Category: Broker Investigations

Broker Dealer Financial Services Corporation Fined by FINRA for Unsuitable Recommendations and a Failed Supervisory System

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According to FINRA’s Disciplinary and Other FINRA Actions publication, Broker Dealer Financial Services Corp. (CRD#8073), an Iowa Firm, was censured and fined $75,000 for failing to establish and maintain a supervisory system, including written procedures, that were reasonably designed to ensure that the firm’s sales of leveraged or inverse exchange-traded funds (“ETFs”) compiled with applicable securities laws and NASD and FINRA rules.

Allegedly, representatives of Broker Dealer Financial Services Corp. made unsuitable recommendations to their customers by recommending high-risk ETFs. FINRA further alleged that Broker Dealer Financial Services Corp. did not investigate nontraditional ETFs before allowing its registered representatives to recommend them to customers. Furthermore, Broker Dealer Financial Services Corp. allegedly did not train its personnel in the appropriate use of nontraditional ETFs, and did not adequately monitor and supervise ETF activity in customer accounts. (See AWC No. 2012030436501)

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.

Former Huntington Bank Broker of Columbus Ohio Barred by FINRA for Misappropriation of Client Funds

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According to FINRA’s Disciplinary and Other FINRA Actions publication, Bryan A. Carnahan (CRD No. 3103811), a former broker with Huntington Bank in Hilliard, Ohio, was barred by FINRA for misappropriation of funds from a Huntington customer. FINRA alleged that between September 2013 and March 2015, Carnahan converted approximately $169,500 from one of his customers by causing fund transfers to be made on five occasions from the customer’s brokerage account to her bank account at the Firm’s affiliated bank. FINRA further alleged that Carnahan then had his client withdraw funds from her bank account and get cashier’s checks for supposed investments. FINRA alleged that after Carnahan took possession of the cashier’s checks, he fraudulently caused them to be re-issued in the form of multiple cashier’s checks, totaling approximately $169,500, that were payable to his own accounts and to the accounts of at least 13 of his other customers who had suffered investment losses. (See FINRA AWC No. 2015044908301)

According to FINRA’s Broker Check, Bryan A. Carnahan was permanently barred by FINRA from acting as a broker or otherwise associating with firms that sell securities to the public. Carnahan was registered in the securities industry for sixteen (16) years with the following firm(s):

THE HUNTINGTON INVESTMENT COMPANY
CRD #16986
COLUMBUS, OH
02/1999 – 03/2015

JOHN HANCOCK DISTRIBUTORS, INC.
CRD #486
BOSTON, MA
08/1998 – 12/1998

If you have suffered financial 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 represents investors nationwide and is dedicated to helping investors who have been victims of securities fraud. If you have been a victim of securities fraud, you may be entitled to recover your investment losses. Contact the Hanley Law toll free at (239) 649-0050 for a complimentary initial consultation.

Michigan Representative Fined and Suspended by FINRA over Unlicensed Insurance Sales and Misappropriation

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According to FINRA’s Disciplinary and Other FINRA Actions publication, Brian Kenneth Edwards (CRD #6011762) was fined $5,000 and suspended by FINRA for fourteen (14) months for violating Michigan law and his member firm policies by allegedly permitting his insurance agency to enter into a client referral relationship with an individual who was not licensed to sell insurance. FINRA further alleged that Edwards created circumstances which allowed the unlicensed individual to misappropriate over $6,900 in funds from customers that were intended to pay insurance premiums. Despite discovering such misconduct, FINRA alleged that Edwards failed to report the misconduct to the insurance affiliate, and did not terminate his agency’s relationship with the individual until one (1) month later. (See FINRA AWC No. 2013037999901)

According to FINRA’s Broker Check, Brian Kenneth Edwards is not currently licensed to act as a broker or as an investment adviser. Edwards has been registered in the securities industry for one (1) year with the following firm(s):

STATE FARM VP MANAGEMENT CORP.
CRD #43046
BLOOMINGTON, IL
01/2012 – 08/2013

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.

