Month: November 2017

Miami Florida Broker Michael Borja Formerly of Wells Fargo Advisors Fined and Suspended by FINRA Over Wire Transfer

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According to FINRA’s Disciplinary and Other FINRA Actions publication, Michael Vincent Borja (CRD #5451360) formerly of Wells Fargo Advisors, LLC was fined $5,000 and suspended for 45 days by FINRA for processing wire transfer requests without first obtaining verbal confirmation from the client.

FINRA’s findings allege that Borja falsely represented in the Firm’s records that he verbally confirmed the wire requests with the customer and also provided fictitious reasons for the customer’s transfer requests. As a result of such actions, FINRA alleged that Borja caused his FINRA regulated broker-dealer to maintain false books and records concerning these wire transfer requests.

According to FINRA’s Broker Check, Borja is not currently licensed to act as a broker or as an investment adviser. The suspension is in effect from February 2, 2015, through March 18, 2015. (See FINRA AWC No. 2013037029901)

Michael Vincent Borja was licensed in the securities industry for 5 years with the following firm(s):

WELLS FARGO ADVISORS, LLC
CRD #19616
MIAMI, FL
01/2012 – 05/2013

OPPENHEIMER & CO. INC.
CRD #249
MIAMI, FL
02/2009 – 01/2012

UBS INTERNATIONAL, INC.
CRD #107726
CORAL GABLES, FL
02/2008 – 02/2009

If you have suffered investment losses as a result of your broker’s or brokerage firm’s misconduct, contact the Hanley Law to discuss 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 entitled to recover your investment losses. Contact Hanley Law toll free at (239) 649-0050 for a complimentary initial consultation.

FINRA Takes Disciplinary Action Against Florida Based Former LPL Financial Broker Kevin Luby for Failure to Disclose Outside Business Activities with Member Firms

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According to FINRA’s Disciplinary and Other FINRA Actions publication, Kevin Luby (CRD #4568246) was suspended for 10 months and fined $25,000 by FINRA, for failing to disclose to his member firms certain outside business activities he engaged in on behalf of an elderly firm customer.

FINRA alleged that from 2009 to 2013 Luby was a successor co-trustee of a customer’s trust and co-personal representative of her estate. Additionally, FINRA alleged that Luby also assisted this customer in the management of certain rental properties.

Luby failed to disclose the fiduciary appointments and involvement with the rental properties to one of his member firms, and failed to disclose his involvement with the rental properties to the other firm. Furthermore, FINRA affirms that Luby provided false answers on one of the firm’s compliance questionnaires and annual certifications regarding being named the beneficiary of any client’s estate or holding any fiduciary positions for a client.

According to FINRA’s Broker Check Luby is not currently licensed to act as a broker (buying or selling securities on behalf of customers) or as an investment advisor (providing advice about securities to clients). Luby’s suspension is in effect from January 20, 2015, through November 19, 2015. (See FINRA AWC No. 2013038108802)

Kevin Luby was previously registered with the following securities firms:

LPL FINANCIAL, LLC
CRD #6413
SOUTH DAYTONA, FL
03/2012 – 08/2013

STIFEL, NICOLAUS & COMPANY, INC.
CRD #793
DAYTONA BEACH, FL
08/2009 – 03/2012

UBS FINANCIAL SERVICES, INC.
CRD #8174
DAYTONA BEACH, FL
02/2007 – 08/2009

EDWARD JONES
CRD #250
ORMOND BEACH, FL
09/2002 – 02/2007

If you have suffered investment losses as a result of your broker’s or brokerage firm’s misconduct, contact the Hanley Law to discuss 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 entitled to recover your investment losses. Contact Hanley Law toll free at (239) 649-0050 for a complimentary initial consultation.

FINRA Fines Fidelity Brokerage Services, LLC for Overcharging Customer Accounts

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Fidelity Brokerage Services, LLC (CRD #7784) was censured and fined $350,000 by FINRA for overcharging client accounts. (See FINRA AWC No. 2012034916901)

FINRA alleged that at various times from January 2006 through September 2013, Fidelity Brokerage Services, LLC overcharged 20,663 customer accounts approximately $2.4 million. FINRA further alleged that the firm did not have reasonable supervisory systems or procedures to ensure that customers were charged accurate fees for accounts managed by third-party investment advisors. As such, this resulted in erroneous and duplicate fees charged in certain clients accounts utilizing asset-based pricing, duplicate fees in certain customer accounts managed by third-party wrap providers, and erroneous markups on certain fixed income investments.

FINRA’s findings also allege that Fidelity failed to establish an adequate supervisory system and written procedures reasonably designed to ensure that customers received accurate disclosures relating to the Asset-Based Pricing Program for accounts managed by third-party investment advisors. FINRA further alleged that Fidelity failed to monitor billing in these fee-based brokerage accounts to ensure that customers were charged in accordance with Fidelity’s disclosures.

If you feel that your investment account has been mishandled by your broker or brokerage firm, contact the Hanley Law to discuss your legal options. 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 Hanley Law toll free at (239) 649-0050 for a complimentary initial consultation.

