Category Archives: Charles Schwab

Texas State Securities Board Fines Charles Schwab & Co. $95,000

 

September 2016- Austin, Texas

Charles Schwab & Co. entered into a Consent Order with the Texas State Securities Board (TSSB) and agreed to pay an administrative fine of $95,000 as well as a contribution of $30,000 to be used for education efforts in Texas to the Investors Education Fund of the Investor Protection Trust.

In the Consent Order, TSSB concluded that Charles Schwab & Co. failed to maintain and establish a supervisory system reasonably designed to achieve compliance with the Texas securities laws, in violation of TSSB rules and regulations.

The order followed an investigation by the staff of the State Securities Board into Schwab’s procedures for monitoring the registration status of persons authorized by clients as a limited power of attorney or full power of attorney (POA). Staff investigated Schwab’s procedures from January 2010 to January 2016.

Schwab requires persons authorized as a limited or full POA to state whether they are receiving compensation for any investment advice rendered to clients. Receiving compensation for advisory services may require registration under state and federal law unless the person with a POA is covered by an exemption from registration.

According to the order, Schwab identified certain persons who had power of attorney authorizations in Texas and who appeared to be rendering investment advice for compensation, but were not registered and did not qualify for an exemption from registration.

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

Jeffrey Grove-Former Charles Schwab Broker-Discloses Felony Charges & Termination

Melbourne, Florida

The FINRA records of Jeffrey B. Grove ,  a  former Charles Schwab stock broker who was permanently barred from acting as a broker or otherwise associating with firms that sell securities disclose  a final regulatory event, a pending criminal matter, a prior criminal matter and a termination from employment.

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.

In 11/2014 FINRA barred Grove from the securities industry after Grove consented to sanctions an entry of findings that he converted the proceeds of office equipment sales, totaling about $1 million, for his own use. FINRA Case 2014042497701.

Grove discloses that adjudication was withheld and he was placed on probation for 18 months and served 50 hours of community service and 12 weeks of drug classes in 1999 to resolve criminal charges for possession of more than 20 grams of cannabis.

Grove discloses that In 8/2014 he was charged with two felonies: 1-Unlawful use of a two way communication device to commit a crime and 2-Conspiracy to traffic in oxycodone.

In 8/2014, Grove was discharged by Charles Schwab & Co. who made the following allegations: “Allegations regarding Mr. Grove’s purchases of unauthorized office equipment through the firm’s office supply channels.”

Grove was employed by Schwab from 7/1999-9/2014.

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

Jeffrey Grove, Melbourne, FL Schwab Broker Charged With Drug Trafficking

UPDATE-Melbourne, FL-Jeffrey Grove charged with felonies and discharged by Schwab. See this for more details. 

December 8, 2014-Melbourne, FL

The Orlando Sentinel reports that Jeffrey Grove was arrested  along with 17 other central Florida individuals, who are charged with trafficking in oxycodone, hydrocodone and hydromorphone.

In November, Grove, formerly a broker with Charles Schwab & Co. was barred from the securities industry after allegations that he stole $1 million worth of office equipment which he sold and converted the proceeds to his personal use.

If you had an account with Grove that suffered losses, contact us 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

Jeffrey B. Grove of Melbourne, FL, Barred From Securities Industry

UPDATE December 8, 2014Orlando Sentinel reports Jeffrey Grove charged with drug trafficking. 

November 17, 2014- Melbourne, Florida- Jeffrey Brian Grove, formerly a broker with Charles Schwab & Co. was barred from the securities industry by the Financial Industry Regulatory Authority (FINRA) to resolve allegations that between February and August 2014, he utilized the firm’s procurement system to purchase office equipment for his branch office which he then sold and converted the $1 million in proceeds to his personal use.

FINRA records indicate that Grove was discharged from Schwab on 8/29/2014, and on that same day was charged with two felonies in Orange County, FL:

1-unlawful use of a two way communication device to commit a crime and

2- conspiracy to traffic in oxycodone.

If you had an account with Grove that suffered losses, contact us to learn how you may be able to recover damages through FINRA arbitration.

Rex Securities Law , located in Boca Raton, FL, provides nationwide representation to investors 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 December 2012 Disciplinary Actions

FINRA Announces December 2012 Disciplinary Actions

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 December 2012. Follow this link to the FINRA website for the entire report for actions nationwide for the month of December 2012 as well as to access  earlier time periods.

Falcon Research, Inc. Clearwater, Florida submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $10,000. The firm consented to the described sanctions and to the entry of findings that it permitted a person registered solely as a general securities principal to prepare, author and approve a research report that the firm issued. The findings stated that the report contained a rating but failed to define the meaning of each rating used in its rating system. The report failed to disclose the percentage of all securities the firm rated, to which the firm would assign a buy, hold/neutral or sell rating, or to disclose the percentage
of subject companies within each of these three categories for whom the firm had provided investment-banking services within the previous 12 months. The report referred to
important disclosures that are located at the end of the document, however, the disclosure was not prominent. The findings also stated that the report failed to contain research
analyst certifications required by SEC Regulation AC and found various other regulatory issues.

