Annuity Losses with Roger Zullo

LPLIf you suffered investment losses or stuck in a variable annuity, or other investment losses, as a result of Roger Zullo, formerly of LPL Financial, please call 1-866-817-0201.

On April 4, 2017, Zullo entered a Consent Order, a settlement, with the Massachusetts Securities Division resolving charges made in an administrative complaint by the state against Zullo and LPL.

The complaint alleged that Zullo, under the oversight of LPL, defrauded their clients, falsified client financial suitability profiles, and sold his customers unsuitable variable annuities. Pursuant to the Consent Order, without admitting or denying any allegations of fact or violations o flaw, he consented to a permanent bar from the securities industry in Massachusetts, a $40,000 administrative fine, and disgorgement of $1,875,348. Payment for disgorgement was waived due to Zullo’s circumstances, however, this does not preclude investors from retaining private attorneys to seek this recovery from LPL.

The action stems largely from variable annuity sales.  Zullo, allegedly, recommended variable annuities to elderly individuals.  Investment professionals have a legal duty to only recommend suitable investments.  Variable annuities are inherently unsuitable for seniors.  Not only do they lock-up the funds at a time when people need access to their funds, the investments pay the broker a very high commission.  This commission is for the sale of many aspects of the variable annuity that senior investors do not need.  These include tax deferral and life insurance.  When a broker makes a heightened commission for the sale of things that are unneeded, the broker puts his interests ahead of the investors, and that constitutes a form of fraud known as the sale of “unsuitable investments.”

Zullo first became registered with FINRA as an IR in September 1998. He maintained that registration through consecutive associations with two member firms between September 1988 and August 2004. From August 2004 through December 2016, he was registered as an Investment Representative with LPL.

In November 2004, Zullo also became registered as IP through his association with the Firm. Zullo maintained those registrations through his association with the Firm until December 2016. Zullo worked for the Firm as a broker-dealer agent and investment adviser representative in Wellesley, Massachusetts.

On January 10,2017, FINRA sent a request for information and documents pursuant to FINRA Rule 8210 to Zullo with a response date of January 24, 2017. Zullo, through his counsel, requested two extensions to the January 10 request. Pursuant to these requests, FINRA extended the response date to March 1,2017.

Zullo did not provide any documents or information to FINRA in response to the January 10 request. On March 2,2017, FINRA sent a second request for documents and information pursuant to FINRA Rule 8210 to Zullo with a response date of March 16, 2017. Zullo did not provide any documents or information to FINRA in response to the March 2 request.

The resulting FINRA punishment is a permanent bar from the securities industry.

Anthony Vincent Ferrone securities violations

If you have suffered securities losses with Anthony Vincent Ferrone, formerly of Morgan Stanley, Ameriprise and Stifel Nicolaus, please call 1-866-817-0201 for a free and confidential consultation with a private attorney.   We believe that investors may be entitled to recovery for securities losses based upon recent actions concerning allegations of securities violations.

NYSE pic 2In July 2017, Mr. Ferrone was barred by FINRA from the securities industry.  The reason was because of his refusal to give complete testimony in a regulatory investigation concerning allegations that he sold investors unsuitable investments.

Unsuitable investments are investments recommended by a broker that are too aggressive or otherwise consistent with the investment objectives of an investor.  It can also mean any investment where a broker puts his personal compensation ahead of those of his investors.  Investors sold unsuitable investments are entitled to damages from the broker and the broker’s employer.

This is a recent event in a history of events concerning alleged mismanagement of funds and other red flags as to Mr. Ferrone’s ability to act as a broker.  Ferrone has four other allegations of mismanagement by investors, which are largely based on suitability issues.

Although Ferrone appeared for the FINRA investigation review on June 21, 2017, he did not provide complete testimony to FINRA. Specifically, during the review, Ferrone stated that he did not intend to proceed further on that date or at any future date and departed prior to the completion of his testimony.

