Author: finralawyer

Hanley Law Brings Claim Against Edward Carroll and Mark Scribner

Our firm is currently representing clients in a lawsuit against attorney Edward Carroll and attorney Mark Scribner related to the Jay Peak Hotel Suites LP EB5 Immigrant Investor Program.

The Jay Peak project attracted foreign investors who were hoping to earn permanent residence in the United States through investing in U.S. projects that create a certain number of jobs.  The Jay Peak project was structured as investments in limited partnerships, whereby each limited partnership would use its investors’ funds for specific purposes and under certain restrictions.

Investors who invested in the Jay Peak limited partnerships thought they were investing their funds in hotels, cottages, a biomedical research facility and other projects.  In reality, while some of the funds were used for the projects, the majority of the funds were commingled, misused, and diverted to pay for other projects and improper personal expenses which resulted in significant losses to the investors.

HANLEY LAW

Hanley law represents individual investors nationwide with significant investment losses.  Let Hanley Law work for you. Call (239) 649-0050 or contact the firm through our Website to arrange a free confidential consultation with an attorney to discuss your experiences which resulted in investment losses.

 

Dismissal of a Counterclaim is an Appropriate Sanction for Flagrant Discovery Abuse

Simons vs. Fox, No. 17-1012 (7th Cir., February 1, 2018)

This appeal addresses the propriety of sanctions against a litigant for discovery abuses. In a highly contested dispute between the ex-CEO of a trading firm and its founder, the founder and defendant, asks the appellate court to vacate the dismissal of his counterclaim as a sanction for his discovery abuse. Simons sued Fox for firing him for uncovering Fox’s alleged violations of corporate and securities laws. Fox then countersued Simons for defamation. Throughout the acrimonious litigation, Fox asserted that Simons lied in order to destroy Fox’s companies. Rather than prove that assertion with evidence, Fox obstructed Simons’s discovery. This led to sanctions and ultimately the dismissal of Fox’s counterclaim. Fox appeals the orders leading up to the dismissal.

Fox repeatedly refused Simons’s discovery requests, he refused to produce documents he possessed or controlled, and he was an uncooperative deponent. The district court judge directed the production of documents in at least three separate orders, yet Fox declined to produce discovery. The judge sanctioned Fox and he refused to pay the monetary sanction. Fox was then held in contempt of court and ordered to pay a fine for everyday he remained in contempt. Fox refused to pay the fine for contempt. After Fox asserted that he lacked funds to pay any fines, the judge entered an alternative sanction of dismissing his counterclaim as the sanction for Fox’s obstruction. The court found that when presented with the dismissal of claims as a sanction, “we weigh not only the straw that finally broke the camel’s back, but all the straws that the recalcitrant party piled on over the course of the lawsuit.” Domanus, 742 F.3d at 301 (quoting e360 Insight, Inc. v. Spamhaus Project, 658 F.3d 637, 643 (7th Cir. 2011)).

Similarly, the circuit court held that the trial court did not commit reversible error by allowing Simons to voluntarily dismiss the claims against Fox after Fox’s counterclaim was dismissed. Federal Rules of Civil Procedure 41(a)(2) allows a Plaintiff to dismiss claims voluntarily at any time “on terms the court considers proper.” The court reasoned that at the time of dismissal, Fox was in contempt of court, and he showed no prospect of respecting his long-ignored discovery obligations. Therefore, Fox cannot show prejudice from the judge allowing Simons to dismiss his claims voluntarily to end the case. Finally, Fox contended that the district judge was biased and should have disqualified himself. The court found that judicial rulings, even those that “are critical or disapproving of, or even hostile to” a party, do not constitute a valid basis for disqualification except in the “rarest circumstances” in which “deep-seated favoritism or antagonism” makes fair judgement impossible. Liteky v. United States, 510 U.S. 540, 555 (1994). The circuit court found that Fox presented no persuasive reason to disturb the district judge’s fair and patient approach to managing the case and affirmed the decision.

