Todd Jones of J.P. Morgan investment fraud

If you have suffered investment losses while investing with J.P. Morgan financial advisor Todd Jones, you may be entitled to a recovery.  Mr. Jones has recently been accused of committing fraud in a large number of his investors’ accounts.  Call 1-866-817-0201 for a free and confidential consultation.

Invest photo 2The regulatory action was initiated by FINRA concerning unauthorized trades by Jones in certain high risk investments.  The FINRA regulatory settlement identifies that in July 2015, while registered with J.P. Morgan, Jones made trades in his investors’ accounts without permission in the accounts of 12 firm customers and mismarked most of the trades as “unsolicited,” which means that the trade was made at the request of the investor.

While many investors believe that their financial advisor or stock broker can make trades as he/she sees fit, regulations require that there must actually be verbal authority from the account owner contemporaneous to the trade.  Absent such verbal authorization, there must written authority.

On July 6 and 7, 2015, Jones exercised discretion to purchase a total of $208,714 of VelocityShares 3x Long Crude Oil (UWTI) in the accounts of 12 firm clients. This investment was not only unauthorized, the investment was also a very risky investment that is designed to multiply the gains or losses of the underlying holdings by three.

None of the 12 clients, had provided Jones with written permission to exercise such trades in their brokerage accounts.  Regulatory rules provides in relevant part that, “No… registered representative shall exercise any discretionary power in a customer’s account unless such customer has given prior written authorization to a stated individual or individuals and the account has been accepted by the member . . .” .

The trades likely enriched Jones by thousands of dollars while putting his clients in financial jeopardy.

Though Jones appears to be out of the securities industry, FINRA impose a fine and a four-month suspension.  Jones neither confessed or denied the allegations.

 

Kinan Nimeh investment loss recovery

If you have suffered investment losses with Kinan Nimeh, formerly a financial advisor with McBarron Capital, please call 1-866-817-0201 to discuss with a lawyer your rights for recovery of those losses.  Recently Nimeh has entered into a settlement with FINRA, the regulator that oversees securities brokerages, concerning allegations of serious regulatory violations.  That settlement states the following:

NYSE pic 2FINRA Rule 2111(a) provides: “A [financial advisor] must have a reasonable basis to believe that a recommended [investment] transaction or investment strategy involving a security or securities is suitable for the [investor utilizing the advisor's services], based on the information obtained through the reasonable diligence of the [brokerage or advisor] to ascertain the customer’s investment profile.”

In June 2009, FINRA advised all brokerages through a notice concerning Non-Traditional ETFs that “[d]ue to the effect of compounding, their performance over longer periods of time can differ significantly from the performance…of their underlying index or benchmark during the same period of time.” Because of these risks and the inherent complexity of the products, FINRA Regulatory Notice 09-31 advised securities brokerages and their adivsors that Non-Traditional ETFs “typically are not suitable for retail investors who plan to hold them for more than one trading session, particularly in volatile markets.”

During the Relevant Period, Nimeh recommended approximately 52 NonTraditional ETF purchases in 29 customer accounts. These types of investments were not meant to be held for extended periods. In fact, the prospectuses for the NonTraditional ETFs recommended by Nimeh warned that the ETFs were intended to be used as short-term trading vehicles, not long-term investments. Despite the warning in the prospectuses; however, Nimeh recommended that the Non-Traditional positions be held in these customers’ accounts for between 62 and 176 days with the averaged holding period was 130 days. This is much longer than is suitable for such investments.

Nimeh did not have reasonable grounds for believing that these recommendations were suitable, according to the settlement.  As such, the settlement states, the sale of the securities are in violation of FINRA regulations and investors of Nimh may be entitle to recovery of the losses if they invested in ETFs with Nimeh.

Nimeh consented to the settlement without admitting or denying the findings.

Diones LaCerte Investment Fraud Investigation

We are currently investigating the actions of Colorado Springs broker Diones LaCerte.  Ms. LaCerte was most recently a financial advisor for Morgan Stanley.  If you information or would like to discuss a potential claim that you have concerning Ms. LaCerte, please call 303-300-5022 in Colorado or 1-866-817-0201 outside of Colorado to speak to a Colorado licensed attorney.

Ms. LaCerte has recently been alleged by FINRA regultators to have committed significant fraud. Between July 1,2012 and December 31,2014, LaCerte engaged in an unsuitable pattern of short-term trading of Unit Investment Trusts (“UITs”) in 107 of her customers’ accounts.  This is a significant type of fraud perpetrated on a large number of investors.   Diones LaCerte settled the charges without admitting or denying fault.

