Month: November 2017

FINRA Takes Action Against New York Broker Chris Fulco for Participating in Sales Without Firm’s Approval

Posted by finralawyer on November 14, 2017 with 0 Comment

According to FINRA’s Disciplinary and other FINRA Actions publication, New York Broker Chris Fulco of vFinance Investments, Inc. was barred by FINRA for his involvement in sales of a non-public company’s shares away from his member firm without approval.

FINRA found that Fulco solicited the sale of US Coal shares away from the firm. Fulco allegedly conveyed to the buyer, either directly or indirectly, a stock purchase agreement with wiring instructions. As a result of facilitating such transactions, FINRA affirms that Fulco received wires transfers totaling $601,159.

Fulco allegedly lied to FINRA regarding his involvement in these sales by falsely testifying that the wire transfers he received were not payments relating to the transactions. Fulco also reportedly encouraged the primary seller of US Coal securities not to appear for his scheduled testimony or, if he did, to falsely testify about the transactions in order to support Fulco’s false testimony.
Chris Fulco was an acting broker for 10 years and has been registered with the following securities firms:

CHELSEA FINANCIAL SERVICES
CRD #47770
STATEN ISLAND, NY
06/2013 – 11/2013

AVENIR FINANCIAL GROUP
CRD #148490
NEW YORK, NY
10/2012 – 04/2013

JOHN CARRIS INVESTMENTS, LLC
CRD #145767
HOBOKEN, NJ
06/2012 – 10/2011

OLSON, CROSS & ALAMO, LLC
CRD #157249
NEW YORK, NY
02/2012 – 04/2012

CALDWELL INTERNATIONAL SECURITIES
CRD #104323
FISCHER, TX
04/2011 – 12/2011

CHARLES MORGAN SECURITES, INC.
CRD #138887
NEW YORK, NY
07/2010 – 02/2011

VFINANCE INVESTMENTS, INC.
CRD #44962
NEW YORK, NY
06/2007 – 06/2010

BRILL SECURITIES, INC.
CRD #18565
NEW YORK, NY
06/2006 – 06/2007

CLARK DODGE & CO., INC.
CRD #23288
NEW YORK, NY
02/2006 – 06/2006

GREAT EASTERN SECURITIES, INC.
CRD #2061
NEW YORK, NY
07/2005 – 02/2006

ROYAL ALLIANCE ASSOCIATES, INC.
CRD #23131
NEW YORK, NY
06/2005 – 07/2005

INDEPENDENT SECURITES INVESTORS CORPORATION
CRD #43598
CHIPLEY, FL
11/2014 – 05/2005

J.P. TURNER & COMPANY, L.L.C.
CRD #43177
ATLANTA, GA
06/2004 – 12/2004

NATIONAL SECURITIES CORPORATION
CRD #7569
SEATTLE, WA
09/2003 – 06/2004

BISHOP, ROSEN & CO., INC.
CRD #1248
NEW YORK, NY
04/2003 – 08/2003

LEGEND SECURITIES, INC.
CRD #44952
NEW YORK, NY
10/2002 – 04/2003

FIRST MONTAUK SECURITIES CORP.
CRD #13755
RED BANK, NJ
04/2002 – 10/2002

The Hanley Law is dedicated to helping investors who have been victims of securities fraud. If you have lost money as a result of your broker’s or brokerage firm’s misconduct, you may be able to recover your investment losses. Contact our office toll free at (239) 649-0050 for a free initial consultation.

5 Most Common Types of Fraud Identified by FINRA

Posted by finralawyer on November 14, 2017 with 0 Comment

The Financial Industry Regulatory Authority (FINRA) issued a new Investor Alert called Avoiding Investment Scams which described common types of fraud. Below are the 5 most common types of fraud identified by FINRA:

Pyramid Schemes: Fraudsters claim that they can take a small investment and turn it into large profits in a short amount of time. However, participants make money solely by recruiting new participants and the schemes quickly fall apart when new participants are no longer available. Pyramid schemes may appear to be legitimate multi-level marketing programs.
2. Ponzi Schemes: Fraudsters recruit new investors and use their funds to pay earlier-stage investors, instead of investing the funds as promised. This type of scam is named after Charles Ponzi, who in the 1920s tricked thousands of investors to place their funds in a price arbitrage scheme involving postage stamps. Ponzi schemes are similar to pyramid schemes with the exception that in ponzi scheme investors do not have to recruit new investors to earn a share of profits. Ponzi Schemes usually collapse when new investors cannot be attracted or when too many investors try to cash out.
3. Pump-and-Dump: Fraudsters buy shares of a low priced stock from an unknown company and then trump up interest in the stock to increase the stock’s price. Investors are tricked into believing they are getting a good deal and create buying demand at high prices. At this point the fraudsters sell their shares at the high prices and disappear, leaving the unsuspecting investors with worthless stock. Previously, these schemes were conducted by cold callers, facsimiles or online newsletters, but now the most common medium is through spam emails or text messages.
4. Advance Fee Fraud: The scams starts by an offer placed to buy a worthless stock for a high price, but to facilitate the deal the investor must send a fee for the service. Once the fee is sent, the investor never hears from the fraudster again.
5. Offshore Scams: These scams include any of the above mentioned scams and may also involve Regulation S. Offshore scams can be difficult for U.S. law enforcement agencies to investigate or rectify.

