misrepresentations

Customers File Complaints Against Eric Wegner Over Tenants-in-Common (TIC) Real Estate Investments

October 26, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Eric Wegner (Wegner) has been the subject of at least 5 customer complaints and two financial disclosures. Customers have filed complaints against Wegner alleging a number of securities law violations including that the broker made unsuitable investments, misrepresentations, breach of fiduciary duty, and false statements mostly in connection with recommendations to invest in private placements such as tenants-in-common (TICs) interests. In addition, one complaint involves a dispute over a variable annuity recommendation.

Wegner entered the securities industry in 2000. From December 2002, until December 2008, Wegner was a registered representative with Sammons Securities Company, LLC. Thereafter, from January 2009, until February 2011, Wegner was associated with QA3 Financial Corp. From February 2011, until July 2013, Wegner was associated with Sigma Financial Corporation. Finally, Wegner is currently a registered representative with Cambridge Investment Research, Inc. out of the firm’s Delafield, Wisconsin office location.

TIC investments have led to devastating investor losses and are in almost all cases unsuitable products. The near certainty of failure of investing in TICs as a whole has led to the product virtually disappearing as an offered investment from most reputable brokerage firms. 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.

Broker Investigation: Robert Horning’s Sale of Tenants-in-Common (TIC) Real Estate Investments

October 20, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Robert Horning (Horning) has been the subject of at least 8 customer complaints. Customers have filed complaints against Horning alleging a number of securities law violations including that the broker made unsuitable investments, misrepresentations, fraud, breach of fiduciary duty, and false statements in connection with recommendations to invest in private placements such as tenants-in-common (TICs) interests, direct participation programs and limited partnerships which include investments like oil & gas, non-traded real estate investment trusts (Non-Traded REITs), and equipment leasing programs.

Horning entered the securities industry in 1993. From November 2004, until July 2009, Horning was a registered representative with Direct Capital Securities, Inc. Thereafter, since July 2009, Horning has been associated with Centaurus Financial, Inc. (Centaurus) out of the firm’s Los Angeles, California office location.

TIC investments have come under fire by many investors. Indeed, due to the failure of the TIC investment strategy as a whole across the securities industry, TIC investments have virtually disappeared as offered investments. 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.

Customers File Dozens of Complaints Against Broker John Schooler

October 16, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker John Schooler (Schooler) has been hit with at least 26 customer complaints over his career. Customers have filed complaints against Schooler alleging securities law violations including that the broker made unsuitable investments, negligence, misrepresentations, breach of fiduciary duty, violation of blue sky statutes in several states, and fraud among other claims. The claims against Schooler involve various types of securities including private placements, direct participation programs and limited partnerships which include investments like oil & gas, non-traded real estate investment trusts (Non-Traded REITs), equipment leasing programs, and tenants-in-common (TICs). The majority these products are high commission based products that often pay broker commission of between 7-10%. As the research now shows these products are arguably always unsuitable for investors because they do not compensate investors for their substantial risks. See Controversy Over Non-Traded REITs: Should These Products Be Sold to Investors? Part II

Schooler entered the securities industry in 1993. From 1994, until July 2011, Schooler was associated with WFP Securities. From June 2011, until July 2011, Schooler became associated with JRL Capital Corporation. Finally, Since July 2011, Schooler has been associated with First Financial Equity Corporation out of the firm’s Scottdale, Arizona office location.

As a background, a Non-Traded REIT is a security that invests in different types of real estate assets such as commercial, residential, or other specialty niche real estate markets such as strip malls, hotels, storage, and other industries. There are publicly traded REITs that are bought and sold on an exchange with similar liquidity to traditional assets like stocks and bonds. However, Non-traded REITs are sold only through broker-dealers, are illiquid, have no or limited secondary market and redemption options, and can only be liquidated on terms dictated by the issuer, which may be changed at any time and without prior warning.

Broker Spotlight: Morgan Stanley Broker Hilary Zimmerman

October 14, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Hilary Zimmerman (Zimmerman) has been the subject of at least 6 customer complaints over the course of her career. Customers have filed complaints against Zimmerman alleging securities law violations including that the broker made unsuitable investments, negligence, unauthorized trading, misrepresentations, churning and excessive trading, fraud, and breach of fiduciary duty, among other claims.

