Published on:

Dalas L. Gundersen, a former Registered Representative with the Willows, California branch of Edward Jones, submitted a letter of acceptance, waiver, and consent in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) sanction and findings that he made unsuitable investment recommendations to his customers in light of their financial goals.

FINRA’s findings alleged that Dalas Gundersen, of Arbuckle California, recommended that a married couple invest in an intermediate municipal bond mutual fund, even though the investor couple had inquired about investing in oil and gas master limited partnerships. According to FINRA, the couple acted upon Mr. Gundersen’s recommendation and purchased nearly $1.26 million in mutual fund, which represented 80% of their net worth. Continue reading →

Published on:

Douglas Jay Melzer, a former broker with the Sewickley, Pennsylvania branch of Wells Fargo Advisors, LLC (Wells Fargo), submitted a letter of acceptance, waiver, and consent in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) findings that he solicited his firm’s customers to invest $2 million in an unapproved outside investment.

According to FINRA, Douglas Melzer, aka Dutch Melzer, solicited four of his Wells Fargo customers to invest $2 million in an investment contract that had not been approved by the firm. Mr. Melzer received at least $27,000 for his participation in the securities transactions and a 2.5% member interest in the investment. Further, FINRA found that Mr. Melzer caused the registered representative code on some customer accounts to be changed, which resulted in the firm paying him over $9,500 in commissions that should have gone to his partners. Consequently, Douglas Melzer, of Mars, Pennsylvania, was permanently barred from any association with any FINRA member in any capacity. Continue reading →

Published on:

The U.S. Commodity Futures Trading Commission (CFTC) has ordered New York resident Mark Bloom, along with his firm North Hills Management, LLC to pay a $26 million civil monetary penalty for operating a fraudulent commodity pool called North Hills LP and for misappropriating customer funds.

The CFTC Order states that Mr. Bloom and North Hills Management misappropriated approximately $13 million from North Hills LP between 2002 and 2009. During this time, Mr. Bloom lived a lavish lifestyle, including the purchase of a $5 million Manhattan apartment. The Consent Order found that Mr. Bloom and North Hills Management made several misrepresentations and omissions to pool participants. On July 30, 2009 Mr. Bloom plead guilty to charges of misappropriation and concealment in a parallel criminal proceeding. Mr. Bloom is still awaiting sentencing in his criminal case and will be required to pay restitution in an amount to be decided by the court. Continue reading →

Published on:

A complaint filed against Calton & Associates Inc., located in Tampa, Florida, and Kenneth Harter of Roland, Arkansas alleges that they “charged customers prices that were not reasonable in municipal bond transactions.” The complaint alleges that R.M. Duncan Securities, acting through two of its representatives and, eventually, Calton & Associates and Mr. Harter, sold bonds to its customers at unfair prices. R.M. Duncan Securities representatives allegedly solicited three elderly customers to purchase a total of $215,000 par value of the bonds.

According to FINRA, the representatives told their clients the bonds “would receive an 11% tax-free yield on the bond interest payments, despite the fact that the bonds were in default and not paying full interest.” Calton & Associates and Mr. Harter allegedly solicited customers to purchase bonds that were purchased from the R.M. Duncan Securities at a price that was 60% higher than the prevailing market price. FINRA alleges that R.M. Duncan Securities and Calton & Associates worked in “concert” to make the inter-dealer appear higher than the market price to pull off their scheme. FINRA alleges the brokerage firms failed to supervise their municipal securities activities and prices and are currently under investigation. Continue reading →

Published on:

A complaint filed by the Financial Industry Regulatory Agency (FINRA) against MSC-BD, LLC and Paul McIntyre of Lake Oswego, Oregon alleged that the respondents “misrepresented and omitted material facts in the offering documentation for a private offering, which was sold to investors through the firm and four other broker dealers.” FINRA alleges that between September 2009 and March 2010, Mr. McIntyre omitted material facts in the offering documents for the Hurricane Bay Marina private offerings.

FINRA alleges that MSC and Mr. McIntyre created the offering to recoup losses for investors from a prior failed offering and did not communicate this to clients of the new offering. In addition, FINRA alleges that Mr. McIntyre misused funds and violated the terms of the offering by providing a full refund for one investor, and not for others. These actions are a violation of the Exchange Act and FINRA Rules 2010 and 2020. Mr. McIntyre is still associated with MSC-BD, but he and the firm are still under investigation by FINRA. Continue reading →

Published on:

A complaint filed by the Financial Industry Regulatory Agency (FINRA) against Jonathan Jay Greenfield of West Hills, California alleges the former representative of Arete Wealth Management (AWM) made fraudulent misrepresentations and omissions through emails with clients regarding features of renewable secured debentures. FINRA alleges that during the period of March 2012 to October 2012, Mr. Greenfield made material and sometimes intentional misrepresentations to three customers regarding connections with their purchases of GWG Renewable Secured Debentures.

