Library - Law Offices of Robert Wayne Pearce

Former Ameritas and TFS Securities Representative Barred for Converting Client Funds

Richard A. McGuire, of Bay Shore, New York, has been permanently barred from acting as a broker or otherwise associating with firms that sell securities to the public for allegedly taking $95,000 from a customer under false pretenses and refusing to give the money back when the customer requested it. The National Adjudicatory Council (NAC) of the Financial Industry Regulatory Authority (FINRA) affirmed the findings and sanctions imposed by the Office of Hearing Officers (OHO) which found that Richard McGuire converted $95,000 of a former customer’s money by using the money for his personal use and forged her signature on two loan agreements. FINRA’s Department of Enforcement had found that Mr. McGuire was allegedly given the money to invest in an annuity-like product and neither loaned him the money nor signed any loan documents.

Apr 18, 2016

Waddell & Reed Broker Suspended by FINRA for Exercising Discretion without Authorization

Carlos Benavidez Jr., a former registered representative with the Louisville, Kentucky branch of Waddell & Reed, consented to, but did not admit to or deny, the sanction and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he exercised discretion in 80 customer accounts without the necessary prior written authorization from the customers or his member firm. According to FINRA, Carlos Benavidez Jr., of Louisville, Kentucky, exercised discretion in effecting hundreds of securities transactions in approximately 80 customer accounts. Further, FINRA found that Mr. Benavidez participated in the backdating of 26 customer notes in order to falsely reflect the date of the conversations with the customers. Mr. Benavidez did not have the written authorization from his customers to exercise discretion, nor had he received written approval from Waddell & Reed for discretionary trading in these accounts.

Apr 15, 2016

PFS Investments Broker Suspended by FINRA for Taking Customer Loans

Marco Daniel, a registered representative with the Chula Vista, California branch of PFS Investments, consented to, but did not admit to or deny, the sanction and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he borrowed money from a customer, failed to disclose his outside business activity, and falsely reported in a firm questionnaire his involvement in this misconduct. According to FINRA, Marco Antonio Daniel (aka Tony Daniel), of Chula Vista, California, borrowed a total of $19,015 from a customer and did not repay the loans until the customer had complained to the firm. Mr. Daniel also failed to disclose the loans or to receive the firm’s approval. Further, he failed to provide notice to his firm that he had engaged in outside business activity involving the use of the borrowed money.

Apr 13, 2016

WFG Investments Representative Suspended for Failing to Supervise Unsuitable IRA Recommendations

Carl Busch, a Registered Principal with the Dallas, Texas based WFG Investments, Inc. (WFG) submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he was fined and suspended by the Financial Industry Regulatory Authority (FINRA) for failing to adequately supervise the unsuitable IRA recommendations and transactions of a registered representative under his supervision. According to FINRA, Carl Wayne Busch, of Oklahoma City, Oklahoma, failed to adequately supervise or properly investigate numerous red flags in connection with a registered representative of his member firm who recommended and engaged in unsuitable trades in the Individual Retirement Account (IRA) of a retiree with known health problems, limited income, and a “moderate” risk tolerance.

Apr 11, 2016

NYLIFE Securities Broker Barred by FINRA for Forging Customer’s Signature

Michael Roger Griffith, a broker formerly employed by the Timonium, Maryland branch of NYLIFE Securities, LLC, submitted a letter of Acceptance, Waiver, and Consent (AWC) in which he consented to, but did not admit to or deny, the described sanction and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he forged a customer’s signature on fictitious life insurance applications without the customer’s knowledge or consent. Michael Griffith, of Middle River, Maryland, was found by FINRA to have submitted fictitious life insurance applications in which he forged the customer’s signature and set up an automatic bank account debit for the policies. Mr. Griffith is alleged to have done all of this without the customer’s knowledge or permission. As a result of Mr. Griffith’s fraudulent misconduct, the customer’s account was debited $1,220 which prompted the customer to contact NYLIFE Securities. The fake policies were then canceled, and the customer was repaid the money. Mr. Griffith’s actions caused him to be in violation of FINRA Rule 2010. Consequently, FINRA barred him from association with any FINRA member in any capacity.