Zimmerman entered the securities industry in 1991. From December 2007 until present Zimmerman has been associated with Morgan Stanley out of the firm’s Ridgeland, Mississippi office.

All advisers have a fundamental responsibility to deal fairly with investors including making suitable investment recommendations. In order to make suitable recommendations the broker must have a reasonable basis for recommending the product or security based upon the broker’s investigation of the investments properties including its benefits, risks, tax consequences, and other relevant factors. In addition, the broker must also understand the customer’s specific investment objectives to determine whether or not the specific product or security being recommended is appropriate for the customer based upon their needs.

Customers File Churning Complaints Against Legend Securities Broker Daren Dorval

October 14, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Daren Dorval (Dorval) has been the subject of at least 6 customer complaints, 1 regulatory matter, and one criminal matter over the course of his career. Customers have filed complaints against Dorval alleging securities law violations that focus primarily on churning and excessive trading. In addition to the churning claims, customers have complained of unsuitable investments, negligence, fraud, unauthorized trading, and misrepresentations, among other claims.

According to a 2010 FINRA finding, the regulator alleged that Dorval engaged in unauthorized discretionary trading in a customer account by entering trades based upon the orders of a person related to the customer without appropriate written trading authority.

Dorval entered the securities industry in 2001. From January 2002, until September 2009, Dorval was associated with vFinance Investments, Inc. Thereafter, Dorval became associated with Legend Securities, Inc where he remains registered.

FINRA Files Complaint Against Former Woodstock Financial Group Broker David Wolk

October 13, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker David Wolk (Wolk) has been the subject of an astonishing 13 customer complaints, 3 regulatory matters, one criminal matter, and 6 judgments and liens over the course of his career. Customers have filed complaints against Wolk alleging securities law violations that focus on churning and excessive trading. In addition to the churning claims, customers have complained of unsuitable investments, negligence, fraud, unauthorized trading, and misrepresentations, among other claims. In total the customer complaints allege several million dollars in damages.

The latest FINRA complaint (Disciplinary Proceeding No. 2012033981601) alleges that from November 2003, through January 2014, while Wolk was associated with Woodstock Financial Group, Inc. (Woodstock), Wolk was subject to six tax liens totaling over $810,000 and a state tax levy for $106,871.02. FINRA alleges that Respondent willfully failed to timely update his Form U4 to disclose these matters within FINRA’s 30-day reporting deadline. In addition, FINRA alleged that Respondent made a false attestation to Woodstock on an annual compliance questionnaire failing to disclose the liens. The latest FINRA complaint is only one of three total FINRA complaints. In October 2014, Wolk faied to pay fines associated with another FINRA matter. In August 2014, Wolk consented to FINRA’s findings that he attempted to settle a customer complaint without notifying his firm.

Wolk entered the securities industry in 1998. From February 2003 until September 2014, Wolk was associated with Woodstock out of the firm’s Garden City, New York office.

Customers File Dozens of Complaints Against Former Oppenheimer Broker Bennett Broad

October 13, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Bennett Broad (Broad) has been the subject of an astonishing 28 customer complaints and one regulatory matter over the course of his career. Customers have filed complaints against Broad alleging securities law violations including that the broker made unsuitable investments, negligence, unauthorized trading, misrepresentations, and churning and excessive trading, among other claims. In total the customer complaints allege several million dollars in damages. In May 2015, FINRA sought to investigate Broad and his activities and requested that the broker provide the regulator with information. Broad failed to respond to FINRA’s requests and was consequently subject to an automatic bar from the industry. The details of FINRA’s requests and investigation is not available at this time.

Broad entered the securities industry in 1979. From March 2003 until April 2015, Broad was associated with Oppenheimer & Co. Inc. out of the firm’s Jenkintown, Pennsylvania office.

All advisers have a fundamental responsibility to deal fairly with investors including making suitable investment recommendations. In order to make suitable recommendations the broker must have a reasonable basis for recommending the product or security based upon the broker’s investigation of the investments properties including its benefits, risks, tax consequences, and other relevant factors. In addition, the broker must also understand the customer’s specific investment objectives to determine whether or not the specific product or security being recommended is appropriate for the customer based upon their needs.

