Moloney Securities

Moloney Securities Broker Shane DeSherlia Has Three Customer Complaints

July 17, 2024 | by Staff Attorney

According to records kept by The Financial Industry Regulatory Authority (FINRA) financial advisor Shane DeSherlia (DeSherlia) has at least three disclosable events. These events include three customer complaints alleging that DeSherlia engaged in some form of investment related misconduct in the handling of the client’s accounts. DeSherlia is currently employed by Moloney Securities Co., Inc. (Moloney Securities). DeSherlia’s customer complaints allege that DeSherlia recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.

In July 2023 a customer complained that DeSherlia violated the securities laws by alleging that DeSherlia made unsuitable and negligent investment recommendations in the 2019-2020 time period resulting in $500,000 in damages. The claim is currently pending.

In July 2023 a customer complained that DeSherlia violated the securities laws by alleging that DeSherlia made unsuitable and negligent investment recommendations in the 2018-2020 time period resulting in $182,000 in damages. The claim settled for $65,000.

Under the securities laws brokers are obligated to act in their clients’ best interests and provide only suitable recommendations for investments to the client. In addition, the SEC has promulgated “Regulation Best Interest” which according to the SEC enhanced the broker-dealer standard of conduct beyond existing suitability obligations and requires broker-dealers to act in the best interest of a retail customer when making a recommendation of any securities transaction or investment strategy involving securities. Regulation Best Interest and the fiduciary standard for investment advisers are drawn from key fiduciary principles that include an obligation to act in the retail investor’s best interest and not to place their own interests ahead of the investor’s interest.

Advisor David Phillips Accused of Selling Future Income Payments Investment Fraud

January 12, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor David Phillips (Phillips), formerly employed by Moloney Securities Co., Inc. (Moloney Securities) has been subject to one customer complaint and one tax lien during his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), the complaint against Phillips concerns allegations of unsuitable investments in Future Income Payments, Inc. (FIP).

In October 2018 a customer complained that Phillips recommending an investment in Future Income Payments, Inc. that was misrepresented and improperly recommended. The claim alleges $106,368 in damages and is currently pending.

The law offices of Gana Weinstein LLP have been investigating investor recovery options due to the alleged pay advance fraud scheme orchestrated by Future Income Payments, LLC (Future Income Payments) also known as Pensions, Annuities, and Settlements, LLC, and its owner Scott Kohn (Kohn). Future Income Payment is an unregistered and illegal security offering. Numerous state and local regulators and agencies also have concluded that FIP product violates a host of laws including securities, loan laws, usury laws, elder abuse, and consumer protection laws.

At the heart of the alleged scheme is the misrepresentation that Future Income Payments engages in agreements that are sales of pensions and not loans. However, regulators have claimed that the company misstates the effect of the contract and that in fact pensioners are entering into a consumer loan and not a sale. The purpose of the misrepresentations are to try to exempt Future Income Payments loans from consumer lending laws and regulations and to collect interest on loans at illegal rates.

Financial Advisor Sara Eng Subject to Multiple Firm Terminations

May 25, 2017 | by Staff Attorney

Our firm is investigating claims made by various regulators and brokerage firms including Axiom Capital Management, Inc. (Axiom) and Financial West Group (FWG) concerning broker Sara Eng (Eng a/k/a Sara Aiping Ng). Eng is currently associated with brokerage firm Moloney Securities Co., Inc. (Moloney).

The allegations revolve around Eng’s offering of investments to clients. In October 2015, FWG terminated Eng for cause and allowed Eng to voluntarily resign after allegations were made that Eng was being placed on heightened supervision for potential violation of firm policy regarding marketing of investments to firm customers. Thereafter, in September 2016, Axiom terminated Eng for cause for violation of the firm’s policies and procedures regarding email correspondence. At the same time The Financial Industry Regulatory Authority’s (FINRA) opened its own investigation into Eng concerning Axiom’s disclosures for Eng’s termination. At this time it is unclear the exact nature and extent of the investigation.

