Western International Securities Tag Archives

Jeffrey Higgins Barred Over Misappropriation of Client Funds – Investor Recovery Options

November 9, 2024 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Jeffrey Higgins (Higgins) has been accused by multiple investors of engaging in fraudulent misappropriation of their funds. Higgins was barred by a regulator for engaging in undisclosed investment activities including undisclosed outside business activities (OBAs). According to records kept by The Financial Industry Regulatory Authority (FINRA), it appears that Higgins was employed by Western International Securities, Inc. (Western) and Financial West Group (FWG) at the time of the activity. However, Higgins also did business under the names Azzurra Wealth Management, LLC. If you have been a victim of Higgins’ alleged misconduct our firm may be able to assist you in recovering funds.

In June 2024 Western terminated Higgins for cause alleging that the firm was investigating the conduct of Higgins following his notification to Western that he had been misdirecting client investments and funds and misappropriating client investments and funds to his own use, starting in approximately 2007 at his prior broker-dealer firm, and that these activities have continued through to the current date.

On July 1, 2024, Higgins accepted a permanent industry bar with FINRA by failing to respond to the regulator’s requests for documents and information. According to FINRA, Higgins consented to the sanction and to the entry of findings that he refused to produce information and documents and refused to appear for testimony requested by FINRA during the course of a matter that originated from an examination by FINRA following a regulatory tip. FINRA found that Higgins’ member firm filed a Form U5 stating that he was discharged based on his notification to it that he had been misdirecting client investments and funds and misappropriating client investments and funds to his own use, starting at his prior broker-dealer firm, and that these activities have continued through to the date of termination.

Heath Goldstein Sold GWG Bonds and Investor Complaints

October 2, 2022 | by Staff Attorney

Advisor Heath Goldstein (Goldstein), currently employed by brokerage firm Western International Securities, Inc. (Western International) has been subject to at least 9 disclosures and customer complaints. According to a BrokerCheck report the customer complaints concern alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements. In Goldstein’s case at least three of the complaints occurred from the sale of GWG Holdings L-Bonds. GWG went into bankruptcy. The attorneys at Gana Weinstein LLP represented nearly 100 investors who suffered losses in GWG.

GWG’s business focused on the acquisition of life insurance policies in the secondary market. GWG was offered to investors even though the company had no significant operating history and no profits. Until 2018, GWG’s sole business was to borrow money to buy life insurance policies in the secondary market at prices that are less than the face value of the insurance benefits payable upon the death of the insureds. GWG would then hold the policies until maturity and collect the face value upon the insured’s death.

The contours of the GWG bonds are as follows:

Brokers Earned up to 8% commissions. From GWG’s prospectus “The total amount of the selling commissions…in the course of offering and selling L Bonds will not exceed 8.00% of the aggregate gross offering proceeds….” GWG Prospectus (Sept. 5, 2019).
GWG bonds are inadequately secured. While GWG claims that the L Bonds are secured by insurance portfolio, in the prospectus, the life insurance policies held by DLP IV and Life Trust “do not serve as direct collateral for the L Bonds” and have been “pledged as direct collateral securing” other debt obligations senior to L Bond investors.
GWG bonds are “auto-renewable.” Like a magazine subscription, unless an L bond investor gives notice ahead of the maturity date that they wish to redeem their investment, the bond is renewed automatically and replaced with a new one with the same terms and interest rate then being offered by GWG. This feature forces investors to be vigilant as expiration approaches.
GWG bonds are unlisted. This means the bonds are not tradable on any stock exchange. Because there is no market for the L Bonds there is no way for an investor to regularly gauge the value of an L Bonds or the credit worthiness of GWG based on market sentiment.
GWG bonds are not rated. L Bonds were not credit rated by any credit rating agency nor were they insured.

FINRA Accuses Megurditch Patatian of Falsifying Investor Financial Information to Sell REITs

October 19, 2021 | by Staff Attorney

Advisor Megurditch Patatian (Patatian), formerly employed by brokerage firm Western International Securities, Inc. (Western International) has been subject to at least 13 disclosures of which nine are customer complaints, three are employment terminations for cause, and one is a regulatory action. According to a BrokerCheck report several of the customer complaints concern alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.

