Retirees - Law Offices of Robert Wayne Pearce

Jul 28, 2017

INVEST Financial Corporation Broker Suspended for Unsuitable Mutual Fund Trading

Stephen J. Landa, of Easton, Connecticut, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was fined $5,000 and suspended for two months for recommending and engaging in a short-term mutual fund trading strategy in the accounts of retirees on a fixed income and conservative investment goals. FINRA found that while employed with INVEST Financial Corporation, Stephen Landa engaged in an unsuitable short-term mutual fund trading strategy in two customers’ accounts. The customers were 60 years old at the time, retired, and living on a fixed income. Further, the customers had conservative investment objectives and moderate risk tolerances. Notwithstanding their conservative investment profiles, FINRA found that Mr. Landa recommended they purchase mutual fund shares and shortly thereafter (on average, just six months), he recommended they sell the shares. Consequently, the customers suffered losses of $18,156.53.

Jun 26, 2017

AXA Broker Suspended for Unsuitable Mutual Fund Trading

James Davis Trent, of Lexington, South Carolina, was named a Respondent in a Financial Industry Regulatory Authority (FINRA) complaint for allegedly recommending and executing unsuitable mutual fund trades in the accounts of elderly retirees, causing the customers to suffer substantial losses. FINRA alleged that while employed with AXA Advisors, LLC, James Trent engaged in a pattern of recommending unsuitable short-term trading of Class A mutual fund shares to four customers. In the 14 transactions at issue, Mr. Trent is alleged by FINRA to have recommended the sale of Class A mutual fund shares within less than a year, on average just six months. This unsuitable trading activity resulted in the customers incurring over $6,000 in unnecessary sales charges and a commission, for Mr. Trent, of nearly $3,000.

May 10, 2017

Red River Securities and CEO Expelled/Barred by FINRA for Fraudulent Oil and Gas Offerings

A FINRA hearing panel has expelled Red River Securities, LLC and barred its CEO, Brian Keith Hardwick, for fraudulent sales in five oil and gas offerings. They have also been ordered to pay $24.6 million in restitution to investors. According to FINRA, over the course of four years, Red River Securities and Brian Hardwick made misrepresentations and omissions in connection with the sales of interests in oil and gas joint ventures issued by Regal Energy, LLC, a close affiliate of Red River Securities. FINRA found that Red River Securities and Brian Hardwick fraudulently misrepresented and omitted facts relating to the risky offerings. For example, they allegedly misrepresented the amount of income distributed to investors, failed to disclose material facts regarding the risk involved, and omitted information about the fees involved. The FINRA panel referred to this aforementioned misconduct as egregious and noted the “extent of the respondents’ monetary gain,” in which investors received total distributions less than $50,000 from the more than $25 million they invested in the offerings.

Apr 24, 2017

LPL Financial Broker Suspended for Unsuitable Recommendations to Elderly Customers

Adam Fritzsche, a stockbroker formerly registered with LPL Financial Corporation (LPL Financial), submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was suspended for one year for allegedly making unsuitable recommendations of a speculative, illiquid investment to three elderly retirees. According to FINRA, Adam Stuart Fritzsche, of Canterbury, Connecticut, recommended that three of his customers purchase an investment in a business development company, which was a speculative, illiquid investment that was suitable only as a long-term investment for those with no need for liquidity. His customers were ages 81, 89, and 61 at the time of Mr. Fritzsche’s recommendations.

Apr 5, 2017

Former Bay Mutual Broker Barred For Recommending Risky Gold and Energy Stocks

Christopher Ariola, of Santa Monica, California, was barred by the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) in a default decision made by FINRA’s Office of Hearing Officers for allegedly recommending that elderly retirees invest a large portion of their retirement assets in high-risk gold and energy stocks, causing the customers to lose a combined total of $137,993.13 FINRA alleged that while associated with Bay Mutual Financial, LLC, Christopher Ariola recommended his customers invest heavily in gold and energy stocks. The investment recommendations, including stocks that were purported to produce high-yield dividends, exposed his customers to significant risk. Two of the customers who allegedly took Mr. Ariola’s investment recommendation were a married couple who lost $93,052.21. Another customer lost $44,940.92 as a result of Mr. Ariola’s alleged unsuitable recommendations. Mr. Ariola was barred from association with any FINRA member in any capacity and required to pay $137,993.13 plus interest in restitution to customers.