The actions of LaCerte constitute an unsuitable pattern of short term trading of UITs in 107 customer accounts. This is similar to churning an account.  Short term trades of a high commission and high cost investment puts the advisor’s financial gain ahead of that advisor’s investors.

UITs typically carry significant upfront charges, such as costs and commissions, and as with mutual funds, short-term trading of UITs is generally improper. During the Relevant Period, in connection with these 107 customer accounts, LaCerte repeatedly recommended that the customers purchase UITs and then sell these products well before their maturity dates.

The primary issue brought by FINRA concerns the selling of UITs less than two years after purchase.  The majority of the UlTs that LaCerte recommended had maturity dates of at least 24 months. Nevertheless, LaCerte repeatedly recommended that her customers sell their UIT positions less than one year after purchase. Indeed, the average holding period for the UITs purchased in these customers’ accounts was less than 300 days. In addition, on more than 100 occasions, LaCerte recommended that her customers use the proceeds from the short-term sale of a UIT to purchase another, similar UIT. LaCerte’s recommendations caused the customers to incur unnecessary sales charges, and were unsuitable in view of the frequency and cost of the transactions.

Diones LaCerte has a significant history of customer complaints prior to the current regulatory action.  The CRD of Ms. LaCerte, the record a financial advisor has with FINRA regulators, indicates that she has received many customer complaints concerning the sale of unsuitable investments, and these complaints have led to five investor lawsuits brought or threatened in the past three years.

Colo. Attorney for Sonya Camarco Victims

Sonya Camarco is an LPL Financial advisor based in Colorado Springs who stole approximately $2.8 million from her investors/clients.  Camarco then used the stolen funds for personal expenses such as buying several homes.

If you are a victim, please call the Law Offices of Jeffrey Pederson at 1-866-817-0201 for a free consultation on your rights.  Jeffrey Pederson is an attorney licensed in Colorado who has helped hundreds of victims of financial advisor fraud and theft from across the country.

The Securities and Exchange Commission charged Sonya D. Camarco with five counts of fraud charges and has frozen her assets after SEC investigators said she used third-party checks and other means to forward client funds toward personal expenses like mortgage and credit card payments.  Federal authorities filed charges against Comarco on or about August 27, 2017 in the United States District Court for the District of Colorado.

broker in handcuffs

Camarco forged clients’ signatures on at least 129 first- and third-party checks, having them sent to a post office box and signing them over to an entity she controlled, an entity named “C Investments,” according to the SEC. Camarco bilked one widow victim for more than $1 million, investigators say.

These actions not only raise questions on the actions of Camarco, but also raises question as to the LPL supervisors charged with overseeing Camarco.  Reasonable supervision is designed to detect and stop these types of actions.  There are also money laundering issues on the part of those who helped Camarco commit her crimes.

Prior to working for LPL, Camarco had worked from both Morgan Stanley and Merrill Lynch.

Jeffrey Pederson, from his offices in the Denver Tech Center, has handled cases in the past with similar facts and has experience in this type of advisor scheme where an advisor uses similar mechanisms to gain control of the investor’s funds.   Consequently, he knows the documents to seek in discovery from defendants or to subpoena from non-defendants, and additional avenues of recovery to allow victims to increase their level of repayment.

George Merhoff Loss Recovery

Investors of George Merhoff, a broker and advisor with Cetera Advisors, can call 1-866-817-0201 for a free initial consultation with an attorney concerning loss recovery.  All consultations are confidential and representations done on a contingent basis, where attorney fees paid from the ultimate settlement or judgment.

Merhoff, a securities broker located in Oregon, has been the subject of approximately 16 lawsuits in the past two years.  These lawsuits concern the recommendation of unsuitable securities.  Merhoff sold a significant amount of oil and gas investments to his investors over the last six years.  Oil and gas investments are inherently speculative.

The sale of unsuitable securities is not only a negligent action, but also a form of fraud.  The payout to the broker/advisor from these investments are generally higher.  This gives the broker or advisor an incentive to omit from the investor the high level of risk that these investments pose.

