Elder Abuse Can Include Financial Abuse of Your Investment Account

Elder abuse is often defined as a single of repeated act, or lack of appropriate action, occurring in any relationship where there is an expectation of trust, which causes harm or distress to an older person. It is also referred to as:

  • elder mistreatment
  • senior abuse
  • abuse in later life
  • abuse of older adults

The types of abuse include physical , psychological and emotional, sexual, neglect and abandonment. Victims of any of these types of abuse should consider contacting the Adult Protective Services office in the city or county where you reside.

Elder abuse can also involve financial abuse or financial exploitation, for example the illegal or unauthorized use of a person’s money or valuables. It can also include being deceived and or coerced  by a financial advisor or stockbroker.

The basis of all forms of Elder Abuse stems from the expectation of trust the older person has for the abuser. In the case of nursing home Elder Abuse, it is the trust the older person places in the nursing home staff. In cases involving financial Elder Abuse, it is the trust the older person places in their trusted adviser or stock broker.

While the overwhelming majority of financial advisers and stockbrokers are honest and do their very best to take care of their clients, we can tell you from experience that there exists a small percentage who will take advantage of the elderly by trading their account in a manner that benefits the broker/advisor, and his firm at the expense of the trusting elderly account holder.

This abuse can range from over-trading the account or selling high risk high commission products like REITs, private placements and limited partnerships, to outright theft .

AARP  suggests you think twice if you hear words like this from your broker:

•    “Your profit is guaranteed.”
•    “It’s an amazingly high rate of return.”
•    “There’s no risk.”
•    “You can get in on the ground floor.”
•    “This offer is only available today.”
•    “It’s a secret investment tip just for you.”
•    “I’ll get you the paperwork later.”
•    “Just make your check out to me.”

If you believe you are the victim of elder financial abuse, you need to consult with an attorney experienced in pursuing losses from stockbrokers and brokerage firms. It is likely that you may be able to recover all or a part of your losses through FINRA arbitration.

We have been helping investors recover stock market losses for 25 years. No charge for initial consultation.

Rex Securities Law , located in Boca Raton, FL, 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.

Rex Securities Law

561 391 1900

Oil & Gas Investment Losses May Be Recoverable

Investors who have losses on Oil & Gas investments may be able to recover losses through FINRA arbitration. Many investors were sold products that were not suitable for them due to the high risk associated with many of these products that generally pay a higher commission than most other products.

Here is a listing of some companies who offered Oil & Gas investments  to retail customers through various brokerage firms over  recent years.

Adageo Energy
Alliance Petroleum Corporation
Alpha Energy
Atlas Resources
Aztec Oil & Gas
Bradford Energy
Black Diamond Energy
Catalyst Energy
Mewbourne Energy
Noble Royalties
Penneco Drilling
Reef Oil & Gas
Ridgewood Energy
Sandridge Energy
Texas Energy
U.S. Energy
Waveland Capital Partners

Brokers have a duty to make recommendations that are suitable. Many oil and gas investments are risky and unsuitable for the elderly and retired. If you have losses on oil & gas investments you may be able to recover all or a part of your losses through FINRA arbitration.

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

FINRA Fines ING Companies For Supervisory Issues

FINRA announced February 19 , 2013, that it has fined five ING affiliates $1.2M for failing to review emails for periods ranging from two months to six years. The five affiliates are:

  • Directed Services, LLC
  • ING American Equities, Inc.
  • ING Financial Advisers, LLC
  • ING Financial Partners, Inc.
  • ING Investment Advisors, LLC

The FINRA press release which can be accessed here said:

“In addition, four of the firms failed to review millions of emails that
the firms’ email review software had flagged for supervisory review. At
various times between January 2005 and May 2011, nearly six million
emails flagged for review went unreviewed by supervisory principals
because the email review software was not properly configured.”

These emails could have been flagged for review are likely related to supervisory issues and/or customer complaints and the failure to review them could have resulted in no action being taken where it is clear that supervision was needed.