Apr 5, 2016

Wedbush Securities Broker Permanently Barred by FINRA for Conversion of Elderly Customer’s Funds

Michael B. Winegar, a former General Securities Representative with Los Angeles, California-based Wedbush Securities, Inc. (Wedbush) submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he was permanently barred by the Financial Industry Regulatory Authority (FINRA). According to FINRA, Michael Winegar, of Salem, Oregon, converted $100,000 from an elderly customer and used the money to repay his family and personal debts and trade securities. According to FINRA, Mr. Winegar enticed an 85-year-old elderly customer into paying him $100,000. Mr. Winegar allegedly told the customer that he intended to use the money to establish an independent investment advisory firm and would supposedly pay back the $100,000 debt by providing the customer with free investment advice for the next four years. FINRA found that soon after Mr. Winegar had received the $100,000, he did not establish an independent advisory firm but instead sold his securities business to another Wedbush registered representative and left the securities industry. Part of the sale involved Mr. Winegar entering into a non-compete agreement that prevented him from providing the elderly customer the investment advice that he had intended to provide in order to obtain the money for the business.

Mar 29, 2016

FINRA Fines and Suspends Edward Jones Broker for Discretionary Trade Violations

James P. Hilty Jr., an Ocala, Florida based broker formerly employed with Edward D. Jones & Co., L.P. (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) findings that he entered discretionary trades customers’ accounts without the necessary prior written customer authorization. FINRA found that while employed as a General Securities Representative with Edward Jones, James Hilty exercised discretion in three customer accounts with the execution of 14 trades. In violation of NASD Conduct Rule 2510(b) and FINRA Rule 2010, Mr. Hilty neglected to obtain the necessary prior written authorization for discretionary trading from the customers or his member firm. FINRA stated that none of the customers were aware of the trades executed by Mr. Hilty at the time they were made. Mr. Hilty had instead previously spoken with the customers about a trading strategy, but he failed to discuss the subject trades prior to their execution or on the day of the trades.

Mar 24, 2016

Oppenheimer Broker Fined and Suspended by FINRA for Falsifying Letters of Authorization

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.

Mar 23, 2016

American Portfolios Representative Fined and Suspended for Unsuitable Mutual Fund Switches

Jeffrey Davidson, a registered representative employed by the Stuart, Florida branch of American Portfolios Financial Services, Inc. (American Portfolios), 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 made unsuitable mutual fund switch recommendations which cost his customers approximately $46,000 in unnecessary sales charges. According to FINRA, Jeffrey Lee Davidson, of Stuart, Florida, recommended a series of mutual fund switches in 12 customer accounts which were unsuitable for those customers. Mr. Davidson recommended that the customers, one of whom was 97 years old and 5 others were 65 or older, purchase Class A mutual funds, for which they paid commissions and sales charges. He then recommended that they sell the mutual funds within less than one year of the purchase. Mr. Davidson used the funds from the sales of the mutual funds to purchase other mutual funds, for which the customers paid additional commissions and fees.

Mar 15, 2016

NEXT Financial Broker Fined by FINRA for Unsuitable Bond Recommendations

Betsy Bratton Marcom, a former Registered Representative with the Georgetown, Texas branch of NEXT Financial Group, Inc. (NEXT Financial), submitted a letter of Acceptance, Waiver, and Consent in which she consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) sanction and findings that she made unsuitable investment recommendations to her customer which resulted in approximately $135,000 in realized losses. FINRA’s findings state that Betsy Marcom, of Georgetown, Texas, recommended that her client, a non-profit parish church, invest almost its entire portfolio in non-investment grade corporate bonds. Her recommendation was inconsistent with her client’s investment objectives and risk tolerance. According to FINRA, Betsy Marcom was a member of her client’s Finance Council and recommended that the council begin investing in non-investment grade bonds in order to generate a larger return in their account. Relying on the expertise of Ms. Marcom, the church’s account became increasingly concentrated in the bonds, reaching as much as 99% of the account’s assets. As a result of Ms. Marcom’s unsuitable recommendations, her client had invested over $700,000, approximately 45% of its liquid assets, in non-investment grade bonds in the NEXT Financial account, with realized losses of approximately $135,000.

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