According to FINRA, Mr. Greenfield made similar misrepresentations to more than fifty other clients who did not end up buying the debentures during this period. In addition, FINRA alleges that between September 2012 and November 2012, Mr. Greenfield “provided twelve customers with GWG sales literature that stated GWG was secured by life insurance policies owned by GWG.” However, the debentures were not secured by insurance policies. These alleged misrepresentations and omissions are violations of NASD Rule 2210 and FINRA Rule 2010. FINRA’s enforcement department has requested sanctions to be imposed and for further findings into which Mr. Greenfield willfully violated the Exchange Act. Continue reading →

Published on:

A complaint filed by the Financial Industry Regulatory Agency (FINRA) against Philip Leonard Grasso Jr. alleges that he, a representative of Allstate Financial Services, LLC (Allstate Financial) “inserted himself into the lives of two elderly customers in order to defraud them of their funds.” FINRA alleged that while Mr. Grasso was on a medical leave of absence from Allstate Financial, he inserted himself into the lives of two elderly customers (ages 89 and 91) in order to defraud them financially.

Between December 2013 and January 2014, Mr. Grasso allegedly convinced the two elderly clients to liquidate their various life insurance policies and annuities (approximately $227,150) and open a brokerage account. Mr. Grasso allegedly then took all the funds from the brokerage account and put them in his own bank account. Mr. Grasso used these client funds for personal expenses like his mortgage and stock investments. In an attempt to hide the misconduct, Mr. Grasso allegedly created false documents for his clients and misrepresented their investment. Mr. Grasso was terminated by Allstate Financial due to allegations that he “commingled the customers’ funds” in May 2014. As it’s a current investigation, FINRA has requested sanctions and restitution to be imposed upon Mr. Grasso. Continue reading →

Published on:

A FINRA complaint filed against Miles Bahl of Salt Point, New York, Conrad Huss of Airmont and Christopher Moran of Jackson Heights alleges that the three representatives of du Pasquier & Co. Inc. made fraudulent misrepresentations in “connection with the solicitation and sale of over $3 million of promissory notes.”

The complaint alleges that Mr. Bahl and Mr. Huss fraudulently misrepresented a private offering issued by a real estate development company to 17 of Bahl’s clients. Mr. Bahl and Mr. Huss allegedly misrepresented promissory notes to clients with falsified paperwork that stated that the notes were secured. The complaint also alleges that Mr. Bahl and Mr. Huss made intentional misrepresentations by recommending notes for clients that didn’t fit their “reasonable basis suitability obligations.” In addition, the complaint further alleges that Mr. Moran “failed to establish, maintain, or enforce a reasonable supervisory system or written procedures in connection with the firm’s private placement business.” Mr. Moran allegedly failed to supervise Mr. Bahl and Mr. Huss in connection with the notes, missing multiple “red flags.” In January 2015, Miles Bahl, Conrad Huss, and Christopher Moran settled with FINRA and were barred from association with any FINRA member in any capacity. Continue reading →

Published on:

Darrell Vanpamel of Cape Coral, Florida submitted a Letter of Acceptance, Waiver and Consent, in which he consented to, but did not admit to or deny, the described sanctions and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he engaged in outside business activities for which he received compensation without the approval of member firm, USA Financial Securities Corporation.

Between April and May 2013, Mr. Vanpamel allegedly engaged in outside insurance activities with four clients without his firm’s approval. Mr. Vanpamel received approximately $1,400 in total from his four clients for “account set-up fees.” FINRA found that Mr. Vanpamel failed to provide written notice to USA Financial Securities Corp. (USA Financial) for his outside business activities or for his compensation. According to FINRA, Mr. Vanpamel violated FINRA Rules 3270 and 2010. Mr. Vanpamel was fined $5,000 and was suspended from association with any FINRA member in any capacity for one month. Continue reading →

Published on:

David Leonard Potter, of St. Petersburg, Florida submitted a Letter of Acceptance, Waiver and Consent in which he consented to, but did not admit to or deny, the described sanctions and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he made “negligent misrepresentations to investors” in regard to private offerings his firm, LaSalle Street Securities, had yet to approve.

Mr. Potter, former branch manager of LaSalle Street Securities’ Tampa, Florida office, ran an investment advisory business, Platinum Wealth Partners, Inc. (PWP) which he decided to expand in late 2012. Without the capital to do so, Mr. Potter commenced a PWP private placement offering in March 2013 to raise capital through the sale of convertible debenture units. The offering was a minimum and maximum offering requiring at least $1.5 million being raised before distribution. Continue reading →