Category: Securities Broker Misconduct

Hanley Law Files FINRA Arbitration Involving broker Ronald Radner Former Registered Representative at the Delray Beach Florida Branch of Edward Jones

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Hanley Law recently filed a FINRA arbitration claim alleging that Ronald Radner a broker formerly registered with Edward Jones solicited an elderly client into transferring his investment portfolio to his care after Radner hosted a “free lunch” seminar at a local deli.  The client alleges that Ronald Radner convinced him to surrender his American National annuity and to allow Ronald Radner to manage the funds from the surrendered annuity.  The client alleges that Ronald Radner convinced him that he could earn a greater rate of return on the funds, and therefore would be able to provide him with additional growth and income through retirement.

The client alleges that because of the recommendation of Ronald Radner and Edward Jones he incurred a large surrender charge, and also lost his substantial death benefit of nearly $400,000 when Mr. Radner surrendered his American National Annuity.  Furthermore, the client alleges that he incurred a large tax consequence because of Ronald Radner’s and Edward Jones’ recommendation that he surrender his American National annuity.  Additionally, the client alleges that he lost significant principal on the investments Ronald Radner purchased with his annuity proceeds.

The Boynton Beach, Florida retiree client alleges that Edward Jones violated industry rules, including but not limited to FINRA’s customer suitability standard (Rule 2310) as well as FINRA rules 3010 and 2110. The client further alleges that Edward Jones violated its duty of care and was negligent and that Edward Jones breached the contract it entered into with its client. The client alleges that Edward Jones also breached the fiduciary duty that a securities firm and its employees/agents owe to their clients.  The client alleges that Edward Jones’ misconduct constitutes common law fraud.  Moreover, the client alleges that the accounts at issue were handled negligently and Edward Jones was negligent in their hiring, retention, and supervision of their employees.

According to FINRA’s Brokercheck, Ronald Radner was registered with the securities industry for 9 years, and was registered with the following firm(s) and has multiple customer complaints:

Raymond James Financial Services, Inc.
CRD 6694
Delray Beach, FL
3/29/2019 – present

Edward Jones
CRD 250
Delray Beach, FL
9/30/2011 – 4/1/2019

Morgan Stanley Smith Barney
CRD 149777
Delray Beach, FL
10/4/2010 – 9/7/2011

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, including Edward Jones.

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.

 

Hanley Law Files FINRA Arbitration Involving broker William “Bill” Collins Registered Representative of Morgan Stanley Smith Barney

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Hanley Law recently filed a FINRA arbitration claim alleging that William “Bill” Collins a broker with Morgan Stanley Smith Barney mislead his retired client into believing that he was not charging her any commissions or fees because he was managing her account as a favor to her. Meanwhile, the client alleges that Bill Collins recommended and purchased unsuitable investments in her accounts, improperly increased her lines of credit and acted negligently when handling her account. The retired client residing in Naples, Florida trusted Bill Collins implicitly to her detriment. The retired investor client alleges that Bill Collins redeemed a treasury note in her IRA account and used the proceeds to by speculative and high-risk investments without authorization. The client also alleges that Bill Collins sold suitable and low risk equities in her account and used the proceeds to buy speculative and high-risk equities without her authorization which lead her to suffer devastating principal losses. Specifically, the client alleges that Bill Collins purchased the Chinese coffee company Luckin in her accounts and that shortly after his purchase of Luckin Coffee, the stock’s trading halted on reports of fraud. The company is facing various class action lawsuits and bankruptcy is looming. The investor client’s large investment in Luckin Coffee is now essentially worthless. Lastly, the investor client alleges that when the market became increasingly volatile in March 2020 due to growing concerns of the coronavirus, Bill Collins refused her requests to provide her financial guidance or to discuss her concerns over her line of credit and her diminishing account value.

The Naples, Florida retiree alleges that Morgan Stanley violated industry rules, including but not limited to FINRA’s customer suitability standard (Rule 2310) as well as FINRA rules 3010 and 2110. The client further alleges that Morgan Stanley violated its duty of care and was negligent and that Morgan Stanley breached the contract it entered into with its client. The retired client alleges that Morgan Stanley also breached the fiduciary duty that a securities firm and its employees/agents owe to their clients. The client alleges that Morgan Stanley’s misconduct constitutes common law fraud and that Morgan Stanley violated Florida Statute § 517. Moreover, the client alleges that the accounts at issue were handled negligently and Morgan Stanley was negligent in their hiring, retention, and supervision of their employees.

