securities fraud

Former RBC Advisor Patrick Hudson Sanctioned Over Real Estate Sales

October 13, 2017 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Patrick Hudson (Hudson), in June 2015, was terminated by his then employer RBC Capital Markets (RBC). RBC stated that Hudson was terminated due to undisclosed outside business activities and the sale of unapproved products.

Thereafter, in August 2017, FINRA brought action against Hudson finding that Hudson participated in private securities transactions in the form of promissory notes, without providing written notice or seeking written from RBC. FINRA found that Hudson’s outside real estate business entered into a series of promissory notes away from the firm totaling $490,000. In addition, Hudson participated in multiple outside businesses without providing prior written notice to the firm. FINRA determined that on at least 21 occasions Hudson sent letters on firm letterhead to various third-parties for the purpose of verifying the assets of firm customers but that Hudson failed to submit these letters to the firm’s operations support department for supervisory review.

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”.

Broker Michael Siva Arrested for Insider Trading

August 31, 2017 | by Staff Attorney

Gana Weinstein LLP is examining claims made by the United States Securities and Exchange Commission against broker Michael Siva (Siva). According to BrokerCheck records, Siva and five other individuals allegedly engaged in securities fraud and profited by over $5 million by trading on insider information about dozens of impending corporate mergers, acquisitions, and tender offers.

Siva entered the industry in 1996. He is currently employed at Morgan Stanley and has worked there for 8 years. Between October 2014 and April 2017, Siva allegedly used inside information to make profitable trades for his clients, earning commissions for himself in the process. Mr. Siva also allegedly traded on behalf of himself and his wife based on two of the tips he received.

Securities fraud (a/k/a investment fraud) stems from a variety of deceptive practice in the stock or commodities markets. Securities fraud stems from intentionally false information or the omission of material information that induces an investor to make purchase or sales decisions. Securities fraud violates state and federal securities laws. Securities fraud encompass a wide range of illegal activity, including violations of section 10(b) of the Securities Exchange Act of 1934, insider trading, and other illicit activity on trading floors of stock and commodities exchanges. Insider trading is the illegal practice of trading on the stock exchange to one’s own advantage through having access to confidential information.

Gana LLP Files Complaint on Behalf of Dean Mustaphalli Investors (Update)

June 27, 2017 | by Staff Attorney

The law offices of Gana Weinstein LLP have recently filed a complaint on behalf of nearly a dozen investors alleging that Dean Mustaphalli (Mustaphalli) engaged in securities fraud. The claim was brought against brokerage firms Sterne Agee Financial Services, Inc. (Sterne Agee) and Interactive Brokers LLC (Interactive Brokers) alleging that the firms failed to supervise Mustaphalli’s misconduct and otherwise aided his fraud causing them approximately $3,000,000 in losses.

If you unfortunately trusted Mustaphalli with your investments there is still time to act. Gana Weinstein LLP’s securities fraud attorneys represent investors who have suffered investment losses at the hands of securities professionals. Details concerning Mustaphalli’s alleged fraud continue to surface.

On June 14th, 2017, New York Attorney General Eric T. Schneiderman announced charges against Mustaphalli and entities he controlled with defrauding elderly clients out of millions of dollars. The New York Attorney General alleged that Mustaphalli engaged in a six-year scheme to defraud clients that were elderly and near retirement by investing their money in his hedge fund and in many instances without their knowledge Schneiderman said in a statement – “As we allege, Dean Mustaphalli squandered and looted $10 million from hardworking individuals. New Yorkers deserve to know that their investments are safe—and financial professionals who won’t play by the rules will face consequences.”

Broker Andrew Elsoffer Faces Allegations of Securities Fraud

June 13, 2017 | by Staff Attorney

The experienced securities fraud lawyers of Gana Weinstein LLP are investigating multiple customer disputes filed with the Financial Industry Regulatory Authority (FINRA) against broker Andrew Bruce Elsoffer (Elsoffer). According to Elsoffer’s FINRA BrokerCheck records, there are several disclosures on his record pertaining to securities fraud, misrepresentation, unsuitability, breach of fiduciary duty, and negligence amongst other allegations.

Elsoffer entered the securities industry in 1994 and was only registered with Merrill Lynch, Pierce, Fenner & Smith, Inc. until November 2011. He is currently employed at Stifel Nicolaus & Co., Inc. since November 2011. He was previously employed at:

• Bank of America (December 2009 – October 2011)

FINRA Sanctions Broker Paul Alexander For Unauthorized Trading

May 17, 2017 | by Staff Attorney

Our securities fraud attorneys are investigating customer complaints and a recent regulatory action filed with The Financial Industry Regulatory Authority (FINRA) against Paul Alexander (Alexander) formerly associated with Raymond James & Associates, Inc. (Raymond James), alleging Alexander engaged in a number of securities law violations including that the broker made unsuitable investments, unauthorized trading, breach of fiduciary duty, and securities fraud among other claims.

