Category Archives: FInancial Exploitation of the Elderly

San Antonio Based Investment Professionals Inc. Sanctioned for Unsuitable Advice

October 2017-San Antonio, Texas

San Antonio, Texas, based stock brokerage firm Investment Professionals, Inc.  (IPI)  recently was ordered by William F. Galvin of the Massachusetts Securities Division to pay a $100,000 fine and offer restitution to four senior clients who were allegedly sold unsuitable investment products from offices on the premises of local financial institutions.

In addition the settlement order requires IPI to retain an independent compliance consultant to review the firm’s policies governing supervision of their Massachusetts-registered financial consultants and the sales of securities to persons over 65.

In November 2016, Massachusetts regulators charged IPI with using high pressure sales contests and selling unsuitable investment products to senior citizens who were depositors at community banks.

“This case highlights the dangers of aggressive sales culture that leaves older customers exposed to pressure to buy unsuitable investments,” Secretary Galvin said. “This is especially true when the broker dealer is operating out of a community bank.”

Link to the Massachusetts Securities Division/ Investment Professionals Consent Order. 

In February 2017, without admitting or denying, Investment Professionals agreed to pay FINRA $125,000 and to the entry of findings that from 10/2011-10/2013 it executed 167 non-bona fide municipal transactions without a change of beneficial ownership and that the execution of seven of the transactions were pre -arranged. FINRA also found that IPI did not have written supervisory procedures applicable to trading in limited partnership accounts. FINRA Case 20120313632.

Investment Professionals, Inc., has been a FINRA member since 1992 and operates over 300 branch offices and over 360 employees nationwide.

FINRA records disclose that Investment Professionals, Inc. has 15 prior final regulatory events.

If you have questions about an account handled by Investment Professionals, Inc. call to learn 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

Andrew “Todd” Yocum Investigation Continues-The VIllages, FL

The Villages Florida

UPDATE OCTOBER 2017FINRA records disclose that Andrew “Todd” Yocum has two prior final regulatory matters resulting in his bar from the industry. There are 10 currently pending customer disputes and 23 prior customer disputes that are final.

In the bulk of the customer disputes, the customers allege an overconcentration of oil and gas related securities.

Here is a sampling of some of the 23 prior cases that have been settled:

  • In 2/2017 a customer of Morgan Stanley was paid $67,500 to resolve allegations that Yocum made unsuitable recommendations in the energy sector 2014-1015.
  • In 8/2017 a Morgan Stanley customer was paid $75,000 to resolve allegations that Yocum over-concentrated their portfolio with unsuitable investments. FINRA Case 17-0049.
  • IN 8/2016 a customer of Morgan Stanley was paid $35,975 to resolve allegations that from March 2012-September 2015 Yocum made unsuitable recommendations.

FINRA Alleges Yocum Recommended Unsuitable Energy Investments to Seniors

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. Customers of broker dealers who have a dispute, such as a claim for account losses , are entitled to file an arbitration proceeding against the firm and/or the broker to recover damages. FINRA entered a permanent bar against Yocum in May 2016 after he refused to appear for FINRA on-the-record testimony in connection with an investigation into whether he effected unauthorized transactions, exercised discretion without written authorization, and recommended unsuitable concentrated purchases of energy sector securities to senior investors.

Florida Securities Regulators Find That Yocum Executed Unauthorized Trades

In 3/2017 the Florida Office of Financial Regulation filed an Administrative Complaint alleging violations of standards of commercial honor and principles of trade; suitability; and placing trades in client accounts without authorization. Yocum was barred from the securities industry by FINRA in May 2017.

The Florida regulators found that Yocum executed trades that were not authorized, made trade recommendations that were not suitable, and failed to execute trades by the end of the day on the date the client requested. Yocum was ordered to cease and desist and be permanently barred from submitting an application for license or registration under Florida Chapter 517.

 

Andrew Yocum was employed by Morgan Stanley and worked in their office located at 832 Lake Sumter Landing, The Villages, Florida, until he was discharged in October 2015 for “Allegations concerning acting on verbal discretion” according to FINRA records.