If you and have suffered investment losses, please contact the Hanley Law to explore your legal options. The Hanley Law is dedicated to helping investors who have been victims of securities fraud. If you have lost money as a result of securities fraud, you may be able to recover your financial losses. Contact us today toll free at (239) 649-0050 for a free initial consultation.

Common Sales Pitches Used in Investment Scams

Posted by finralawyer on November 14, 2017 with 0 Comment

The Financial Industry Regulatory Authority (FINRA) issued a new Investor Alert called Avoiding Investment Scams which describes common sales pitches used in investment scams.

Investment fraudsters make their living by making sure the investments they pitch sound good and true. Additionally, fraudsters tailor their pitches to the investor by first gaining background information on the investor and using that information to lure them in. FINRA has identified the following five (5) most common sales pitch tactics:

Phantom Riches Tactic: Entice investors with promises of wealth.
2. Source Credibility Tactic: Build credibility with claims of having expertise, experience and being from a reputable firm.
3. Social Consensus Tactic: Lead investors to believe that other savvy investors have already invested.
4. Reciprocity Tactic: Offer to do a small favor for investor in return for the investor doing a large favor.
5. Scarcity Tactic: Create a false sense of urgency by claiming limited supply of product.

FINRA Issues New Investor Alert, Avoiding Investment Scams

Posted by finralawyer on November 14, 2017 with 0 Comment

The Financial Industry Regulatory Authority (FINRA) issued a new Investor Alert called Avoiding Investment Scams which describes common types of tactics employed by fraudsters to solicit investors. FINRA advises of the following seven (7) red flags investors should look out for:

Guarantees: Be wary of anyone who predicts how investments will perform.
2. Unregistered Products: Many investments scams involve unlicensed individuals selling unregistered products.
3. Overly Consistent Returns: Investments that provide steady returns regardless of current market conditions.
4. Complex Strategies: Avoid anyone who cannot clearly explain their investment technique.
5. Missing Documentation: A stock should have a prospectus or offering circular, if not the product may be unregistered.
6. Account Discrepancies: Unauthorized trades, missing funds or other problems with your account statements could indicate churning or fraud.
7. Pushy Salesperson: No reputable investment professional should push you to make an immediate decision about an investment.

Identifying Risk Factors that Make Investors Susceptible to Fraud

Posted by finralawyer on November 14, 2017 with 0 Comment

The Financial Industry Regulatory Authority (FINRA) issued a new Investor Alert called Avoiding Investment Scams which described risk factors that make investors susceptible to investment fraud and provides tips to avoid being scammed.

FINRA has identified the 5 following risk factors for investors falling prey to fraudsters:

Owning high-risk investments.
2. Relying on friends, family, co-workers for advice.
3. Being open to new investment information.
4. Failing to check the background of an investment or investment professional.
5. Inability to spot persuasion tactics used by fraudsters.

FINRA urges investors to ask questions about investments and investment professionals by doing the following:

Perform a Background Search on the Investment Professional: Ask if the investment professional is licensed to sell you the investment and confirm which regulator issued their license. Additionally, ask if and when their license has ever been revoked or suspended. A legitimate securities salesperson must be properly licensed, and his or her firm must be registered with FINRA, the SEC or a state securities regulator—depending on the type of business the firm conducts. An insurance agent must be licensed by the state insurance commissioner where he or she does business. To verify the investment professional’s response use FINRA BrockerCheck, contact National Association of Insurance Commissioners or contact North American Securities Administrators Association.
Check Out Investments: Ask whether the investment is registered and, if so, with which regulator. Usually companies register their securities before they can sell shares to the public. You can find out whether a product is registered with the SEC by using the EDGAR database. Additionally, you can also use FINRA’s ScamMeter to determine whether an investment might be a scam.

FINRA takes Disciplinary Action Against New Jersey Broker David Chapman for Forging the Signature of Deceased Client

Posted by finralawyer on November 14, 2017 with 0 Comment

According to FINRA’s “Disciplinary and Other FINRA Actions” publication, David Glenn Chapman of PRUCO SECURITIES, LLC was recently barred for forging the signature of a deceased client in effort to renew the client’s insurance policy. Chapman also provided false information to FINRA regarding the renewal of the client’s policy.