Oct 24, 2016

FINRA Files Complaint Against Bay Mutual Financial Broker For Alleged Unsuitable Recommendations

Christopher Ariola, of Santa Monica, California, was named a respondent in a Financial Industry Regulatory Authority (FINRA) complaint alleging that he made unsuitable recommendations to elderly retirees to invest in gold and energy stocks. As a result of his unsuitable recommendations, FINRA alleges that his customers suffered combined losses totaling approximately $140,000. Formerly registered with Bay Mutual Financial, LLC, a Santa Monica, California based broker dealer, the now unlicensed Christopher B. Ariola is alleged to have recommended to three elderly retirees to invest a substantial portion of their limited retirement assets in gold and energy stocks. Mr. Ariola’s alleged recommendations were unsuitable in light of the customers’ financial circumstances, investment objectives, and low to moderate risk tolerances.

Jun 16, 2016

Investor Alert – FINRA is Scrutinizing Variable Annuity Sales and You Should Too!

The Financial Industry Regulatory Authority (FINRA) is scrutinizing the sales of variable annuities, noting that they are complex products typically marketed to seniors. This follows a record fine of $25 million FINRA slammed MetLife Securities, Inc. (MetLife) with for negligent misrepresentations and omissions of fact regarding the costs and guarantees relating to variable annuities and variable annuity replacements. At a recent Insured Retirement Institute (IRI) conference, FINRA associate vice president and enforcement chief counsel James Day stated that variable annuities “… are at the sweet spot of complex products marketed to retirees and people about to retire.” Also noted at the IRI conference as a specific area of FINRA’s scrutiny were L-share variable annuities. These products offer increased liquidity and a shorter surrender-penalty period, typically three years rather than seven.

Dec 11, 2015

Can You Recover Your Oil and Gas Master Limited Partnership Investment Losses?

Master limited partnerships (MLPs) in oil and gas have been a highly recommended investment over the past few years. Many brokerage firms and financial advisors have advised clients to invest in these oil and gas energy stocks for the high yield or income potential. Touted to investors as secure, high quality income generating investments with only a moderate risk, these investments were anything but. Oil and gas MLPs are, in fact, risky and speculative because of their connection with oil prices. The massive slides in oil prices have caused these MLP investments to lose substantial value, which has resulted in substantial investment losses for many investors. Brokerage firms and financial advisors should never have sold these risky investments to investors with conservative or moderate investment objectives. Unfortunately, these MLPs were often recommended to retirees and conservative investors who needed to protect their principal or earn income.

Nov 16, 2015

SEC Complaint Filed Against Bobby Collins for Ponzi Scheme to Defraud Elderly Investors

The Securities and Exchange Commission (SEC) has filed a Complaint against Bobby M. Collins, a Wichita Falls, Texas resident. The SEC Complaint alleges that Mr. Collins raised nearly $4.6 million from at least 36 investors, most of whom were over the age of 65, to invest in what was a classic Ponzi scheme orchestrated through his unincorporated retirement planning business, Collins Insurance Companies a/k/a BMC Retirement Planning. The SEC alleges that Bobby Collins lured investors across Texas and Oklahoma by offering high-yield, unsecured promissory notes promising returns typically of 25% over a 12, 18, or 24-month term. Mr. Collins also allegedly enlisted the assistance of an Oklahoma stockbroker to find additional investors, providing hundreds of thousands of dollars in additional investor funds in exchange for over $100,000 in referral fees.

Oct 14, 2015

Former Morgan Stanley and UBS Financial Broker Barred by FINRA for Financial Abuse of an Elderly Customer

Former Morgan Stanley Smith Barney (Morgan Stanley) and UBS Financial Services, Inc. (UBS) broker John Anthony Waszolek, of Scottsdale, Arizona, submitted an Offer of Settlement in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) findings that he took unfair financial advantage of an 81-year-old customer who had twice been diagnosed with Alzheimer’s disease and suffered from dementia and memory loss. According to FINRA, John Waszolek (Waszolek) was informed by an estate planning attorney that she would not amend the elderly client’s trust to make Waszolek a beneficiary because it had been determined that the client lacked sufficient testamentary capacity. However, through a separate attorney, Maszolek gained appointment as successor trustee and residual beneficiary of the client’s trust. Upon the elderly client’s death, FINRA found that Waszolek attempted to inherit more than $1.8 million from the estate.