Rex Investment Loss Recovery Blog
Dickenson Murphy Rex & Sloan 561-391-1900
FINRA Announces Arbitration Statistics March 2013
There were 918 new cases filed through March 2013. This compares to 1,183 in 2012, and 1,276 in 2011 for that same quarter.
To access the complete report which also includes customer win statistics, follow this link.
If you have questions about losses, unauthorized trading or unsuitable investments in your stock brokerage account, contact us for a no charge consultation.
Nationwide representation
Rex Securities Law
561 391 1900
Ohio Certified Financial Planners Disciplined by CFP Board
The CFP Board can discipline those holding the CFP title in one of three ways:
- Public Letter of Admonition
- Temporary Suspension of CFP certification
- Revocation of individual's CFP certification
The list below, taken from the CFP board disciplinary page of their website in May 2013, is a historical record of individuals from Ohio who have been disciplined by CFP Board and does not imply that any listed discipline is currently in force. To verify an individual's current certification status visit the CFP website here.
<< MORE >>Tennessee Certified Financial Planners Disciplined by CFP Board
The CFP Board can discipline those holding the CFP title in one of three ways:
- Public Letter of Admonition
- Temporary Suspension of CFP certification
- Revocation of individual's CFP certification
The list below, taken from the CFP board disciplinary page of their website in May 2013, is a historical record
of individuals from Tennessee who have been disciplined by CFP Board and does not imply that any listed discipline is currently in force. To verify an individual's
current certification status visit the CFP website
here.
Revocations
William C.
SEC Issues Investor Alert: Private Oil and Gas Offerings
Merrill Ordered to Pay $82k on Van Kampen Strategic Muni Bond Fund
In Case # 10-519, the customer alleged negligence, suitability, failure to diversify and failure to supervise and requested over $282,000 in total damages. << MORE >>
Morgan Stanley Wins Suit Vs. Their Former Broker
This is 100% of the amount requested by Morgan Stanley in FINRA Case #12-2803 which was recently heard in Tampa, FL. << MORE >>
Customer Wins Arbitration Against Ameriprise
FINRA Finds Ameriprise Financial Liable to Customer
If you believe you are a victim of stockbroker fraud or negligence, you may be able to recover losses through FINRA arbitration which is much quicker and less costly than litigation in court. << MORE >>
Brokerage Firms Continue to Win Cases Against Their Former Brokers
FINRA Finds Noble Financial Capital Liable for Misrepesentation
The investments complained of in the matter were two private placement promissory notes:
- Athena Premium Funding II LLC
- SHL Holdings
If you have questions or complaints about losses in your brokerage account, call us for a no charge consultation.
<< MORE >>Michigan Certified Financial Planners Disciplined by CFP Board
The CFP Board can discipline those holding the CFP title in one of three ways:
- Public Letter of Admonition
- Temporary Suspension of CFP certification
- Revocation of individual's CFP certification
The list below, taken from the CFP board disciplinary page of their website in April 2013, is a historical
record of individuals from Michigan who have been disciplined by CFP Board and does not imply that any listed discipline is currently in force. To verify an
individual's current certification status visit the CFP website
here.
Revocations
Mark J.
Maine Certified Financial Planners Disciplined by CFP Board
The CFP Board can discipline those holding the CFP title in one of three ways:
- Public Letter of Admonition
- Temporary Suspension of CFP certification
- Revocation of individual's CFP certification
The list below, taken from the CFP board disciplinary page of their website in April 2013, is a historical record of individuals from Maine
who have been disciplined by CFP Board and does not imply that any listed discipline is currently in force. To verify an individual's current certification status visit the CFP website
here.
Revocations
James F.
Pennsylvania Certified Financial Planners Disciplined by CFP Board
The CFP Board can discipline those holding the CFP title in one of three ways:
- Public Letter of Admonition
- Temporary Suspension of CFP certification
- Revocation of individual's CFP certification
The list below, taken from the CFP board disciplinary page of their website in April 2013, is a historical record of individuals from
Pennsylvania who have been disciplined by CFP Board and does not imply that any listed discipline is currently in force. To verify an individual's current certification
status visit the CFP website here.
