Articles Posted in Uncategorized

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Jay Dee Jordan, a former registered representative with WFG Investments, Inc. submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he was barred by the Financial Industry Regulatory Authority (FINRA) for recommending and executing hundreds of unsuitable non-traditional exchange traded fund (ETF) purchases in his customers’ accounts.  FINRA found that Mr. Jordan’s unsuitable recommendations and ETF purchases resulted in his clients’ accounts sustaining realized and unrealized losses of more than $8.4 million.

FINRA found that Jay Dee Jordan, of Oklahoma City, Oklahoma, recommended that his clients purchase over $22 million in non-traditional ETFs. Of the 84 accounts in which Mr. Jordan recommended the  non-traditional ETFs, 79 of these accounts held ETF positions for longer than thirty days, and on numerous occasions, the ETF positions were held for years.  According to FINRA, Mr. Jordan routinely failed to sell these complex products on the same day he purchased them and did not have a reasonable basis to believe that his long-term buy-and-hold recommendations were suitable for his customers.  Continue reading →

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Jeffrey Delaney, a broker formerly registered with Pruco Securities, LLC, submitted a Letter of Acceptance, Waiver, and Consent (AWC) in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) findings that he forged a customer’s signature on life insurance applications without the customer’s knowledge or consent.

According to FINRA, Jeffrey Allen Delaney Jr, of Peachtree City, Georgia, forged his customer’s electronic signature on seven forms related to the exchange of an existing life insurance policy for a new one.  Mr. Delaney then submitted the forms for processing.  FINRA found that Mr. Delaney never had the customer’s knowledge or consent to forge the signature.  FINRA also found that Mr. Delaney willfully reported a false address on his Form U4.  Mr. Delaney listed his incorrectly as South Carolina, allegedly to avoid Georgia’s insurance licensing requirements. Continue reading →

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Roger Zullo, a former registered representative with LPL Financial LLC, has been barred by the Financial Industry Regulatory Authority (FINRA) for refusing to produce information and documents requested by FINRA in connection with an investigation into allegations of fraud, falsifying client suitability profiles and unsuitable variable annuity sales.  FINRA’s investigation arose from a complaint, and subsequent Consent Order, by the Massachusetts Securities Division against Mr. Zullo and LPL Financial.

FINRA began an investigation in January 2017 following allegations made in the complaint filed by the Massachusetts Securities Division.  That complaint alleged that Mr. Zullo, of Boston, Massachusetts, “fabricated the financial suitability profiles of numerous LPL clients, selling them scores of large, illiquid, unsuitable, high-commission variable annuities, at substantial upfront profits to himself and LPL.”  Further, the complaint alleged that Mr. Zullo prematurely switched out his clients’ existing annuities (which were also sold by Mr. Zullo), caused unnecessary surrender charges, and disregarded his clients’ investment profiles at an enormous profit to himself and LPL. The complaint states, “Over the course of three years, Zullo and LPL received more than $1,825,000 in variable annuity commissions alone; of this amount, more than $1,791,000, or 98%, represented commissions from the sale of the same annuity product, the Polaris Platinum III (B Shares) variable annuity.” Continue reading →

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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 →