In February 2021 FINRA filed a complaint against Patatian alleing that he made 81 recommendations to 59 customers to purchase non-traded real estate investment trusts (REITs). According to FINRA, all of the recommendations were unsuitable because he lacked a reasonable basis to recommend the product to any investor. FINRA found that Patatian did not understand the basic features and risks associated with the non-traded REITs and failed to conduct reasonable diligence to understand the product. As part of the misconduct, FINRA alleges that Patatian caused customers to incur taxes and surrender fees by recommended that the customers surrender existing variable annuity policies when he failed to understand the adverse financial consequences of the surrenders. In one instance, FINRA claims that Patatian impersonated a customer in a telephone call with an insurance company to obtain the contract value and surrender fee for the variable annuity. Finally, in order to qualify investors for the REITs, FINRA claims that Patatian recorded inaccurate customer information on his member firm’s customer account and disclosure forms, including by overstating customers’ net worth and exaggerating customers’ years of investment experience. According to FINRA, Patatian inflated the customer’s net worth on the firm’s REIT paperwork in order to evade concentration limits on REIT investments.

Advisor Doron Kochavi Has Unsuitable Investment Complaints

October 16, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that broker Doron Kochavi (Kochavi), currently employed by Western International Securities, Inc. (Western International) has been subject to at least six customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Western International’s customer complaints allege that Mr. Kochavi recommended unsuitable investments in various investments, among other allegations of misconduct relating to the handling of their accounts.

In October 2019, a customer complained that Mr. Kochavi violated the securities laws by alleging that Mr. Kochavi breached his fiduciary duty. The claim alleges $4,000,000.00 in damages and is currently pending.

In August 2002, a customer complained that Mr. Kochavi violated the securities laws by alleging that Mr. Kochavi engaged in the recommendation of unsuitable investments, breach of fiduciary duty, and a failure to disclose material information regarding the investments. Damages were granted in the amount of $35,000.

In addition, older claims also involved allegations of similar misconduct. Claims from 1997 and 1999 involved allegations that Mr. Kochavi engaged in the recommendation of unsuitable investments.

Advisor John Jaramillo Terminated for Selling a Non-Approved Product

May 15, 2020 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor John Jaramillo (Jaramillo) has been accused by his former employer of selling a non-approved product among other allegations. According to records kept by The Financial Industry Regulatory Authority (FINRA) Jaramillo has been terminated by his prior employer, Western International Securities, Inc. (Western International) concerning his outside business activities. If you have been a victim of Jaramillo’s alleged misconduct our firm may be able to assist you in recovering funds.

In March 2020 Western International terminated Jaramillo after alleging that he sold a non-approved product.

Jaramillo’s outside business activities disclosed on his publicly available BrokerCheck report include accident & health insurance and Integrity Real Estate Solutions which is listed as a real estate agent.

Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in receiving loans from clients or selling securities sales through OBAs. The sale of unapproved investment products – is a practice known in the industry as “selling away” – a serious violation of the securities laws. 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. Sometimes those investments have some legitimacy but often times these types of investments can end up being Ponzi schemes or the advisor can be engaging in the conversion of funds.

Western International Advisor Stuart Godin Has Customer Complaints

February 20, 2020 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Stuart Godin (Godin), currently employed by Western International Securities, Inc. (Western International) has been subject to at least eight customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Godin’s customer complaints alleges that Godin recommended unsuitable investments in various investments such as promissory notes, managed commodities, and other investments among other allegations of misconduct relating to the handling of their accounts.

In May 2019 a customer complained that Godin violated the securities laws by alleging that Godin made misrepresentation and incompetence on stock selections from 2018 to 2019. The claim alleged $35,000 in damages and settled for $9,000.

In November 2017 a customer complained that Godin violated the securities laws by alleging that Godin caused losses due to the financial advisor’s unsuitable recommendation to invest in a managed futures fund from November 2012 through 2016. The claim alleged $50,000 in damages and settled for $20,000.

Former Broker Paul Soll Barred from the Securities Industry

September 20, 2019 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating advisor Paul Soll (Soll), formerly registered with Western International Securities, Inc. (Western International) and Financial West Group (FWG) out of Los Angeles, California. According to records kept by The Financial Industry Regulatory Authority (FINRA), Soll was barred from the financial industry for failing to provide the regulator with information about his trading activities that concern possible excessive trading a securities law violation that is similar to churning. According to a BrokerCheck report, Soll also disclosed at least one customer complaint alleging breach of fiduciary duty.

