Category Archives: FINRA

Investigation of NEXT Financial Group RE: Misappropriation of Customer Funds-Houston, TX

February 2018

In connection with a currently pending lawsuit, we are investigating Houston, TX-based broker dealer NEXT Financial Group.

Publicly available records disclose a number of recent complaints by customers of  NEXT Financial  alleging  that their funds have been wrongfully converted by  NEXT Financial Group brokers, including the following:

  • Heidi Wivolin-In February 2018, Heidi Wivolin who was employed in the NEXT Financial Group office in Manalapan, FL, from 2009-2014 pleaded guilty to mail and tax fraud and agreed to pay restitution of over $2.5 million. Sentencing is set for May 2, 2018. See this for details. 
  • Joshua Ray Abernathy-In September 2017, NEXT Financial Group entered into a settlement agreement with Virginia Securities regulators which included a fine of $50,000 and costs of $10,000 for failing to properly supervise their former broker Joshua Abernathy, who had confessed to securities fraud and misappropriation of over $442,000 in customer funds.
  • Tye Williams-September 2016- Frisco, TX-based NEXT Financial Group broker Williams was barred from the securities industry by FINRA in connection with an investigation regarding a customer complaint that he had converted over $1 million from the customer’s account from 2004-2014.  . See this for more details.
  • Eduardo Diaz-Ocean Springs, MS. In June 2016, Diaz, who pleaded guilty to wire fraud,  was sentenced to 70 months, fined $15,000 and ordered to pay restitution of over $640,000 to his victims which include a 70 year old widow.
  • James McGilvrey-San Antonio, TX-Charged with Theft from The Elderly, sentenced to 20 years in state prison, fined $10,000 and ordered to pay over $1.9 million in restitution. See this for more detail.
  • Douglas P. Simanski-Altoona, PA-In June 2016, Simanski, without admitting or denying the findings, consented to a permanent bar from the securities industry and entry of findings that he failed to provide documents and information related to an investigation into allegations related to the conversion of funds. FINRA Case 2016049621301.
  • Gwendolyn M. Berry , of Dallas, TX, was associated with NEXT Financial group from 2009-2015 as a non-registered fingerprint person working as a non-registered assistant and bookkeeper for a Series & General Securities Representative and Series 24 General Securities Principal. After initiating an investigation into Berry regarding possible misappropriation and mismanagement of customer assets, FINRA repeatedly requested that Berry produce documents and information. Berry failed to produce the documents and information and was barred from association with any FINRA regulated broker-dealer in any capacity in April 2016. FINRA AWC No. 2015047059701.  

The official FINRA regulatory records for NEXT Financial Group disclose 19 prior regulatory events including a recent $750,000 fine by FINRA for supervisory failures. See this for details.

If you have information you believe would be helpful to our investigation please contact us. If you have an account with NEXT Financial Group that you believe has been mishandled, 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

 

NEXT Financial Group Fined $750K by Securities Regulator-Houston, Texas

January 2018-Houston, Texas

Houston-based NEXT  Financial Group recently was sanctioned by FINRA for various deficiencies in its supervisory procedures over one of its brokers in FINRA  Letter of Acceptance Waiver and Consent No. 20155043319901. FINRA fined NEXT Financial Group $750,000, issued a censure and required NEXT to hire an Independent Consultant to conduct a comprehensive review of its supervisory system.

Those supervisory deficiencies include:

  • A failure to implement a system reasonably designed to detect excessive trading (“churning”).
  • NEXT’s systemic failures in the supervision of the sales of variable annuities (VA). The sale of variable annuities earned NEXT over $219 million, 27% of its revenues, from July 2012-April 2014.
  • Failures in supervising the preparation and dissemination of consolidated reports from brokers to customers which allowed brokers to manually enter and value assets held away from the firm without providing supporting documentation to show the existence and value of the assets.
  • Misleading information on the company’s website and the omission of material facts relating to compensation received by NEXT from financial partners supplying investment products to NEXT.

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 official records for NEXT Financial Group maintained on the FINRA website disclose that NEXT has been the subject of 19 prior regulatory events.

Several NEXT Financial Group brokers have been accused of converting customer funds in recent years. See this for more detail on NEXT Financial Group brokers alleged to have wrongfully taken funds from customer accounts.

 

Customers of NEXT Financial Group who have questions about how their account has been handled should  contact us to discuss your legal options. If you have suffered losses in your account, 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

Daniel T. Fischer-Former Four Points Capital Partners Broker-Named In SEC Complaint-Melville, NY

January 2018-Melville, New York / Texas

Daniel T. Fischer , a currently unregistered stockbroker who last worked for Four Points Capital Partners, a Texas LLC, (Four Points) was named in a complaint filed by the Securities and Exchange Commission in December 2017, which alleges that Fischer and another Four Points broker, Zachary S. Berkey, recommended a high cost, in and out trading strategy without reasonable basis to believe it was suitable for the customers.

The SEC alleges that Berkey and Fischer:

  •  were reckless in making such a recommendation which was not suitable given the customers’ financial needs, investment objectives and circumstances.
  • made material misrepresentations and omissions to customers

and that Fischer engaged in unauthorized trading.

