Failure to Supervise - Page 45 of 46 - Law Offices of Robert Wayne Pearce

459 search results found for “Failure to Supervise”

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.

Feb 10, 2017

BancWest Broker Barred by FINRA for Unapproved REIT Transactions

John Hudnall, a former broker with BancWest Investment Services, Inc. (BancWest), submitted an Offer of Settlement to the Financial Industry Regulatory Authority (FINRA) in which he was barred from the securities industry amid findings that he recommended and sold a REIT investment to an 80 year old customer, which he split into two transactions in order to circumvent his firm’s supervisory review. FINRA found that John Stuart Hudnall, of Pacifica, California, sold a $400,000 Wells Core Office Income REIT investment to an 80 year old customer. He then split it into two transactions, one of 40,000 and the other of $360,000, to avoid supervisory review of such a large transaction. Mr. Hudnall only submitted the $40,000 portion to his firm, and submitted the $360,000 portion directly to the REIT sponsor. Mr. Hudnall allegedly received a gross commission of $25,200 in connection with the $360,000 part of the REIT investment.

Dec 19, 2016

Wells Fargo Broker Suspended for Unsuitable Discretionary Trades

Robert Batchen, a broker formerly employed with the Skokie, Illinois branch of Wells Fargo Advisors, LLC (Wells Fargo), 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 made unsuitable discretionary trades in his customer’s accounts, causing losses in excess of $56,000. FINRA found that Robert James Batchen, of Wheeling, Illinois, exercised discretion in his customer’s accounts without the written authorization of the customer of his member firm, in violation of NASD Rule 2510(b). Mr. Batchen is alleged by FINRA to have effected more than 900 discretionary trades during the relevant time period.

Jul 13, 2016

New York Princor Investment Representative Fined and Suspended for Unsuitable Annuity Recommendations

Michael Taylor of Buffalo, New York was registered with FINRA as an Investment Company Products and Variable Contracts Limited Representative through Princor Financial Services Corporation (Princor) from 2010 until March 16, 2016. Mr. Taylor 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 identify and submit seven variable annuity purchases as annuity replacements even though each was funded by the sale of another annuity. According to FINRA, from December 2010 through May 2011, Mr. Taylor “circumvented Princor’s compliance procedures by failing to identify and submit seven variable annuity purchases as annuity replacements even though each was funded by the sale of another annuity. In addition, Taylor provided inaccurate information on the annuity transaction documents further concealing that they were replacements.” This alleged conduct would be in violation of NASD Conduct Rule 3110 and FINRA Rule 2010.

Jul 4, 2016

World Equity Group Fined for Alleged Churning

World Equity Group, Inc. (WEG) of Arlington Heights, Illinois submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for alleged supervisory failures in connection with excessive equity securities trading. WEG, a FINRA member since 1992, has been the subject of similar FINRA disciplinary actions. According to FINRA, between 2009 and 2012, WEG failed to detect and prevent excessive trading, also known in the securities industry as “churning.” Churning is excessive trading in client accounts by a stockbroker to generate commissions. Churning is an illegal activity that violates SEC and FINRA rules. During the relevant time period (2009 through 2012), FINRA alleged that WEG’s supervisory failures led to an ongoing practice of churning. FINRA found a pattern of excessive unsuitable trades in WEG customer accounts, therein violating NASD Rules 3010, 3310, 2310, 2110, and FINRA Rule 2010. It is the responsibility of the investment advisor and his/her associated member firm to ensure clients are treated fairly and not taken advantage of. Firm representatives are required to recommend investment strategies that comply with multiple criteria regarding an individual including investment objectives, financial status and age. Excessive trading is a violation of FINRA Rules as it generally disadvantages the customer in order for the broker to generate additional commissions.

Feb 15, 2016

E.S. Financial Services of Miami Florida Fined for Undisclosed Fees

E.S. Financial Services, Inc. (ESF) of Miami, Florida submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly charging customers additional commission fees without their knowledge as well as keeping inaccurate books and records. ESF faced similar allegations in 2007 for allegedly failing to maintain accurate books and records. FINRA found that ESF essentially created another source of revenue by charging its customers additional fees. Between September 1, 2011 and October 31, 2012 ESF allegedly charged its customers “a transaction fee and a custody fee in addition to a commission on fixed income transactions.” FINRA alleged that the fees were not related to services provided by ESF and therefore a violation of NASD 2430 and FINRA Conduct Rule 2010.

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 13, 2015

LPL Financial Representative Suspended for Unauthorized Securities Transactions

Walter Rae Chao, a former broker with the San Mateo, California branch of LPL Financial, LLC (LPL Financial), 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 participated in private securities transactions totaling $1.27 million without the required approval from LPL Financial. FINRA found that Walter Chao, of Redwood City, California, introduced at least 13 clients to purchase interest in special purpose vehicles (SPV), which were created by another firm, in order to purchase pre-initial public offering (IPO) shares of Facebook, Inc. Nine of the 13 clients invested a total of $1.27 million in the Facebook SPVs. FINRA stated that although Mr. Chao did not receive direct compensation from the other firm for the transactions, approximately $8,000 in fees associated with Mr. Chao’s mother’s purchase of the Facebook SPV were waived.

Oct 23, 2015

12 More Independent Broker Dealers Fined by FINRA for Failing to Give UIT Discounts to Investors

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).

Oct 19, 2015

Six Independent Broker Dealers Fined by FINRA for Failing to Give REIT Discounts to Investors

The Financial Industry Regulatory Authority (FINRA) fined six independent broker dealers for failing to give their clients the proper discounts available to them, known as breakpoint discounts, on large sales of certain nontraded REITs. The six firms are Voya Financial Advisors Inc. (Voya), Transamerica Financial Advisors Inc. (Transamerica), Investacorp Inc. (Investacorp), J.P. Turner & Co. (J.P. Turner), National Planning Corp. (National Planning), and Cetera Investment Services (Cetera). The fines were levied in July and August and total more than $500,000. Voya and Transamerica were fined the largest amounts: $325,000 for Voya and $85,000 for Transamerica. The other fines levied against Investacorp, J.P. Turner, National Planning, and Cetera were: $50,000, $45,000, $30,000, and $30,000, respectively. All six firms were also ordered to pay restitution.

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459 search results found for “Failure to Supervise”