Former Arizona Broker Barred by FINRA for Conversion of Client Funds

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According to FINRA’s Disciplinary and Other FINRA Actions publication, Adam Robert Bollinger (CRD #6065030), a former Edward Jones broker, was barred by FINRA for allegedly converting funds from seven (7) individuals, six (6) of whom were Firm customers. FINRA alleged that during the period of February through December 2014, Bollinger converted $17, 525 by requesting that the individuals make out checks payable to him for a variety of reasons, such as for charitable contributions. FINRA further alleged that rather than using the funds for their intended purposes, Bollinger converted the funds for his own personal use and benefit. (See FINRA AWC No. 2015044164801)

According to FINRA’s Broker Check, Adam Robert Bollinger has been permanently barred from acting as a broker or otherwise associating with firms that sell securities to the public. Bollinger was registered in the securities industry for two (2) years with the following firm(s):

EDWARD JONES
CRD #250
CHANDLER, AZ
08/2012 – 01/2015

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.

Tallahassee Florida Broker Barred by FINRA for Misuse of Customer Funds

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According to FINRA’s Disciplinary and Other FINRA Actions publication, William Oscar Hardy Jr. (CRD #1444999) was barred by FINRA for misusing customer insurance premium funds which caused the customer’s policy to lapse. FINRA alleged that Hardy misused $658 in customer funds by applying them to various insurance policies held by the customer’s daughter and son-in-law, and depositing some of the funds into his personal business checking account, instead of paying the customer’s premium payments for his fixed life insurance policy. As a result, the customer’s policy lapsed. (See FINRA AWC. No. 2014039881901)

According to FINRA’s Broker Check, William Hardy has been permanently barred from acting as a broker or otherwise associating with firms that sell securities to the public. Hardy was registered in the securities industry for twenty eight (28) years with the following firm(s):

NYLIFE SECURITIES LLC
CRD #5167
TALLAHASSEE, FL
05/2002 – 03/2014

MUTUAL OF OMAHA INVESTOR SERVICES, INC.
CRD #611
OMAHA, NE
12/1985 – 03/2002

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.

Wells Fargo Advisors, LLC Fined and Required to Revise Written Supervisory Procedures

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According to FINRA’s Disciplinary and Other FINRA Actions publication, Wells Fargo Advisors, LLC (CRD #19616) of St. Louis, Missouri, was censured, fined $35,000, and required to revise its Written Supervisory Procedures (WSPs). The Firm allegedly accepted and held customer market orders, traded for its own account at prices that would have satisfied the customer market orders, and failed to immediately thereafter execute the customer market orders.

FINRA alleged that the firm failed to show the correct time of execution on the memorandum of numerous different brokerage orders, which was a direct violation of FINRA rules. FINRA’s findings also allege that the firm’s Written Supervisory Procedures did not provide for reasonable supervision designed to achieve compliance with respect to the applicable securities laws and regulations, and FINRA rules. (See FINRA AWC. No. 20120352228-01)

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.

Ft. Lauderdale Florida Broker Sylvester King Suspended and Fined by FINRA for Concealing Customer Loans

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According to FINRA’s Disciplinary and Other FINRA Actions publication, Sylvester King Jr. (CRD #4011622) of Miramar, Florida, was suspended for eighteen (18) months and fined $35,000 for allegedly helping another broker conceal hundreds of thousands of dollars in customer loans. FINRA alleged that from the period of July 2009 through November 2012 while registered with Morgan Stanley and then later Wells Fargo Advisors, King circumvented Wells Fargo’s policies and procedures by allegedly helping another registered representative conceal approximately $399,500 in loans of three (3) clients who were professional athletes in the NFL and NBA, loaned $25,000 to a firm customer without permission from his firm, participated in a private securities transactions that were undisclosed, and provided false information to Morgan Stanley on two separate questionnaires. (See FINRA AWC No. 2013036262101)

According to FINRA’s Broker Check, Sylvester King Jr. is not currently licensed to act as a broker or as an investment adviser. King was registered in the securities industry for fifteen years (15), and was registered with the following firm(s):

WELLS FARGO ADVISORS, LLC
CRD # 19616
FORT LAUDERDALE, FL
10/2011 – 05/2015

MORGAN STANLEY SMITH BARNEY
CRD #149777
FORT LAUDERDALE, FL
11/2006 – 06/2009

CITIGROUP GLOBAL MARKETS INC.
CRD #7059
FORT LAUDERDALE, FL
11/2006 – 06/2009

BANC OF AMERICA INVESTMENT SERVICES, INC.
CRD #16361
FORT LAUDERDALE, FL
10/1999 – 11/2006

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 Barred by FINRA for Allegedly Converting Funds from Clients’ Accounts