Revocations
Robert J.
New Jersey Certified Financial Planners Disciplined by CFP Board
The CFP Board can discipline those holding the CFP title in one of three ways:
- Public Letter of Admonition
- Temporary Suspension of CFP certification
- Revocation of individual's CFP certification
The list below, taken from the CFP board disciplinary page of their website, is a historical record of individuals from New Jersey who have
been disciplined by CFP Board and does not imply that any listed discipline is currently in force. To verify an individual's current certification status visit the CFP
website here.
Revocations
Stuart Albert (Marlton)
Michael R.
Georgia Certified Financial Planners Disciplined by CFP Board
Georgia Certified Financial Planners Disciplined by CFP Board
According to their website, the "Certified Financial Planner (CFP) Board is a non-profit organization acting in the public interest by fostering professional standards in personal financial planning through its setting and enforcement of the education, examination, experience, ethics and other requirementments for CFP. "The CFP Board can discipline those holding the CFP title in one of three ways:
- Public Letter of Admonition
- Temporary Suspension of CFP certification
- Revocation of individual's CFP certification
The list below, taken from the CFP board disciplinary page of their website, is a historical record of individuals from Georgia who have been disciplined by CFP
Board and does not imply that any listed discipline is currently in force. To verify an individual's current certification status visit the CFP
website here.
Revocations
Charles B.
Quest Capital Strategies Broker Discharged for Borrowing from Firm Client
Texas Certified Financial Planners Disciplined by CFP Board
The CFP Board can discipline those holding the CFP title in one of three ways:
- Public Letter of Admonition
- Temporary Suspension of CFP certification
- Revocation of individual's CFP certification
The list below, taken from the CFP board disciplinary page of their website, is a historical record of individuals from Texas who have been disciplined by CFP Board
and does not imply that any listed discipline is currently in force. To verify an individual's current certification status visit the CFP website here.
Revocations
Nicole Y.
Florida Certified Financial Planners Disciplined by CFP Board
The CFP Board can discipline those holding the CFP title in one of three ways:
- Public Letter of Admonition
- Temporary Suspension of CFP certification
- Revocation of individual's CFP certification
The list below, taken from the CFP board disciplinary page of their website, is a historical record of individuals from Florida who have been disciplined by CFP Board and does not imply that any listed discipline is currently in force. To verify an individual's current certification status visit the CFP website here.
Revocations
Carol M. Allen (Deland)
Kenneth W.
FINRA Fines Merrill $1 Million and $320k Restitution
Merrill was fined $1.05 million and ordered to pay restitution to customers who did not receive best execution on their bond trades of more than $323,000. << MORE >>
FINRA Files Cease/Desist Vs. Success Trade Securities
Success Trade is an online broker operating through Just2Trade and LowTrades. << MORE >>
FINRA Announces April 2013 Disciplinary Actions
FINRA Announces April 2013 Disciplinary Actions
By Robert H. Rex, Esq.
Here are some of the most significant actions for April 2013. << MORE >>
SEC Announces Action Vs.Richard P. Sandru
MML Investors Services Hit with $1.2M Award on Diversified Lending Group Notes
DLG sold over $200 million in purportedly guaranteed notes that turned out to be a fraud and was shut down by the SEC in 2009. Its creator, Bruce Friedman died while in custody in France awaiting extradition back to the U.S. to face criminal fraud charges in 2012. << MORE >>
Investors May Be Able to Recover Losses on Diversified Lending Group Notes
DLG offered promissory notes in the form of one or five year Secured Investment Notes that guaranteed rates of return of 9% or 12%. Applied Equities, Inc. << MORE >>
Thomas Redmond-Former Capital Financial Services/Next Financial Broker Charged with Fraud
- Next Financial Group, Inc. 12/2007-10/2009
- Capital Financial Services, Inc. 8/2005-11/2007
- Empire Financial Group, Inc. 11/2003-8/2005
- Freedom Financial, inc. 2/2002-11/2003
- SII Investments, Inc. 3/2001-3/2002
In 2011,FINRA revoked Redmond's registration for making an unsuitable investment to a 60 year old widow, for whom he invested 47.5% of her liquid net worth in high risk investments including $100,000 in an oil and gas limited partnership. Redmond forged signatures and otherwise failed to follow the instructions of the customer.
