Merrill Lynch Fined $7M Over Leveraged Management Account Inadequacies

November 2016- New York

Merrill Lynch was fined $7 million by the Financial Industry Regulatory Authority (FINRA) for inadequately supervising the use of leverage (margin) in customer accounts.

Merrill Loan Management Accounts (LMAs) permit customers to borrow money from an affiliated bank using securities in the account as collateral. From 2010-2014, FINRA found that Merrill’s supervisory procedures were inadequate with regard to the use of the loan proceeds from the LMA’s and that customers were using the loan proceeds to purchase securities in violation of the LMA agreements.

In addition FINRA found that from 2010-2013 Merrill’s supervisory procedures were inadequate to ensure the suitability of transactions in certain Puerto Rican securities, including municipal bonds and closed-end funds, where customer accounts were highly leveraged through LMA or margin borrowing.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Matthew & WIlliam Griffin of Payson Petroleum-Named In SEC Action

November 2016 -Dallas, Texas

Matthew Carl Griffin and his brother William Daniel Griffin were named in a civil action filed by the Securities and Exchange Commission (SEC) charging them with fraudulently offering interests through their company Payson Petroleum, Inc. , in two Texas partnerships.

The SEC alleges that in 2013-2014 the Griffins raised $23 million from about 150 investors for the purpose of developing 3 oil and gas wells. The Griffins are accused of misleading investors about Payson’s participation and compensation in the program.

According the to the SEC Payson was to contribute over $5 million up front to cover 20% of the cost and Payson would cover any cost overages beyond $24 million in completing the wells in the two partnerships. However, the SEC alleges that Payson contributed no money to the offering and and lacked the financial means to pay even the smallest cost overage.

The Griffins have agreed to an injunction, disgorgement and penalty, in an amount yet to be determined.

SEC Litigation Release No 23694

SEC records indicate that Payson Petroleum has offered a number of private placement limited partnerships in recent years, including:

  • Payson Development Drilling Fund 2014 II
  • Payson Drilling Fund 2015
  • Payson Drilling Fund 2015 II
  • Payson North Texas Multi-Well I
  • Payson Petroleum 3 Well 2014
  • Payson Petroleum Crowe 1

Financial advisors recommending alternative investments such as oil and gas limited partnerships have a duty to disclose the risks associated with such investments. Furthermore financial advisors are required to make recommendations that are suitable , taking into account the investor’s age, level of financial sophistication, investment objectives and ability to withstand risk.

If you suffered losses in a Payson Petroleum limited partnership investment that was made on the recommendation of your financial advisor, you may be able to recover damages if that recommendation was unsuitable or if the investment was misrepresented to you.

Contact us for a no charge consultation.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Investors Capital Corp.-How to Recover Damages For Investment Losses

November 2016- Lynnfield, MA

Investors Capital Corp.  will be closing down and transferring some of its brokers and current clients to another firm within the Cetera network of broker dealers, according to a spokesman for Cetera Financial Group.

RCS Capital, Cetera’s parent has been in bankruptcy and this consolidation is part of their restructuring. The company has announced that  it will also close down VSR Financial Services , another small independent broker dealer as well. It is expected that most of the current brokers of VSR and Investors Capital will be asked to join Summit Brokerage Services, a related entity which is headquartered in Boca Raton, FL.

Investor’s Capital Corp. Recent Regulatory Issues

October 2016-According to FINRA records, Investors Capital Corp agreed to pay $1.1 million in fines and restitution to resolve FINRA allegations that sales procedures for the sale of unit investment trusts (UITs) were inadequate. A UIT is a mix between an actively managed fund and a fixed portfolio of income producing securities.  UITs are generally intended as long term investments.

According to the FINRA sanction several Investors Capital brokers traded UITs on a short term basis causing losses to customers.

August 2016-Pennsylvania securities regulators fined Investors Capital Corp. $100,000 for failures in supervising its brokers.

Recovery of Investment Losses From Investors Capital Corp.

If you have suffered losses in an account at Investors Capital Corp. you may be able to recover damages through FINRA arbitration. Time is of the essence, so if you have a claim, you would be wise to pursue it immediately. Call to discuss your options.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Houston Based Valic Financial Advisors Fined $1.75M by Securities Regulator

November 2016-Houston, Texas

The Financial Industry Regulatory Authority (FINRA) fined Valic Financial Advisors  (VFA)$1.75 million for conflicts of interest related to the way it compensates brokers selling annuities.

FINRA found that Valic failed to have a reasonable system to address and review the conflict of interest created by its compensation policy.