If you have questions about losses in your brokerage account, do not hesitate to contact us for a no charge consultation.

Rex Securities Law , located in Boca Raton, FL, 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.

Rex Securities Law

561 391 1900

FINRA Announces February 2013 Disciplinary Actions

FINRA Announces February 2013 Disciplinary Actions

By Robert H. Rex, Esq.

The
Financial Industry Regulatory Authority (FINRA) issues a report on
disciplinary and other actions involving registered brokers, investment
advisers and brokerage firms every month. 


Here are significant Florida related actions for February 2013. Follow this link to the FINRA website for all of the February 2013 disciplinary actions as well as for prior periods.


Gardnyr Michael Capital, Inc. (Mobile, Alabama) and James Michael Pietkiewicz -Winter Park, Florida was censured, fined $30,000 and was liable for paying $11,155.35, plus interest, in restitution to customers. Pietkiewicz was fined $10,000 and suspended from association with any FINRA member in any principal capacity for 45 days.

Pietkiewicz consented to the described sanctions and to the entry of findings that the firm permitted a registered
representative to use personal accounts he maintained or controlled as inventory accounts from which he could, through a firm account, sell and also buy municipal securities to and from customers. The firm and the representative did not disclose to their customers that one of the representative’s personal accounts had been interposed or otherwise involved
in the transactions, or that they had charged excessive markups on the transactions.

The findings stated that Pietkiewicz was responsible for reviewing the registered representative’s municipal securities transactions for, among other things, fair pricing violations, excessive markups and interpositioning. Contrary to the firm’s WSPs—which prohibited the firm from selling municipal securities from its own account to a customer except at an aggregate price that was fair and reasonable and would not exceed a 3 percent markdown/markup; and prohibited interpositioning—the firm, through Pietkiewicz, failed
to supervise the registered representative’s handling of municipal bond transactions, and failed to implement or enforce the policies regarding markups on municipal securities and interpositioning.

Pietkiewicz was responsible for the management of a branch office and was involved in the management, direction or

supervision of the firm’s underwriting of municipal securities deals, although he did not pass the municipal securities principal qualification examination until a later date and was
not properly registered or qualified to act in that capacity.

The suspension is in effect from January 22, 2013, through March 7, 2013. 

EFG Capital International Corp. -Miami, Florida was censured and fined $12,500.
The firm consented to the described sanctions and to the entry of findings that it failed to report S1 transactions in TRACE-eligible corporate debt securities transactions to TRACE within 15 minutes of the execution time.

The firm also failed to report P1 transactions in TRACE-eligible securities to TRACE within T+1 of the execution time.

E.S. Financial Services, Inc. -Miami, Florida) was censured and fined $200,000.

The firm consented to the described sanctions and to the entry of findings that it served as a placement agent and solicited certain non-U.S. persons to invest in a commercial paper program offered by a firm affiliate located outside the United States. The commercial paper program was offered and sold exclusively to non-U.S. persons pursuant to Regulation S. At certain times, in connection with the firm’s sales of the investments, the firm provided a customized document to each of the customers and/or prospective customers, in which the firm included the program in the cash component of the customer’s portfolio alongside U.S. Treasuries and other commercial paper products; placed the program within investment options described as conservative; and that the main objective of investing in this category was to reduce global risk as well as to generate some income.

The findings stated that the firm recommended investing
in the program over U.S. Treasuries or other commercial paper if the customer wanted a higher-yielding option. Contrary to the contents of the investment proposals, the program was not a cash component, nor was it necessarily a conservative, low-risk investment.

These representations amounted to false, exaggerated or unwarranted statements in these materials. The findings also stated that the firm posted an information memorandum on a
password-protected website accessible to customers; the memorandum did not adequately detail certain risks associated with investing in the program. The firm failed to conduct adequate due diligence relating to its sales of the commercial paper program, and failed to adopt, maintain and enforce adequate WSPs pertaining to its sale of the investments until nearly four years after it began selling the investments. The findings also included that the
firm failed to adopt, maintain and enforce written due diligence procedures tailored to its sale of the investments. Although all of the investments were repaid on a timely basis at maturity and no customer lost money, the firm’s failure to implement written due diligence procedures nevertheless led it to fail to conduct a reasonable investigation concerning
various matter concerning the investments.