In November 2016 FINRA sanctioned Alexander after he consented to the entry of findings that in contravention of his member firm’s policies and procedures, Alexander effected transactions while exercising discretion without prior written authorization in customer accounts and without notifying his brokerage firm to accept the accounts as discretionary.

The most recent customer complaint filed against Alexander was in September 2015 alleging unauthorized trading causing $244,000 in damages. The claim was settled for $95,000.

Broker Tracy Rae Turner barred from FINRA

April 25, 2017 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with Financial Industry Regulatory Authority (FINRA) against broker Tracy Rae Turner (Turner). According to BrokerCheck records, Turner has been subject to at least 31 customer complaints, two employment separations for cause, one regulatory, and one financial among other claims during his 22 years of experience. The customer complaints against Turner alleges securities law violations that including unauthorized trading, fraud, breach of contract, negligence, and failure to supervise among other claims.

In a FINRA regulatory action against Turner in November 2016, the agency alleged that he offered and sold interests to investors totaling approximately $4.1 million without giving prior notice to and receiving prior written permission from his member firm. For successfully soliciting these investments, Turner received approximately $270,000 in compensation. A decision was rendered in April 2017 which resulted in barring Turner from FINRA association and fining him for $272, 879.04. The findings of the decision also alleged that Turner created a publically available offering memorandum to market sales of interest in private securities without providing a sound evaluation of investments and included false and misleading statements.

In June 2009, Turner was permitted to resign from his position at CapWest Securities, Inc. for conducting sales in states where he was not registered.

Morgan Stanley Advisor Albert Dishner Subject to Customer Complaints

February 6, 2017 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating a customer complaint filed with The Financial Industry Regulatory Authority (FINRA) against broker Albert Dishner (Dishner), currently associated with Morgan Stanley. According to BrokerCheck records Dishner has been subject to at least four customer complaints among other claims. The customer complaints against Dishner allege securities law violations that including unsuitable investments, unauthorized trading, churning (excessive trading), and breach of fiduciary duty trading among other claims.

The most recent complaint against Dishner was filed in August 2016, while employed at Credit Suisse Securities, alleging $600,000.00 in damage stemming from violation of FINRA rules and federal securities laws, churning, and trading negligently in customer’s account from 2010 until 2015. The complaint settled in December 2016 for $205,000.00.

In 2012 a customer filed a complaint alleging, while employed at Credit Suisse Securities, Dishner did not follow customers instructions to sell securities and later executed an unauthorized sale causing $354,000 in damages. The complaint was denied.

Broker Investigation: National Securities Advisor Mark Gassoso

January 31, 2017 | by Staff Attorney

Our securities fraud attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Mark Gassoso (Gassoso) currently associated with National Securities Corporation alleging Gassoso engaged in a number of securities law violations including that the broker made unsuitable investments, unauthorized trading, and churning (excessive trading) among other claims.

The most recent complaint was filed in October 2016 alleging unsuitable investments, breach of fiduciary duty, and misrepresentations causing $150,000 in damages. The complaint is currently pending. In September 2013 another investor filed a complaint and alleged excessive trading. The complaint was denied.

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.

Broker Bryon Glime Barred From Financial Industry

January 29, 2017 | by Staff Attorney

Our securities fraud attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Bryon Glime (Glime) formerly associated with Capital Investment Group, Inc. (Capital Investment) alleging unsuitable investments and unauthorized trading among other claims. According to brokercheck records Glime has been subject to three customer complaints, one criminal matter, three judgments or liens, one employment termination for cause, and one regulator action.

In September 2015 Glime was terminated by Capital Investment after the firm alleged that Glime failed to timely report a criminal disclosure to the firm. The criminal disclosure disclosed includes allegations of theft, embezzlement, and misappropriation.

Brokers in the financial industry have the fundamental responsibility to treat investors fairly. This obligation includes making only suitable investments for their client. The suitable analysis has certain requirements that must be met before the recommendation is made. First, there must be reasonable basis for the recommendation for the investment based upon the broker’s and the firm’s investigation and due diligence. Common due diligence looks into the investment’s properties including its benefits, risks, tax consequences, the issuer, the likelihood of success or failure of the investment, and other relevant factors. Second, if there is a reasonable basis to recommend the product to investors the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives. These factors include the client’s age, investment experience, retirement status, long or short term goals, tax status, or any other relevant factor.

NetWork 1 Financial Securities Broker Mark Miranda Subject to Multiple Churning Complaints

January 27, 2017 | by Staff Attorney

According to records kept by The Financial Industry Regulatory Authority’s (FINRA) customers have filed complaints against broker Mark Miranda (Miranda). Our attorneys have been reviewing records that Miranda has been the subject of at least seven customer complaints, one bankruptcy filing, and one tax lien in September 2012 for $39,000. The customer complaints against Miranda allege a number of securities law violations including that the broker made unsuitable investments, unauthorized trading and churning (excessive trading) among other claims.

The most recent complaint was filed in September 2016 and unsuitable investments causing $49,797.17 in damages. The complaint is currently pending. In April 2016 another investor filed a complaint and alleged excessive fees causing $47,620 in damages. The complaint 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.