In July 2018, FINRA stated that Soll violated FINRA Rules 8210 and 2010 by failing to provide the regulator with information about his potential trading abuses. Soll was thereby barred from the securities industry.

Moreover, a customer filed a complaint alleging that Soll engaged in breach of fiduciary duty, breach of contract, and misrepresentation in the sale of bonds. The amount of damages was not specified. The claim settled for $660,574.

Advisor Michael Heath Subject to Regulator Complaint and Employment Terminations

December 31, 2018 | by Staff Attorney

According to BrokerCheck records financial advisor Michael Heath (Heath), currently employed by Infinity Financial Services (Infinity Financial) has been subject to one regulatory action, two employment terminations for cause, and one civil lien during his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), the regulatory action against Heath concern allegations of unsupervised record activity.

In October 2018 FINRA alleged that Heath consented to the sanctions and findings that he regularly communicated with his customers through an unapproved personal email account about member firm business and circumvented the firm’s supervision. FINRA found that in these emails Heath sent account documents, discussed account performances, and discussed specific investments with his customers. FINRA further found that the firm’s supervisory procedures required electronic business-related correspondence to be sent through firm issued or firm approved email accounts so that the firm could monitor such communications for recordkeeping and compliance purposes. FINRA determined that by using unapproved personal email account Heath caused his firm to fail to maintain all business-related communications. In addition, FINRA also found that Heath failed to comply with FINRA rules on communications with the public in that he created account performance summaries that he used in meetings with clients that failed to provide a sound basis for customers to evaluate the facts.

In March 2016 Heath was discharged by Securities America, Inc. (Securities America) on allegations that he failed to disclose internal investigation with previous broker dealer on his CRD update.

That disclosure followed Heath’s termination from First Allied Securities, Inc. (First Allied) where the firm terminated him for failing to comply with the firm’s email policies.

Clement Chichester and Brittney Sias Barred Over Claims of Receiving Customer Funds

November 30, 2017 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisors Clement Chichester (Chichester) and Brittney Sias (Sias), in October 2017, were terminated by their firm, Western International Securities, Inc. (Western International) based on allegations that they accepted a FINRA sanction. Chichester and Sias were barred from the industry by FINRA after FINRA requested documents and information and they failed to provide FINRA with the requested documents and information after initially providing partial responses to a previous request in connection with FINRA’s investigation of their alleged receipt of funds from a customer of the firm.

At this time it is unclear the extent and scope of Chichester’s and Sias’ private securities activities. Chichester CRD lists that he is engaged in insurance as an outside business activity. 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”.

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.

FINRA Files Complaint Against Dennis Mehringer Over Mutual Fund Switching

July 6, 2017 | by Staff Attorney

According to BrokerCheck records The Financial Industry Regulatory Authority (FINRA) has filed a complaint against Dennis Mehringer (Mehringer) over allegations that Mehringer made unsuitable recommendations that caused a customer to engage in excessively expensive short-term trading of mutual fund Class A shares. According to FINRA, Mehringer repeatedly recommended, and caused the customer to engage in, short-term purchases and sales of 84 mutual fund Class A positions in five of the customer’s accounts. FINRA alleged that in 47 of the 84 purchase transactions, the customer paid front-end sales loads ranging from four to five percent and that all but 17 of these 84 mutual fund positions were held for less than six months while 35 of them were held for less than three months. FINRA found that Mehringer received $169,735 in commissions from the transactions and that the trades were without reasonable grounds to believe that the recommendations were suitable for the customer in light of the frequency and nature of the transactions based on the customer’s investment objectives.

Class A mutual fund share investments are long-term trades that come with significant sales loads. Frequent trading and switching between the mutual funds and mutual fund families is unsuitable for any customer.

Mehringer is currently associated with Western International Securities, Inc. (Western International) and has been subject to nine customer complaints alleging unsuitable investments, overconcentration, excessive commission charges among other claims. The securities lawyers of Gana Weinstein LLP continue to investigate the customer complaints against Mehringer.