Tradewire Securities, LLC -Miami, Florida was censured and fined $125,000. The firm consented to the described sanctions and to the entry of findings that it failed to establish and implement adequate AML procedures and controls, including requiring due diligence to be performed on correspondent accounts for foreign financial institutions, monitoring new rules proposed under Section 311 of the
USA Patriot Act, evidencing its searches of its records as required by Section 314 of the USA Patriot Act, and freezing and prohibiting tra
nsactions by persons suspected of terrorist
activities under Executive Order #13224.

The findings stated that the firm’s AML procedures were inadequate in that it incorrectly identified the firm’s AML compliance officer (AMLCO), incorrectly stated the firm did not maintain customer accounts or maintain accounts for foreign correspondent banks when it did, and incorrectly stated it would not open or maintain private banking accounts or accounts on behalf of senior foreign political figures or public officials when it did.

FINRA found that the firm failed to develop and implement a written AML compliance program that was reasonably designed to achieve compliance with the BSA, regulations
promulgated thereunder, and applicable FINRA and NASD rules. FINRA also found that the firm failed to establish an adequate system of supervisory control procedures.
management, and certify its compliance and supervisory processes. The firm assigned two general securities representatives to review the firm’s email but they were not
registered firm principals, so the firm failed to comply with FINRA/NASD rules regarding review of correspondence by a registered firm principal. Moreover, FINRA found that the
firm failed to conduct annual inspections of one OSJ for three years and failed to conduct annual inspections of another OSJ for two years.

Joseph Edward Conti -was barred from association with any FINRA member in any principal capacity and suspended from association with any FINRA member in any capacity for three months. In light of Conti’s financial status, no monetary sanctions have been imposed.

Conti consented to the  described sanctions and to the entry of findings that he negligently and repeatedly made false oral and written representations to FINRA that an individual was his member firm’s financial and operations principal (FINOP) when he was not acting in that capacity. The findings stated that Conti’s firm did not have a FINOP and no one performed the functionsusually performed by a FINOP. The findings also stated that by negligently and repeatedly providing false information to FINRA, Conti impeded FINRA’s examination. FINRA records indicate that Conti was last registered with Forge Financial.
The suspension is in effect from December 17, 2012, through March 16, 2013.

Donald Richard Dahn -Palm City, Florida-was suspended from association with any FINRA member in any capacity for six months. In light of Dahn’s financial status, no monetary sanction was imposed.

Dahn consented to the described sanction and to the entry of findings that he borrowed a total of $240,900 in business loans from customers, for operating expenses for a company Dahn and his brother ran, and failed to disclose the loans to his member firm.

Dahn co-signed promissory notes executed on behalf of the customers. The firm’s written supervisory procedures prohibited borrowing money from customers. Dahn failed to repay the loans to the customers, which his firm ultimately reimbursed.

FINRA records indicate Dahn was last registered with LPL Financial.
The suspension is in effect from December 17, 2012, through June 16, 2013.

Stephen Chrismore Hamblin Geneva, Florida- was fined $15,000 and suspended from association with any FINRA member in any capacity for five months.

Hamblin consented to the described sanctions
and to the entry of findings that while working as a banking associate at a bank that was affiliated with his member firm, Hamblin received a watch valued at approximately $2,000 as a gift from a bank client, which violated the bank’s policies.