FINRA found that Chapman signed the deceased client’s name to a letter without authority or consent, and submitted the letter to the insurance company to renew the client’s insurance policy. Chapman further arranged for his assistant to pay the outstanding premium on the policy using the assistant’s personal credit card. FINRA also states that Chapman claimed that the deceased client’s sister-in-law both signed and paid the premium for the renewal of the insurance policy; both statements allegedly false. As a result of such actions, Chapman earned a quarterly bonus of $325 from PRUCO SECURITIES.

According to FINRA’s Broker Check, David Glenn Chapman (CRD #1702066) of PRUCO SECURITES, LLC has been permanently barred as a broker or from otherwise associating with any FINRA member.

David Glenn Chapman was an acting broker for 25 years with the following securities firm(s):

PRUCO SECURITIES, LLC.
CRD #5685
MATAWAN, NJ
06/1988 – 01/2014

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
CRD #680
NEWARK, NJ
06/1988 – 12/1993

F.D. ROBERTS SECURITIES, INC.
CRD #693
02/1988 – 04/1988

If you or anyone you know has been a client of David Glenn Chapman or any of the above referenced securities firms and have suffered financial losses, please contact The Hanley Law to explore your legal rights. The Hanley Law is dedicated to helping investors who have been victims of securities fraud. If you have lost money as a result of securities fraud, you may be able to recover your financial losses. Contact us today toll free at (239) 649-0050 for a free initial consultation

FINRA Issues New Investor Alert, Should You Exchange Your Variable Annuity

Posted by finralawyer on November 14, 2017 with 0 Comment

The Financial Industry Regulatory Authority (FINRA) issued a new Investor Alert called Should You Exchange Your Variable Annuity. The article explains what a variable annuity is, reasons investors should or should not make a section 1035 exchange, what investors should look out for and what regulators do to protect investors.

An annuity is a contract between an investor and an insurance company. The investor buys the annuity and the company promises to make periodic payments to the investor. There are three types of annuities, fixed, variable and equity-indexed. Fixed annuities are guaranteed a payout, variable annuities payouts depend on the investments chosen and equity-indexed annuities payouts vary, but typically not as much as a variable annuity.

Variable annuities are securities registered with the Securities and Exchange Commission (SEC) and their sales are regulated by the SEC and FINRA. These annuities may impose numerous fees when you invest in them, including surrender charges, mortality and expense risk charges, administrative fees, underlying fund expenses and charges for special features.

An investor might choose to make a Section 1035 Exchange because of new developments in annuity features, including an increase in investment options, less expensive variable annuity contracts, and enhancement of death and living benefits.

However, Section 1035 Exchanges are not always a good idea for investors. FINRA listed the following reasons why investors should not take part in the exchanges:

1) The credits offered are usually offset by the insurance company adding other charges.

2) Contract provisions, such as surrender charges, expire with an existing contract. New charges could be imposed with a new contract or may increase the period of time for which the surrender charge applies.

3) There could be higher charges, like annual fees for the contract.

4) The costly features might not benefit the investor.

5) The broker usually gets paid a higher commission for a variable annuity, compared to the sale of a stock, bond or mutual fund.

Prior to making a Section 1035 Exchange an investor should learn all the facts to determine if the exchange will benefit them. An investor should only exchange their investment when it benefits the investor, not just the financial advisor.

Financial Advisors and Insurance Agents must provide all information to the investor. The advisor or agent should offer the exchange only if it is determined that it could benefit the investor after conducting a review of the investor’s personal and financial situation and needs, tolerance for risk and financial ability to pay for the contract. This suitability obligation is based on FINRA Rules.

Several states and brokerage firms require forms to reflect customer acknowledgement of a replacement transaction. Such forms should provide a comparison of features and costs of an existing contract to the proposed contract and detail what is needed to make the exchange.

FINRA and the SEC have conducted special sales practice examinations that focus on the sales of variable contracts, annuities and life insurance products. The results indicated that some advisors and agents recommended unsuitable products for their customers and the firms did not properly supervise their employees to prevent the unsuitable recommendations.

Furthermore, FINRA points out that unsuitable sales of variable contracts are routinely investigated. Therefore, it is important for the investor to do research and protect their assets.

FINRA Fines and Suspends Naples Florida Broker Brian Pittman Over Sales Not Approved by Member Firm

Posted by finralawyer on November 14, 2017 with 0 Comment

FINRA found that Brian Lewis Pittman participated in private securities transactions by making sales of oil and gas limited partnership interests that were not approved by his member firm, Westport Resources Investment Services, Inc.