According to FINRA’s Brokercheck, William “Bill” Collins was registered with the securities industry for 23 years, was registered with the following firm(s) and has multiple customer complaints:

Morgan Stanley
CRD 149777
34901 Woodward Ave.
Suite 300
Birmingham, MI 48009
5/28/2010 to present

Wells Fargo Advisors, LLC
CRD 19616
Troy, MI
01/01/2008 – 06/01/2010

A.G. Edwards & Sons, Inc.
CRD 4
Troy, MI
09/16/1996 – 01/03/2008

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, including Morgan Stanley Smith Barney.

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.

FINRA Sanctions MetLife Securities, Inc. $25 Million for Negligent Misrepresentations and Omissions in Connection With Variable Annuity Replacements

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The Financial Industry Regulatory Authority (FINRA) announced recently that it has fined MetLife Securities, Inc. (MSI) $20 million and ordered it to pay $5 million to customers for making negligent material misrepresentations and omissions on variable annuity replacement applications for tens of thousands of customers. FINRA alleged that each misrepresentation and omission propounded by MSI made the replacement appear more beneficial to the customer, even though the recommended variable annuities were typically more expensive than customers’ existing variable annuity. According to FINRA, MSI’s variable annuity replacement business constituted a substantial portion of its business, generating at least $152 million in gross dealer commission for the firm over a six-year period.

FINRA advises that replacing one variable annuity with another involves a comparison of the complex features of each security. Accordingly, variable annuity replacements are subject to regulatory requirements to ensure a firm and its registered representatives compare costs and guarantees that are complete and accurate.

FINRA found that from 2009 through 2014, MSI misrepresented or omitted at least one material fact relating to the costs and guarantees of customers’ existing variable annuity contracts in 72 percent of the 35,500 variable annuity replacement applications the firm approved, based on a sample of randomly selected transactions. Examples from FINRA’s review found that:

• MSI represented to customers that their existing variable annuity was more expensive than the recommended variable annuity, when in fact, the existing variable annuity was less expensive;
• MSI failed to disclose to customers that the proposed variable annuity replacement would reduce or eliminate important features in their existing variable annuity, such as accrued death benefits, guaranteed income benefits, and a guaranteed fixed interest account rider; and,
• MSI understated the value of customers’ existing death benefits in disclosures.

According to Brad Bennett, FINRA Executive Vice President and Chief of Enforcement, “Variable annuities are complex and expensive products that are routinely pitched to vulnerable investors as a key component of their retirement planning. Firms engaging in this business must ensure that the information on the costs and benefits of these products provided to customers is accurate, and that their registered representatives are sufficiently trained to understand and explain the risks and complex features of what they are selling. These obligations take on even greater importance when a significant part of a firm’s marketing effort involves switching customers out of existing annuities.”

FINRA also found that MSI failed to ensure that its registered representatives obtained and assessed accurate information concerning the recommended VA replacements, and did not adequately train its registered representatives to compare the relative costs and guarantees involved in replacing one variable annuity with another. According to FINRA MSI’s principals did not consider the relative costs and guarantees of the proposed transactions. FINRA alleged that MSI principals ultimately approved 99.79 percent of variable annuity replacement applications submitted to them for review, even though nearly three quarters of those applications contained materially inaccurate information.

FINRA further found that MSI failed to supervise sales of the GMIB rider, the firm’s bestselling feature for its variable annuities. The rider was marketed to customers (many of whom were already holding MetLife annuities) as a means of providing a guaranteed future income stream. The GMIB rider is complex and expensive—annual fees during the relevant period ranged from 1 percent to 1.5 percent of the variable annuities notional income base value. FINRA found that a frequently cited reason for MSI’s recommendation of variable annuity replacements was to allow a customer to purchase the GMIB rider on the new variable annuity contract. Nevertheless, MSI failed to provide registered representatives and principals with reasonable guidance or training about the cost and features of the rider.

In addition, FINRA found that since at least 2009, MSI customers have received misleading quarterly account statements that understate the total charges and fees incurred on certain variable annuity contracts. Typically, the quarterly account statements misrepresented that the total fees and charges were $0.00 when, in fact, the customer has paid a substantial amount in fees and charges.

If you have suffered investment losses as a result of investing with MetLife Securities, 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 or brokerage firm’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.

What is Securities Arbitration?

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Securities Arbitration is the process, which takes place following a dispute with a broker or dealer. Prior to arbitration, the investor has determined that the broker engaged in some form of wrongdoing, or otherwise negligent action that resulted in a loss. Depending on the amount of the claim, the investor may or may not have to appear before an arbitrator or group of arbitrators. Arbitration is an alternative to settling in court and is often the preferred method of dispute resolution because it is typically faster and less expensive.