 

 

Glenn Robert King investment losses

Over the course of his career, New Jersey broker Glenn Robert King, most recently of Royal Alliance and Buckman, Buckman and Reid,  has been accused many times of inappropriate action leading to investment loss of his investors.  His record discloses 25 disclosure events.  Disclosure events can be either lawsuits/judgments, terminations, regulatory investigations, bankruptcies, or written investor complaints seeking recovery.  His employers had a duty to provide heightened supervision to King in light of this extensive history but apparently failed to supervise adequately.  Investors may call for a free and confidential consultation with a private attorney by calling 1-866-817-0201.

A FINRA Hearing Officer in the most recent action found that King: 1) willfully misrepresented and omitted material facts, which constitutes fraud, when he sold 44 unit investment trusts (“UITs”) to seven customers; 2) excessively traded the accounts of four customers when he traded the customers’ UITs and closed-end mutual funds (“CEFs”) on a short-term basis (a suitability violation because the expense and commissions of trading were more than the reasonable benefit to the investor of such trades ); 3) made unsuitable recommendations to the same four investors when he recommended that they purchase UITs and CEFs as short-term trading investments; and 4) exercised discretion in the accounts of the four customers without written consent or approval. The Hearing Officer barred King for the fraud and imposed an additional bar on him for the suitability violations. In light of the bars, the Hearing Officer declined to impose sanctions on King for the improper exercise of discretion.

After an independent review of the record, FINRA affirmed the Hearing Officer’s findings of liability of King for the excessive trading and improper exercise of discretion in investor accounts, but we reverse the Hearing Officer’s findings of liability related to the fraud and unsuitable recommendations. For sanctions, FINRA decided to bar King for excessive trading in his investors’ accounts. In light of this bar, FINRA declined to impose sanctions on King for his improper discretionary trading.

In February 1992, Glenn Robert King registered with FINRA as a securities broker.  During the periods relevant to the conduct for the most recent allegations, April 2008 to March 2011 and January 2013 to December 2014, King was registered with Royal Alliance Associates, Inc. (“Royal Alliance”) and Buckman, Buckman & Reid, Inc. (“Buckman Reid”), respectively. King joined Royal Alliance as a broker in January 2005. He voluntarily terminated his association with the firm in June 2011. In January 2012, King registered with Buckman Reid as general securities representative. King voluntarily left Buckman Reid in June 2015. King has not registered with another FINRA member firm since he terminated his association with Buckman Reid.

 

James Davis Trent

Investors suffering losses with James Davis Trent may be entitled to recovery from his brokerage employers, AXA, Proequities and Allstate.  Please call 1-866-817-0201 for a free consultation with a private attorney.

investingstockphoto 1Trent entered into a regulatory settlement with FINRA in which Trent was suspended from
association with any FINRA member in all capacities for six months. In light of Trent’s
financial status, no monetary sanction has been imposed. Without admitting or denying
the allegations, Trent consented to the sanction and to the entry of findings that he
engaged in a pattern of recommending unsuitable short-term trading of Class A mutual
fund shares to customers, resulting in the customers (all of whom were retired) incurring
approximately $6,362.50 in unnecessary sales charges, while Trent received approximately
$2,910 as his commission from the sales loads.

Short-term trading of mutual funds is a form of churning, an action where there is very little benefit to the investor but significant commissions to the broker.  Such actions are in violation of FINRA rules and the anti-fraud provisions of state and federal securities laws.

The regulatory findings stated that Trent recommended all of the transactions that were executed in the customers’ accounts at the firm, including short-term trading involving Class A front-end-loaded mutual funds. In the transactions at issue, Trent recommended the purchase of Class A mutual fund shares and, within less than a year, recommended the sale of the positions, resulting in an average holding period for the customers’ accounts of six months. Given the long-term nature of investments in Class A mutual fund shares and the customers’ investment profiles, Trent lacked a reasonable basis to believe that the recommended securities transactions were suitable for the customers.

 

Attention Investors of Kyle P. Harrington

Investors of Kyle Patrick Harrington may have recourse for their losses.  Please call 1-866-817-0201 for a free and confidential consultation.

Harrington has been alleged to have committed several forms of deceit in his dealings with investors and regulators in the last eight years.  This includes actions while employed at National Securities (NSC), Bannockburn Partners, Matrix Captial, First Allied, and Robert B. Ausdall.  He is currently a representative of Aurora Capital and also operates under the name of Harrington Capital Management.  Responsibility for the actions of Harrington fall not just on Harrington, but also on his employers.