Statetrust Investments Inc. – Miami, Florida, submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $20,000. The firm consented to the described sanctions and to the entry of findings that it failed to report transactions in TRACE-eligible securities to TRACE within 15 minutes of the execution time, failed to report the correct trade execution time for transactions in TRACE-eligible securities to TRACE, and failed to report the correct contra-party’s identifier for transactions on TRACE-eligible securities to TRACE.

Shari Robin Frimer Eastport, New York and Thomas Joseph Heaphy Jr. of , Boynton Beach, Florida submitted an Offer of Settlement in which Frimer was fined $32,407.50, which includes disgorgement of financial benefits of $17,407.50, and suspended from association with any FINRA member in any capacity for seven months. The amount of the fine has been reduced to reflect Frimer’s payment of a $20,000 fine to the State of Florida Office of Financial Regulation. Heaphy was fined $40,827.50, which includes disgorgement of financial benefits of $30,827.50, and suspended from association with any FINRA member in any capacity for nine months.

Frimer and Heaphy consented to the described sanctions and to the entry of findings that they participated in private securities offerings by selling securities offerings to customers and receiving selling compensation for their sales. The findings stated that prior to participating in the private securities transactions, Frimer and Heaphy did not provide written notice to their member firm and did not receive the requisite approval from their firm to participate in the transactions.  The findings also stated that Frimer guaranteed, in writing, to a customer that he would be able to sell shares of a stock within a certain time period for his cost to acquire them. The findings also included that Frimer sent, or caused to be sent, marketing newsletters regarding a company to firm customers, without requesting or receiving the firm’s approval to disseminate the newsletters. The newsletters were not fair and balanced, failed to provide a sound basis for evaluating the facts in regard to the company, and contained exaggerated, unwarranted, and misleading claims and unreasonable and unwarranted forecasts. FINRA found that Heaphy willfully failed to timely amend his Form U4 to disclose a material fact, a lien placed on his property for unpaid taxes, and willfully failed to disclose the material fact on the Form U4 that a member firm filed for him. Frimer’s suspension is in effect from November 5, 2012, through June 4, 2013. Heaphy’s suspension is in effect from November 5, 2012, through August 4, 2013.

According to FINRA records Shari Frimer is not currently registered. She last worked for Emmet A Larkin Co. and prior to that for Scottsdale Capital Advisors. Likewise, Heaphy is not currently registerd having last worked for Forge Financial Group and prior to that Scottsdale Capital Advisors.

Michael Wayne Hendrick – Indialantic, Florida submitted a Letter of Acceptance, Waiver and Consent in which he was fined $5,000 and suspended from association with any FINRA member in any capacity for 20 business days. Hendrick consented to the described sanctions and to the entry of
findings that he effected trades in his customer’s account at the direction of the customer’s spouse. The findings stated that the firm did not accept the account as discretionary,
and the customer did not give Hendrick written authority to exercise discretion over the account. In addition, the customer’s spouse did not have written authority to direct
trading in the customer’s account. The findings also stated that on that same day, Hendrick mismarked order tickets in securities as unsolicited when the trades were actually solicited, thus causing the firm’s books and records to be inaccurate concerning these trades.

The suspension was in effect from October 15, 2012, through November 9, 2012. According to FINRA records Hendrick last worked for Charles Schwab and is not currently registered.

William Edward Hesse -Freeport, Florida submitted
a Letter of Acceptance, Waiver and Consent in which he was suspended from association with any FINRA member in any capacity for three months. In light of Hesse’s financial
status, no monetary sanction has been imposed. Hesse consented to the described sanction and to the entry of findings that he failed to reasonably supervise an individual and failed to reasonably review trades and wire transactions directed by a client of the individual for potentially suspicious activity and other irregularities. The finding stated that despite several red flags, Hesse did not identify an
y of the activity in the accounts the client controlled to be suspicious or irregular,
and failed to take any supervisory action to prevent the client from engaging in a cherrypicking scheme. The client had the ability to reallocate trades among the accounts that he controlled.

The suspension is in effect from October 15, 2012, through January 14, 2013.

FINRA records indicate that Hesse is not currently registered and last worked for Wm. H. Murphy & Co.

Thomas Homer Morrow II – Jupiter, Florida was barred
from association with any FINRA member in any capacity. The sanction was based on
findings that Morrow failed to register with FINRA despite functioning as a representative
for a member firm. The findings stated that Morrow traded in the firm’s proprietary account on the firm’s behalf, sharing in the profits from his trading and causing the firm’s capital requirement to increase from $5,000 to $100,000. The findings also stated that Morrow created and maintained the trading blotters for the firm’s proprietary trading account. The findings also included that although Morrow conducted trading without oversight from the firm, his activities were controlled by the firm and was therefore, an associated person of the firm. FINRA found that Morrow failed to appear and testify at a FINRA on-the-record interview.

