Tag Archives: texas securities attorney

Will Stock Brokerage Firms Be Required to Help Investors Learn About A StockBroker’s Past?

 

January 2013

Actually it seems strange that is even still a question.

It is my guess that it would be hard to find an investor who wouldn’t want to know if the broker he is considering handing his nest egg over to manage has filed for bankruptcy or has a string of customer complaints.

The Financial Industry Regulatory Authority (FINRA) has for many years maintained the historical data regarding a stockbrokers educational, employment, regulatory, and  disciplinary history. This report, called a CRD (Central Registration Depository) also contains information about any customer complaints, arbitrations and lawsuits involving that broker as well as whether that broker has ever filed for bankruptcy or had tax liens filed against him.
This information has been considered “public information” for many years however there has been little attempt until recently to let the public know about its existence. Until FINRA added the BrokerCheck service to their website a few years ago, the path to obtaining this public information was not well known.

In a regulatory notice filed January 25th, 2013, FINRA is proposing that all firms include a description and a direct link to the information on the broker or firm on the BrokerCheck website. This proposal is open for public comment  for 45 days from the January 25th publication in the Federal Register.

For more about what is included on a stockbroker’s CRD visit here.

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 Van Patter Investigation-VSR Financial-Plano, Texas

We are investigating VSR Financial Services stockbroker  Dennis Van Patter on behalf of one of his former customers whose account suffered significant losses. The subject account of our elderly lady client was invested in a number of alternative investments that appear unsuitable given her age, limited net worth and lack of financial sophistication.

The investments in non-conventional products such as real estate investment trusts (REITs), oil and gas limited partnerships and tax credit entities include the following:

  • APC 2003B
  • ATEL Fund 
  • Atlas Energy Public-17-2008B
  • Atlas Energy Public 18 2009B
  • Behringer Harvard REIT 1
  • Boston Capital Series L.P. 16-29 
  • CNL Lifestyle Fund
  • Cole Credit Property Trust
  • Cypress Equipment Leasing
  • Independence Tax Credit L.P.
  • Inland American Real Estate Trust
  • KBS Real Estate Investment Trust
  • MPF Income Funds
  • Penneco Oil Company 2008-1
  • Retail Properties of America
  • United Development Funding

According to FINRA records, Van Patter is registered with VSR Financial Services, Inc. a broker dealer with offices nationwide. Van Patter operates through First Financial Services Group in Plano, Texas.

Real estate investment trusts, especially those not traded on a
conventional exchange, as well as other alternative investments such as oil and gas and other limited partnerships are generally not considered suitable for retired conservative investors.

If you have losses in an account handled by Dennis Van Patter, you may be entitled to damages. Call 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

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

Raymond James & Associates (St. Petersburg, Florida)-censured and fined $250,000 for failure to safeguard against the unauthorized disclosure or personally identifiable information about firm customers after a customer complained that her firm account number and other personal information was available on the internet.

Charles Eugene Bishop, Jr.-Pompano Beach, Florida- was fined $7,500 and suspended from association with any FINRA member in any capacity for two years. Bishop consented to the described sanctions and to the entry of
findings that he attempted to misappropriate approximately $3 million from an elderly customer of his member firm. Bishop created paperwork by which the deceased customer’s assets would be transferred to a purported entity that was never formed, but whose name was virtually identical to a company the customer owned, with a tax identification number assigned by the Internal Revenue Service (IRS) to another entity that was never formed, but whose sole member, according to IRS records, was Bishop.

After the customer passed away, Bishop, through his attorney, filed a notice with a Probate Division with his state’s Circuit Court representing that he had an interest in the customer’s estate as a claimant and beneficiary of the deceased customer’s estate.

The suspension will be in effect from December 3, 2012, through December 2, 2014. According to FINRA records, Bishop is not currently registered. His last industry position was with Merrill Lynch. Prior to that he worked for Morgan Stanley.

Robert Joseph Eanell-St. Petersburg, Florida-was fined $7,500 and suspended from association with any FINRA member in any capacity for 30 business days. Eanell consented to the described sanctions and to the entry of findings that he misrepresented his educational background to prospective securities customers, including on his business cards. The findings stated that on annual forms, Eanell’s member firm asked him to identify all of the degrees, titles and designations that he used on letterhead, business cards or in communications with clients. Nevertheless, Eanell failed to disclose the fact that he held himself out as the holder of a doctoral degree.

The suspension was in effect from October 1, 2012, through November 9, 2012. According to FINRA records Eanell is no longer registered. He last worked for Sterling Enterprises Group. Prior to that he was with GunnAllen and AXA Advisors.

