Tag Archives: Iowa

William P. Carlson of Elhert

On February 21, 2017, he Securities and Exchange Commission charged William P. Carlson, Jr., a Deerfield, IL investment advisor with misappropriating more than $900,000 from a client’s account through more than 40 unauthorized transactions.  Deerfield is in the Chicago-area.

The SEC alleges that Carlson, an investment advisor representative associated with the Ehlert Group in Lincolnshire, forged a client’s signature on checks and journal requests and caused checks to be issued from the client’s account to a third party who gave the proceeds to Carlson.

Carlson had discretionary authority to place trades in the victim’s accounts. Such trades, involving the purchase and sale of mutual fund shares, were supposed to be made pursuant to a model asset allocation portfolio selected by the client based on advice from Carlson. When requested by the client, Carlson could direct disbursement of funds held in the accounts to the client. In order to disburse funds held in the accounts for the benefit of a third party, the Broker-Dealer holding the funds required a written request signed by the client.

On at least sixteen different occasions from November 2012 to April 2014, Carlson directed that a check made payable to the client be issued from the client’s account, purportedly based on instructions Carlson had received from the client. The check amounts ranged from $6,500 to as much as $97,000, and collectively totaled $437,000.

In approximately June 2014, Carlson changed his method of making unauthorized withdrawals from the client’s account. Carlson began forging the vicitm’s signature on “Check and Journal Request” forms that directed the Broker-Dealer to make disbursements of funds held in the client’s account to a third party who was a friend of Carlson’s.

In March 2015, Carlson forged the vicitm’s signature on a letter of authorization and a notarized signature sample letter permitting the firm holding the funds to issue checks from the victim’s account to Carlson’s same friend, without the need for further check and journal requests that required additional client signatures.

Between approximately June 2014 and December 2016, through the use of these forged authorizations, Carlson caused at least 25 checks—ranging in amount from $10,000 to $35,000 and collectively totaling $474,000—to be issued from the client’s account to Carlson’s friend, who in turn gave the proceeds to Carlson.

The Complaint of the SEC can be found at the following link.

Dougherty & Company Investment Losses

 

The Financial Industry Regulatory Authority (FINRA) announced in January 2017 that it resolved a regulatory action against Dougherty & Company LLC, headquartered in Minneapolis, Minnesota.  We believe that this action exposed supervisory problems within Dougherty and may entitle investors of certain investments recovery for investment losses.  Please call 1-866-817-0201 for a free consultation with an attorney

Dougherty entered into a settlement agreement with FINRA regulators, where Dougherty did not did not admit or deny fault, but agreed to a censure, a fine of $140,000, and required to pay $78,910 in restitution to a customer.  The action stems from the allegation that for more than four years, Dougherty did not adequately supervise a securities broker who initiated hundreds of trades for elderly customers without contacting them, thus lacking appropriate authorization, and unsuitably recommended dozens of transactions to those customers. Unsuitable recommendations are investment recommendations that were of higher risk than the investor agreed to assume.

The settlement agreement contained certain findings of fact, and those findings stated that Dougherty assigned the primary responsibility for supervising broker trading activity to a supervisor who was also responsible for supervising numerous other brokers and handling his own customers’ accounts. The supervisor’s supervision of the broker in question was not subject to adequate firm oversight or specific direction. Instead, Dougherty inappropriately relied on the supervisor’s discretion and judgment, which the supervisor did not exercise appropriately.

The findings also stated that the firm did not have supervisory tools that were reasonably designed to detect financial adviser or broker misconduct.  FINRA stated that while the supervisor received daily trade blotters and certain monthly exception reports, data generated by a brokerage firm that identifies the investments recommended by a broker and warns of potentially inappropriate investment recommendations, the firm did not provide exception reports addressing short-term trading or margin usage by the financial adviser to the supervisor.

Additionally, the firm’s exception reports designed to identify inappropriate recommendations to elderly customers excluded accounts in the name of a trust, regardless of the age of the settlor or trustee.  Such shortcomings are important because the broker’s trading activity in two of the accounts at issue did not appear on those exception reports because of the existence of a trust.