While typically a contract between a firm and investor is what provides ground for arbitration, the absence of a contractual agreement does not mean that the dispute cannot be settled through arbitration. If the broker or firm is registered with the Financial Industry Regulatory Authority, they are bound to FINRAs procedural guidelines, which include the duty to participate in arbitration when a conflict arises.

Arbitration is NOT an investor complaint. If you want to make FINRA aware of any suspicious activity then you should file an investor complaint. Arbitration is similar to a court case, with formal proceedings but for the reasons stated above is a simpler and quicker alternative to litigation. If a claim is under $50,000 then the dispute can be settled through what is known as “Simplified Arbitration”. In this scenario, parties provide case materials, which are reviewed by an arbitrator; this does not require parties to appear in person. For cases involving larger sums, arbitration takes place in-person and is reviewed by a panel of up to 3 arbitrators.

To initiate an arbitration, the investor must submit what is known as a “Statement of Claim”. The statement of claim must be articulate and while there is no standardized format, following the format of a suit in court is effective. The statement of claim should include all the pertinent information that the arbitrator(s) need to make an intelligent decision. This included the nature of the dispute, any background information, dates, types of securities at hand, names of the parties involved, the kind of transactions that took place and the damages sought.

Following the statement of claim, the respondents must answer to the allegations. This must also be detailed and simple denial will not suffice. At this point in time the respondent can file a counter-claim against the investor or a 3rd party involved. Once the submission of facts from either side is received by FINRA, a hearing location is chosen. Before the hearing is a discover period, where documentation is provided and exchanged amongst parties involved and FINRA officials. This stage is a window of opportunity for the assertive attorney as it is the opportunity to obtain any and all relevant information from the other party prior to the hearing. Often, the persistence of a dedicated attorney during the prehearing discovery phase can result in a favorable verdict for their client.

The hearing itself is scheduled in advance and follows a similar format to a case in court. Witnesses are interviewed, cross-examined and evidence is produced. A series of questions are asked and there are multiple stages before the process is concluded. The arbitrators will determine what awards are served usually within 30 days of the last hearing. The award will include the basic facts of the dispute but does not have to provide justification or rationale behind the actual dollar amount awarded. The opportunity to appeal a decision exists on the state and federal level but it is rarely ever successful.

The Hanley Law is a Naples, Florida based firm who have an extensive track record of successfully securing awards for their clients. The arbitration process is complex and difficult to navigate without the guidance and advocacy that skilled attorneys can provide. Hanley Law offers a free case evaluation to determine the best course of action for you.

Fraud Lawyers in Florida

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Investing in securities can be a great way to secure your financial future; however, it’s important to understand the ways your investments can be mishandled. Understanding the different types of fraudulent activity that can occur is crucial if you plan to invest your money. Making an arrangement with a stockbroker should be carefully considered, as there are many ways that your investments can be mishandled. Stockbroker fraud constitutes a large portion of all lawsuits related to securities, so understanding the different ways your broker could be mishandling your accounts is essential for investors.

You might feel that your investments are unsuitable to your portfolio, over-concentrated in one area or industry, were misrepresented to you (either by purposefully withholding information or presenting misleading information), or that your broker was churning your investments. Churning refers to when a broker trades excessively on your behalf to increase their commissions. Insurance and annuity fraud is often subject to this; annuities, for example, offer some of the highest commissions for stockbrokers, and as such can be misrepresented or sold to investors when it is not in their best interest.

In addition to stockbroker fraud, there are other abuses that regulatory agencies like FINRA & the SEC (Securities & Trade Commission) look out for. Insider trading, fraud and market manipulation also occur in the industry, when individuals privy to certain company information use that information to help theirs or others investments. Investment schemes need to also be considered – these include methods for stealing investor’s money, using misrepresentation and instilling false hope into the investor. A well-known example of an investment scheme is the Ponzi scheme – Where brokers will use the money from new investors to pay their current clients, rather than money generated from the investment. To this end, when the Ponzi scheme is shut down, there isn’t enough real money that can be used to pay back investors. Pyramid schemes are another example of an investment scheme.

Securities violations come in many different forms and carry severe punishments. The process for solving these issues can come in the form of litigation or, more commonly, arbitration, and anyone looking to recover damages from a securities lawsuit should fully understand both options and the prerequisites to filing a claim. If you feel your investments have been mishandled or you may have been subject to securities abuses, it’s important to speak with an attorney who specializes in securities arbitration and litigation. The Hanley Law offer free case evaluations and can help you navigate through your claim.