<< MORE >>Cetera To Buy Walnut Street/Tower Square Securities
- Cetera Advisors Network (formerly Financial Network Investment Corp.)
- Cetera Financial Institutions (formerly PrimeVest Financial Services)
- Cetera Financial Specialists (formerly Genworth Financial)
The acquisition of Walnut Street and Tower Square will bring another 800 financial advisors to Cetera , for a total of over 7000, and is a continuation of Cetera's expansion efforts. Cetera Financial Group will have over $130 billion in client assets following the merger of Walnut Street and Tower Square into Cetera Advisors Network.
<< MORE >>Why Are Brokerage Firms Suing Their Former Stock Brokers ?
The amount of this signing bonus is based on the production (commissions, margin interest credits, etc) history of the broker and can be in the hundreds of thousands of dollars (or millions for the really big producer). This is referred to as the value of "his book".
The firm disguises the bonus to your broker as a forgivable loan. If the broker generates the revenue requirements in the forgivable loan agreement annually, then a certain amount of the loan is forgiven. It does not take much contemplation of this arrangement to arrive at the conclusion that there is an inherent conflict of interest that works contrary to the best interest of you, the broker's customer.
For example, if the year is coming to an end and the broker has not yet generated sufficient commission income from his customers who followed him to the new firm to qualify for having a portion of the loan forgiven, he is faced with two choices:
- Figure a way to generate activity in the customer accounts to meet the revenue goal and have a portion of the loan forgiven; or
- Face having to repay that portion of the bonus to the firm.
My experience with both the industry and human nature leads me to believe option 1 will be the path taken in most cases. We often see in our cases mutual fund churning, equity churning and the recommendation of unsuitable investments including private placements, non traded REITs , oil & gas investments and limited partnerships that have likely been generated, not to benefit the investor, but rather to generate commissions for the broker and his firm.
What happens when a broker who has received a signing bonus leaves his firm for a new firm with the promissory note unpaid? Prudent business practice would suggest that the broker would pay off the note to the firm he is departing. In real life, many brokers leave for the new firm and are sued in FINRA arbitration by the old firm for the outstanding balance. Their defense is generally based upon allegations that the old firm somehow hindered their ability to conduct business.
In this week's FINRA arbitration awards there was a spate of arbitrations by firms against their former brokers, including these:
- Wells Fargo v Caio Dean Dunson (Case 10-2139) Dunson had signed two notes in 2005 and 2006 on which he still owed over $800,000 when he left Wells Fargo, and apparently the industry, in 2009. The FINRA arbitration panel ordered Dunson to pay Wells Fargo nearly a million dollars, plus attorney fees and costs. A review of Dunson's CRD on the BrokerCheck site reveals that he had a number of customer complaints involving misrepresentation of variable universal life policies. Wells Fargo paid hundreds of thousands to the aggrieved investors.
- Ameriprise v Lisa Engstrom Seran (Case 12-2563) Ameriprise requested the $75,000 note balance and interest which the arbitration panel awarded pursuant to a stipulated award between the parties. According to FINRA recoreds Seran currently is registered with Cetera Advisors, LLC.
- Morgan Keegan v Wayne Thomas Altman (Case 11-3624) Morgan Keegan alleged failure to repay commissions related to cancelled annuity sales and to repay promissory notes executed by Altman in 2009 & 2010 and sought $115,000 plus interest on the notes and $5,100 related to commissions. The panel awarded a total of $121,000 to Morgan Keegan. According to FINRA records, Altman currently works for Ameriprise Financial Services.
- Regal Services, Inc. v John A. Cavanaugh (Case 12-980) Regal sought the unpaid balance on a note executed by Cavanaugh in 2007. The panel awarded $71,000 plus attorney fees and costs. Cavanaugh is no longer registered according to FINRA records.
If you have losses in your brokerage account that you believe are due to the negligence or fraud of your broker or broker dealer contact us for a no charge consultation.
Nationwide representation.
