Author: finralawyer

FINRA Elder-Abuse Rule to Take Effect Next Month

Posted by finralawyer on January 29, 2018 with 0 Comment

A new FINRA regulation taking effect on February 5, 2018 is designed to prevent financial exploitation of seniors and will result in what could be challenging conversations between brokers and older clients. The rule requires that brokers make a reasonable effort to identify a trusted person who can be contacted if the broker is concerned that the client is suffering from diminished mental capacity or is the target of a scam. The request for a trusted contact must be made at account openings for new clients and during account updates with existing clients. The regulation also provides brokers with liability protection if they place a hold on disbursements from an account because they think their clients could be harmed.

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.

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.

Principal Securities, Inc. fka Princor Financial Services Corporation Censured and Fined by FINRA for Annuity Sales Practices

Posted by finralawyer on January 10, 2018 with 0 Comment

According to FINRA’s Disciplinary and Other Actions publication, FINRA censured and fined Principal Securities, Inc. fka Princor Financial Services Corporation (CRD # 1137) $250,000. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that for at least three years, its system for supervising additions to existing variable annuities was not reasonably designed to ensure that they complied with applicable securities laws and rules, including those governing suitability (See FINRA Case #2015047322502).

FINRA alleged that from October 2013 to September 2016, Principal Securities customers added money to existing variable annuities on more than 6,000 occasions. Those additions accounted for approximately one-sixth of Principal Securities’ revenue from variable products during that period.

While Principal Securities reviewed some of those additions the scope of that supervision was unreasonably limited. First, the exception reports covered only transactions involving one of Principal Securities’ affiliates, not all or the existing variable annuities that Principal Securities’ customers held. Second, the exception reports covered only additions to existing variable annuities that were funded by surrendering insurance products, not all sources. For example, the exception reports did not cover additions that were funded by rolling over a retirement plan. Third, Principal Securities’ supervisors used the exception reports to identify trading trends and patterns, rather than to evaluate the propriety of individual additions. Fourth, Principal Securities’ periodic audits covered only selected customers, not additions to existing variable annuities generally or patterns of recommendations to make such additions.

As a result of those and other limitations, Principal Securities’ system for supervising additions to existing variable annuities was not reasonably designed to comply with applicable securities laws and rules, including those governing suitability. Principal Securities’ system did not capture, so the firm did not review, more than two-thirds of those additions. Principal Securities’ system was not reasonably designed to focus on the additions that posed the greatest risk to the firm’s customers such as additions resulting in high concentrations of customers’ net worth in variable contracts, or additions by customers whose financial needs and goals had changed since they initially purchased their contracts. As a result, Principal Securities’ system was not likely to detect and flag relatively risky transactions, such us a large addition to a contract long after it was purchased, prompted by a recommendation front an associated person, so that the firm could determine whether such recommendations violated any securities laws or rules.

Those gaps in Principal Securities’ system resulted in improper transactions escaping detection by the firm, causing harm to contract holders. For example, Principal Securities did not detect recommended in-and-out trading between a customer’s variable annuities, which resulted in frequent and unnecessary surrender charges, nor did the firm detect another customer’s excessive concentration in a variable annuity resulting from a $300,000 addition to that contract which was more than doubled the customer’s initial investment.

HANLEY LAW

Interactive Brokers LLC Censured and Fined Relating to the Firm’s Supervisory System

Posted by finralawyer on January 8, 2018 with 0 Comment

According to FINRA’s Disciplinary and Other Actions publication, FINRA censured and fined Interactive Brokers LLC (CRD #36418). On October 18, 2017, an Acceptance Waiver and Consent (“AWC”) was issued in which the firm was censured and fined a total of $70,000. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that the firm failed to establish and maintain a supervisory system reasonably designed to achieve compliance with applicable securities laws and regulations regarding the use of intermarket sweep orders. FINRA found that given the recurring nature of the violations from January 2015 through December 2015, the firm’s supervisory system was inadequate. (FINRA Case #2014041235404).