Link to SEC complaint.

According to the SEC complaint, the ten customers accounts involved suffered losses of $573,867 while Berkey earned $106,000 and Fischer earned $175,000 in commissions.

According to FINRA records Fischer was employed by Four Points Capital Partners from 11.2012-7/2017. Prior to that he was employed by WTS Proprietary Trading Group and before that Dimension Securities.

Fischer discloses a prior regulatory event. In 7/2016 he consented to FINRA sanctions and was fined $5,000 and suspended for 20 business days to resolve allegations that he exercised discretion in customers’ accounts notwithstanding the fact that he did not have written authorization from the customers to place discretionary trades.

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.

If you have questions about  an account handled by Daniel T. Fischer if you have an account with Four Points Capital Partners that you believe has been mishandled , contact us to discuss your legal 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

Joeann Walker-Former LPL Financial Broker-Sanctioned Over Annuity Sales-Brockton, MA

December 2017-Brockton, MA

According to FINRA  records Joeann M. Walker, (CRD# 2210194) ,  a   stockbroker who formerly worked for NEXT Financial Group and LPL FInancial  was barred from the securities industry for failing to cooperate with a regulatory investigation.

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.

According to FINRA Letter of Acceptance Waiver and Consent #2016049354501 , FINRA requested financial records and other documents from Walker in connection with an inquiry into the unsuitable sales of variable annuities to one of Walker’s clients. While Walker did provide some documents to FINRA , and  acknowledged that her response was incomplete, she refused to cooperate fully, resulting in a bar from the securities industry.

In 11/2016 a customer of NEXT Financial Group and LPL Financial alleged unauthorized sales of stocks, unauthorized and unsuitable purchases of variable annuities and unauthorized mutual fund switches. That matter was settled for $175,000, with Walker contributing $50,000 toward the settlement.

 

 

Walker was employed by LPL Financial from 8/2006-4/2015 and by NEXT Financial Group from 4/2015-11/2017.

If you have questions about an account handled by Joeann M. Walker, contact us 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

Terry Lee Brodt Jr.-Garden State Securities Broker-Discloses Customer Complaints-Boise, Idaho

October 2017 – Boise, Idaho

According to publicly available records  Terry Lee Brodt, Jr. (CRD#2033812) , a stockbroker currently registered with Garden State Securities, Inc. , disclose a regulatory event , five prior customer disputes and 10 outstanding judgment/liens.

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 May of 2017 FINRA entered into an agreement with  Terry Lee Brodt, Jr.  resulting in a $10,000 fine and a two month suspension.   According to the agreement,  “Without admitting or denying the findings, Brodt consented to the sanctions and to the entry of findings that he exercised discretion in accounts maintained by customers without written authorization from these customers and without having obtained approval from his member firm to treat these customer accounts as discretionary.   The findings stated that Brodt provided inaccurate responses about his use of discretion in connection with his firm’s annual compliance documents.”

Prior customer disputes include:

  • FINRA Case 16-1108- a dispute was filed by Garden State Securities, Inc.  customer alleging churning, excessive losses and commissions.   The case was settled for $120,000 with Brodt being personally responsible for $45,000.
  • FINRA Case 12-3841- a Garden State Securities customer filed a dispute alleging unauthorized trading and unsuitable investments.   The case settled for $24,900 with Brodt being personally responsible for the entire amount of the settlement.

Brodt has been  employed with Garden State Securities, Inc. since August of 2010. Brodt discloses a business affiliation with Brodt Capital Management in Boise.

Brodt discloses the filing of a Chapter 7 bankruptcy in Boise, Idaho in 2012 that was dismissed and filing of a Chapter 13 bankruptcy in 7/2016 that is currently pending.

If you have questions about losses in an account handled by Terry Lee Brodt, Jr., contact us 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.

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Tye Williams-Former NEXT Financial Broker-Subject of $1M Customer Dispute-Frisco, TX

UPDATE OCTOBER 2017– Frisco, TX

Former NEXT Financial Group stockbroker, Tye Williams was barred from the securities industry by FINRA for failing to cooperate with regulatory investigation alleging theft of $1M, making unsuitable recommendations and mismanaging accounts. FINRA Case 2015047059702. See this for more details. 

FINRA records report that NEXT Financial Group stockbroker Tye Williams , of Frisco, TX,  has been named in Case 2015-41457, pending in Harris County, Texas, alleging that from mid 2004 until 2015  Williams mismanaged the finances of a customer and exceeded the scope of his authority. Damages of $1 million are sought.

Williams FINRA record also discloses a pending FINRA arbitration (16-0609) filed by a customer of NEXT Financial that makes identical allegations as are made in the Harris County court case.

Williams was employed by NEXT Financial from 11/2008-8/2016. Williams discloses business affiliations with DC Rightside LLC which was formed to deal with the business activities following the sale of Smashburger, Tye Williams Financial Services, and One Source Advisors Group.

If you have losses in an account handled by Tye Williams, contact us to learn how you may be able to recover damages from his former 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