The types of deceit alleged over the years include churning, creating of falsified documents, theft of investor funds, unsuitable investments, excessive trading, unauthorized purchases made in investor accounts, and other forms of misrepresentations and fraud.

Of all the allegations of deceit, the most recent is a civil suit filed by FINRA.   The FINRA suit involves a series of alleged deceptions by Kyle Harrington with the help of his assistant, Linda Milberger, to conceal Harrington’s alleged theft of customer funds and private securities transactions, securities transactions done outside of his firms’ fraud monitoring to put his investors in questionable investments.

Harrington is also alleged to have created false documents to submit to FINRA to conceal his misconduct not just from his employers, but also from regulators. For her part, Milberger falsified wire request forms which allowed Harrington’s conversion of customer funds, submitted those falsified wire request forms to her firm and another brokerage as if they were authentic records, and knowingly assisted Harrington in providing an altered bank statement to regulators.

In particular, in August 2012, Harrington convinced an investor to authorize a wire transfer to Harrington’s registered investment advisor firm for a purported investment. In fact, after the investor’s funds were wired to Harrington’s business checking account, Harrington took the investor’s funds without her knowledge or consent, and used it to pay his own business expenses.

When difficulties arose completing the $20,000 wire transfer from the investor’s account in August 2012, Harrington’s assistant, Milberger, altered the wire request form that the investor had signed without the investor’s knowledge or consent, on at least two occasions, in order to transfer all available cash out ofLD’s account to Harrington. Milberger submitted the altered wire request forms to her own firm and another broker dealer as iftheywere authentic, thereby causing those firms to maintain inaccurate books and records regarding the wire transfer.

In August 2012 and early 2013, Harrington also engaged in a series of private securities transactions with multiple individuals through which he sold over 300,000 shares of restricted stock he had purportedly received as compensation from a company named Islet Sciences, Inc. for approximately $276,000. Harrington failed to disclose these transactions, including his role as seller of the securities, to his employing firm or seek its prior approval of them.

Harrington not only failed to disclose his private securities transactions in Islet but he actively attempted to conceal them. Specifically, in July 2014, during a firm audit of his business, Harrington submitted falsified records to his firm mischaracterizing payments he had received for the sale of his Islet stock.

Additionally, Harrington has been the subject of nine actual or threatened investor lawsuits, multiple other regulatory investigations and employment terminations.  This information is contained in the CRD of Harrington.

Jon T. VanSlooten Losses

Jon Timothy VanSlooten, a former broker with Edward Jones in Ohio, has been fined by FINRA for excessive and unauthorized trading in his investors’ accounts.  If you are a former investor of VanSlooten, please call 1-866-817-0201 for a free and confidential consultation.

During the relevant period, 2009 through 2016, VanSlooten exercised discretionary trading authority in the accounts of Firm customers, without obtaining prior written authorization from each of the customers or approval from the Firm to treat the customers’ accounts as discretionary. Specifically, VanSlooten effected approximately 586 trades in the four customers’ accounts without discussing and receiving approval for the trades from the customers’ on the dates of the transactions.

NASD Rule 2510(b) prohibits registered representatives from exercising discretion in a customer’s account unless the customer has provided prior written authorization and the account has been accepted in writing as a discretionary account by the registered representative’s member firm employer.

FINRA Rule 2010 requires all associated persons to “observe high standards of commercial honor and just and equitable principles of trade.” A violation of NASD Rule 2510(b) is also a violation of FINRA Rule 2010. During the Relevant Period, the Firm’s written supervisory procedures prohibited its registered representatives from exercising discretionary authority over client accounts.

VanSlooten no longer appears to be in the industry according to his CRD.  However, this does not relinquish his employer for the damages he caused.

 

Losses with Larry Charles Wolfe

Jeffrey Pederson PC assists investors in recovering losses such as those incurred as the result of the misdeeds of brokers, such as the alleged misdeeds of Larry Charles Wolfe.  Currently with Stoever, Glass & Co., Wolfe was previously with Aegis Capital Corp., and Herbert J. Sims & Co. Those suffering losses with this broker are likely entitled to recovery from either Wolfe or his employer.  Call 1-866-817-0201 for a free and confidential consultation.