Second Circuit Rejects Manifest Disregard of Law as a Basis for Vacating Arbitration Award Against Wells Fargo Advisors

Pfeffer v. Wells Fargo Advisors, LLC, et al., No. 17-1819-cv (2d. Cir. Feb. 15, 2018)

A FINRA arbitration panel dismissed Claimant Pfeffer’s state law claims arising from Wells Fargo Advisors failure to follower her late husband’s instructions to transfer all assets from a trust naming his children as beneficiaries to a trust naming her as the beneficiary. Pfeffer testified that her now deceased husband requested the transfer because the Pfeffers became concerned about the management of the accounts. The Wells Fargo broker testified that he did not transfer the assets because he was worried that Mr. Pfeffer was not competent and was being unduly influenced by Mrs. Pfeffer. After receiving two letters from physicians confirming that Mr. Pfeffer was not capable of making financial decisions, Wells Fargo froze both trust accounts. After a five-and-a-half-day hearing, during which both parties presented testimony and other evidence, the Panel denied Mrs. Pfeffer’s claim.

Mrs. Pfeffer filed a complaint challenging the arbitration award and Wells Fargo moved to dismiss the complaint and confirm the award. The district court confirmed the award and this appeal followed. On appeal, Mrs. Pfeffer argued that the award was procured by undue means, evident partiality, and misconduct because the Panel was intimidated by defense counsel and refused to consider relevant evidence. Pfeffer alleged that the Panel exhibited manifest disregard for the law and facts.

Under the Federal Arbitration Act, a district court may vacate an arbitration award if: (1) the award was procured by “corruption, fraud, or undue means”; (2) the arbitrators exhibited “evident partiality” or “corruption”; (3) the arbitrators were guilty of “misconduct” such as “refusing to hear evidence pertinent and material to the controversy” or “any other misbehavior” that prejudiced the rights of any party; or (4) the arbitrators “exceeded their powers.” 9 U.S.C. § 10(a); see also AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 350 (2011). The court reasoned that the second circuit does not recognize manifest disregard of the evidence as a proper grounds for vacating an arbitration panel’s award, and will only find a manifest disregard for the law where there is no colorable justification for a panel’s conclusion. Wallace v. Buttar, 378 F.3d 182, 193 (2d Cir. 2004).

The court held that Mrs. Pfeffer failed to meet her “very high” burden to demonstrate that vacatur was appropriate. Id. at 103. The court found that the transcript of the arbitration reveals no suggestion that the award was produced by undue means, evident partiality, or misconduct. Mrs. Pfeffer’s allegations that the Panel failed to abate defense counsel’s abrasive manner and that it was intimidated by him are belied by the record. The court found that contrary to Mrs. Pfeffer’s allegations, the transcript of the proceedings shows that the Panel considered her evidence, understood the issues underlying her claims, and afforded her latitude because she was pro se. Therefore, the court found no support for the conclusion that the panel had manifestly disregarded the law and affirmed the lower court’s decision confirming the award.

HANLEY LAW INVESTIGATES MATTHEW COCHRAN FORMER CHARLOTTE NORTH CAROLINA BROKER

According to the Financial Industry Regulatory Authority (“FINRA”) Matthew Cochran has been barred from the industry and consented to a sanction and to the entry of findings that he and a third party exercised discretionary authority to execute securities transactions in accounts held away from Cochran’s member firm. (FINRA Case #2017054247001).

FINRA alleged that during the relevant period, Cochran recommended that 98 firm customers and other individuals, who were not family members, open 94 accounts at another broker-dealer. FINRA further alleged that at Cochran’s recommendation, the investors verbally gave him and/or a third party discretionary authority over the outside accounts and Cochran assisted the investors in opening the outside accounts. FINRA alleged that during the relevant time-period, Cochran and the non-registered person executed securities transactions in the outside accounts pursuant to the investors’ verbal discretionary authority. According to FINRA, neither Cochran nor the Non-Registered Person obtained written discretionary authority. Furthermore, FINRA alleged that Cochran and the Non-Registered Person executed a total of approximately 5,931 transactions with an aggregate trade value (buy and sell) of more than $9.6 million for the investors in the outside accounts. According to FINRA, Cochran received $34,000 in funds from the investors related to this activity. FINRA further alleged that during ten telephone calls during the relevant period, for ten different investors, Cochran misrepresented to the executing firm that he himself was one of the investors and during two of these telephone calls, Cochran instructed the firm to liquidate investors’ securities positions. By impersonating investors, Cochran violated FINRA rules.