We continue to evaluate potential cases for former clients of Todd Yocum. Call to discuss your options for recovery. Cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Dion R. Padilla Investigation Update-Former NEXT Financial Group Broker-San Antonio, TX

OCTOBER 2017 -San Antonio, Texas

We continue our investigation of former NEXT Financial Group broker Dion Padilla who discloses that several of his customers have brought claims against his former employer for misrepresentations and losses related to the purchase of annuities. In early 2017 Padilla was sanctioned and suspended by securities regulators to resolve allegations that he made an unauthorized purchase of an annuity and hid that fact from the customer. Details below.

JUNE 2017 UPDATE-In May 2017 a customer of NEXT Financial Group filed FINRA Case #17-2402 alleging that in 2007 he purchased a variable annuity and relied on Padilla’s representations that he had a product that guaranteed a monthly distribution for the remainder of his life, however no guaranteed income rider was included with the annuity purchase. The customer seeks damages of $465,500.

MAY 2017 UPDATE– A customer of NEXT Financial Group made a claim seeking damages of $970,578 , alleging that Dion Padilla misrepresented the monthly distributions, benefits and dividends to be received on a variable annuity. In May 2017 2017, NEXT Financial disclosed that the claim was denied and that it is not currently pending.

FEBRUARY 2017

We are investigating Dion R. Padilla, a stockbroker who was formerly employed by  NEXT Financial Group in San Antonio, Texas, on behalf of a former employee of AT&T who alleges that her AT&T retirement account was mishandled.

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.

Padilla discloses two prior customer disputes that were resolved with cash settlements:

  • In FINRA arbitration 16-2163, a customer of NEXT Financial Group alleged damages of $347,000 in connection with an investment in a variable annuity. That case was settled for $175,000.
  • In February 2014, a customer of NEXT FInancial Group alleged damages of $62,617 for the unauthorized purchase of a variable annuity. That case was settled for $69,400 of which Padilla contributed $54,400 to the settlement.

Recently, in February 2017, Padilla entered into an Order Accepting Offer of Settlement with the Financial Industry Regulatory Authority (FINRA) and was fined $10,000 and suspended for 15 months from association with any FINRA member in all capacities. Disciplinary Proceeding 2014040362001. 

REGULATORY ACTION FOR SALE OF ANNUITY TO AT&T EMPLOYEE

Without admitting or denying the allegations, Padilla agreed to the entry of certain findings and violations and to the entry of the sanctions described above. The findings and conclusions made by FINRA include:

  • Prior to transferring their accounts to NEXT Financial, a customer (who had worked for AT&T for 39 years) and his wife met with Padilla and stressed  that they did not want any of their funds invested in a variable annuity due to the high fees and because of their desire for liquidity.
  • Notwithstanding those desires, Padilla made unauthorized purchases of a variable annuity for the customer, investing over $789,000, the customer’s entire 401K rollover, in a variable annuity. Thereafter, when the customer inquired, Padilla misrepresented to the customer that the investment was not a variable annuity.

If you have information which you believe is helpful to our investigation, please contact us. If you have losses in an account handled by Dion Padilla , call to discuss how you may be able to recover damages from his prior employer.

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

Study by Regulators Confirms That Elderly Are Most Vulnerable to Financial Abuse/Fraud

August 2017

The North American Securities Administrators Association (NASAA) recently released a study showing that financial fraud on the elderly has increased, despite increased awareness and regulatory attempts to protect senior citizens.

Key findings in the study, which can be accessed here, are:

  • Most cases are undetected until it is too late.
  • Awareness is increasing, but fraud is not decreasing.
  • The industry is not doing enough proactively to protect its senior citizen customers.

In a prior survey of more than 60 brokerage firms, it was found that over half (54%) of the firms did not have a formal policy defining senior citizens and less than half (41%) had developed a form for customers to identify an emergency or trusted contact person.

