Articles Tagged with Boca Raton Florida Broker Misconduct Attorney

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President of The Investment Center, Inc. (Investment Center) Ralph Devito was named as a Respondent in a Texas State Securities Board (TSSB) investigation that alleged Mr. Devito failed to properly supervise a registered representative with the firm. The investigation arose after the TSSB received a complaint alleging an Investment Center employee recommended unsuitable investments.

As President of The Investment Center, the firm’s written procedures required Mr. Devito to conduct a reasonable investigation into a representative’s activity. The TSSB found that between January 2010 and March 2014, an Investment Center employee recommended and executed several securities transactions that raised numerous “red flags.” TSSB alleges Mr. Devito either failed to notice or chose to ignore those “red flags” in client accounts. The investigation found that a majority of the representatives’ clients held over 95% of their total assets in equity positions of a single energy company. Continue reading →

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Lance Ziesemer of Waconia, Minnesota submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement for the Financial Industry Regulatory Authority (FINRA) for allegedly implementing a trading strategy and making unsuitable recommendations to two customers in connection with Unit Investment Trusts (UITs). From May 2007 until February 3, 2016, Mr. Ziesemer was registered with Feltl & Company (Feltl) as a General Securities Representative (GSR) and General Securities Sales Supervisor.

During his association with Feltl, Mr, Ziesemer recommended that a number of his customers buy and sell UITs. Between January 2011 and December 2012, Mr. Ziesemer recommended that two customers repeatedly sell UITs that they had held for a short time only to repurchase different UITs. The customers following Mr. Ziesemers recommendations made 36 short-term UIT switches.

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Oriental Financial Services Corp. (OFS) of San Juan, Puerto Rico submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Market Regulation of the Financial Industry Regulatory Authority (FINRA) for allegedly purchasing municipal securities for its own account from customers and then selling those municipal securities to other customers at prices that were not fair or reasonable.

Between July 1, 2013 and September 30, 2013 FINRA investigators found multiple transactions in which OFS was not fair or reasonable to its customers. FINRA alleged OFS failed to take into consideration all relevant factors, including the best judgment of the broker as to the fair market value of the securities at the time of the transaction and of any securities traded in connection with the transaction. Additionally, FINRA alleged that OFS didn’t account for the expense involved in effecting the transaction, the fact that the broker is entitled to a profit, and the total dollar amount of the transaction.

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TradeSpot Markets Inc. (TradeSpot) and its President, Chief Operating Officer and owner Mark Beloyan of Davie, Florida were named as Respondents in a Financial Industry Regulatory Authority (FINRA) complaint that alleges the firm, acting through its representatives, engaged in penny stock transactions without complying with Section 15(h) and Rule 15g-9 of the Securities Exchange Act of 1934 and FINRA conduct rules.

Section 15(h) of the Exchange Act prohibits brokers and dealers from “using the mails or any means or instrumentality of interstate commerce to effect any transaction in penny stock by any customer except in accordance with the requirements of Section 15(h) and the rules and regulations prescribed thereunder.” Rule 15g-9 of the Exchange Act makes it “unlawful for a broker or dealer to sell a penny stock to, or to effect the purchase of a penny stock by, any person unless, prior to the transaction, the broker or dealer has approved the person’s account for transactions in penny stocks and has received from the person an agreement to the transaction.”

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Meyers Associates, L.P. (the firm) and Bruce Meyers of New York, New York were subject to disciplinary action from the Financial Industry Regulatory Authority (FINRA) for allegedly misleading prospective investors in connection with claims surrounding a medical drug company. Meyers Associates has been a FINRA member since 1994 and has faced 10 FINRA disciplinary actions similar to this case. Mr. Meyers, cofounder of the firm, entered the securities industry in 1982 and acted as a General Securities Representative (GSR) and General Securities Principal (Principal).

Between May 2008 and September 2011, Meyers Associates began to raise between $1.5 million and $6 million for SignPath Pharma, Inc. (SignPath) through a private offering of convertible preferred stock and warrants. SignPath had not generated revenue and had an accumulated deficit of over $13.4 million. Meyers Associates and Mr. Meyers collectively owned more than 60 percent of shares in SignPath’s common stock during which time Mr. Meyers sent over 1,037 emails about SignPath to potential investors with whom he had no pre-existing or substantive relationship.

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John Hudnall of Pacifica, California was named a Respondent in a Financial Industry Regulatory Authority (FINRA) complaint that alleged he participated in undisclosed and/or unapproved outside business activities while associated with a FINRA member firm. Mr. Hudnall entered the securities industry in 2000 and was associated with FINRA member firms BancWest Investment Services, Inc. (BancWest) and US Bancorp Investments, Inc. (US Bancorp) during the relevant period.

FINRA alleged that Mr. Hudnall, while associated with US Bancorp and Bancwest, participated in an undisclosed and unapproved private securities transaction, made unapproved and undisclosed financial sales promotions to firm customers, recommended and sold an unsuitable variable annuity product and provided false information in response to FINRA information requests. FINRA’s investigators also alleged that in connection with an undisclosed securities transaction in May 2012, Mr. Hudnall artificially split a customer’s $400,000 REIT investment into two parts and submitted only the smaller part ($40,000) to his firm for supervisory review and approval generating himself $25,000 in ill-gotten commissions.

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