Breach of Fiduciary Duty - Page 33 of 35 - Law Offices of Robert Wayne Pearce

341 search results found for “Breach of Fiduciary Duty”

Jul 26, 2017

Former Gold Coast Securities Broker Named in FINRA Complaint Alleging Churning

Joseph Farah, a former registered representative with Gold Coast Securities, was named a Respondent in a Financial Industry Regulatory Authority (FINRA) complaint for allegedly engaging in a fraudulent churning scheme, causing his customer to suffer substantial losses. Joseph C. Farah, of Hacienda Heights, California, is alleged by FINRA to have acted with intent to defraud and reckless disregard for his customer’s interests by churning his customer’s account. According to FINRA, Mr. Farah allegedly executed more than 600 trades in his customer’s account, causing the account to diminish in value by over 25%. The FINRA complaint alleges that Mr. Farah failed to inform his member firm that he had discretionary authority over the customer’s account, which Mr. Farah suggested she open at TD Ameritrade. FINRA’s complaint notes that the customer’s annual income was listed as just $25,000 – $49,999, which was correct, but her investment experience was incorrectly described as 1-2 years of experience. FINRA found that she actually had no investing experience.

Apr 26, 2017

FINRA Bars Wells Fargo Advisors Broker for Unsuitable and Excessive Trading

Matthew Maczko, a former registered representative with Wells Fargo Advisors, LLC, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was barred from association with any FINRA member in all capacities amid allegations that he made unsuitable recommendations and excessively traded four brokerage accounts held by an elderly customer. According to FINRA, Matthew Christopher Maczko, of Downers Grove, Illinois, was the registered representative for his now 93 year old customer’s four brokerage accounts. According to FINRA, Mr. Maczko allegedly controlled the four brokerage accounts. During the relevant period, January 2009 to April 2016, FINRA found that Mr. Maczko effected over 2800 transactions in this customer’s accounts. FINRA stated that Mr. Maczko’s excessive trading strategy generated approximately $581,650 in commissions, $84,270 in fees, and allegedly caused his customer $397,000 in trading losses. Without admitting or denying the findings, Mr. Maczko was barred from association with any FINRA member in any capacity.

Apr 19, 2017

FINRA Bars Former Financial West Group Broker for Unsuitable and Excessive Trading

Kelly Clayton Althar, a former registered representative with Financial West Group, submitted an Offer of Settlement to the Financial Industry Regulatory Authority (FINRA) in which he was barred from association with any FINRA member in all capacities amid allegations that he made unsuitable recommendations and excessively traded two accounts held by an elderly customer. According to FINRA, Mr. Althar, of San Pablo, California, was the registered representative for an elderly customer with hopes of retiring in a few years. Without admitting or denying FINRA’s findings, Mr. Althar consented to FINRA’s findings that he exercised de facto control over two of his customer’s accounts and utilized that control to place frequent trades without consulting his customer in order to generate increased commissions for himself. FINRA found that Mr. Althar often purchased, sold, and subsequently repurchased the same security in his customer’s accounts in order to generate commissions while his customer suffered substantial losses. During the relevant period, FINRA stated that Mr. Althar generated approximately $91,000 in commissions from his excessive IRA trades, and an additional $48,000 in commissions in his customer’s individual. His customer, who was close to retirement and purportedly only wanted low-risk investments, suffered extensive losses in the value of her two accounts, which dropped by more than 50%.

