Tag Archives: FINRA

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.

 

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.

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.

 

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.

Illinois/Chicago Muni Bond Loss Recovery

Jeffrey Pederson is licensed in the federal courts for the Northern and Central Districts of Illinois, and has aided investors nationwide in the recovery of investment losses, such as muni bond losses.  Please call 1-866-817-0201 for a free and confidential consultation with an attorney.  We are currently investigating the potential recovery for losses in muni bonds issued by both Illinois and Chicago.

The risks of these bonds were foreseeable for years.  Financial professionals have a duty to only recommend investments that are consistent with the level of risk the investor both wants and can withstand.  Those either looking for retirement income or non-speculative investments may possibly have a claim if recommended either the Illinois or Chicago bonds.

Illinois bonds have long been at risk since the state has not had an approved budget in over two years.  The state currently has over $14 billion in unpaid bills.  This comes in the wake of similar financial problems in the territory of Puerto Rico.  In Puerto Rico, financial problems led to bankruptcy and caused thousands of investors to lose their life savings when they were led to believe that they were invested in “safe” municipal bonds.

Chicago is also on the verge of bankruptcy.  For years, the return on Chicago bonds were known to be too good to be true.  In 2014, the city’s debt was downgraded to junk status given the massive debts owed to four of its pension funds. This led to a widespread selloff in Chicago muni bonds.

Chicago Mayor Rahm Emanuel, in response, instituted a record property tax increase for city residents. Bills in 2016 will be, on average, 13% higher. The increased ‘revenue’ to the city is being used to help fix the four pension funds’ large underfunded status.

The Mayor’s plan to fix the $20 billion public pension shortfall was ruled unconstitutional. The restructuring plan was passed by the state legislature in 2014, but was struck down due to the state’s constitution, which has a clause that forbids the reduction of public pensions.

David Lerner Associates REIT Investigation

David Lerner Associates agreed to pay a $650,000 fine for the sale of unsuitable REITs to its investors and other violations.  Very little of the fine will compensate investors for their losses.  Instead, investors suffering losses contact a private attorney.  For a free, confidential consultation, investors can call Jeffrey Pederson at 1-866-817-0201.

LandmarkThe non-traded REITs at issue in the regulatory action were REITs now known as Apple Hospitality REIT investments.  The offerings included are Apple 7, Apple 8 and Apple 9.

Suitability violations are for the recommending of investments that are too risky, complicated or volatile for an investor considering the investors objectives, risk tolerance and investment sophistication.  Non-traded REITs such as Apple are generally only suitable for only a limited slice of the investing public.  Investors, including those looking for either stability, income, low risk, preservation of capital or liquidity from this investment, were likely inappropriately sold this investment.

The agreement to settle the charges was in the form of a consent order entered into with New Jersey regulators.  Of the fine, $100,000 went to pay for costs and $50,000 was to pay for investor education programs.

More information on the fine and the regulatory action can be found at the following link.

Investigation – K.C. Ward, Craig David Dima

FINRA barred former K.C. Ward Financial registered representative Craig David Dima
for making unauthorized and unsuitable trades totaling approximately $15 million in a
73-year-old retiree’s account, and for misrepresenting the reasons for the trades to the
customer.  This was announced in FINRA’s May Disciplinary Report.

NYSE pic 1Susan Schroeder, FINRA Acting Head of Enforcement, said, “There is no place in this industry
for brokers who take advantage of elderly customers. Protecting senior investors from
predatory behavior such as unsuitable and unauthorized trading is part of our core mission
and will always be a priority for FINRA.”

FINRA found that on 11 occasions, Dima sold virtually all of the customer’s Colgate-
Palmolive stock, accumulated over 28 years of employment at the company, without the
customer’s permission. In fact, Dima sold the customer’s shares even after the customer
told Dima not to sell the stock, which she considered a valuable long-term investment
and reliable source of dividends.

When confronted by the customer about the sales, Dima misrepresented to her that they were caused by a “computer glitch” or a technical error. In connection with Dima’s unauthorized sales and subsequent repurchases of Colgate stock, Dima charged the customer more than $375,000 in mark-ups, mark-downs and fees and deprived the customer of substantial dividends had she held the Colgate shares as intended.

FINRA also found that Dima’s trading of the customer’s Colgate shares was unsuitable and
violated FINRA rules prohibiting excessive mark-ups and mark-downs.

Investigation of Harold Stephen Pomeranz

Invest photo 2Harold Stephen Pomeranz of Stifel Nicolaus of New York entered into a regulatory settlement with FINRA regulators to settle charges against him.  Though Pomeranz neither admitted or denied fault, FINRA asserted the following factual findings and assessed a deferred fine of $5,000 and suspended from association with any FINRA member in any capacity for three months.

Pomeranz consented to the sanctions and to the entry of findings that he
recommended a number of unsuitable short-term unit investment trust (UIT) transactions
in an elderly customer’s account. The findings stated that the UITs Pomeranz recommended
to the customer had maturity dates of 24 months, and carried initial sales charges ranging
from approximately 2.5 percent to 3.95 percent. Yet the average holding period for the UITs Pomeranz recommended was less than 14 months. Moreover, on numerous occasions,
Pomeranz recommended that the customer use the proceeds from the short-term sale
of a UIT to purchase another UIT with similar or even identical investment objectives.
Pomeranz’s recommendations to purchase and sell UITs on a short-term basis caused the
customer to incur unnecessary sales charges and were unsuitable in view of the frequency,
size and cost of the transactions.

Securities brokers are not allowed to charge commissions and costs that are excessive in relation to the average equity in the portfolio.  So when a broker makes trades in products that have costs of 3 to 4% it only takes a few before those trades become excessive and in violation of the duties owed the investor.

Attention Investors of Voigt Cullen Kempson III

Pederson, PC is investigating the actions of V. Cullen Kempson III currently of American Portfolios and previously of Commonwealth Financial Network.   Kempson has previously settled charges of unauthorized trading in the account of a deceased investor and is currently facing felony weapons charges.  To speak to an attorney for a free and confidential consultation please call 1-866-817-0201.  

A recent settlement agreement Kempson enter into with FINRA regulators agrees to the 30-day suspension for making a large number of unauthorized trades in the account of an investor Kempson knew was deceased.  In the agreement, referred to as an AWC, Kempson neither admits nor denies fault.

The alleged facts are that in February 2007, A Kempson investor opened two investment Invest photo 2advisory accounts with Kempson at the Firm. At the time, the investor signed an agreement with the Firm granting Kempson discretionary trading authority, the ability to make securities trades without first contacting the investor.  A broker must contact an investor prior to the making of trades unless the broker has been granted authority by the investor in writing to make trades in an account.

On June 13, 2015, the investor passed away. Although Kempson was aware of the investor’s death since at least June 29,2015, Kempson did not inform his Firm of the investor’s death and continued to effect trades on a discretionary basis in the accounts.

Between June 29,2015 and April 5, 2016, Kempson effected a total of 40 trades in the deceased individual’s accounts.  FINRA Rule 2010 requires members to observe high standards of commercial honor and just and equitable principles of trade. After the investor passed away, Kempson had no written authority to conduct any trades in the investor’s accounts. FINRA charged that, by effecting 40 trades in a deceased customer’s accounts, Kempson violated FINRA Rule 2010.

Additionally, in February 2017, Kempson was charged on felony weapons charges for the unlawful possession of a weapon.  As stated in his CRD, he case is in front of the New Jersey Superior Court in Essex Vincinage.  He has asserted that he is not guilty.