Invest photo 2FINRA has announced that it has entered into a settlement with Larry Charles Wolfe for making unauthorized transactions in his clients’ accounts.  The allegations are that between November 10, 2015 and November 16,2015, Wolfe inappropriately exercised discretion in the accounts of 39 investors without obtaining prior written authorization from the customers or written approval of the accounts as discretionary from his employing member firm, in violation of numerous state and federal securities laws.

A securities broker must obtain authorization from an investor prior to making a securities transaction in the investor’s account unless that broker has written authorization to make such a trade.

Additionally, MSRB Rule G-17 and FINRA rules require that each broker or dealer in municipal securities to deal fairly with customers and prohibits registered representatives from engaging “in any deceptive, dishonest, or unfair practice.”

The trades are believed to involve municipal bonds and other securities.

In addition to this regulatory action, Wolfe has been sued by investors at least ten (10) times, primarily for allegations of unauthorized, excessive, or unsuitable trades.  Additionally, at least two (2) other investors have threatened suit.  Despite Mr. Wolfe being accused of wide-scale fraud he has not yet lost his license and is still working in the securities industry.

 

Randy Alford Losses

 Certified Financial Planner Board of Standards, Inc. (CFP ) announced June 16, 2017 that it has imposed an automatic interim suspension of Randy Alford’s CFP certification.  If you suffered losses with Limited Partnerships recommended by Mr. Alford call the Law Offices of Jeffrey Pederson at 1-866-817-0201 for a confidential and free consultation of your rights.

The CFP Board imposed an automatic interim suspension, effective March 16, 2017, after discovering that FINRA barred Mr. Alford from associating in any capacity with any FINRA member firm, which includes every licensed securities brokerage, for failing to adequately respond to requests for information by FINRA during its investigation of Alford.

The FINRA investigation began after FINRA discovered Mr. Alford brokerage firm, Southeast Investments, terminated him from his position as a registered representative for failing to disclose an outside business activity involving a limited partnership and for “selling away,” which is the selling investments  without his firm’s approval and thereby circumventing the firm’s compliance department that detects fraudulent securities transactions.

The failure to respond to FINRA’s request for information violated FINRA Rule 8210, and caused FINRA to suspend Mr. Alford in December 2015. The suspension from January 2016 to March 2016 converted to a permanent bar from the securities industry due to Mr. Alford’s failure to timely request termination of his suspension.

Pursuant to Article 5.7 of CFP Board’s Disciplinary Rules and Procedures, “[a]n interim suspension shall immediately be issued without a hearing when CFP Board Counsel receives evidence of a conviction or a professional discipline in accordance with Article 13.1 for…revocation of a financial professional license (securities, insurance, accounting or bank-related license).” Under the interim suspension order, Mr. Alford’s right to use the CFP® certification marks is suspended pending CFP Board’s completed investigation and possible further disciplinary proceedings.

 

Geraldine Gordon Investment Loss

The Law Offices of Jeffrey Pederson, PC represents investors suffering losses as the result of adviser mismanagement, such as the investment losses of investors of Geraldine Gordon of Ameriprise.  Ms. Gordon has been accused by FINRA regulators of inappropriately recommending oil and gas investments.  Concentrating such unorthodox investments in an investor’s portfolio can be unsuitable, which is mismanagement of a portfolio and in some cases fraudulent.  Please call 1-866-817-0201 for a free and confidential consultation.

The regulatory filing highlights the plight of one such investor.  On June 2013, Gordon recommended to one of her investors that she liquidate a number of
diversified investments in her Ameriprise brokerage and IRA accounts, which
comprised approximately half (49.9%) of her liquid net worth. Ms. Gordon recommended that
this investor use those assets to purchase a Master Limited Partnership (“MLP”) focused
on the energy-sector. This investment is believed to be an investment in oil and gas.  The MLP’s prospectus described the investment as speculative.