HANLEY LAW

Ameriprise Financial Services Censured and Fined Relating to the Sale of Securities to Non-Qualified Investors

Posted by finralawyer on January 5, 2018 with 0 Comment

According to FINRA’s Disciplinary and Other Actions publication, FINRA has fined Ameriprise Financial Services, Inc. (CRD #6363). On October 13, 2017, an Acceptance Waiver and Consent (“AWC”) was issued in which the firm was censured and fined $45,000. Without admitting or denying the findings, Ameriprise Financial Services consented to the sanctions and to the entry of findings that it effected municipal bond transactions in amounts below the minimum denomination set for the bonds. FINRA’s findings stated that the firm also recommended and sold securities to customers who were not qualified institutional buyers (QIBs), because the firm was unaware of such sales restrictions in the official statements. The official statements for these securities explicitly limited their sale/resale to qualified institutional buyers. By lacking awareness of such a material fact about the securities due to its failure to review such official statements, Ameriprise Financial Services, Inc. failed to exercise reasonable diligence to form a reasonable basis to believe that the recommended transactions were suitable under the “reasonable-basis” obligations of the suitability requirements. The findings also stated that Ameriprise Financial Services, Inc. failed to disclose to customers at or prior to the time of the trade that the transaction was being effected in an amount below the minimum denomination, of the above sales restriction, and the potential adverse effect on liquidity of a customer position below the minimum denomination. The findings also included that Ameriprise Financial Services supervisory system did not provide for supervision reasonably designed to achieve compliance with respect to the applicable securities laws and regulations, and the Municipal Securities Rule Making Board (See FINRA Case #2015046583001).

HANLEY LAW

St. Albans, Missouri broker William August Glaser of National Planning Corporation Barred by FINRA

Posted by finralawyer on January 3, 2018 with 0 Comment

According to FINRA’s Disciplinary and Other FINRA Actions publication broker William August Glaser (CRD# 1274847) of St. Albans Missouri was barred from association with any FINRA member in all capacities for failing to provide documents and information requested by FINRA in connection with FINRA’s Department of Enforcement’s investigation concerning the circumstances surrounding the termination of Glaser’s registration by National Planning Corporation. The findings stated that the National Planning Corporation terminated Glaser’s registration, reporting that it had received an arbitration claim alleging that he had solicited a private investment away from the firm (FINRA Case # 2017054809301).

Glaser entered the securities industry in 1984. He was registered with eight firms before joining National Planning Corporation in December 2007. National Planning Corporation terminated Glaser’s registration on July 5, 2017.

According to FINRA’s Broker Check, William August Glaser was registered with the securities industry for 33 years, and was registered with the following firm(s):

National Planning Corporation
CRD# 29604
St. Albans Rd, MO
12/2007 – 7/2017

Investment Planners, Inc.
CRD# 18557
Chesterfield, MO
1/2002- 12/2007

Cutter & Company, Inc.
CRD# 22449
Ballwin, MO
9/1996 – 12/2001

J.E. Liss & Company, Inc.
CRD# 21950
Milwaukee, WI
7/1991-9/1996

Walnut Street Securities, Inc.
CRD# 15840
El Segundo, CA
12/1989 – 7/1991

Investment Management & Research, Inc.
CRD# 6694
St. Petersburg, FL
7/1989-12/1989

Integrated Resources Equity Corp.
CRD# 6403
2/1989 – 7/1989

Mark Twain Brokerage Services, Inc.
CRD# 16925
11/1987 – 12/1988

ISFA Corporation
CRD# 12984
7/1984- 11/1987

HANLEY LAW

Hanley law represents individual investors nationwide with significant losses in their portfolios, retirement plans or investment accounts. Hanley Law 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. Hanley Law represents clients nationwide in cases against the major Wall Street broker dealers.

If you have suffered investment losses as a result of your broker’s or brokerage firm’s misconduct, contact Hanley Law to discuss your legal options. Contact Hanley Law at (239)649-0050 or contact us 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.

Colorado Springs CO Broker Bruce Page Barber of Securities America Barred by FINRA

Posted by finralawyer on January 2, 2018 with 0 Comment

According to FINRA’s Disciplinary and Other FINRA Actions publication broker Bruce Page Barber (CRD# 3095959) of Colorado Springs CO was barred from association with any FINRA member in all capacities for failing to provide documents and information requested by FINRA in connection with FINRA’s Department of Enforcement’s investigation concerning Barber’s outside business activity and solicitation of Firm customers to invest in a private securities offering (FINRA Case #2017053346301).

FINRA rules provide, in relevant part, that “[f]or the purpose of an investigation, complaint, examination, or proceeding authorized by the FINRA By-Laws or rules … FINRA staff shall have the right to … require a member, person associated with a member, or any other person subject to FINRA’s jurisdiction to provide information orally, in writing, or electronically … with respect to any matter involved in the investigation, complaint, examination, or proceeding.” FINRA Rule 2010 requires that associated persons, in the conduct of their business, observe high standards of commercial honor and just and equitable principles of trade. A failure to comply with FINRA Rule 8210 is a violation of FINRA Rule 2010.