FINRA Takes Action Against New Jersey Broker Sergey Pustelnik

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New Jersey broker Sergey Pustelnik was barred by FINRA for failure to cooperate with the investigation of suspicious trading activities. (See AWC No. 2011029713003)

During the period of October 1, 2010 through December 31, 2013, FINRA’s Department of Market Regulation conducted an investigation of suspicious trading activities occurring through a FINRA-member firm. In conducting this investigation, FINRA requested that Respondent Pustelnik provide a copy of a .pst file containing emails in a Gmail account used by Pustelnik for business and personal purposes.

FINRA stated that Pustelnik refused to produce all of the emails requested, and as a result engaged in misconduct violating FINRA rules. As a result, according to FINRA’s Broker Check Sergey Pustelnik (CRD #4439199) was permanently barred from acting as a broker or otherwise associating with firms that sell securities to the public.

Sergey Pustelnik was an acting broker for 8 years and was previously registered with the following firm(s):

LEK SECURITIES CORPORATION
CRD #33135
NEW YORK, NY
03/2011 – 01/2015

GENESIS SECURITIES, LLC
CRD #46992
NEW YORK, NY
01/2002 – 09/2010

If you have suffered financial losses as a result of your broker or brokerage firm’s misconduct, contact the Hanley Law to discuss your legal options. The Hanley Law is dedicated to helping investors who have suffered losses as a result of securities fraud. Contact the Hanley Law toll free at (239) 649-0050 for a complimentary initial consultation.

New Jersey Broker Harvey Meldrum of BCG Securities Sanctioned by FINRA

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According to FINRA’s Disciplinary Actions publication, New Jersey broker Harvey Herman Meldrum (CRD No. 1804905) of BCG Securities, Inc. was fined $5,000 and suspended from association with any FINRA member for three (3) months for violation of FINRA rules and by-laws.

Meldrum entered into a Letter of Acceptance, Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA) to resolve allegations that while associated with BCG Securities, Inc., he failed to disclose five (5) federal tax liens on FINRA reporting forms in violation of FINRA. FINRA alleged that upon receiving notice of the liens Meldrum should have updated the disclosures within thirty days, but failed to do so. (See FINRA Case No. 2014040319701)

Meldrum was registered with BCG Securities, Inc. from 2/2006 – 2/2014.

If you have suffered financial 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 and have suffered losses as a result of their broker’s or brokerage firm’s misconduct. If you have lost money as a result of securities fraud, you may be able to recover your investment losses. Contact our office toll free at (239) 649-0050 for a free initial consultation.

Florida Broker Darrell Vanpamel Suspended and Fined by FINRA for Outside Business Activity

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According to FINRA’s Disciplinary Actions publication, Florida broker Darrell Robert Vanpamel of Gradient Securities, LLC was suspended for one month and fined $5,000 for his involvement in outside business activities.

FINRA alleged that during the period from April 2013 to May 2013, Vanpamel engaged in outside business activities with four insurance clients who paid him a total of $1,400 for his activities. Specifically, Vanpamel received $500 each from two clients for “account set-up fees” in connection with the clients’ purchases of equity indexed annuities, received $150 from another client for a “social security report,” and received $250 from a final client for, among other things, work that he performed at the client’s home. Vanpamel did not provide written notice to his employer member firm prior to engaging in the aforementioned outside business activities and accepting compensation for such activities. (See FINRA Case No. 2013037723101)

Darrell Robert Vanpamel (CRD No. 5117737) was an active broker in the securities industry for 8 years and was registered with the following securities firm(s):

GRADIENT SECURITIES, LLC
CRD # 103857
PUNTA GORDA, FL
08/2013 – 02/2015

USA FINANCIAL SECURITIES CORPORATION
CRD # 103857
PRUDENVILLE, MI
03/2006 – 07/2013

If you have suffered financial losses, please contact the Law Office of 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 toll free at (239) 649-0050 for a free initial consultation.

SEC Issues Investor Bulletin: Opening an Options Account

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The SEC’s Office of Investor Education issued an investor bulletin to assist individuals in understanding what to expect when opening an options trading account with a broker-dealer.

Prior to trading options, the broker must approve the client’s brokerage account for options trading. In order to be approved for options trading, the client will need to complete the broker’s options agreement. In an options agreement, the client will provide information that will assist the broker in understanding the client’s knowledge of options and trading strategies, the client’s general investing knowledge and the client’s ability to bear the risks of options trading. Based on the information provided by the client, the broker will determine whether options trading is suitable, and if so, what type of options trading is appropriate.

The SEC identified the information that the client will need to provide in an options agreement to include:

  1. Investment Objectives such as capital preservation, income, growth, or speculation;
    2. Trading Experience;
    3. Personal Financial Information such as liquid net worth, total net worth, annual income and employment information; and
    4. The types of options an individual is interested in trading.