Eng entered the securities industry in 1997. From November 2002 until March 2014, Eng was associated with Berthel, Fisher & Company Financial Services, Inc. From February 2014 until November 2015, Eng was associated with FWG. From October 2015 until September 2016, Eng was registered with Axiom. Finally, since November 2016 Eng has been registered with Moloney out of the firm’s Oak Brook, Illinois and Flushing, New York office locations.

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.

FINRA Sanctions John Jones Over Unsuitable Investments

October 7, 2015 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) brought and enforcement action against broker John Jones (Jones) (FINRA No. 2013036960801) alleging that between January 2004 and December 2006, Jones engaged in unsuitable trading in a customer’s account by recommending purchases of three speculative investments inconsistent with the customer’s investment objectives and financial condition and resulting in an overconcentration in the customer’s account in speculative investments. FINRA determined that the recommendations were made without reasonable grounds by Jones for believing that they were suitable for the customer. Finally, FINRA found that Jones willfully failed to timely amend his Form U4 to disclose two tax liens.

In addition to FINRA’s latest regulatory action, Jones has been the subject of two customer disputes, one tax lien, one bankruptcy, and two other regulatory actions, and one employment separation. The customer complaints allege that Jones’ made misrepresentations in recommending private placements, made unsuitable investments and engaged in fraudulent activity. One of the other regulatory actions was by the state of Georgia found that Jones misrepresented private placements. The other regulatory action also involved the state of Georgia and customer complaints concerning Jones’ private placement sales.

Jones first became associated with a FINRA member in 1986. From December 2007 until February 2010, Jones was a registered representative of First Legacy Securities, LLC. Thereafter, from March 2010, until July 2015, Jones was associated with Moloney Securities Co., Inc.

Moloney Securities Fined Over Supervisory Failures Concerning Non-Traditional (Leveraged) ETFs

July 3, 2014 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) has sanctioned Moloney Securities Company, Inc. (Moloney Securities) concerning allegations Moloney Securities failed to establish and maintain a supervisory system, including written policies, regarding the sale of leveraged, inverse and inverse leveraged exchange-traded funds (Non-Traditional ETFs) that was reasonably designed to meet the requirements under the securities laws.

ETFs attempt to track a market index, sector industry, interest rate, or country. ETFs can either track the index or apply leverage in order to amplify the returns. For example, a leveraged ETF with 300% leverage attempts to return 3% for every 1% the underlying index returns. Nontraditional ETFs can also be designed to return the inverse or the opposite of the return of the benchmark. In general, Leveraged ETFs are used only for short term trading. The Securities Exchange Commission (SEC) has warned investors that most Non-Traditional ETFs reset daily and are designed to achieve their stated objectives in a single trading session. In addition to the risks of leverage, Non-Traditional ETFs held over the long term can differ drastically from the underlying index or benchmark during the same period. FINRA has also acknowledged that leveraged ETFs are complex products that carry significant risks and ”are typically not suitable for retail investors who plan to hold them for more than one trading session, particularly in volatile markets.”

FINRA found that from January 2011, through December 2012, Moloney Securities allowed its representatives to recommend and sell Non-Traditional ETFs to customers. At this time, FINRA found that Moloney’s written supervisory procedures did not address the sale or supervision of Non-Traditional ETFs. In addition, FINRA alleged that Moloney Securities did not conduct due diligence of Non-Traditional ETFs before allowing financial advisors to recommend them to customers. Despite the unique features and risk factors of Non-Traditional ETFs that FINRA has noted, FIRNA found that Moloney Securities did not provide its brokers or supervisors with any training or specific guidance as to whether and when Non-Traditional ETFs would be appropriate for their customers. FINRA also found that Moloney Securities did not use any reports or other tools to monitor the length of time that customers held open positions in Non-Traditional ETFs or track investment losses occurring due to those positions.