SEC Accuses Dawn Bennett of Misleading Investors On Her Radio Program

October 9, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Dawn Bennett (Bennett) has been the subject of at least six customer complaints over the course of her career. Customers have filed complaints against Bennett alleging securities law violations including that the broker made unsuitable investments, breach of fiduciary duty, negligence, misrepresentations, and excessive trading among other claims. In addition to customer complaints, The Securities and Exchange Commission (SEC) filed a press release announcing fraud charges against Bennett, a Maryland-based financial services firm and founder/CEO, accusing her of grossly inflating the amount of managed assets and exaggerating the investment returns actually obtained for customers.

Bennett entered the securities industry in 1987. From 2006, until October 2009, Bennett was associated with Royal Alliance Associates, Inc. Thereafter, from October 2009, till present Bennett is associated with Western International Securities, Inc.

The SEC’s allegations relate to Bennett’s attempts to inflate the firm’s profile and prestige by overhyping assets under management and customer returns. The SEC alleged that Bennett frequently touted to customers and on her paid radio program that highly profitable investment returns generated by Bennett Group Financial Services placed the firm in the top 1 percent of firms worldwide. However, the SEC charged that Bennett failed to disclose that the returns were calculated for a model portfolio and not based on actual investor performance. The SEC further alleged that Bennett and her firm claimed to be managing more than $2 billion in assets when in reality Bennett managed no more than one-fifth of that amount.

Customers File Claims Against Broker David Page

October 9, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker David Page (Page) has been the subject of at least three customer complaints over the course of his career. Customers have filed complaints against Page alleging securities law violations including that the broker made unsuitable investments, breach of fiduciary duty, negligence, unauthorized trading, misrepresentations, and failure to follow instructions among other claims.

An examination of Page’s employment history reveals that the broker 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 Page’s 18 year career he has worked at eight different firms. Since May 2005 until April 2008, Page was associated with Investors Capital Corp. Thereafter, from April 2008, until May 2013, Page was a registered representative with John Thomas Financial. From May 2013, until March 2015, Page was associated with Brookville Capital Partners. After that Page was associated for only one month with Tryco Securities, Inc. Finally, Page is currently registered with Legend Securities, Inc.

Several the firms Page has been associated with have been expelled by FINRA including John Thomas Financial which was run by Anastasios “Tommy” Belesis who recently agreed to be banned from the securities industry when the SEC accused him of defrauding investors in two hedge funds. In addition, John Thomas faced allegations of penny-stock fraud by FINRA after the firm reaped more than $100 million in commissions over its six-year history before it closed in July. According to new sources trainees at the firm earned as little as $300 a week to pitch stocks with memorized scripts.

Former National Securities Corporation Broker Brian Folland Subject to Numerous Customers Complaints

October 8, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Brian Folland (Folland) has been hit with at least 30 customer complaints over his career and two tax liens. Customers have filed complaints against Folland alleging securities law violations including that the broker made unsuitable investments, negligence, misrepresentations, breach of fiduciary duty, violation of blue sky statutes in several states, and fraud among other claims. The claims against Folland involve various types of securities including private placements, direct participation programs and limited partnerships which include investments like oil & gas, non-traded real estate investment trusts (Non-Traded REITs), equipment leasing programs. In addition, in July 2012, Folland disclosed a tax lien of $334,995 owed. Tax liens of that size provide an incentive and conflict of interest in the recommendation of high commission based products such as private placements and direct participation programs that often pay commission between 7-10%.

Folland entered the securities industry in 1995. From July 2007 until May 2013, Folland was associated with brokerage firm National Securities Corporation (National Securities) out of the firm’s Fresno, California office location.

All advisers have a fundamental responsibility to deal fairly with investors including making suitable investment recommendations. In order to make suitable recommendations the broker must have a reasonable basis for recommending the product or security based upon the broker’s investigation of the investments properties including its benefits, risks, tax consequences, and other relevant factors. In addition, the broker must also understand the customer’s specific investment objectives to determine whether or not the specific product or security being recommended is appropriate for the customer based upon their needs.