Category Archives: Massachusetts Securities Division

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

Kestra Investment Services Discloses Regulatory Fines/ Arbitration Awards-Austin, Texas

April 2017-Austin, Texas

According to publicly available records Kestra Investment Services (formerly NFP ) , (CRD# 42046) ,  a  FINRA registered broker dealer headquartered in Austin, Texas,  discloses  10 prior final regulatory events and 4 prior customer arbitrations. Kestra has about 1,800 registered representatives in 639 branch offices.

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.

Recent regulatory issues include:

  • In November 2016 Kestra Investment Services was censured and fined $475,000 and without admitting or denying FINRA’s allegations agreed to entry of findings that between October 2013 and June 2014 they failed to reasonably supervise brokers who recommended the purchase of multi-share class variable annuities. During the relevant time period Kestra sold 1,873 individual variable annuity contracts of $25,000 or greater, totalling over $280 million in principal investments.
  • In July 2016 Kestra was fined $100,000 by Massachusetts securities regulators for failure to register investment advisors who had a place of business in Massachusetts.
  • In July 2016, Kestra was censured and fined $500,000 by FINRA to resolve allegations that from December 2008-January 2014 they violated FINRA and SEC rules relating to the supervision of brokers dually registered with registered investment advisers, the preservation of emails and advertising and to timely update Form U-4.

Prior arbitration awards against Kestra Investment Services include:

  • In June 2014, an arbitration panel awarded $1.2 million to a customer who alleged breach of fiduciary duty, account activity, breach of contract and negligence in connection with the investment in annuities, municipal bonds, mutual funds and real estate investment trusts (REITs). FINRA arbitration 13-0430.

If you have losses in an account with  Kestra Investment Services , 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

San Antonio Based Investment Professionals, Inc. Sanctioned Over Sales to Senior Citizens

March 2017-San Antonio, Texas

San Antonio, Texas, based stock brokerage firm Investment Professionals, Inc.  (IPI)  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. 

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 losses in an account with Investment Professionals, Inc. 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

LPL Financial Ordered to Pay $3.7M Over Variable Annuity Sales-Polaris Platinum III

UPDATE Jan 2017LPL Financial  ordered to pay up to $3.7 million in restitution and fines as a result of an investigation into sales of unsuitable variable annuities by former top producer, Roger Zullo.

Original Post –December 2016- Boston, MA

LPL Financial LLC and one of its former brokers Roger S. Zullo were named in an administrative complaint filed by Massachusetts’s securities regulator William Galvin alleging that LPL Financial failed to supervise Zullo who allegedly commited fraud in selling unsuitable variable annuities to retirees.  Link to Massachusetts complaint. 

According to the Massachusetts complaint:

  • Zullo fabricated the financial suitability profiles of numerous LPL clients, selling them scores of large, illiquid, unsuitable, high commission variable annuities, thereby generating large profits for LPL and Zullo, to the detriment of retiree victims.
  • Over a three year period Zullo and LPL received over $1.8 million in commissions on the sale of variable annuities, nearly all of which was generated from one annuity product, the Polaris Platinum III (B shares)
  • “Zullo’ s greed for commissions at times led him to disregard the well being of his clients. Zullo knew one client personally for more than twenty years – a single, retired healthcare worker, with no financial sophistication, no assets at her disposal except those in Zullo’s hands,  and no nearby family to assist her financially. In 2008, Zullo sold the client a variable annuity, which thereafter generated income payments that the client relied on as her primary source of income. In 2015, with the client past the age of 80 and experiencing cognitive impairment, and with the client seeking out assisted living arrangements, Zullo had the client meet him at a subway station near his office to sign paperwork for a switch into a new variable annuity with a fresh, seven-year surrender schedule. The switch was unnecessary, unsuitable, and unwanted; cost the client $1,391.03 in surrender charges; and deprived the client of income she relied on to pay for the basic costs of living.”

Zullo was discharged by LPL Financial in 12/2016 following the filing of the Massachusetts complaint.

If you have questions about an annuity, including Polaris Platinum III,  you purchased from LPL Financial, call to learn about options for recovery of damages.

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

Dennis H. Cambal-Former JHS Capital Broker-Discloses Regulatory Action & Customer Disputes

August 2016- Yarmouth, MA

The FINRA records of Dennis H. Cambal ,  a  stock broker who is currently  employed by NBC Securities  disclose a prior regulatory event and 9 prior customer disputes.

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.

Massachusetts Regulators Place Cambal on Heightened Supervision.

In 9/2015, upon reviewing Cambal’s  request for registration (Case# R-2015-114), Massachusetts securities regulators noted that Cambal has been the subject of at least 9 customer complaints alleging inter alia:

  • making excessive trades
  • failing to follow customer instructions
  • making unsuitable investment recommendations
  • effecting unauthorized trades while registered with several broker-dealers since 1983

Massachusetts regulators determined that it is in the public interest to allow Cambal’s applications for registration as a broker-dealer agent of NBC Securities, Inc. in Massachusetts upon certain conditions, which shall be effective for five years. Those conditions include:

  • Cambal shall be supervised, on a heightened basis by NBC
  • NBC shall not permit Cambal to have any principal, supervisory, or managerial duties while associated with NBC
  • NBC shall not permit Cambal to possess or exercise discretion in the handling of Massachusetts customer accounts
  • NBC shall ensure that Cambal’s Massachusetts customer are satisfied with Cambal’s services

Cambal has been employed by  NBC Securities  since 8/2015. Prior to that he was employed by JHS Capital Advisors from 10/2011-8/2015 and prior to that with RBC Capital Markets 8/2005-10/2011.

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

Merrill Fined $2.5 Million by Massachusetts Securities Regulator William Galvin

March 23, 2015

The Wall Street Journal reports that Merrill Lynch was ordered to pay $2.5 million to to Massachusetts Securities Regulators to resolve claims that it gave  internal presentations in Boston in 2013 that violated its own compliance policies.

According to the WSJ, the presentations, which were not first reviewed by Merrill compliance,  included training on ways for advisers to double production by transferring existing customer assets from commission-based brokerage accounts to fiduciary based alternatives.

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

Regulators Launch Investigation of Realty Capital Securities

November 7, 2014–Massachusetts securities regulators launched an investigation of Realty Capital Securities, the wholesaling division of RCS Capital Corp,  a broker-dealer holding company led by Nicholas Schorsch it’s chairman.

Earlier this week American Realty Capital Properties, Inc. , which is  a part of the Schorsch real estate investment trust (REIT) empire, announced a $23 million accounting error that, according to news reports, was intentionally uncorrected.

News reports suggest that the SEC and the FBI have begun investigations of American Realty Capital Properties.

The Massachusetts regulators, led by William Galvin, are reportedly looking at the information provided to investors purchasing REITs , especially accounting information.

According to the recent quarterly report (10Q for Q1), a copy of which can be found here on the company website, Inland American REIT is currently under investigation by the Securities & Exchange Commission (SEC).

According to the report, the SEC investigation is to determine if there have been violations of federal securities laws related to:

  • business manager fees
  • property management fees
  • transactions with affiliates
  • timing and amount of distributions to investors
  • determination of property impairments

The report states that at the current time the company has not been accused of any wrongdoing and that they are cooperating fully in the investigation.

 

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