FINRA’s enforcement division commenced an investigation into allegations that Barber engaged in an undisclosed outside business activity by serving as an advisor to the Board of Directors for ABC, LLC (“ABC”), for which he was compensated with warrants, and for soliciting 15 Firm customers to invest in ABC’s private securities offering. FINRA enforcement sent a letter to Barber requesting that he provide certain documents and information to FINRA. FINRA advised Barber that his failure to provide the requested information could subject him to disciplinary action and the imposition of sanctions, including a bar from the securities industry. Barber informed FINRA that he received their request, and that he would not cooperate with FINRA’s investigation.

According to FINRA’s Broker Check, Bruce Barber was registered with the securities industry for 19 years, and was registered with the following firm(s):

Securities America, Inc.

CRD # 10205

Colorado, Springs, CO

12/2000 – 2/2017

Lincoln Investment Planning, Inc.

CRD # 519

Fort Washington, PA

8/1998 – 12/2000

HANLEY LAW

AEGIS CAPITAL CENSURED, FINED AND ORDERED TO PAY RESTITUTION

Posted by finralawyer on November 27, 2017 with 0 Comment

FINRA recently issued an Acceptance Waiver and Consent (“AWC”) with Aegis Capital in which Aegis Capital was censured, fined $27,500, ordered to pay $620.30, plus interest, in restitution to customers, and required to revise its written supervisory procedures. (See FINRA Case #2016048939201). Aegis consented to the sanctions and to the entry of findings that it failed to execute orders fully and promptly. FINRA’s findings stated that the firm failed to use reasonable diligence to ascertain the best inter-dealer market and failed to buy or sell in such a market so that the resultant price to its customer was as favorable as possible under prevailing market conditions. FINRA’s findings also stated that the firm’s supervisory system did not provide for supervision reasonably designed to achieve compliance with respect to certain applicable securities laws and regulations and FINRA rules. FINRA further found that Aegis Capital’s written supervisory procedures failed to sufficiently provide for one or more of the minimum requirements for adequate FINRA compliance.

FINRA found that in 22 instances, Aegis Capital failed to execute orders fully and promptly. Additionally, for 11 of the above-referenced 22 orders, the firm failed to use reasonable diligence to ascertain the best inter-dealer market and failed to buy or sell in such market so that the resultant price to its customer was as favorable as possible under prevailing market conditions. FINRA found that Aegis Capital’s supervisory system did not provide for supervision reasonably designed to achieve compliance with respect to certain applicable securities laws and regulations and the Rules of FINRA.

Aegis Capital Corp. was founded in 1984 and is a full service retail and institutional broker-dealer located in New York City. Aegis Capital Corp.’s main office is located at 810 7^th Ave. 18^th and 22^nd Floor New York, NY 10019.

HANLEY LAW

Our law firm represents individual investors nationwide with significant losses in their portfolios, retirement plans or investment accounts. Our securities team 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. We have experience handling cases against the major Wall Street broker dealers.

Let our team work for you. Call us at (239) 649-0050 or contact us 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.

NY J.P. Morgan Securities Broker Michael Fang Suspended and Fined by FINRA

Posted by finralawyer on November 14, 2017 with 0 Comment

According to FINRA’s Disciplinary and Other FINRA Actions publication, FINRA issued a suspension and fine against Michael Fang (CRD# 5653787) of J.P. Morgan Securities, LLC (CRD# 79). FINRA alleged that between May 2015 and August 2015, and while associated with J.P. Morgan Securities, Fang engaged in an outside business activity without providing any notice to his member firm in violation of FINRA Rules.

FINRA Rule 3270 prohibits a registered person from, among other things, being compensated or having the expectation of compensation from any other person as a result of any business activity outside the scope of the relationship with his or her member firm without providing prior written notice to the firm. FINRA Rule 2010 requires associated persons to “observe high standards of commercial honor and just and equitable principles of trade.” A violation of FINRA Rule 3270 is considered inconsistent with high standards of commercial honor and just and equitable principles of trade.

FINRA alleged that during the time period at issue, Respondent participated in an undisclosed outside business activity with a customer of J.P. Morgan to purchase high-end cars in the United States and export them to China. FINRA alleged that Fang’s role was to bring prospective customers to car dealerships to make purchases and then to assist with delivering those cars to United States ports for transport to China. FINRA alleged that Fang was not compensated from this business during the Relevant Period, but he entered the business arrangement with the expectation that he would receive approximately $250.00 to $400.00 for each car delivered. FINRA alleged that Michael Fang failed to notify his firm about his participation in the car exporting business. FINRA alleged that because of the foregoing Michael Fang violated FINRA Rules 3270 and 2010.

As a result, Michael Fang consented to FINRA imposing sanctions of a sixty (60) day suspension from associating with any FINRA member in any capacity and a fine of $5,000.