Following Gordon’s recommendation, the investor invested a total of $334,000.00 in the
MLP investment through her Ameriprise brokerage and IRA accounts. The investor’s investment in the MLP comprised a large portion of the investor’s liquid net worth at the time.

blog_gulf_mexico_oil_rigFINRA Rule 2111, the FINRA suitability rule, provides that when recommending the purchase, sale, or exchange of any security to an investor, a securities broker “must have a
reasonable basis to believe that a recommended transaction [...] is suitable for the
customer, based on the information obtained through the reasonable diligence of
the member or associated person to ascertain the customer’ s investment profile.”

Gordon’ s recommendation that her investor invest half of her liquid net worth in this
single sector-focused, in this case an oil and gas, MLP was not suitable for the investor in light of the investor’s financial condition and the excessively concentrated nature of the investment.

Many state regulators have rule the suitability requirement even more restrictively.  Some have limited the investment in such an investment to 10% of the investor’s liquid net worth.

One of the concerns with MLP investments is that many pay an extremely high commission to the broker, which is usually not disclosed.  This can cause some brokers to recommend MLPs despite the inherent risks in the investment to those who cannot afford to take such risks.

WFG Investor Loss Recovery

WFG has recently been identified and fined as the result of allegations that its supervision of its brokers is lacking.  To speak to an attorney to discuss your rights please call 1-866-817-0201 for a free and confidential consultation.

FINRA asserts that during 2012 and 2013, senior personnel at WFG were aware of red flags that one of its brokers in its San Antonio office, who FINRA only identifies as “MB,” was engaged in unsuitable trading with respect to low-priced securities, which generally carry a high level of risk. Notwithstanding their knowledge of these red flags, the Firm consistently failed to take adequate supervisory steps to ensure that MB’s sales of low-priced securities to his customers were suitable.

Unsuitable investments are investments a broker recommends that are either more aggressive than an investor’s risk tolerance, inconsistent with an investor’s objectives, too risky given an investor’s financial condition, too complicated for an investor given the investor’s lack of investment sophistication, or otherwise inconsistent with the wants and needs of an investor.  There are many incentives that a broker may have for recommending unsuitable investments, but the most common is that risky investments often pay a higher commission.

Brokerage firms have a duty to ensure that only suitable investments are sold.  FINRA’s action alleges that WFG failed to respond appropriately when it should have been aware that a broker was recommending unsuitable investments.

For instance, in August 2012, the Firm held a meeting at WFG’s headquarters that was attended by senior supervisory and compliance personnel, as well as a supervisor FINRA identifies only as “WG,” MB’s direct supervisor. During this meeting, compliance personnel noted that MB was unsuitably concentrating his customers’ portfolios in low-priced securities. WG was instructed during this meeting not to permit MB or other representatives in the San Antonio branch office to purchase any more positions in a specific security, LB, on behalf of their clients.

WG, however, failed to enforce this directive. In fact, MB continued to sell low-priced securities, including LB, in his WFG and RIA (investment advisory) accounts. The Firm and its personnel also failed to follow up appropriately on red flag information that they learned about MB’s sale practices during this meeting.

ln September 2012, the Firm conducted an inadequate inspection of MB’s branch office in San Antonio. The Compliance Manager assigned to conduct this audit, JA, another supervisor, had participated in the August 2012 meeting. Notwithstanding his knowledge of potential sales practice violations involving low-priced securities, the audit conducted by JA related only to non-sales practice issues, such as the review of change of address requests and a check of controls over the receipt of incoming mail.

During this audit, JA did not review: (1) advisory activity by representatives in this branch office, including MB, (2) trading in low-priced securities, including LB; or (3) suitability of transactions recommended or executed in this branch office. In January 2013, the Firm held another meeting at its headquarters with senior supervisory and compliance personnel, as well as WG and MB. During this meeting, compliance personnel raised continuing concerns about ongoing unsuitable trading in low-priced securities in MB’s accounts and about undisclosed complaints against MB from his time with his previous employer.

Ultimately, FINRA censured the firm and ordered it to pay a $150,000 fine for their supervisory lapses.  Such lapses in supervision can make the firm responsible for other broker misdeeds.  If you suffered a loss, call toll-free 1-866-817-0201.