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According to FINRA’s Disciplinary and Other FINRA Actions publication, Richard W. Ohrn (CRD No. 5106991) of Boca Raton, was barred by FINRA for allegations of theft from his elderly clients. FINRA’s findings alleged that Ohrn converted a total of $15,250 from two (2) of his elderly clients at Chase Investment Services Corporation. Allegations also stated the Ohrn forged or falsified the signatures of four (4) customers at Chase Investment Services Corporation, on nine (9) separate documents, and also changed the addresses of these clients so that their statements would be mailed to Ohrn’s firm or his firm’s bank. (See FINRA Disciplinary Proceeding No. 2012030987301)

According to FINRA’s Broker Check, Richard W. Ohrn has been permanently barred from acting as a broker or otherwise associating with firms that sell securities to the public. Ohrn was registered in the securities industry for four (4) years, and was registered with the following firm(s):

WELLS FARGO ADVISORS, LLC
CRD #19616
BOCA RATON, FL
06/2011 – 08/2012

CHASE INVESTMENT SERVICES CORP.
CRD #25574
BOCA RATON, FL
07/2009 – 06/2011

USF SECURITIES, L.P.
CRD #37942
PALM BEACH, FL
08/2006 – 12/2007

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 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.

Miami Florida Broker Fined and Suspended by FINRA for Allegedly Borrowing Funds from Client

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According to FINRA’s Disciplinary and Other FINRA Actions Publications, Miami broker Patrick McGrath III (CRD #1251254), also known as Pat McGrath, was fined $10,000 and suspended for four (4) months for allegedly borrowing $210,000 from a customer. Allegedly McGrath defaulted on the loan and his client filed a lawsuit to recover the funds owed.

FINRA alleged that McGrath was prohibited from borrowing funds from clients, other than family members, by his firm’s written supervisory procedures. FINRA also alleged that McGrath submitted three (3) compliance questionnaires to his brokerage firm which falsely stated he had not borrowed funds from a Firm customer, when he in fact had. (See FINRA AWC No. 2013037238901)

According to FINRA’s Broker Check, Patrick McGrath III has been registered in the securities industry for thirty one (31) years. McGrath is currently registered with the following firm:

NORTHEAST SECURITIES, INC.
CRD #25996
MIAMI, FL
02/2014 – PRESENT

McGrath has previously been registered with the following firm(s):

OPPENHEIMER & CO., INC.
CRD #249
MIAMI, FL
04/2009 – 01/2014

WACHOVIA SECURITIES, LLC
CRD #19616
CORAL GABLES, FL
07/2003 – 04/2009

PRUDENTIAL SECURITIES INCORPORATED
CRD #7471
NEW YORK, NY
05/2001 – 07/2003

UBS PAINEWEBBER INC.
CRD #8174
WEEHAWKEN, NJ
07/1990 – 05/2001

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
CRD #7691
NEW YORK, NY
05/1984 – 08/1990

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.

Former Pennsylvania Stockbroker Accused in Ponzi Scheme and Barred by FINRA

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According to a Press Release from the U.S. Securities and Exchange Commission (SEC), Malcolm Segal (CRD #1723563), a former stockbroker of Aegis Capital, was charged with conducting a Ponzi Scheme and stealing investor money to use for his own benefit.

The SEC alleged that Segal fraudulently sold certificates of deposits (CDs) to his customers by assuring them that they were FDIC-insured and claiming that he could get them higher interest rates of return than otherwise available to the general public. Segal then allegedly purchased CDs for his clients, but without their knowledge or consent, sold the CDs and kept the proceeds for himself. The SEC further alleged that Segal eventually began stealing directly from his customers by forging letters of authorization to facilitate the transfer of customer funds to personal accounts he controlled. The SEC further alleged that Segal stole directly from his customers’ brokerage accounts. Segal allegedly raised $15.5 million from investors, which he either spent on himself or used to pay interest and principal repayments to earlier investors in a Ponzi scheme fashion.

According to FINRA’s Disciplinary and Other FINRA Actions publication, Segal also failed to provide documents and information and appear for testimony as requested by FINRA. (See FINRA AWC No. 2014041990901)

According to FINRA’s Broker Check, Malcolm Segal has been permanently barred from acting as a broker or otherwise associating with firms to sell securities to the public. Segal was registered in the securities industry for twenty five (25) years with the following firm(s):

AEGIS CAPITAL CORP.
CRD #15007
NEW YORK, NY
04/2011-07/2014

CUMBERLAND BROKERAGE CORPORATION
CRD #13409
LANGHORNE, PA
01/1989-04/2011

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.