Hamblin’s firm acquired another member firm and while registered with the acquired firm, Hamblin was interviewed by federal investigators in connection with a criminal investigation of three bank clients. During the interview, Hamblin stated that one of the bank’s clients being investigated bought a watch for him, and claimed that he
subsequently reimbursed the client for the watch. In fact, Hamblin had not reimbursed the bank client. The findings also stated that thereafter, Hamblin sent an email to the bank
investigator and a manager of the acquired firm, in which he repeated his false claim that he purchased the watch and attached a receipt for a bond that he claimed evidenced that
he purchased the watch. The receipt for the bond disclosed that one of the bank clients purchased the bond during the same time Hamblin had received the watch. The findings
also included that later, Hamblin met with counsel the firm hired in connection with its ongoing investigation. Hamblin again denied that the watch was a gift, and claimed that he paid $2,000 to a friend—but not one of the bank clients—who had purchased the watch online. Each of Hamblin’s statements that he purchased the watch was false.

FINRA records indicate Hamblin was last registered with JW Cole Financial

The suspension is in effect from January 22, 2013, through June 21, 2013.

Edward Daniel Hochard -Palm Bay, Florida-was fined $15,000 and suspended from association with any FINRA member in any capacity for six months.

Hochard consented to the described sanctions and to the entry of findings that he personally purchased 1,000 shares of a private company’s common stock for the total amount of $10,000, directly from the company in a private offering, when he did not provide prior written notice to his member firm of his intent to participate in the purchase of the company’s common stock in a private transaction, nor did he receive the firm’s approval to purchase the common stock.

Hochard opened and maintained a Roth independent retirement account (IRA) with another FINRA member
firm without providing notice to the FINRA member firm that he was employed by another FINRA member firm. Hochard further failed to disclose to his firm that he had opened a
securities account with another FINRA member firm. When Hochard completed the new account form to open the account he falsely answered “no” to the question regarding NASD
affiliation. The findings also stated that on separate occasions, Hochard completed annual attestations and representations reports and, on each occasion, he submitted the report to
his firm in which he made false and inaccurate representations for the question concerning the opening of an outside brokerage account for which the firm had not been notified.

According to FINRA he was last registered with PFS Investments.

The suspension is in effect from January 7, 2013, through July 6, 2013.

Kelly Quinn Patrick – Clearwater, Florida was suspended from association with any FINRA member in any capacity for 30 days. In light of Patrick’s financial status, no monetary sanction has been imposed.

Patrick consented to the described sanction and to the entry of findings that he engaged in an outside business activity after his member firm denied his request to engage in such activity. The findings stated that Patrick requested approval to work as chief operating officer for his friend’s newly-founded business, an online securities information resource, which was also attempting to launch a hedge fund. The firm denied Patrick’s request, noting that the activity would be impossible to supervise and might constitute working for a competitor. The findings also stated that after his request was denied, Patrick engaged in activities related to the outside business. Patrick attended meetings with potential investors on the outside business’ behalf. During these meetings, Patrick held
himself out as an officer of the outside business. Patrick also provided editing assistance, research and news updates to the outside business.

FINRA reports that he was last registered with Fidelity Brokerage Services, LLC.

The suspension was in effect from January 7, 2013, through February 5, 2013.

Richard Alan Seligson -Boca Raton, Florida- was fined
$10,000, suspended from association with any FINRA member in any capacity for one year and ordered to pay $41,100, plus interest, in restitution to customers.

Seligson consented to the described sanctions and to the entry of findings that he borrowed $45,000 from close friends and relatives, all of whom were his firm’s customers. The findings stated that Seligson has repaid only $3,900 of the amount owed. Seligson did not seek to obtain his firm’s written approval to obtain loans from any of the customers.
Seligson completed compliance questionnaires in which he was asked if he had entered into loans with customers. On each questionnaire, Seligson falsely answered that he had
not taken such loans. The findings also stated that the firm’s WSPs generally prohibited representatives from taking loans from their customers, except under extremely rare and
extenuating circumstances. Under the firm’s procedures, these circumstances could include borrowing or lending arrangements with clients who were family members. The firm’s WSPs explicitly stated that requests to enter into borrowing or lending arrangements with family members had to be submitted for review and approval before engaging in lending activity.

Seligson was last registered with National Securities Corporation according to FINRA records.