561 391 1900
MMl Investors Services Hit With $1.1 Million Arbitration Award
Steven Corzan, the former MML broker, sold the investor $1.2 million in promissory notes issued by Diversity Lending Group, Inc. (DLG). On the advice of the broker, the purchase was financed using equity from the family home and retirement plan funds. The investor was told that DLG, run by Bruce Friedman, was a real estate investment but it turned out to be a fraud that was shut down by the Securities and Exchange Commission in 2009.
Corzan was barred from the industry by FINRA earlier this year.
In addition to the $1.1 award, the panel also awarded the investor expert witness fees and other costs to the investor, however they denied the request for attorney fees.
Brokerage firms have a duty to supervise the brokers that work for them to assure that they make suitable and legitimate investment recommendations. Investors who have suffered losses due to the negligence or fraud of their broker may be able to recover all or a part of their losses through FINRA arbitration.
If you have questions about the way your brokerage account has been handled, call for a no charge consultation with an experienced securities fraud attorney.
Nationwide representation.
Rex Securities Law
561 391 1900
LPL Financial Hit wtih $8.5M Claim
The plaintiff in the action is reported to be an heiress to the Knott's Berry Farm theme park and claims that her LPL broker Alberto Neira's suggestion that she invest in Silver Oak Leasing is a fraud.
A review of Neira's CRD on the FINRA BrokerCheck website reveals that he was permanently barred by FINRA from the industry in December 2012 for selling securities away from the firm. The report indicates he worked for LPL Financial from February 2002 until January 2011 when he was discharged for failing to disclose participation in an outside business activity and selling away in violation of firm policies.
LPL has grown very quickly since the 1989 merger of Linsco, a Boston firm, and Private Ledger of San Diego. The company was known as Linsco Private Ledger prior to going public in 2010.
They claim to have over 13,000 brokers and 6,500 offices. The operational model is much different that the conventional wire house. Offices tend to be small, sometimes just one or two brokers who are often located in rural America, creating issues related to compliance review and oversight.
The brokers are independent contractors paying their own staff and rent and get LPL business cards, email addresses and letterhead.
Although the brokers are independent contractors with regard to their relationship with LPL Financial, LPL nevertheless remains liable for their actions should an investors account be mishandled and incur unwarranted losses.
If you have questions about your legal rights with regard to investment losses, call us for a non charge consultation. Visit our website for more information on FINRA arbitration.
Nationwide representation
Rex Securities Law
561 391 1900
Securities Regulators Issue Warning- Oil & Gas Investment Fraud
NASAA has issued a warning to investors regarding oil & gas scams. Here is a link to the entire article.
The SEC has also issued a warning to investors: Oil and Gas Scams: Common Red Flags and Steps You Can Take to Protect Yourself. You should read it if thinking of investing in oil and gas.
Every investor contemplating an investment in an oil and gas limited partnership, private placement offering, Reg D offering or other form of entity should take the time to read the articles.
From the NASAA article, here are some of the misrepresentations investors should be aware of in the high pressured sales pitch that many promoters use when cold calling or sending unsolicited emails:
- you will have an interest in a well that cannot miss
- the risks are minimal
- a geologist has given the sales person a tip
- the salesperson has personally invested in the venture
- the promoter has a "hit" on every well drilled so far
- there has been a tremendous "discovery" in adjacent field
- a large, reputable oil company is operating or planning to operate in the area
- only a few interests remain to be sold and you should immediately send in your money in order to assure the purchase of an interest
- this is a special private deal open only to a lucky chosen few investors
Oil & gas private placements are extremely speculative in nature. The risk associated with these investments is only suitable for those individuals who understand and are financially capable of taking the risk inherent to these products. If you were sold an oil & gas investment based upon misrepresentations, such as the inaccurate representation of the production of wells in the target area, or if this type of investment is unsuitable for a person your age and profile, you may be able to recover all or a part of your losses through FINRA arbitration.
Please read the SEC & NASAA warnings linked above before parting with your hard earned dollars.
If you have questions about losses on oil & gas investments or other stock market losses call to speak with an experienced securities attorney.
Nationwide representation.
561 391 1900