Matthew Thomas Cochran entered the securities industry in 2011. Matthew Cochran (CRD # 5853600) has been registered with the following firms:

Northwestern Mutual Investment Services, LLC
CRD # 2881
Charlotte, NC
11/14/2011 – 05/11/2017

HANLEY LAW

Hanley law represents individual investors nationwide with significant losses in their portfolios, retirement plans or investment accounts. The firm is dedicated to assisting investors to recover losses suffered by unsuitability, over-concentration, fraud, misrepresentation, self-dealing, unauthorized trades or other wrongful acts, whether intentional or negligent. The firm handles cases against the major Wall Street broker dealers, including Northwestern Mutual Investment Services, LLC.

Let Hanley Law work for you. Call (239)649-0050 or contact the firm through our Website to arrange a free confidential consultation with an attorney to discuss your experiences with your stock broker which resulted in investment losses.

HANLEY LAW INVESTIGATES DAVID OLSON EX-MORGAN STANLEY BROKER LARGO FLORIDA

According to the Financial Industry Regulatory Authority (“FINRA”) David Olson has been barred from the industry for refusing to appear for an on-the-record interview in which testimony was requested in connection with an investigation by FINRA into allegations that he was involved in an undisclosed business activity, and that he solicited a loan from a customer for that outside business activity. In December 2016, FINRA began an investigation regarding allegations that Olson was involved in an undisclosed outside business activity and that Olson solicited a loan from a Morgan Stanley customer for that outside business activity. Morgan Stanley terminated Matthew Singer’s registration on March 14, 2016 according the FINRA Letter of Acceptance, Waiver and Consent (AWC 2016052579701).

David Olson entered the securities industry in 1987. David Olson (CRD # 1700644) has been registered with the following firms:

Morgan Stanley
CRD# 149777
St. Petersburg, FL
07/30/2010 – 01/13/2017

Merrill Lynch, Pierce, Fenner & Smith, Inc.
CRD# 7691
Clearwater, FL
10/23/2009 – 08/03/2010

Banc of America Investment Services, Inc.
CRD# 16361
Belleair Bluffs, FL
09/10/2004 – 10/23/2009

UBS Financial Services, Inc.
CRD# 8174
Weehawken, NJ
01/28/1999 – 09/30/2004

Prudential Securities Inc.
CRD# 7471
New York, NY
08/25/1989 – 02/10/1999

Thomson McKinnon Securities, Inc.
CRD# 829
New York, NY
05/02/1989 – 08/25/1989

Painewebber Inc.
CRD# 8174
07/22/1987 – 05/08/1989

HANLEY LAW

Hanley law represents individual investors nationwide with significant losses in their portfolios, retirement plans or investment accounts. The firm is dedicated to assisting investors to recover losses suffered by unsuitability, over-concentration, fraud, misrepresentation, self-dealing, unauthorized trades or other wrongful acts, whether intentional or negligent. The firm handles cases against the major Wall Street broker dealers, including Morgan Stanley.

Let Hanley Law work for you. Call (239)649-0050 or contact the firm through our Website to arrange a free confidential consultation with an attorney to discuss your experiences with your stock broker which resulted in investment losses.

HANLEY LAW INVESTIGATES MATTHEW SINGER EX-MORGAN STANLEY BROKER AVENTURA FLORIDA

According to the Financial Industry Regulatory Authority (“FINRA”) Matthew Singer has been barred from the industry for refusing to appear for an on-the-record interview in which testimony was requested in connection with an investigation by FINRA into whether or not he and others made unsuitable options recommendations to customers. Morgan Stanley terminated Matthew Singer’s registration on March 14, 2016 according the FINRA Letter of Acceptance, Waiver and Consent (AWC 2016049937901).