The suspension is in effect from December 17, 2012, through December 16, 2013.

Delaney Equity Group,
LLC -Palm Beach Gardens, Florida and David Cameron Delaney West Palm Beach, Florida named respondents in a FINRA complaint alleging that the firm, acting through Delaney, its president/CCO/AMLCO, failed to conduct adequate due diligence to determine whether
they were participating in a scheme to evade the registration requirements of Section 5 of the Securities Act of 1933 by selling shares of low-priced equity securities that were
unregistered and non-exempt. A firm customer had obtained almost $2.4 million through the sale of these securities, which ceased only when the firm’s clearing firm restricted
the customer’s accounts. The complaint alleges that the firm, acting through Delaney, relied on opinion letters by one counsel representing all of the issuers, who was later
found to have issued inaccurate correspondence to the OTC markets and failed to note the contradiction in the customer’s actions and representations. The firm, acting through
Delaney, sold almost a billion shares of common stock on the customer’s behalf that were not registered with the SEC, and no exemption from registration applied to such sales. The
complaint also alleges that the firm, acting through Delaney, failed to establish, maintain and enforce adequate policies and procedures, including WSPs, reasonably designed to
ensure compliance with Section 5 of the Securities Act to prevent the sale of unregistered securities not exempt from registration. The firm, acting through Delaney, failed to develop and implement AML policies, procedures and internal controls reasonably designed to achieve compliance with the BSA and implementing regulations. The complaint further alleges that the AML procedures failed to address the detection, monitoring, analyzing, investigating and reporting of suspicious activity in the context of its securities liquidation business. The firm and Delaney should have detected the suspicious nature of a customer’s liquidation of low-priced securities, investigated the activity and made suspicious activity report (SAR) filings as necessary but instead, permitted the customer’s suspicious trading
activity to occur and failed to report any activities through a SAR as necessary. In addition, the complaint alleges that the firm, acting through Delaney, either failed to identify or
ignored red flags involving numerous instances of potentially suspicious activities, and thus failed to sufficiently investigate and, if necessary, report these activities in accordance
with its WSPs, the requirements of the BSA, and implementing regulations. Moreover, the complaint alleges that when the firm became a FINRA member firm, it agreed, as part of its membership agreement, that a registered representative would be subjected to heightened supervision.

If you have suffered losses in your brokerage account due to negligent advice or fraud, you may be able to recover all or a part of those losses through FINRA arbitration. Most of our cases are done on a contingent fee basis, meaning you only pay fees if you recover.

Nationwide representation.
Free consultation.

Rex Securities Law
561 391 1900

Update on John Thomas Financial/Tommy Belesis

Following up on our recent post regarding the investigation of John Thomas Financial and its CEO Tommy Belesis for stock manipulation,  Belesis  was recently served with a Wells Notice.

FINRA’s BrokerCheck website indicates that on January 11, 2013 he was served a Wells Notice from FINRA stating that he:

 “willfully or recklessly sold a substantial portion of a firm
proprietary position while failing to execute customer orders to sell
shares of the same stock, at prices that would have satisfied the
unexecuted orders,”  and that he “failed
to follow instructions by the customers to sell the shares.”

A Wells Notice is a letter sent by regulators to people or  firms when it is planning on bringing an enforcement action. If you would like to review the profile of Belesis or John Thomas Financial on FINRA’s website, see here for more information.

We have been helping investors nationwide recover stock market losses for 25 years.

Free consultation.

Rex Securities Law

561 391 1900

Thinking of Pursuing Claim for REIT or TIC Losses? Waiting May Be a Bad Idea.

Purchase a REIT or a TIC ?

If you purchased a non traded real estate investment trust (REIT) or a tenant in common (TIC) investment that has dropped in value, ceased distributions or otherwise performed in a manner that differs from the sales pitch that convinced you to buy  it in the first place, and have been putting off taking action to recover your losses, you would be wise to reconsider further delay.

