor, Sonya D. Camarco (Camarco), misappropriated over $2.8 million in investor funds from her clients and customers. LPL terminated Camarco in August 2017 “for depositing third party checks from client accounts into a bank account she controlled and accessing client funds for personal use.”

Camarco is a 23-year industry veteran. From 1993 to 2000, Camarco was associated with Merrill Lynch, Pierce, Fenner & Smith Incorporated. Thereafter, from 2000 to 2004, Camarco became registered with Morgan Stanley DW Inc. Finally, from 2004 to 2017, Camarco was associated with LPL Financial LLC.

According to FinancialPlanning, Camarco faces five counts of fraud charges and an asset freeze after investigators said she used third-party checks and other means to forward client funds towards personal expenses. Camarco allegedly forged clients’ signatures on at least 120 first- and third-party checks, having them sent to a post office box at a UPS store and signing them over to an entity she controlled.

Broker Scott Goldman Subject to Unsuitability Complaints

July 17, 2017 | by Staff Attorney

The investment fraud lawyers of Gana Weinstein LLP are examining multiple customer disputes filed with the Financial Industry Regulatory Authority (FINRA) against broker Scott Goldman (Goldman). Goldman’s FINRA BrokerCheck record shows several disclosures mainly pertaining to unsuitable investments.

In December 2016, an elderly customer alleged that during Goldman’s employment at LPL Financial Corporation, he recommended highly unsuitable investments that were heavily concentrated in risky, leveraged precious metal products. In addition, the broker did not properly inform his client of the risks associated with such an investment. This dispute was settled in December 2016, and resulted in $10,000 penalty and Goldman was suspended from the industry.

Another case against Goldman was filed in October 2014 for allegedly making unsuitable recommendations, failing to supervise, and breaching his fiduciary duty during his employment at H. Beck Inc. The alleged damages were worth $250,000. The case was settled in November 2015 for $75,000.

Michael Spolar Sanctioned By FINRA Over Unauthorized Trading

July 12, 2017 | by Staff Attorney

According to BrokerCheck records Michael Spolar (Spolar), now associated with International Assets Advisory, LLC (IAA), has been sanctioned by The Financial Industry Regulatory Authority (FINRA) over allegations that Spolar exercised discretion in customers’ accounts that were non-discretionary accounts. Since according to FINRA Spolar did not obtain written authorization from these customers to exercise discretion in their accounts and his member firms did not approve these accounts for discretionary trading, these trades were unauthorized. FINRA found that while Spolar stated that he discussed strategy with these clients and he received verbal authority for the trades. However, when the firm discovered the activity Spolar was terminated. FINRA also found that when Spolar moved to a different brokerage firm he continued to exercise discretion in customer accounts despite his prior termination for the same conduct.

In addition to the FINRA sanctions Spolar has been subject to eight customer complaints, one termination, and one financial disclosures including a bankruptcy filing in December 2015. Some of the complaints against Brodt allege securities law violations including that the broker engaged in unauthorized trading among other claims.

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.

Advisor Thomas Oliphint Terminated By LPL Financial Over Outside Business Activities

July 5, 2017 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA), in November 2016, Thomas Oliphint (Oliphint) was discharged and terminated by LPL Financial LLC (LPL) over allegations that Oliphint violated firm policy regarding outside business activities. Oliphint has two other customer complaints on his record. In the industry all such activities must be disclosed and approved by the firm before the broker can engage in them.

According to Oliphint’s disclosures his outside business activities include Oliphint Associates, LLC d/b/a One Advocate Group and Grand Purpose Advocate. At this time it is unclear what outside business activity Oliphint was engaged in that led to his termination. However, the risk to investors is that the broker will use such businesses to engage in unauthorized securities activities. 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”. Brokerage firms are responsible for supervising and preventing such activities.

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.

Broker Joeann Mitchell Walker Subject to Alleged Unsuitable Trades of Variable Annuities

June 6, 2017 | by Staff Attorney

Gana Weinstein LLP is investigating a customer complaint filed with the Financial Industry Regulatory Authority (FINRA) again broker Joeann Mitchell Walker (Walker). According to FINRA’s BrokerCheck records for Walker, there are several settled disclosures on her record. Walker entered the securities industry in 1992 and currently employed at Next Financial Group, Inc. She was previously employed at LPL Financial LLC (8/2006 – 4/2015), Commonwealth Financial Network (7/1998 – 8/2006), American Express Financial Advisors (6/1992 – 7/1998), and IDS Life Insurance Company (06/1992 – 7/1998).

In March 2016, a customer complaint was filed alleging Walker made unauthorized sales of different stocks, unauthorized and unsuitable purchases of variable annuities, and unauthorized mutual fund switches during the period of June 2014 to June 2015 while Walker was employed at LPL Financial LLC. The stated alleged damages were $208,764.00. The claim was settled in November 2016 for the amount of $175,000.00.

Walker has two additional previous disclosures from 2005 and 1999. In April 2005, a claim was filed alleging that Walker practiced in excessive turnovers in the client’s mutual fund account. The claim alleged damages of $30,000.00. This claim was settled in July 2005 for the final settlement amount of $9,900.00.