Articles Posted in Uncategorized

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John Burns, a stockbroker formerly registered with UBS Financial Services, Inc. (UBS) and Ameriprise Financial Services, Inc. (Ameriprise), submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was assessed a deferred fine of $17,500 and suspended for 14 months.  Without admitting or denying FINRA’s findings, John E. Burns, of St. Charles, Missouri, consented to the entry of findings that he engaged in a pattern of unauthorized trading in customer accounts and made unsuitable, risky investments in the account of an elderly couple.

Between December 2013 and August 2015, while registered with UBS and Ameriprise, John Burns allegedly executed 100 unauthorized trades in nine customer accounts.  Mr. Burns did not have written discretionary authority to place the trades in any of these customer accounts.  FINRA found further that Mr. Burns made over 50 unsuitable and unauthorized investments in the account of a senior retired couple.  According to FINRA, these transactions involved repeated high-risk investments in stocks which were unsuitable for the customers given their moderate risk tolerance and investment profile.  As a result of Mr. Burns’ unsuitable investment strategy, the elderly couple sustained losses exceeding $50,000.  Consequently, John Burns was suspended by FINRA for 14 months and assessed a deferred fine of $17,500.  The suspension is in effect from December 5, 2016 through February 4, 2018. Continue reading →

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Wonnie Short of Nashville, Tennessee submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly failing to ensure that a Wells Fargo Advisors LLC, (Wells Fargo) customer received the funds they were due from an annuity.

Between November 1996 and November 2011, Mr. Short was registered with Wells Fargo.  In October 2006, while Short was registered with Wells Fargo, a firm customer executed a will naming Mr. Short as executor. When the customer passed away in November 2008, Mr. Short petitioned the court and was appointed executor of the client’s estate. As executor, Mr. Short facilitated the pay out on three of the client’s annuities. For one of the annuities, the client’s estate was a 10% beneficiary and a local foundation, which was also a Wells Fargo customer, was a 90% beneficiary.

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Stephen Oberman, a registered representative formerly employed with the Chicago, Illinois based Oppenheimer & Co., Inc. (Oppenheimer), 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 falsified signatures on at least 51 letters of authorization (LOAs) requesting fund disbursements from and address changes to a customer’s account.

FINRA’s findings stated that while serving as a General Securities Representative at Oppenheimer, Stephen Mark Oberman, of Naperville, Illinois, was assigned to the account of a customer that had a trust with three trustees. Mr. Oberman falsified the trustees’ signatures by photocopying their signatures from other firm documents and cutting and pasting them onto the LOAs. Even after two of the trustees had died, Mr. Oberman continued to falsify their signatures, only disclosing this to Oppenheimer after learning that two of the three trustees were deceased. Continue reading →

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The Financial Industry Regulatory Authority (FINRA) fined a dozen independent broker-dealers (IBDs) for failing to give their clients the proper discounts available to them, known as breakpoint discounts, on sales of unit investment trusts (UITs). They were also cited for related supervisory failures. Some of the biggest fines were levied against First Allied Securities Inc. (First Allied), Fifth Third Securities Inc. (Fifth Third), Securities America Inc. (Securities America), Cetera Advisors LLC (Cetera Advisors), and Park Avenue Securities LLC (Park Avenue).

FINRA ordered the 12 firms to pay both fines and restitution totaling $6.7 million. The other firms sanctioned were: Commonwealth Financial Network (Commonwealth Financial), MetLife Securities Inc. (MetLife), Comerica Securities (Comerica), Cetera Advisor Networks LLC, Ameritas Investment Corp. (Ameritas), Infinex Investments Inc. (Infinex), and The Huntington Investment Company (Huntington Investment). Continue reading →

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Miami, Florida resident Patrick McGrath III submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) with the purpose of settling the alleged violations that he borrowed funds from his member firm’s client and made false statements while under investigation.

McGrath entered the securities industry in 1984 and has been associated with several FINRA-regulated broker dealers throughout his career. In April 2009, McGrath became associated with Oppenheimer & Co., Inc. (Oppenheimer) as a registered representative. However, in January 2014, Oppenheimer filed a Uniform Termination Notice for Securities Industry Registration (Form U5) reporting that McGrath failed “to timely finalize arrangements to repay loans he received” from a Oppenheimer customer. Continue reading →

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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. Continue reading →

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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 →

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Geoffrey Richards Securities Corp. of Hypoluxo, Florida submitted a Letter of Acceptance, Waiver and Consent in which the firm 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 it conducted securities business after the firm’s net capital fell below its minimum requirement.

FINRA member since 2002, Geoffrey Richards Securities Corp. (Geoffrey Richards) is a firm that specializes in securities. FINRA found “between June 2010 and January 2013, Geoffrey Richards acted as an underwriter in a firm commitment offerings, conducted a securities business while it was net capital deficient, failed to file to the requisite net capital deficiency notifications, filed inaccurate Financial and Operational Combined Uniform Single (FOCUS) Reports, and maintained inaccurate books and records.” Mr. Richards’ alleged involvement as underwriter in the firm commitment offering required deductions to the firm’s net capital to be made. For an eight day period, the firm’s net capital fell below its minimum requirement. For violation of several FINRA, NASD, and SEC Rules, Geoffrey Richards Securities Corp. was fined $40,000. Continue reading →