Matthew Singer entered the securities industry in 2006. Matthew Singer (CRD # 4972708) has been registered with the following firms:

MORGAN STANLEY (CRD#:149777)
AVENTURA, FL
07/22/2013 – 03/14/2016

FBN SECURITIES, INC. (CRD#:18315)
NEW YORK, NY
02/05/2013 – 07/08/2013

ASCENDIANT CAPITAL MARKETS, LLC (CRD#:152912)
IRVINE, CA
01/24/2013 – 02/06/2013

CAPSTONE INVESTMENTS (CRD#:41400)
NEW YORK, NY
10/18/2011 – 01/09/2013

C. L. KING & ASSOCIATES, INC. (CRD#:6183)
NEW YORK, NY
10/04/2010 – 10/14/2011

HUDSON SECURITIES,INC. (CRD#:10467)
NEW YORK, NY
06/30/2008 – 09/01/2010

KNIGHT CAPITAL MARKETS, LLC. (CRD#:38379)
JERSEY CITY, NJ
08/24/2006 – 04/10/2008

KNIGHT EQUITY MARKETS, L.P. (CRD#:38599)
JERSEY CITY, NJ
07/19/2006 – 04/10/2008

HANLEY LAW

Hanley law represents individual investors nationwide with significant losses in their portfolios, retirement plans or investment accounts. The firm is dedicated to assisting investors to recover losses suffered by unsuitability, over-concentration, fraud, misrepresentation, self-dealing, unauthorized trades or other wrongful acts, whether intentional or negligent. The firm handles cases against the major Wall Street broker dealers, including Morgan Stanley.

Let Hanley Law work for you. Call (239)649-0050 or contact the firm through our Website to arrange a free confidential consultation with an attorney to discuss your experiences with your stock broker which resulted in investment losses.

HANLEY LAW INVESTIGATES THOMAS MEIER EX-MORGAN STANLEY BROKER MIAMI FLORIDA

According to the Financial Industry Regulatory Authority (“FINRA”) a Letter of Acceptance, Waiver and Consent (“AWC”) was issued in which Meier was barred from the industry. Meier consented to FINRA’s sanction and to FINRA’s findings that he effected approximately 1,290 unauthorized transactions, including both purchases and sales of equity securities, in eight accounts belonging to six customers. The findings stated that none of the eight accounts were discretionary accounts and Meier did not have discussions with the customers about the trades prior to the transactions and did not obtain the customers’ authorization prior to executing any of the transactions. FINRA found that Meier received approximately $265,000 in commissions for those transactions and that two of the customers realized losses of approximately $78,000.

FINRA’s findings also state that Meier exercised discretion in five accounts belonging to four separate customers. According to FINRA, none of the customers gave Meier written authorization to exercise discretion in their accounts, and the firm had not accepted any of the accounts as discretionary. FINRA’s findings also allege that Meier made inaccurate statements on annual compliance questionnaires that he did not have any accounts in which business was transacted on a discretionary basis. (FINRA Case #2016049628301)

In a Uniform Termination Notice for Securities Registration (“Form U5”) dated April 5, 2016, Morgan Stanley reported that Meier had resigned effective March 15, 2016 while “under internal review for potential issues involving his trade activity, including possible use of discretion.” Between April 5, 2016 and October, 2017, Morgan Stanley filed 21 amended Forms U5 for Meier disclosing 14 customer complaints, including two arbitration claims. To date, the Morgan Stanley has settled 13 of these claims and paid the customers a total of approximately $2.5 million.

Thomas Meier (CRD # 1146044) has been registered with the following firms:

Morgan Stanley
CRD # 149777
Miami, FL
06/01/2009 – 04/05/2016

Citigroup Global Markets, Inc.
CRD # 7059
Miami, FL
10/28/1992 – -6/01/2009

Prudential Securities Inc.
CRD# 7471
New York, NY
08/25/1989 – 11/03/1992

FSC Securities Corp.
CRD# 8323
06/21/1983 – 12/05/1989

Thomson McKinnon Securities, Inc.
CRD# 829
New York, NY
03/18/1989 – 08/25/1989

Amerifirst Securities Corp.
CRD#10711
12/10/1985 – 02/25/1989

Merrill Lynch, Pierce, Fenner & Smith, Inc.
CRD# 7691
04/18/1984 – 08/05/1985

HANLEY LAW

Hanley law represents individual investors nationwide with significant losses in their portfolios, retirement plans or investment accounts. The firm is dedicated to assisting investors to recover losses suffered by unsuitability, over-concentration, fraud, misrepresentation, self-dealing, unauthorized trades or other wrongful acts, whether intentional or negligent. The firm handles cases against the major Wall Street broker dealers, including Morgan Stanley.

