misrepresentations

Broker Investigation: VSR Financial Services Advisor Robert Bragg

December 16, 2015 | by Staff Attorney

The investment lawyers of Gana Weinstein LLP are investigating customer complaints against broker Robert Bragg (Bragg). There are at least 4 customer complaints against Bragg. The customer complaints against Bragg allege a number of securities law violations including that the broker made unsuitable investments, misrepresentations, negligence, fraud, and breach of fiduciary duty among other claims. The claims appear to relate to allegations regard direct participation products and limited partnerships such as equipment leasing and non-traded real estate investment trusts (Non-Traded REITs). Our firm has written numerous times about investor losses in these types of programs such as equipment leasing programs like LEAF Equipment Leasing Income Funds I-IV and ICON Leasing Funds Eleven and Twelve. Investors are destined to lose money in these investments because the costs and fees associated with these investments make significant returns virtual impossibility. Yet for all of their costs investors are in no way compensated for the additional risks of these products.

The most recent complaint was filed in February 2015 and alleged unsuitable investments for investments made between 2005 though August 2013 causing $460,488 in damages. Another complaint filed in November 2014 alleged breach of fiduciary duty among other claims for investments made in October 2007 though September 2010 causing $322,432.

Bragg entered the securities industry in March 2004. Since March 2004, Bragg has been registered with VSR Financial Services, Inc. out of the firm’s Colorado Springs, Colorado office location.

Broker Investigation: VSR Financial Services Advisor Robert Hinz

December 16, 2015 | by Staff Attorney

The investment lawyers of Gana Weinstein LLP are investigating customer complaints against broker Robert Hinz Jr. (Hinz). There are at least 7 customer complaints against Hinz. The customer complaints against Hinz allege a number of securities law violations including that the broker made unsuitable investments, misrepresentations, negligence, fraud, breach of fiduciary duty, and unauthorized trading among other claims. One of the claims involves the purchase of oil and gas private placement Reef Oil & Gas Income and Development Fund III.

The most recent complaint was filed in February 2013 and alleged fraud and negligence from activities that occurred from July 2007 until December 2009 and resulted in $240,000 in damages. Another complaint filed in January 2012 alleged dissatisfied performance with respect to investments and asked for $34,680. The case was closed with no action.

Hinz entered the securities industry in January 1982. Since August 1994, Hinz has been registered with VSR Financial Services, Inc. out of the firm’s Seattle, Washington office location.

Joseph Sturniolo Wipes Investor Complaints From Record Using FINRA’s Flawed Expungement Process

December 14, 2015 | by Staff Attorney

Recently, Joseph Sturniolo’s (Sturniolo) attorney reached out to our firm to inform us that our post on Sturniolo was inaccurate. The post detailed that Sturniolo had been subject to at least eight customer complaints and that the many of these complaints involved the recommendation of unsuitable and misrepresented recommendations concerning tenants-in-common (TICs).

The post also detailed how TICs have virtually disappeared as an investment option because they are almost always unsuitable. According to InvestmentNews “At the height of the TIC market in 2006, 71 sponsors raised $3.65 billion in equity from TICs and DSTs…TICs now are all but extinct because of the fallout from the credit crisis.” In fact, TICs recommendations have been a major contributor to bankrupting brokerage firms. For example, 43 of the 92 broker-dealers that sold TICs sponsored by DBSI Inc., a company whose executives were later charged with running a Ponzi scheme, a staggering 47% of firms that sold DBSI are no longer in business.

TIC investments entail significant risks. A TIC investor runs the risk of holding the property for a significant amount of time and that subsequent sales of the property may occur at a discount to the value of the real property interest. FINRA has also warned that the fees and expenses associated with TICs, including sponsor costs, can, and in our opinion, do outweigh the any potential tax benefits associated with a Section 1031 Exchange. That is, the TIC product itself may be a defective product because its costs outweigh any potential investment value or tax benefit offered to the customer.

Sturniolo’s attorney has brought it to our attention that Sturniolo has succeeded in using FINRA’s flawed expungement process system to remove five complaints from his BrokerCheck record. Sturniolo’s “award” does not even detail how much Sturniolo’s employer paid to settle all of the claims. As shown in Sturniolo’s expungement award Sturniolo’s sued his own employer, Geneos Wealth Management, Inc. (Geneos Wealth) for damages of $1.00 due to the placement on his record of five customer complaints. The “hearing” that took place appears to have been perfunctory at best. The hearing concerning five customer complaints was stretched out over a one year period of time in which the arbitrator participated in four hearing sessions on non-consecutive days. Usually there are two hearing sessions a day – meaning in this case the five cases were heard on four half-day hearings stretched out over the course of a full year. The total cost to Sturniolo by FINRA to expunge five customer complaints from his record was $250 – excluding any fees he privately paid his counsel.

