Broker Misconduct - Law Offices of Robert Wayne Pearce

Jul 7, 2015

Deltona Beach CCO and Firm Suspended for Falsifying DSR Forms

Robert Nash of Deltona Beach, Florida and Merrimac Corporate Securities, Inc., (Merrimac) of Altamonte Springs, Florida have been fined and suspended by the Financial Industry Regulatory Authority (FINRA) Department of Enforcement for failing to establish and maintain a reasonable supervisory system and for falsifying Deposit Securities Request Forms (DSR Forms). Merrimac was a general securities broker-dealer that first became registered as a FINRA member in 1993, where Nash served as the Chief Compliance Officer (CCO). While Merrimac was under investigation by FINRA, it was determined that Merrimac, through Nash, provided false documents to FINRA and that “Merrimac and certain of its employees violated federal securities regulations and FINRA rules relating to a variety of topics.” Over the course of the investigation, Merrimac provided 37 falsified documents to FINRA. Nash, CCO of Merrimac, acknowledged that he was responsible for the information in the documents.

Jul 1, 2015

Commonwealth Capital Securities CEO Barred for Misappropriating Funds

The Department of Enforcement for the Financial Industry Regulatory Authority (FINRA) has brought disciplinary action to Kimberly Springsteen-Abbott of Holiday, Florida for improperly allocating funds. Mrs. Springsteen Abbott served at Commonwealth Capital Securities Corp. as a Chief Executive Officer (CEO), Chairperson, and Chief Compliance Officer (CCO) granting her control of funds at the firm. Mrs. Springsteen-Abbott had the authority to allocate the expenses to investment funds that were incurred in operating the business. After hearing the evidence, the FINRA hearing Panel found that Mrs. Springsteen-Abbott misused investors’ funds for three years by improperly allocating unrelated business expenses to investment funds that she controlled.

Jun 29, 2015

Complaint Filed Against Former Voya Financial Advisors Representative for Fraud and Conversions

FINRA filed a complaint against Giovanni Acevedo of Wilton Manors, Florida for allegedly converting client funds for his own personal use. While no longer registered with a firm, Acevedo served as the registered agent, manager and authorized agent for ACE Capital Investments (a Florida liability company) and was the sole owner of ACE between 2010 and 2014. At the time, he was registered with Voya Financial Advisors, also known as ING Financial Partners. FINRA alleges that between January 2009 and March 2014 Acevedo converted $160,000 of customers’ funds for his own personal use. The allegations are that Acevedo recommended at least one client to invest in “ACI Capital Investment” and represented that he would invest the client’s funds via check on her behalf. The client allegedly gave Acevedo a personal check for $68,000 which he was to deposit in ACI Capital Investment. However, Acevedo allegedly changed the payee line to read ACE Capital Investment (his Florida liability company). In addition, Acevedo allegedly created false document for his client that reflected an open balance of $68,000 and a 7.5% semi-annual return or a period of 36 months while those funds were never actually invested.

Jun 24, 2015

Legend Securities Stockbroker Receives Complaint for Fraud

FINRA has filed a complaint against Richard Gomez of Jackson Heights, New York for allegedly defrauding investors of close to half a million dollars. Gomez, who was a registered representative with Legend Securities Inc. between June and December 2011, allegedly offered investors the opportunity to purchase membership interests in Praetorian Global Fund, Ltd. (Praetorian) and its affiliate companies. According to the U.S. Securities and Exchange Commission (SEC), Praetorian Global Fund was supposed to grant investors an opportunity to invest in a pre-initial public offering (IPO) with shares of Facebook, Groupon and Zynga. Gomez allegedly sold $394,000 worth of shares of the fraudulent company and made at least $22,000 in commissions. Gomez allegedly failed to conduct proper due diligence and missed multiple red flags regarding Praetorian. The “principal place of business” for Praetorian was a residential apartment in Boca Raton, Florida but the mailing address was that of “The UPS Store” in Boca Raton. In addition, Praetorian’s fund manager had a lengthy criminal record that included multiple convictions of grand theft, and other members affiliated with the company have been named defendants in multiple lawsuits alleging fraudulent business practices.

Jun 23, 2015

DeWaay Advisory Stockbroker Receives Complaint for Misrepresentation

FINRA has filed a complaint against Lawrence LaBine of Fountain Hills, Arizona for alleged misrepresentations and omissions of material fact. LaBine, who was a representative at DeWaay Advisory LLC between 2007 and 2010, allegedly sold senior debentures (Series D) issued by Domin-8 to over 100 clients guaranteeing them that they would preserve their initial principal. At the time (April-August 2009), LaBine was receiving updates on Domin-8’s poor financial condition. FINRA alleges that LaBine knew of and willfully failed to disclose Domin-8’s perilous financial condition to his clients in connection with those sales. In September 2009, Domin-8 filed for bankruptcy.