Let Hanley Law work for you. Call (239)649-0050 or contact the firm through our Website to arrange a free confidential consultation with an attorney to discuss your experiences with your stock broker which resulted in investment losses.

Hanley Law Investigates Michael Ralby Ex-Morgan Stanley Broker Boca Raton Florida

According to the Financial Industry Regulatory Authority (“FINRA”) Michael Ralby has been barred from the industry for refusing to appear for an on-the-record interview in which testimony was requested in connection with an investigation by FINRA into whether Ralby had accepted loans from a customer. Morgan Stanley terminated Michael Ralby’s registration on January 11, 2018 according the FINRA Letter of Acceptance, Waiver and Consent (AWC 2017053976201).

Michael Ralby entered the securities industry in 1984 when he became registered as a General Securities Representative. Michael Ralby (CRD # 1301072) has been registered with the following firms:

Morgan Stanley
CRD # 149777
Boca Raton, FL
07/01/2013 – 01/11/2018

Oppenheimer & Co. Inc.
CRD # 249
Boca Raton, FL
03/20/2009 – 07/15/2013

Stanford Group Company
CRD# 39285
Boca Raton, FL
03/15/2005-03/16/2009

FSC Securities Corp.
CRD# 7461
Atlanta, GA
01/07/2002 – 04/06/2005

First Union Securities Financial Network, Inc.
CRD# 11025
St. Louis, MO
09/22/1998 – 12/31/2001

JWGenesis Securities, Inc.
CRD# 33832
Boca Raton
07/01/1999 – 01/02/2001

D.E. Frey & Co.
CRD# 23595
Denver, CO
09/28/1995 – 08/31/1998

Smith Barney Inc.
CRD# 7059
New York, NY
05/31/1990 – 10/06/1995

First Miami Securities, Inc.
CRD# 7793
Boca Raton, FL
12/19/1984 – 06/06/1990

HANLEY LAW

Hanley law represents individual investors nationwide with significant losses in their portfolios, retirement plans or investment accounts. The firm is dedicated to assisting investors to recover losses suffered by unsuitability, over-concentration, fraud, misrepresentation, self-dealing, unauthorized trades or other wrongful acts, whether intentional or negligent. The firm handles cases against the major Wall Street broker dealers, including Morgan Stanley.

Let Hanley Law work for you. Call (239)649-0050 or contact the firm through our Website to arrange a free confidential consultation with an attorney to discuss your experiences with your stock broker which resulted in investment losses.

Hanley Law Investigates Maryland Broker Frederick David Holloway’s Variable Annuity Sales Practices

FINRA is investigating Frederick David Holloway based on allegations that he replaced lower-cost variable annuities with higher-cost variable annuities without ensuring the new annuities were suitable or in their clients’ best interests. Specifically, FINRA alleged that Mr. Holloway, whose firm is based in Easton, Maryland recommended that customers exchange one deferred variable annuity contract for another without having a reasonable basis for his recommendations. As a result, FINRA has instituted disciplinary proceedings against Frederick David Holloway, the owner of Holloway & Associates Inc., to disgorge alleged ill-gotten gains from recommendations he made to clients to exchange their variable annuities.

FINRA alleged that Mr. Holloway persuaded clients to make 43 transactions in which they exchanged lower-cost variable annuities for high-cost variable annuities “without making adequate efforts to ensure that the proposed exchanges were suitable for, and in the best interests of, his customers” during the time-period of January 2013 to June 2016. According to FINRA, Holloway, who was the sole registered representative in his office, derived 70% of his income from variable annuity sales. FINRA also charged that between January 2010 to September 2016, Holloway falsified or inappropriately changed variable annuity transaction paperwork. FINRA alleged that Holloway had clients sign uncompleted paperwork, which he and his assistant filled in later and/or photocopied for use in other transactions. FINRA also charged Holloway with forging or directing his assistant to forge client initials to make changes to documents. FINRA further alleged that Holloway directed his assistant to impersonate clients and employees of an insurance company in telephone conversations regarding variable annuity transactions.