Findings confirm that those ages 70 and older are the most vulnerable to financial fraud.

If you have questions about how your account has been handled or suspect that the account of a senior citizen relative or friend has been abused, call for a no charge consultation with an experienced securities attorney.

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 learn about your options.

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

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

SEC Files Action vs. FL and TN Oil and Gas Deal Scammers

August 2017-Ft. Lauderdale, FL/ Gallatin, TN

The Securities and Exchange Commission charged two men from Tennessee and a man from Florida with allegedly defrauding investors by false promises of high returns from an oil drilling investment.

The SEC Complaint, filed in Savannah, GA, alleges that David R. Greenlee and David A. Stewart, Jr. orchestrated a $15 million scheme through a network of salesmen who raised money from investors who were promised profits of 15-55% per year for decades on wells that would use enhanced recovery techniques to boost production.

Neither Greenlee nor Stewart was registered to sell investments and they routinely used fake names , like “Dave Johnson”, when speaking with investors in order to hide their past criminal records. According to the SEC, only a small fraction of the money raised was actually used as intended.

The SEC alleges that Richard “Ric” Underwood helped draft brochures and oversaw a boiler room sales team of telemarketers in Florida who solicited victims nationwide.

The U.S. Attorneys Office for the Southern District of Georgia has instituted criminal charges in a parallel action.

Companies listed by the SEC as being used in the scam include:

  • Tennstar Energy
  • Black Gold Resources (BRG)
  • Southern Energy Group

Other individuals involved, but not named defendants, per the SEC complaint are Robert Dorrance, 60, of Gallatin, TN, and Jared G. Forrester, 33, of Glasgow, KY.

If you invested in this scheme at the suggestion of a licensed stock broker , you may be able to recover damages from the broker’s employer. Call for details.

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.

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Couple Awarded $550,000 For Losses on Breitburn Energy Investments-St. Louis

September 2017-St. Louis, MO

A FINRA arbitration panel ordered J.J.B. Hilliard, W.L. Lyons to pay a couple $450,000 in compensatory damages, $100,000 in punitive damages and costs of over $18,000. The couple alleged that the firm and broker sold all of their blue chip stocks and invested all of the funds in a highly speculative oil and gas company, Breitburn Energy Partners Limited.

The couple contended that the lack of diversification exposed them to massive risk which was contrary to their conservative investment objectives and risk tolerance. Benitone, et al vs. J.J.B. Hilliard, W.L. Lyons, LLC, FINRA Case 16-01819. 

Stockbrokers have a duty to make recommendations that are suitable in light of your age, health and level of financial sophistication. Brokers are required to make recommendations that comply with your stated investment objectives and risk tolerance.

Many investors have suffered significant losses in oil and gas and other energy related investments over recent years. If you have questions about losses on energy investments, call 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.

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Wedbush Securities Ordered to Pay Customer $1.8M For Elder Abuse-Los Angeles, CA

Los Angeles, CA-July 2017

A Financial Industry Regulatory Authority (FINRA) arbitration panel comprised of three public arbitrators ordered Wedbush Securities to pay two former customers (husband and wife) compensatory damages of $250,000. In addition the arbitration panel, who found that Wedbush subjected the couple to elder abuse,  awarded punitive damages of over $1 million and attorney fees of $277,000 pursuant to the California Elder Abuse and Adult Civil Protective Act, interest and costs.

The former customers alleged a number of causes of action, including unsuitable recommendations, failure to supervise the broker, misrepresentation and elder abuse in connection with investments in long term municipal bonds and structured certificates of deposit. Dancy, et al vs. Wedbush Securities, FINRA Case #16-0847.

FINRA ARBITRATION

Arbitration is similar to going to court, however it is generally less costly and a shorter process than court litigation. Most cases are resolved in about 12-14 months. If you have losses in your brokerage account which you believe are the result of negligent or fraudulent advice given to you by the broker, or if you believe your broker has made trades in your account without your permission (unauthorized trading) call to learn how you may be able to recover damages 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