Suitability violations exist anytime a recommended investment is inconsistent with the wants 7crude-oil-pumps-power-transmission-elementsand needs of an investor.  FINRA, the regulator overseeing financial advisors and securities brokers, prohibits the recommendation of unsuitable securities.  These rules also require that the advisor or broker to “know the customer.”  This means that the advisor or broker must know the wants and needs of his investors, along with that investor’s tolerance for risk and objectives for the account.

Since the oil and gas investments are speculative investments that are inherently volatile, they would not be suitable investors indicating that they can afford to take significant risk with the funds.  The investments would not be suitable for investors looking to receive regular income from their investments or take only moderate risk.

Oil and gas investments of particular interest include Linn Energy (“LINE” or “LNCO”), PennGrowth and Teekay Partners.  Also of interest are investors investing in REITs or utilizing margin loans on the recommendation of Merhoff.

 

John Correnti Investment Losses

If you have suffered investment losses with John Correnti, most recently with AXA, please call 1-866-817-0201 for a free and confidential consultation concerning your rights.

Mr. Correnti was terminated by AXA in July 2016 as the result of allegations concerning market manipulation.  The manipulation concern certain low-priced investments that were traded over-the-counter.  This is a serious type of securities fraud.  Such investments are easy to manipulate by a broker because they generally have a low volume of trading.  If a broker can get several of clients in a short time period or have one client make a significantly large purchase he can artificially inflate the price.  The problem from market manipulation generally comes in that the broker trades in his own account ahead of the purchase, sells once the price is artificially inflated and then the investment crashes since no other investors are available to keep the price inflated, though it is unclear if Correnti directly profited from the alleged market manipulation.  Notwithstanding, a violation may exist even if the broker does not directly profit as either a fraud on the market or by the damage the broker causes the investor/customer.

FINRA sought to investigate Correnti for these allegations and allegations that he was intentionally selling investments to his customer/investors beyond the supervision of AXA compliance and managers.   Correnti, at the regulatory hearing, chose to stop his testimony and, as a result, stopped contesting the charges.  He was then expelled from the securities industry by FINRA.

 

Victims of Jay D. Jordan

We are currently investigating Jay D. Jordan, also known as Jay Dee Jordan and J.D. Jordan, of Oklahoma City and previously an advisor of WFG Investments has been found by regulators to have systemic fraud in the accounts of his investors (customers). These victims of Jordan should speak to a private attorney about their rights by calling 1-866-817-0201.  Initial consultations are free and all information is kept confidential.

Between June 1,2012 and March 31, 2016 FINRA, the regulator that oversees securities brokerages and financial advisors, has made the findings that Jordan engaged in a series of significant violations of FlNRA Rules that resulted in substantial customer harm.  These violations resulted from the following misconduct:

He recommended and engaged in unsuitable trading in nontraditional ETFs in 84 of his customers accounts. These trades, which were unsuitable from both a reasonable-basis and a customer-specific perspective, collectively resulted in customer losses exceeding $8 million.

He exercised discretion without having obtained prior written authorization in the accounts of at least six customers.

He mismarked 927 of his customers’ purchases of nontraditional ETFs as “unsolicited” when he had, in fact, solicited those transactions. He failed to report two customer complaints to his Firm, and then surreptitiously attempted to settle one of the claims away from the Firm through the improper use ofhis personal email account.

He failed to produce requested documents and information pursuant to a FiNRA Rule 8210 information request. As a result ofthe foregoing, Jordan violated NASD Rules 2310(a) (before July 9. 2012) and 2510(b),and FiNRA Rules 2010,21 ll (a) (on and after July 9,2012), 45 ll and 8210.

Additionally, over the course of his career, he has been the subject of at least 15 threatened or filed suits.  Such suits are generally handled through the FINRA arbitration process.

Investors of Paul Vincent Blum

If you suffered losses with Paul Vincent Blum, most recently a financial advisor with RBC, please call 1-866-817-0201.

In 2017, FINRA was conducting an investigation of Blum in connection with customer complaints and arbitration claims alleging, among other things, unsuitable trading. To date, Blum has approximately 23 customer complaints.  Many of the complaints concern his recommendation of energy sector investments to investors not wishing to speculate or unwilling to high levels of risk known to exist in the energy sector.  Many of these complaints were settled by Blum’s employers, including RBC.  He has also been accused of making misrepresentations concerning bonds, including the taxable nature of certain bonds.