Jun 22, 2015

Meyers Associates L.P. Brokers Allegedly Manipulate Stock Market

The Financial Industry Regulatory Authority (FINRA) has filed a complaint against Meyers Associates L.P. which is based in New York and three of its registered members for allegedly violating a slew of conduct rules set by the U.S. Securities and Exchange Commission (SEC). The FINRA complaint alleges that George Johnson, Joseph Mahalick, and Christopher Wynne of Chicago, Illinois were all part of a market manipulation scheme that involved fraudulent omissions, falsification of records, unauthorized disclosure of information, and dissemination of various research and sales materials. FINRA alleges that Johnson willfully violated the Securities and Exchange Act by manipulating the market for the common stock IceWeb Inc. Johnson allegedly solicited certain customers to buy shares in IceWeb while simultaneously telling others to sell in an effort to artificially inflate prices. FINRA also alleges that Christopher Wynne, who was Johnson’s supervisor at Meyers Associates L.P., violated FINRA Rule 2010 by sending customers research materials that were “riddled with misleading, exaggerated and unsupported claims and failed to disclose material information.”

Jun 18, 2015

Former Westpark Capital Broker Suspended for Misleading Personal Emails to Clients

Michael Bell, a former registered representative with the Boca Raton, Florida branch of Westpark Capital, Inc. submitted a Letter of Acceptance, Waiver and Consent in which he consented to, but did not admit to or deny, the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he violated his member firm’s written supervisory procedures (WSPs) by sending misleading, promissory emails to clients from his personal email account. According to FINRA, Michael Bell used his personal email account to communicate with customers, both current and prospective, without the approval of Westpark Capital and in violation of the firm’s WSPs. Mr. Bell had been disciplined previously by Westpark Capital for alleged email related misconduct. Therefore, FINRA stated that Mr. Bell knew that using his personal email for customer correspondence was prohibited.

Jun 16, 2015

The CFTC Obtains Consent Order Against Defendant For Unlawful Acts And Practices

The U.S. Commodity Futures Trading Commission (CFTC) has obtained a Consent Order against James Harvey Mason of Graham, North Carolina. The CFTC found that Mr. Mason was never registered with the CFTC in any capacity. According the CFTC, the consent order against Mr. Mason imposes a $1.67 million civil monetary penalty and restitution of $3.88 million in relevance to off-exchange foreign currency commodity pool fraud along with a permanent trading and registration ban. The CFTC alleged that around July 2010, Mr. Mason fraudulently solicited, accepted and pooled approximately $5,300,000 from about 500 individuals. According to the CFTC, Mr. Mason only used a portion of the funds to trade off-exchange foreign contracts in two commodity pools he formed; the JHM Forex Only Pool and Forex Trading at Home. He allegedly deposited investor funds in bank accounts from when he allegedly misappropriated approximately $780,000 and made payments as part of a “Ponzi sheme.” A “Ponzi scheme” is an unsustainable fraud pyramid that inevitably ends in ruin. Schemers use money raised from latter investors to pay an earlier investor’s returns. Ponzi schemes invariably fall apart when markets deteriorate or when the schemer is unable to raise more cash.

Jun 14, 2015

SEC Announces Insider Trading Charges Against Ardea Executive and San Diego California Stockbrokers

The Securities and Exchange Commission (SEC) filed suit against Michael J. Fefferman, a Senior Director of Information Technology for Ardea Biosciences, Inc. (Ardea). The SEC alleged that Mr. Fefferman leaked non-public information regarding pharmaceutical trials to his brother-in-law, Chad Wiegand, who passed the inside tip to another stockbroker. Between April 2009 and April 2012, Mr. Fefferman allegedly tipped Mr. Wiegand about four separate announcements beforehand that were likely to have a positive impact on Ardea stock prices. The SEC alleged that the Defendants received $550,000 in illegal profits from this insider trading scheme. The first announcement concerned a global agreement with Bayer Healthcare, LLC related to the licensing of an Ardea developmental cancer treatment. The second announcement related to the initial testing of a promising drug for the treatment of gout. The third announcement provided positive news about the second phase of testing for the experimental gout treatment. Finally, the fourth announcement published news of the sale of Ardea to AstraZeneca. The price of Ardea stock increased with each announcement and the Defendants allegedly profited illegally from trading of Ardea stock with the non-public information.

Jun 13, 2015

Former Carlsbad California Broker Pleads Guilty To Fraud Charges

Former Merrill Lynch and Raymond James stock broker, Sunil Sharma, plead guilty to wire fraud charges in Federal court last week. According to the U.S. Attorney Office (“USAO”), Mr. Sharma admitted that he stole $6 million from investors by misrepresenting that he was making conservative investments when he actually was pursuing a risky day trading strategy. Apparently, Mr. Sharma was not a successful day trader and eventually his so called conservative investment venture turned into a massive Ponzi scheme. A “Ponzi scheme,” is an unsustainable fraud pyramid that inevitably ends in ruin. Schemers use money raised from latter investors to pay an earlier investor’s returns. Ponzi schemes invariably fall apart when markets deteriorate or when the schemer is unable to raise more cash.