According to FINRA’s Broker Check, Michael Fang was registered with the securities industry for six (6) years, and was registered with the following firm(s):

J.P. Morgan Securities, LLC
CRD# 79
Fresh Meadows, NY
10/2013 – 09/2015

Essex National Securities, LLC
CRD 25454
Auburndale, NY
4/2013 – 8/2013

Chase Investment Services Corp.
CRD 25574
Oakland Gardens, NY
6/2010 – 9/2011

Northwestern Mutual Investment Services, LLC
CRD 2881
Great Neck, NY
3/2010 – 4/2010

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 nationwide. If you have lost money as a result of your broker’s recommendations, you may be entitled to recover your investment losses. Contact our office toll free at (239) 649-0050 for a complimentary initial consultation.

Boca Raton Florida Broker Steven Colacurcio of Dawson James Broker Fined and Suspended by FINRA

Posted by finralawyer on November 14, 2017 with 0 Comment

According to FINRA’s Disciplinary and Other FINRA Actions publication, from July 2013 through January 2014 broker Steven Colacurcio (CRD# 1717483) of Boca Raton Florida was fined and suspended by FINRA as a result of allegations that he exercised discretionary power in a customer’s account, without obtaining prior written authorization from the customer and without having the account accepted as a discretionary account by his employing FINRA member firm Dawson James Securities. As a result of such conduct, FINRA alleged that Colacurcio violated NASD Rule 2510(b) and FINRA Rule 2010.

NASD Rule 2510(b) provides that registered persons may not exercise discretionary power in a customer’s account unless the customer has given prior written authorization and the account has been accepted by the member firm in writing as a discretionary account.

FINRA alleged that Colacurcio exercised discretionary power in a customer’s account by effecting 11 transactions, without obtaining prior written authorization from the customer and without having the account accepted as a discretionary account by his employing FINRA member firm Dawson James Securities.

As a result of such conduct, Cotacurcio consented to FINRA’s imposition of a fifteen (15) business day suspension from association with any FINRA member in all capacities and a $5,000 fine.

According to FINRA’s Broker Check, Steven Colacurcio was registered with the securities industry for 27 years, and was registered with the following firm(s):

Dawson James Securities Inc.
CRD# 130645
6/2009- Present

Raymond James Financial Services, Inc.
CRD# 6694
6/2008 – 3/2009

Suntrust Investment Services, Inc.
CRD# 17499
6/2004 – 03/2008

Wachovia Securities, LLC
CRD# 19616
02/2002 – 06/2004

WM Financial Services, Inc.
CRD# 599
05/1998 – 03/2002

Great Western Financial Securities Corp.
CRD# 14229
01/1992 – 05/1998

G.K. Scott & Co., Inc.
CRD# 3305
01/1998 – 02/1991

Hanley Law Investigating Claims Involving Bruce Albert Slater and Transamerica Financial Advisors

Posted by finralawyer on November 14, 2017 with 0 Comment

Hanley Law is currently investigating claims against Transamerica Financial Advisors, Inc. (CRD# 16164) regarding Bruce Albert Slater (CRD# 1547792) and Ridgewood Energy. The Hanley Law recently filed a FINRA Arbitration claim on behalf of seven (7) investors in which it was alleged that financial advisor Bruce Slater negligently and/or fraudulently invested Claimants’ retirement funds in Ridgewood Energy alternative investments, among other unsuitable products.

Bruce Albert Slater (CRD#: 1547792), was an associated person of Transamerica, a FINRA member, from June 1997 to March 2016. According to FINRA Brokercheck, Bruce Slater is currently registered with Sagepoint Financial, Inc. (CRD#: 133763).

The seven (7) Claimants bringing a FINRA arbitration claim against Transamerica have alleged that Slater used his ties with the Claimants, and their implicit trust in him, to benefit himself by recommending investments which earned him the highest level of commissions despite their unsuitability for Claimants’ investment profiles. According to FINRA’s Brokercheck Bruce Slater has four other customer complaints currently on his CRD record; three of the most recent complaints appear to be related to the same investments at issue in the claims currently being asserted by Claimants in the pending FINRA arbitration.

Claimants allege that at the recommendation of Slater, Claimants invested over $2 million dollars in Ridgewood Energy Funds Q, S, T, U, V, W, X and Y, Ridgewood Energy A-1 Fund, Ridgewood Energy B-1 Fund, Ridgewood Energy Bluewater Oil Fund II and Ridgewater Energy Bluewater Oil Fund III. Claimants further allege that Slater recommended that Claimants invest over $3 million in a Transamerica Variable Annuities.