Evan Coley Eggers-Jacksonville, Florida-was fined $5,000 and suspended from association with any FINRA member in any capacity for six months. Eggers consented to the described sanctions and to the entry of findings that he made premium payments for his customers’ life insurance policies, using his personal funds to make the payments. The findings stated that each payment was submitted to his member firm via a money order, a practice forbidden by company policy. On each money order, Eggers falsified the customer’s signature. On a couple of occasions, Eggers falsified the customer’s signature to reduce the value of a life insurance policy. The findings also stated that all insurance policies at issue were less than one year old. By continuing payment of the premiums, all policies remained active through a period of 13 months, thus qualifying Eggers for potential remuneration.

The suspension is in effect from October 1, 2012, through March 31, 2013.

FINRA records indicate that Eggers is no longer registered. He last worked for Northwestern Mutual Investment Services.

Ellen Joyce Erenstein – Boynton Beach, Florida- was barred from association with any FINRA member in any capacity.  Erenstein consented to the described sanction and to the entry of findings that she failed to respond to FINRA requests to provide testimony concerning customer complaints prior securities customers and their heirs had filed against her.

FINRA records indicate that Erenstein is no longer registered having last worked for Workman Securities.

Brennan R. Lollar -St. Petersburg, Florida-was
barred from association with any FINRA member in any capacity. The sanction was based on findings that Lollar misappropriated funds from a bank where he worked as a branch manager. The findings stated that without the bank’s permission or authority, Lollar transferred funds into customers’ accounts and labeled the transfers as refunds of bank fees. No bank fees had ever been assessed to the customers, and Lollar knew the customers were not entitled to any refunds. Through a series of several small transactions, Lollar misappropriated a total of $3,242.90 into customers’ accounts. The findings also stated that Lollar admitted to the bank that he issued the false refunds and claimed that he did
so to assist, or to curry favor with, certain customers. The bank obtained reimbursement through the liquidation of Lollar’s retirement fund. The findings also included that other
than Lollar providing FINRA with a photocopy of a written statement previously provided to the bank admitting to certain aspects of his misconduct, he did not respond to FINRA requests for information and failed to appear for a FINRA on-the-record interview.

Brennan last worked for SunTrust Investment Services and is no longer registered per FINRA records.

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

 

SEC Investigating Inland American REIT

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.

Considered to be the largest nontraded real estate investment trust in the industry, Inland American Real Estate Trust Inc., has over $11 billion in real estate assets.

The nontraded-REIT industry recently has seen a number of REITs cut
their estimated values and drawing increased scrutiny from securities
regulators over that issue.We have previously addressed the declining values of other non exchange-traded REITs including a related entity, Retail Properties of America Inc.
Formerly known as Inland Western Retail Real Estate Trust Inc., Retail
Properties of America (RPAI) had an initial public offering last month (following a reverse merger with Inland Western) in which
its shares, which were initially sold at $10, were listed at an equivalent of $3.20 per share.

Many non exchange-traded REITs were sold by retail brokerage firms to retirees and others with the promise of steady and dependable distributions and a promise of liquidity in the not too distant future. Many have ceased making distributions and have cancelled buyback programs while watching values drop dramatically.

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

Investors Beware! Do Not Sign Blank Forms Presented to You by Your Broker

The Financial Industry Regulatory Authority (FINRA) , filed a complaint in February 2012, against two UBS Financial Services brokers, Charles Kern, III and Thomas Haskins,  alleging that they made unsuitable recommendations and material misrepresentations or omissions regarding options
investments in the S&P 500 Euro Index.

The option strategy suggested involved selling uncovered calls with a strike price 10% above the market price of the S&P 500 Index and selling uncovered puts at a strike price 10% below the market price of the S&P 500 index. If the calls and puts expired unexercised, the customer retained the premiums collected on the option sales. If the calls or puts were exercised, the customer would have to purchase the securities to cover the exercise of the options.

Broker Kern told broker Haskins, who apparently did not have personal professional experience with this strategy, represented that it would be successful 90% of the time and did not explain that losses were potentially unlimited, but rather told the customer that losses would be limited to $2-3,000 per transaction.

Two clients, referred to as WH and CH in the complaint were instructed to sign a Client Qualification Form for option trading, but were told not to fill in the part of the form dealing with liquid net worth, annual income, risk tolerance and experience. WH had completed the 8th grade and CH had completed high school. They were 61 and 62 years old.

One was disabled and the other a sewing machine operator. Annual combined income was about $35,000. Clearly they should not have been advised to follow such a risky trading strategy.

Customers should never sign any forms that are not completed and it is a warning sign that something may be amiss. In this case the brokers filled the forms out using false information so that the firm’s compliance department would approve the trading. Had the correct information been submitted(net worth, experience, risk tolerance, etc.) the trading would have been prohibited by the compliance department.

These clients lost $25,000, a significant portion of their $75,000 nest egg.

Other clients who were similarly enticed to follow this option trading strategy had losses of nearly $800,000.

If you have lost money as a result of option trading or other trading strategies which you did not understand at the time of the recommendation, call to speak with an experienced securities attorney and learn how you may be able to recover 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