Morrow is not currently registered.

Alissa Marie Ponzurick fka Alissa Marie Youngblood
Palm Beach Gardens, Florida submitted a Letter of Acceptance, Waiver and Consent in which she was fined $5,000 and suspended from association with any FINRA member in any capacity for three months. Ponzurick consented to the described sanctions and to the entry of findings that after a co-worker advised her that they had earned a $200 bonus, but without confirming from her team leader how she could collect the bonus, Ponzurick submitted a reimbursement form to her member firm claiming approximately $200 in mileage expenses based on the purported use of her personal car for business travel. The findings stated that Ponzurick had not actually incurred such expenses.

The suspension is in effect from November 5, 2012, through February 4, 2013.

Riad Shanawany -Tamarac, Florida submitted a Letter of Acceptance, Waiver and Consent in which he was fined $7,500 and suspended from association with any FINRA member in any capacity for 45 days. Shanawany consented to the described sanctions and to the entry of findings that he engaged in an outside business activity by participating in a limited liability company involved in start-up efforts for reconstruction and modernization of the Port-au-Prince airport in Haiti, and received a membership interest in the company for his participation, without providing his member firm with adequate notice of the outside business activity and membership interest.

The suspension is in effect from November 5, 2012, through December 19, 2012. Shanawany currently works for J.W. Cole Financial. He previously was registered with Ameriprise Financial Services according to FINRA records.

William Mitchell Tillett
-Delray Beach, Florida
submitted a Letter of Acceptance, Waiver and Consent in which he was fined $5,000 and suspended from association with any FINRA member in any capacity for six months. Tillett consented to the described sanctions and to the entry of findings that
he willfully failed to timely disclose material information to his member firm and FINRA. The findings stated that Tillett failed to disclose that he had been charged with the felony
offense of criminal trespassing and the misdemeanor offenses of theft by unlawful taking and theft of services. The findings also stated that Tillett failed to timely file amended Forms U4 to report that the felony trespassing charge was reduced to a non-reportable summary offense for trespassing.

The suspension is in effect from October 15, 2012, through April 14, 2013.

Clyde Marshall Thornburg
-Riverview, Florida submitted an Offer of Settlement in which he was barred from association with any FINRA member in any capacity. Thornburg
consented to the described sanction and to the entry of findings that he engaged in a pattern of unsuitable short-term trading and switching of unit investment trusts (UITs), corporate debt, and mutual funds in customer accounts without having reasonable grounds for believing that such recommendations were suitable in view of the size and
frequency of the recommended transactions, and in light of each customer’s investment objectives, circumstances, financial situations and needs. The findings stated that
Thornburg’s actions caused these customers to pay approximately $332,231 in unnecessary sales charges, and the accounts had cumulative losses of approximately $983,152.
Thornburg generated gross commissions of approximately $301,389 for his firm, of which he received a significant portion based on his member firm’s percentage payout structure.

The findings also stated that at the time some of the customers opened their accounts, Thornburg informed them that they would not pay costs for trading products such as UITs and other securities; these customers paid sales charges, commissions, front-end loads and other costs when they believed they were not paying such costs. Thornburg misled some customers by omitting information about the actual charges they were paying and by misrepresenting products as not having any costs when in fact they did have a charge. The
findings also included that Thornburg exercised discretion in each of the accounts without prior written authorization.
FINRA found that Thornburg forged, or caused to be forged, the names of some customers or their representatives on mutual fund disclosure forms, causing his firm to maintain
inaccurate books and records. FINRA also found that Thornburg provided false information about the customers’ income, liquid net worth, risk tolerance and investment objectives.

FINRA records indicate that Thornburg is no longer registered having last worked for International Financial Solutions.

Enrique Vila -Key Biscayne, Florida submitted
a Letter of Acceptance, Waiver and Consent in which he was fined $5,000 and suspended from association with any FINRA member in any capacity for 15 business days.  Vila consented to the described sanctions and to the entry of findings that he exercised discretion in a customer’s account and executed
numerous trades in the account. T
he findings stated that although the customer authorized the use of discretion with respect to his account, Vila did not obtain the customer’s written authorization and his member firm’s acceptance of the account as discretionary.

The suspension was in effect from November 5, 2012, through November 26, 2012.

FINRA reports that Vila currently works for Morgan Stanley and previously was registered with Merrill Lynch.

If you have questions about
losses or other activity in your brokerage account, please do not
hesitate to contact us. We have been helping investors recover stock
market losses for more than 20 years. 

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