According to FINRA’s Broker Check, Frederick Holloway was registered with the securities industry for 44 years, and was registered with the following firms:

Holloway & Associates, Inc.
Easton, MD
CRD #10349
08/1980-Present

Investors Diversified Services, Inc.
CRD # 6320
09/1973-08/1980

IDS Marketing Corporation
CRD #6363
09/1973-08/1980

IDS Life Insurance Company
CRD #6321
09/1973-08/1980

Cardell and Associates, Inc.
CRD #7700
12/1980-04/1982

Integrated Resources Equity Corp.
CRD #6403
11/1985-11/1989

Royal Alliance Associates, Inc.
CRD #23131
11/1989-5/1999

HANLEY LAW

Hanley law represents individual investors nationwide with significant losses in their portfolios, retirement plans or investment accounts. The firm is dedicated to assisting investors to recover losses suffered by unsuitability, over-concentration, fraud, misrepresentation, self-dealing, unauthorized trades or other wrongful acts, whether intentional or negligent. The firm handles cases against the major Wall Street broker dealers, including cases of annuity fraud.

Let Hanley Law work for you. Call (239) 649-0050 or contact the firm through our Website to arrange a free confidential consultation with an attorney to discuss your experiences with your stock broker which resulted in investment losses.

Hanley Law Investigates Thomas Meier Ex Morgan Stanley Rep Barred by FINRA

According to the Financial Industry Regulatory Authority (“FINRA”) former Morgan Stanley rep Thomas Alan Meier (CRD 1146044) has been barred from the industry for unauthorized trading in his customers’ accounts. FINRA found that Meier effected approximately 1,290 unauthorized transactions in eight accounts belonging to six customers, including three married couples.   Meier did not have authority to trade according to his discretion in any of the at issue customer accounts. The unauthorized transactions entered by Meier were both buys and sales of equity securities.

Meier earned approximately $265,000 in commissions for the unauthorized transactions. Meier did not speak with his customers about the trades prior to conducting the transactions and he did not obtain the customers’ authorization prior to executing any of the transactions. As of February 29, 2016, four of the at issue customers suffered unrealized losses of approximately $1.4 million in their accounts. During the period 2014 through 2015, one of the customers realized a loss of approximately $120,000 and another realized a net loss of approximately $520,000. To date, Morgan Stanley has paid a total of approximately $2.5 million to customers in connection with complaints about Meier.

According to FINRA, Meier resigned from Morgan Stanley in March 2016 while Morgan Stanley was reviewing his trading activity.  Meier entered the securities industry in 1984.  Meier has been registered with the following firms:

Morgan Stanley
CRD 149777
Miami, FL
06/2009 – 4/2016

Citigroup Global Markets, Inc.
CRD 7059
Miami, FL
10/1992 – 06/2009

Prudential Securities Inc.
CRD 7471
New York, NY
8/1989 – 11/1992

FAIC Securities, Inc.
CRD 8323
6/1983 – 12/1989

Thomas McKinnon Securities, Inc.
CRD 829
New York, NY
3/1989 – 8/1989

Amerifirst Securities Corporation
CRD 10711
12/1985 – 2/1989

Merrill Lynch, Pierce, Fenner & Smith Inc.
CRD 7691
4/1984 – 8/1985

HANLEY LAW

Hanley law represents individual investors nationwide with significant losses in their portfolios, retirement plans or investment accounts.  The firm is dedicated to assisting investors to recover losses suffered by unsuitability, over-concentration, fraud, misrepresentation, self-dealing, unauthorized trades or other wrongful acts, whether intentional or negligent.  The firm handles cases against the major Wall Street broker dealers, including Morgan Stanley.

Let Hanley Law work for you. Call (239) 649-0050 or contact the firm through our Website to arrange a free confidential consultation with an attorney to discuss your experiences with your stock broker which resulted in investment losses.