According to FINRA,  “From October 2011 through October 2014, VFA created a conflict of interest by providing registered representatives a financial incentive to recommend that customers move their funds from Valic variable annuities to the firm’s fee-based platform or into a Valic fixed index annuity,”

“VFA further incentivized the conflict by prohibiting its registered representatives from receiving compensation when moving customer funds from a Valic VA to non-Valic VAs, mutual funds or other non-Valic products.”

Valic Financial Advisors is headquartered in Houston, TX, and has about 1,700 registered individuals located in 182 branch offices nationwide.  Valic is owned through subsidiaries of American International Group (AIG) , the giant insurer.

If you have questions about losses in an account at Valic Financial Advisors, contact us for a no charge consultation to discuss your options.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Beth Ty-Former Park Avenue Securities Broker-Discloses Customer Disputes Over Unregistered Promissory Notes

November 2016-Houston, Texas

The FINRA records of  Lizabeth “Beth” G. Ty,  a  former stockbroker with Park Avenue Securities disclose three pending customer disputes and a prior regulatory matter that is final.

The Financial Industry Regulatory Authority (FINRA) is the agency that licenses and regulates stockbrokers and brokerage firms. FINRA requires brokers and brokerage firms to report customer complaints and disputes as well as regulatory sanctions. In addition brokers are required to disclose certain financial matters such as personal bankruptcies, judgments and liens.

The pending customer disputes against Beth Ty are:

  • FINRA Case 16-0871-in which a customer of Park Avenue Securities alleges damages of $250,000 related to the purchase of an unregistered promissory note.
  • FInra Case 16/0481 in which a customer of Park Avenue Securities alleges damages of $500,000 in connection with the purchase of unregistered promissory note investments.
  • FINRA Case 16-0424 in which a customer of Park Avenue Securities alleges damages of $400,000 in connection with investments in unregistered promissory notes.

On April 16, 2016, during the course of an investigation into allegations that Beth Ty sold unregistered securities, FINRA requested that Ty provide documents and information pursuant to FINRA Rule 8210. Through her attorney, Ty indicated that she would not produce the information or documents at any time. In May 2016, FINRA permanently barred Beth Ty from acting as a broker or otherwise associating with firms that sell securities to the public. FINRA Disciplinary Action 2016049315001.  

Ty was registered with Park Avenue Securities from 1/2006-7/2015.

If you have losses in an account in an account handled by Lizabeth “Beth” Ty , contact us to discuss how you may be able to recover damages for those losses.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Kevin Hudak-Former Foothill Securities Broker-Barred From Securities Industry

November 2016-Albuquerque, NM

The FINRA records of  Kevin Hudak,  a  former stockbroker last employed in the industry by Foothill Securities , was permanently barred from acting as a broker or otherwise associating with firms that sell securities to the public.

The Financial Industry Regulatory Authority (FINRA) is the agency that licenses and regulates stockbrokers and brokerage firms. FINRA requires brokers and brokerage firms to report customer complaints and disputes as well as regulatory sanctions. In addition brokers are required to disclose certain financial matters such as personal bankruptcies, judgments and liens.

Without admitting or denying the findings, Hudak consented to entry of findings that he submitted non-solicitation forms to his firm that had non-authentic customer signatures. Hudak falsified the non-solicitation forms by having customers sign blank forms, which he then photocopied and reused for transactions in low priced securities.

The findings also state that Hudak provided false and misleading testimony to FINRA in connection with their investigation into the matter.

Hudak was registered with Foothill Securities from 6/2014-10/2015. Prior to that he was employed by Cetera Advisor Networks.

If you have losses in an account in an account handled by Kevin Hudak  contact us to discuss how you may be able to recover damages for those losses.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Susan Pruitt Sentenced on Oil/Gas Fraud-Dallas, TX

November 2016-Dallas, Texas

Susan Gay Pruitt, 45, pleaded guilty to money laundering and theft of more than $200,000 and was sentenced to 22 years for selling phony oil and gas deals through her company Ember Development Solutions, LLC.

According to the Texas State Securities Board (TSSB), to gain credibility, Pruitt concocted an elaborate phony background telling victims she owned a valuable real estate portfolio and had inherited her father’s oil and gas business. She claimed to be investing in oil and gas deals in Grayson County in North Texas as well as in Oklahoma, Arkansas and Alabama.

Victims included elderly retirees and one victim who spent money from a child’s college fund.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Current information for investors seeking information on recovery of investment losses due to the negligence or fraud of stockbrokers and brokerage firms. Nationwide representation.