FINRA found that between April 2011 and June 2011, Pittman participated in private securities transactions by referring customers with Westport accounts to invest in limited partnership interest in the Permian Advanced Oil Recovery Investment Fund 1 LP (“Permian”), which was being offered by Quest. The Permian limited partnership interests are a security. Specifically, Pittman referred two customers with Westport accounts to Quest. In total, these customers invested $375,000 in the Permian offering. Pittman also participated in the transactions by assisting the customers with processing the requisite paperwork to effect the transactions. In connection with these transactions, Pittman received compensation from Quest of approximately $45,000.

Pittman’s failure to obtain approval of his participation in such transactions has resulted in an assessed fine of $7,500 and suspension from any FINRA member firm for four months. According to FINRA Broker Check (CRD # 2963196), the suspension is in effect from December 15, 2014, through April 14, 2015.

Brian Lewis Pittman has previously been registered with the following member firm(s):

SABADELL SECURITIES USA, INC.
CRD #148137
MIAMI, FL
10/2012 – 02/2014

WESTPORT RESOURCES INVESTMENT SERVICES, INC.
CRD #24535
NAPLES, FL
02/2010 – 10/2012

BONDS.COM, INC.
CRD #43875
NAPLES, FL
10/2007 – 02/2010

JVB FINANCIAL GROUP, LLC
CRD #104412
BOCA RATON, FL
08/2007 – 10/2007

PINNACLE BROKERAGE SERVICE, INC.
CRD #107803
CHARLOTTE, NC
07/2007 – 08/2007

SUNTRUST INVESTMENT SERVICES, INC.
CRD #17499
SARASOTA, FL
03/2006 – 07/2007

CITIGROUP GLOBAL MARKETS INC.
CRD #7059
NEW YORK, NY
11/2003 – 02/2006

ROBERT W. BAIRD & CO. INCORPORATED
CRD #8158
MILWAUKEE, WI
12/1997 – 11/2001

J.P. MORGAN Broker Permanently Barred for Misappropriation of Funds

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Former J.P. Morgan Broker Alen Alic was permanently barred from acting as a broker or otherwise associating with firms that sell securities to the public.

Prior to becoming associated with J.P. Morgan Securities, LLC as a securities broker, Alic was a retail bank employee with JPMorgan Chase Bank, N.A., an affiliate of J.P. Morgan Securities. While working as a retail bank teller, Alic allegedly misappropriated $3,000 in cash from his teller drawer and converted it for his personal use without the bank’s knowledge or consent. (See FINRA Case #2014043420501)

If you have suffered investment losses, please contact the Hanley Law to explore your legal options. The Hanley Law is dedicated to helping investors who have been victims of securities fraud. If you have lost money as a result of securities fraud, you may be able to recover your financial losses. Contact us today toll free at (239) 649-0050 for a free initial consultation.

Ameriprise Financial Broker Randall A. Samson Barred by FINRA for Conversion of Customer Funds to Personal Bank Account

Posted by finralawyer on November 14, 2017 with 0 Comment

Randall A. Samson of Ameriprise Financial Services, Inc. was barred for distributing funds from a customer’s 401(k) account into his personal bank account. In connection, Samson also provided false information to Ameriprise regarding the conversion of funds.

FINRA affirms that Samson abused his position as the plan’s trustee and financial advisor to complete a $10,000 distribution from customer’s 401(k) account into his personal bank account, which he used to fund payroll and other company expenses. Samson falsely represented the knowledge and consent of the customer for the distribution, and further provided false statements to his firm’s compliance department in connection with an inquiry into the $10,000 distribution.

According to FINRA’s Broker Check, Randall A Samson (CRD #2691518) of Ameriprise Financial Services, Inc. has been permanently barred from acting as a broker or otherwise associating with firms that sell securities to the public. Randall A. Samson first became registered with a FINRA member firm in 1996. He was registered with Ameriprise Financial Services, Inc. (or its predecessor firms) from January 1996 until Ameriprise terminated his registration in April 2014.

Randall A. Samson was an acting broker for 18 years with the following securities firm(s):

AMERIPRISE FINANCIAL SERVICES, INC.
CRD #6363
OAKDALE, CA
01/1996 – 04/2014

IDS LIFE INSURANCE COMPANY
CRD #6321
MINNEAPOLIS, MN
01/1996 – 07/2006

If you have suffered financial losses as a result of your Broker’s or Brokerage Firm’s misconduct, please contact the Hanley Law to explore your legal rights. The Hanley Law is dedicated to helping investors who have been victims of securities fraud. If you have lost money as a result of fraudulent activity, you may be entitled to recover financial losses. Contact our office toll free at (239) 649-0050 for a free initial consultation.