Gana LLP Investigation: Customer Complaints Against Howard Slater

December 13, 2015 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints against broker Howard Slater (Slater). In addition, The Financial Industry Regulatory Authority (FINRA) brought an enforcement action (FINRA No. 2015046156301) against Slater. There are at least 18 customer complaints against Slater and 2 regulatory actions. The customer complaints against Slater allege a number of securities law violations including that the broker made unsuitable investments, misrepresentations, negligence, fraud, breach of fiduciary duty, and unauthorized trading among other claims.

The most recent customer complaint was filed in November 2013 and alleges unsuitable investments, fraud, and negligence concerning investments in alternative investments in real estate investments. The complaint seeks $90,000 in damages. In another complaint filed in July 2013, a customer complained that Slater misinformed her regarding the risks of three non-traded real estate investment trusts (Non-Traded REITs).

In a FINRA regulatory action against Slater, the agency alleged that in February 2008 and August 2008, Slater sent emails to two customers in connection with their purchases of IMH Secured Loan Fund, LLC (IMH Fund) that contained misrepresentations regarding the features of the IMH Fund. In addition, according to FINRA, in March 2008, Slater sent an email to a customer that contained exaggerated and misleading statements about the safety of the IMH Fund. Finally, FINRA found that in April 2008, Slater caused an SAI customer’s account records to reflect false annual income and net worth information that caused the business records maintained by his firm to be inaccurate.

SEC Sanctions Gary Arford Over Allegations of Securities Fraud and Misappropriation

December 9, 2015 | by Staff Attorney

The Securities and Exchange Commission (SEC) brought an enforcement action against broker Gary Arford (Arford) resulting in a monetary sanctions of $4,226,684. In addition, according to the BrokerCheck records kept by FINRA, Arford has been the subject of at least 10 customer complaints. The customer complaints against Arford allege unsuitable investments, misrepresentations, and fraud among other claims. Many of the complaints involve products such as oil and gas and penny stocks. Arford was also permitted to resign from Comprehensive Wealth Management, LLC (Comprehensive Wealth Management) after allegations were made that Arford attempted to directly settle a customer complaint. In March 2014, Arford was also terminated from Independent Financial Group, LLC (IFG) after allegations were made that Arford was the subject of customer complaints.

The most recent complaint against Arford alleged $560,000 in damages concerning allegations that Arford as an owner of Comprehensive Wealth Management breach his fiduciary duty by recommending unsuitable oil and gas products from 2011 through 2014 and misrepresented the investments. Another customer complaint filed in September 2014 alleges similar issues with oil and gas and penny stock investment made between 2012 and 2013 which resulted in $500,000 in alleged damages.

In the SEC action, the regulator alleged that between approximately December 2010 and October 2013, Arford acted as an investment adviser to a private fund (Fund) and provided advice for real estate-related investments. The SEC alleged that Arford defrauded the Fund and its investors in at least four ways by: 1) inducing the Fund to commit a total of $4 million to an investment in a company, referred to as Suburban Hotel, that was purportedly planning to build and operate a hotel on undeveloped land in Seattle by misrepresenting and concealing material facts about the company’s debt and the encumbrances; 2) after obtaining the Fund’s investment commitment Respondent took personal ownership of the company’s undeveloped property, and then pledged it as collateral for personal debts; 3) inducing the Fund to continue fulfilling its investment commitment by concealing his personal ownership and use of the company’s undeveloped property and by misrepresenting and hiding material facts about the use of Fund assets; and 4) by misappropriating Fund assets for unrelated purposes.

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 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 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 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.

Broker Investigation: SagePoint Financial’s Scott Aabel

November 30, 2015 | by Staff Attorney

The investment attorneys of Gana Weinstein LLP are interested in speaking with clients of Scott Aabel (Aabel). According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) Aabel has been the subject of at least 10 customer complaints, one regulatory event, three judgment or liens, and three financial disclosures. The customer complaints against Aabel allege securities law violations that claim unsuitable investments and misrepresentations among other claims involving mostly variable annuity products.

In June 2009, a customer filed a complaint alleging $71,873 in damages stemming from a loss of a living benefit rider for an annuity contract. In September 2007, a customer complained that the performance and fees for a variable annuity were misrepresented to the customer leading to losses of $13,595.

Also in April 2012, the Florida Office of Financial Regulation Division of Securities filed an administrative complaint against Aabel alleging violations of the state’s code and imposed a fine of $70,000.