Claimants allege that in order to fund the Transamerica Variable Annuity purchases, Slater recommended that Claimants either surrender or rollover the annuities they owned to purchase the new Transamerica annuities. Claimants allege that by purchasing the new annuities, Claimants entered into new surrender periods which further complicated the fact that Slater over-allocated the Claimants’ portfolios into illiquid non-traded highly speculative alternative investments at a time when they were required to take required minimum distributions. Claimants have alleged that Slater failed to advise them of the costs and surrender charges associated with the purchase of the new Transamerica Variable Annuities. Claimants have further alleged that the only reason Slater recommended that the Claimants rollover their annuities was so that he could earn sizeable commissions.

Furthermore, Claimants allege that Slater invested the Claimants retirement funds in accounts with Community National Bank, American Funds, Fidelity, Franklin Square Alternative Investments, Inland/Wells REITS, Inland Western REIT, Inland Real Estate Corp. Inland Retail Real Estate, Retail Properties of America, Xenia Hotels and Resorts, Inc., Fidelity, Franklin Templeton, Oppenheimer, Allianz Funds and Pioneer Investments.

Claimants further allege that Slater was highly enthusiastic about oil and gas investments, and in particular Ridgewood Energy. Claimants allege that Slater often spoke to the Claimants in technical terms regarding the geopolitics of oil, oil exploration and drilling operations and he often bragged about how great the geologist and petroleum engineers at Ridgewood were. Claimants allege that Slater told the Claimants that they should buy as much Ridgewood as possible because the Ridgewood investments would provide so much income that they wouldn’t need to ever worry about money or any other investments again. Claimants allege that Slater told the Claimants that their investments in Ridgewood were a “guarantee”.

Ridgewood Energy Investments are private placements offered as Regulation D offerings. Simply stated, a private placement is an offering of a company’s securities that is not registered with the Securities and Exchange Commission (SEC) and is not offered to the public at large. The Ridgewood private placements are offered pursuant to Regulation D of the Securities Act of 1933, which specifies the amount of money that can be raised and the type of investor that can be solicited to participate in the offering.

Claimants allege that they made various Ridgewood Energy investments between 2005 and 2014 based on the recommendations of Slater. Claimants allege that Slater’s fraudulent recommendations to invest in Ridgewood Energy were continuing in nature and that over the years, Claimants discussed their investments with Slater and he consistently misrepresented the investments and even recommended that Claimants invest more money in Ridgewood Energy.

Claimants allege that Slater made many material misrepresentations and omissions, including but not limited to the following allegations:

Claimants allege that Slater omitted to inform Claimants that the Ridgewood Funds were illiquid and that Claimants would not be able to sell if needed;
Claimants allege that Slater omitted to inform Claimants that the Ridgewood Funds were private placements and that the investments were not suitable for Claimants given their ages, retirement or near retirement status and investment goals;
Claimants allege that Slater misrepresented to Claimants on numerous occasions that their investments in Ridgewood were performing well and that they should invest additional funds in subsequent Ridgewood offerings;
Claimants allege that Slater failed to inform Claimants that he was actually selling them the Ridgewood Funds because they paid a very high commission and not because they were suitable investments. Indeed, through information and belief the Ridgewood Funds at issue charged upfront fees of 8-16%. In addition, through information and belief Ridgewood Energy charges a 2.5% annual management fee. Claimants allege that Slater failed to inform Claimants that he earned at least an 8% commission on the sale of the Ridgewood Funds; and
Claimants allege that Slater over-concentrated Claimants in illiquid private placements when investing a substantial portion of their net worth in Ridgewood Energy Funds.

Claimants are all in their retirement years. Claimants allege that due to the misconduct of Slater, Claimants are not able to enjoy the retirement they saved for. Claimants allege that Slater was aware that Claimants trusted him completely and he used his position of trust to defraud the Claimants and financially benefit himself.

As a result of the foregoing, Claimants have alleged that Respondent Transamerica is liable for common law fraud; breach of fiduciary duty; breach of contract; breach of the implied covenant of good faith and fair dealing; and negligence. Claimants further allege that Respondent breached FINRA rules, which are the basis for and the standard of care for FINRA member firms and their associated persons. Lastly, Claimants have alleged that Respondent Transamerica is liable under the doctrines of agency, respondeant superior, vicarious liability and was also negligent in the hiring, retention, and supervision of Bruce Slater.

If you were a client of Bruce Slater and/or Transamerica Financial Advisors, Inc. and have suffered investment losses, please contact the Hanley Law to explore your legal options. The Hanley Law is dedicated to helping investors nationwide 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.