Feb 17, 2017

Caldwell International Securities Broker Suspended for Unsuitable and Excessive Trading

John Kakonikos, former registered representative with Caldwell International Securities Corp., submitted a Letter of Acceptance, Waiver, and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was suspended for 18 months, assessed a deferred fine of $10,000, and ordered to pay restitution of $72,524.53, plus interest, to his customer. John Billy Kakonikos, of Flushing, New York, was found by FINRA to have engaged in excessive and unsuitable trading in his customer’s account, causing realized trading losses of $72,524.53, while generating $41,617.56 in fees and commissions. According to FINRA, Mr. Kakonikos was the registered representative for a customer with a high-school education, annual income of approximately $25,000 per year, and no experience actively trading securities. Further, FINRA alleged that Mr. Kakonikos had de facto control over this customer’s account. FINRA found that Mr. Kakonikos recommended and executed 117 securities transactions in this account, nearly half of which were placed without the customer’s authorization. In light of the customer’s financial situation, lack of investment experience and financial needs, FINRA found Mr. Kakonikos’ trading to be unsuitable and excessive. Mr. Kakonikos was assessed a deferred fine of $10,000 and suspended by FINRA for 18 months. The suspension is in effect from November 21, 2016 through May 20, 2018.

Jan 11, 2017

Caldwell International Securities Broker Suspended for Unsuitable and Excessive Trading

Richard Lee, former registered representative with Caldwell International Securities Corp., submitted an Offer of Settlement to the Financial Industry Regulatory Authority (FINRA) in which he was suspended for 18 months and required to requalify by exam before reentering the securities industry in any capacity. Richard Lee, of West Nyack New York, was found by FINRA to have recommended an unsuitable active trading strategy to his customers without understanding the risks involved, whether or not the strategy was suitable for his clients, or the impact the staggering commissions and fees generated by his recommended strategy would have on his customers’ accounts. According to FINRA, Richard Lee generated new customers by cold calling them and generally targeted customers who would agree to speculation as their investment objective. FINRA noted that Mr. Lee allegedly believed that once a customer selected “speculation,” that any investment strategy or trade was suitable. Moreover, FINRA states that the funds in customers’ accounts were considered “gambling money” that the customer could afford to lose. FINRA found that when customers did complain, Mr. Lee allegedly failed to report the complaints, but rather tried to hide his behavior by reducing sales charges. For instance, FINRA stated that when one of Mr. Lee’s customers sent him an email telling him to stop trading and “I am very disappointed in you. You have abused my trust,” Mr. Lee agreed to stop charging the customer commissions until the account was even.

Jan 3, 2017

Caldwell International Securities Broker Suspended for Unsuitable and Excessive Trading

Former Caldwell International Securities Corp. broker, Alex Etter, submitted an Offer of Settlement to the Financial Industry Regulatory Authority (FINRA) in which he was assessed a deferred fine of $10,000, suspended for two years, and ordered to pay disgorgement of ill-gotten gains of $227,395.45 and restitution to customers. Without admitting or denying FINRA’s allegations, Alex Etter consented to the entry of findings that he recommended an unsuitable active trading strategy to his customers despite a lack of understanding of the risks involved or the impact the staggering commissions and fees generated by his recommended strategy would have on his customers’ accounts. According to FINRA, Alex Evan Etter, of Old Tappan, New Jersey, failed to conduct any due diligence into the active trading strategy he was recommending to his customers and routinely recommended the strategy despite the fact that he never reviewed his customers’ accounts to determine if the strategy was successful or suitable for this customers. FINRA found that when customers did complain, Mr. Etter allegedly failed to report the complaints, but rather tried to hide his behavior by reducing sales charges. For instance, FINRA stated that when one of Mr. Etter’s customers expressed concerned about the poor performance and excessive commissions in his account, Mr. Etter offered to stop charging commissions for the next ten trades instead of reporting the complaint. Alex Etter was suspended by FINRA for two years. The suspension is in effect from October 17, 2016 through October 16, 2018.