On July 21,2017, FINRA staff sent Blum’s counsel a written request for on-the-record testimony pursuant to FINRA Rule 8210. As stated in Blum’s counsel’s email to FINRA of July 25,2017, Blum aclmowledges that he received FINRA’s request and will not appear for on-the-record testimony in front of FINRA. FINRA requires that persons subject to FINRA’s jurisdiction provide information, documents and testimony as part of a FINRA investigation.

As a result of the failure to cooperate in the regulatory investigation of FINRA, Blum has been barred from association with any FINRA member, which would include any and all securities brokerages in the United States.

Walter Marino Annuity Complaints

Walter Marino has come to our attention for issues concerning his variable annuity sales and large number of customer complaints.  Marino most recently worked for Benjamin Securities, Lincoln Investments, Planmember and Legend Equities.  If you wish to discuss your rights with an attorney call 1-866-817-0201 for a free consultation.

The most recent issue with Marino is a regulatory complaint filed against him by the securities regulator FINRA.  This complaint constitutes the 16th “event” in the CRD record of Marino.  An event on a CRD is an occurrence which reflects poorly on a broker’s ability to handle the funds of others.  Events include terminations of employment, being sued by a customer/investor, being the focus of a regulatory action, and other similar black marks.

This most recent regulatory complaint involves the sale of variable annuities.  In May and June 2014, Respondent Walter Marino recommended unsuitable replacements (also known as exchanges) of variable annuities to two customers without having a reasonable basis for recommending the transactions.  An investment is unsuitable when the investment puts the interests of the broker ahead of that broker’s investor.

Marino received substantial commissions, approximately $60,000, from the unsuitable transactions. Marino’s investors, however, received no benefit from the exchanges Marino recommended. Indeed, both customers suffered financial harm due to the costs incurred as a result of the annuity replacements since the liquidation of annuities causes the investor to not only lose the substantial commissions and fees that the investor paid to get into the annuity, but the investor commonly incurs significant charges in liquidating the annuities.

Marino’s recommendation to one such investor resulted in that investor incurring an $82,523.23 surrender charge, a charge commonly assessed upon the liquidation of a variable annuity. In addition, switching annuities can have substantial tax ramifications.   When Marino recommended replacing non-qualified annuities, Marino failed to utilize the tax-free exchange available under Section 1035 of the Internal Revenue Code (“1035 exchange”).

The new annuities that Marino recommended to replace those being surrendered also resulted in an increase costs to the investors.  The increases included increases in annual mortality and expense charges, a new, advisory fees of 1.5%, and new surrender periods which decreased the ability to liquidate the annuities.

By recommending annuity replacements that benefit him but caused substantial financial harm to his customers, Marino violated regulatory rules that require him to sell suitable investments to his investors.

These issues should not be a surprise to those familiar with Marino’s history.  The CRD of Marino indicates that he is an alumni of the Stratton Oakmont brokerage firm, the brokerage firm that was the focus of the film The Wolf of Wall Street.

James Fleming Investment Loss Recovery

Please call 1-866-817-0201 to discuss potential investment loss recovery for investors of James Fleming.  Mr. Flemming previously work for Investors Capital Corp. (“ICC”) and currently works for Questar.  Initial consultation with an attorney is free of charge.

Wall Street photo 2As identified by FINRA regulators, between June 2010 and December 2014 (the ”Relevant Period”), Fleming engaged in a pattern of short-term trading of UITs in two customers’ accounts. UITs are investment companies that offer shares of a fixed portfolio of securities in a one-time public offering, and terminate on a specified date. As such, they are not designed to be used as trading vehicles. In addition, UITs typically carry significant upfront charges, and as with mutual funds that carry front-end sales charges, short-term trading of UITs is presumptively improper.

During the Relevant Period, in connection with two customers’ accounts, Fleming repeatedly recommended that the customers purchase UITs and then sell them well before their maturity dates. The UITs that Fleming recommended had maturity dates of 24 months or longer and carried significant sales charges.

Nevertheless, on 177 occasions, Fleming recommended that his customers sell their UIT positions within eight months oftheir purchase. The holding period for the UITs ranges from between three and 235 days, with an average holding period ofonly 96 days. In addition, on several occasions, Fleming recommended that his customers use the proceeds from the short-term sale of a UIT to purchase another UIT with similar investment objectives. Fleming’s recommendations caused the customers to incur unnecessary sales charges, and were unsuitable in view ofthe frequency and cost ofthe transactions.

Regulators suspended Flemming for a period of four months and imposed a $10,000 fine.