The information the client provides to the brokerage firms allows the firm to determine which option trading levels, if any, the client qualifies to trade in his or her account. The trading levels determine the types of options trades which may be executed in the client’s account. Broker-dealers typically offer 5 levels of option trading which represent varying degrees of risk. Level 1 often represents the lowest degree of risk, while level 5 generally represents the greatest level of risk. The types of options trading strategies and the level of risks varies between brokerage firms. Clients may request their brokerage firm to provide a list and description of each options trading level it makes available to its customers.

The SEC and FINRA rules require brokers to provide disclosures to all potential options investors. The disclosures contain basic information about the types of options and examples regarding risks associated with various options and options trading strategies. Individuals should read this information carefully before trading options.

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

SEC Issues Investor Bulletin: An Introduction to Options

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The SEC’s Office of Investor Education recently issued an investor bulletin aimed at educating investors about the basics of options trading. Options trading may occur in a several securities marketplaces, and may also involve a diverse range of products, from stocks to foreign currencies. The SEC’s Investor Bulletin titled “An Introduction to Options” focuses on the basics of trading listed stock options.

Options are contracts that allow the owner to buy or sell an underlying asset at a fixed price on or before a specified future date. Options derive their value from the underlying assets. The underlying assets may be stocks, stock indexes, exchange traded funds, fixed income products, foreign currencies or commodities. Additionally, option contracts trade in various securities marketplaces between a variety of market participants, including institutional investors, professional traders and individual investors. Options trades can be for a single contract or for several contracts.

Options trading uses terminology that investors should understand before buying or selling options. The SEC listed some basic terminology below that investors should be familiar with:

  • “Call and “Put”: A call is a type of option contract. A call option is a contract that affords the buyer the right to buy shares of an underlying stock at the strike price during a specific period of time. Alternatively, the seller of the call option is required to sell the shares to the buyer of the call option who exercises his or her option to buy on or before the expiration date. A put option is a contract that affords the buyer the right to sell shares of an underlying stock at the strike price for a specified period of time. Conversely, the seller of the put option is obligated to buy those shares from the buyer of the put option who exercises his or her option to sell on or before the expiration date.
  • “At-the-money”: Indicates that the strike price and the actual price are the same.
  • Exercise: When a buyer invokes his or her right to buy or sell the underlying security, they are “exercising” the right.
  • Assignment: When a buyer exercises his or her right under an option contract, the seller of the option contract receives a notice called an assignment notifying the seller that he or she must fulfill the obligation to buy or sell the underlying stock at the strike price.
  • Holder: The buyer of an options contract is referred to as the “holder” of the contract.
  • Writer: The seller of an options contract is referred to as the “writer” of the contract.

The basics of how options transactions operate are explained below. Many options contracts and trading strategies that are utilized are actually much more complex. However, the SEC provided the following information to investors so that potential investors have a basic idea of how transactions occur.

  • Market Participants: There are generally four (4) market participants in options trading- the buyer of calls; seller of calls; buyers of puts; and sellers of puts.
  • Opening a Position: When you buy or write a new options contract, you are establishing an open position. The open position will then be matched with a buyer or seller on the other side of the contract.
  • Closing a Position: If you hold an options contract or have written an options contract, but then want to get out of the contract, you can close your position, which means either selling the same option you bought if you are a holder or buying the same option contract you sold if you are a writer.

There are several risks associated with trading options. Investors should be aware that it is possible to lose all of your initial investment, and sometimes more. Below is a list of risks the SEC has identified:

  • Option holders risk losing the entire premium paid to purchase the option. If a holder’s option expires “out-of-the-money” the entire premium will be lost.
  • Option writers may carry an even greater level of risk because certain types of options contracts may expose writers to unlimited potential losses.
  • Other risks associated with trading options include market risks because extreme market volatility near an expiration date could cause price changes that result in the option expiring worthless.
  • Option traders also have risks relating to the underlying asset. Since options derive their value from an underlying asset, risk factors that impact the price of the underlying asset will also indirectly impact the price and value of the option.

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

Illinois Broker Andrew DeVine Barred by FINRA for Misappropriation of Clients Funds

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Andrew James DeVine of Country Capital Investment Company was barred by FINRA for allegedly misappropriating funds from clients. According to FINRA’s Disciplinary and Others FINRA Actions publication, DeVine took advantage of his position as agent of a member firm to use customer funds for his own benefit rather than applying them towards insurance premiums. FINRA alleged that DeVine misappropriated over $700 in customer funds.

Andrew James DeVine was a registered broker for 7 years, and was recently affiliated with the following firms:

COUNTRY CAPITAL INVESTMENT COMPANY
CRD #12060
O’FALLON, IL
03/2009 – 08/2013

NATCITY INVESTMENTS, INC.
CRD #17490
BRENTWOOD, MO
06/2008 – 01/2009

AXA ADVISORS, LLC
CRD #6627
CLAYTON, MO
01/2006 – 06/2008

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 entitled to recover your investment losses. Contact our office toll free at (239) 649-0050 for a complimentary initial consultation.