Many investors we have spoken to were unaware of these important factors prior to making their purchases of a non-traded REIT or TIC investment:

  • Distributions are not certain. For many of these investments distributions have ceased
  • The investments are illiquid and are difficult or impossible to sell. Company buybacks have ceased for many.
  • The commissions paid at the time of purchase may have been as high as 7-12%.


FINRA Rule May Prohibit Your Claim if You Wait Too Long

The Financial Industry Regulatory Authority (FINRA) has what is known as the eligibility rule (Rule 12206) which provides that no claim shall be eligible for submission to arbitration where six years have elapsed from the occurrence or event giving rise to the claim.

While the ultimate determination of whether this rule is to be applied and if so as of what date it is to be run from is the decision of each arbitration panel, in most cases the date of purchase, not the date of discovery that your claim exists, is the day when the six years starts running.

Today is February 13, 2013. Six years ago is February 13, 2007. When did you make your purchase?

While there are factual situations and arguments which may convince an arbitration panel to hear claims on purchases prior to the 2007 date, investors with actionable losses would be wise to act before the six year time period has run.

Did You Qualify for Purchase of The Investment Initially?

Most TICs and non traded REITs are not registered with the SEC and are sold under the SEC’s Regulation D (private placements). According to those rules investors must meet certain criteria in order to invest in these private placement offerings. In general, those rules require that the investor have at least $1 million net worth (exclusive of primary residence) and income exceeding $200,000 in each of the two preceding years.

We have seen a number of cases where the investor did not meet this SEC criteria but the suitability documents were falsely completed by the selling broker.

Did you qualify for purchase?

Popular NonTraded REITs and TIC Investments


Partial list of popular REITs
Behringer Harvard
CNL Lifestyle
Cornerstone
Dividend Capital
Hines
Inland American
Inland Western
KBS
Wells
Wells Timberland

Partial List-Popular Tenant In Common Investments(TICs)
American Investment Exchange
Argus Realty
BNI Equities, Notes, TICs
Cabot
Canyon Creek Financial
Cottonwood
Core Tenancy
Covington
DBSI
Eliason
Evergreen Realty Group
First Guardian Group
FOR 1031
Gemini
Grubb & Ellis
Medical Capital Holdings
Moodys
Provident Asset Management
Provident Royalties
Ridgewood Energy (oil & gas TIC)
Striker Petroleum (oil & gas TIC)
Tax Strategies
Triple Net Properties (NNN)
TSG
US Advisors

We are a securities fraud, stock market loss recovery law firm located in Boca Raton, FL and have been helping investors nationwide recover investment losses.

Free consultation

Rex Securities Law

561 391 1900

Sun Life Annuities Can Be A Problem for Investors

Especially if the annuities subaccounts are investing in hedge funds.


FINRA recently investigated the following  firms in connection with  variable annuities( Foresee Strategies Insurance Funds and Sala Multi Series Fund) issued by Sun Life Financial, Inc. that contained sub-accounts with hedge fund investments:

  • Geneos Wealth Management
  • Lincoln Financial Network
  • National Planning Corp.
  • SagePoint Financial, Inc.
  • FSC Securities 

The strategy of the subaccount manager was to invest in options in the S&P 500, using both put and call options. This strategy is known as a strangle and counts on the hope that the market doesn’t move very hard up or down. In a period of high volatility, as happened in Septmeber 2008, this strategy does not work. In this case the subject annuities were nearly wiped out completely. 

There are lots and lots of annuities out there and investors need to be very wary when purchasing one. Variable annuities tend to be riskier because they are dependent upon the ups and downs of the stock market. Principal is not generally guaranteed in variable annuities so when the markets go down, the variable annuity will lose money. This may not be suitable for those on fixed incomes who are dependent upon their nest egg to survive and who cannot afford to lose capital.

If you have questions about your stock brokerage account, please give us a call. We have been helping investors recover stock market losses for 25 years.

Nationwide representation

Free consultation.

Rex Securities Law

561 391 1900