Dec 9, 2016

JP Turner Broker Barred by the SEC for Fraudulent Investment Scheme

The Securities and Exchange Commission (SEC) announced that it has accepted an Offer of Settlement submitted by Levi Lindemann in which he is barred from the securities industry for allegedly operating a fraudulent scheme through his private company, Gershwin Financial, Inc. and his sole proprietorship, Alternative Wealth Solutions. The SEC alleged in its complaint that Levi Lindemann, of West Lakeland, Minnesota, raised approximately $976,000 from six investors, including elderly individuals, and told the investors that their money would be used to purchase various investments including notes and interests in a unit investment trust (UIT). The SEC complaint alleged that in reality, none of Mr. Lindemann’s purported investments were ever made. Mr. Lindemann is a former registered representative with J.P. Turner & Company, LLC (J.P. Turner). His BrokerCheck report shows that Mr. Lindemann is currently involved in four (4) pending customer disputes while he was employed by J.P. Turner for allegations including breach of fiduciary duty, misrepresentations, violation of Minnesota Uniform Securities Act, and negligence.

Aug 16, 2016

FINRA Fines and Suspends Deutsche Bank Broker Gregory Barr for Discretionary Trade Violations

Gregory Barr., a Boca Raton, Florida based broker formerly employed with Deutsche Bank Securities, Inc. (Deutsche Bank) and Raymond James & Associates, Inc. (Raymond James), 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 in the accounts of four customers without the necessary prior written customer authorization. FINRA found that while employed as a General Securities Representative with Deutsche Bank, Gregory Edward Barr exercised discretion in four of his customers’ accounts. He placed sell orders for the customers in the same stock. Although these customers had allegedly given Mr. Barr verbal authorization to sell their positions if the stock decreased in price, he allegedly failed to discuss the transactions with his customers on the day of the sell orders. FINRA further alleged Deutsche Bank had not approved the customers’ accounts for discretionary trading. Therefore, none of the accounts had been approved for the discretionary trades made by Mr. Barr.

Sep 25, 2014

Wells Fargo Advisors Fined $5 Million for Failure to Prevent Employee’s Insider Trading

The Securities and Exchange Commission (SEC) has charged Wells Fargo Advisors with failing to maintain adequate controls in order to prevent one of its employees from using confidential customer information to engage in insider trading. Additionally, the SEC charged Wells Fargo Advisors with producing an altered document in a compliance review of the broker’s trading activities. This case, in which Wells Fargo has agreed to the monetary penalty of $5 million, is the first time the SEC has charged a brokerage firm for its failure to protect a customer’s confidential information, an important ruling at a time when many peoples’ personal information is reportedly being compromised due to computer hacking. According to the SEC’s order, a Wells Fargo broker received confidential information from a customer that Burger King was being acquired by private equity firm 3G Capital Partners. The broker, Waldyr Da Silva Prado Neto (Prado), then used that confidential information to enact trades ahead of the public announcement. The SEC has also charged Prado with insider trading, freezing his assets to prevent any transfers of the ill-gotten profits, alleged to be $175,000. The SEC’s order goes on to state that multiple groups responsible for compliance or supervision at Wells Fargo were told of the broker’s misuse of customer information, but failed to act. According to Andrew J. Ceresney, Director of the SEC’s Enforcement Division, “When investors entrust private information to their stockbrokers or investment advisors, they have the right to expect that it will not be exploited.” Wells Fargo admitted to the SEC’s findings and agreed to pay the $5 million penalty. Section 15(g) of the Securities Exchange Act of 1934 and Section 204A of the Investment Advisers Act of 1940 require broker-dealers and investments advisers to establish, maintain, and enforce policies and procedures reasonably designed to prevent the misuse of material nonpublic information. Brokerage firms like Wells Fargo Advisors have a legal duty to protect their customers’ confidential information and to supervise their brokers to ensure compliance and prevent violations of the rules and regulations of the securities industry.

Jul 28, 2014

Novice Investor Wiped Out by Merrill Lynch Stockbroker

This arbitration arises from a series of unsuitable recommendations by a Merrill Lynch financial advisor for the Claimant to purchase and hold overconcentrated, leveraged Puerto Rico bonds in a Merrill Lynch account. As a result of Merrill Lynch and its employee, the Claimant suffered substantial investment losses.

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341 search results found for “Breach of Fiduciary Duty”