The findings also included that the firm failed to respond appropriately to warning signs about the broker’s business, such as a dramatic increase in his commissions without a commensurate change in the number of accounts that he handled or the type of products that he sold. In sum, the firm’s system of supervision was not reasonably designed under the circumstances to prevent violations of securities laws and rules, including rules governing trading without customers’ approval and unsuitable recommendations.

The full AWC can be found at the following link.

Jeffrey Pederson PC is a private law firm that has helped hundreds of investors successfully recover similar losses.

 

Levi David Lindemann Ponzi Victims

Stock handcuffsAs reported in Investmentnews.com, Levi David Lindemann, a Minnesota-based investment adviser has received a six-plus-year prison sentence for stealing from clients and perpetuating a Ponzi scheme.

The 40-year-old adviser, Lindemann, was sentenced to 74 months in prison by a Minnesota federal court, after having pled guilty earlier this year to federal mail fraud and money-laundering charges.

Mr. Lindemann owned and operated Gershwin Financial Inc., which did business under the name Alternative Wealth Solutions, between 2009 and 2014.

“Lindemann abused his position of trust as a financial adviser to steal from his clients, including the elderly ” Mike Rothman, Minnesota’s commerce commissioner, said. “Lindemann defrauded his victims by promising to put their money in legitimate, safe investments when he actually used the funds to pay for personal expenses and Ponzi-type payments to other clients to cover up and continue his fraud.”

According to Mr. Lindemann’s guilty plea, he solicited funds from roughly 50 investors and said he would “use the invested funds to buy secured notes or other legitimate investment vehicles.”

If you are a victim of Lindemann or some other Ponzi scheme, please call 1-866-817-0201 to speak to a private attorney on a free and confidential basis to discuss your rights in private litigation.

David B. Tysk of Ameriprise Investment Loss

If you suffered investment loss with David B. Tysk please call 1-866-817-0201 for a free consultation.

David Tysk, financial advisor for Ameriprise in Eden Prairie, MN, was fined $50,000 and
suspended from association with any FINRA member in any capacity for one year. The
Invest photo 2NAC affirmed the findings in the OHO decision and increased the sanctions. The sanctions
were based on findings that Tysk altered computer notes of customer contacts after the
customer complained about the suitability of a recommendation.

The findings stated that Tysk knew or should have known the importance of customer-related notes in the event of complaints. Tysk’s concealed alterations of his notes did not comply with the clear import of the document-retention policies in his member firm’s code of conduct. Tysk failed toinform the firm of the alterations when he provided a copy of the notes to be produced in discovery during an arbitration proceeding.

The customer became suspicious of the notes and requested further discovery to determine whether the notes had been altered after he lodged his complaint with the firm. Tysk and his firm opposed the requests. In a meeting to prepare for the arbitration hearing, Tysk finally disclosed to the firm that he had altered the notes. At the conclusion of the arbitration hearing, the firm and Tysk were sanctioned for violating arbitration discovery rules.

A copy of the NAC decision can be found at the following link.

Recovery for Jean Walsh-Josephson Losses

If you were an investor of Jean Walsh-Josephson, please call 1-866-877-0201 for a free consultation concerning potential recovery for your losses.

broker in handcuffsJean A. Walsh-Josephson was a financial advisor for Thrivent, formerly Thrivent Financial for Lutherans.  A Winnebago County judge has ordered a two-week trial for this former Oshkosh, Wisconsin financial adviser who accused of stealing $4 million from her mostly elderly investment clients.

The trial for Walsh-Josephson is set for Feb. 20 through March 3, 2017. Judge Thomas Gritton ordered the trial this week, days after victims and their families gathered in court May 13 for what they were led to believe would be a plea and sentencing hearing.

Walsh-Josephson faces 28 counts of theft in a business setting of more than $10,000 each after authorities say she stole more than one million dollars from at least seven clients in Winnebago and Outagamie counties. She also faces felony forgery misdemeanor theft and obstructing an officer charges after authorities say she stole $400 from a client while acting as a third-party intermediary in a property dispute.

If convicted on all charges, she could face a maximum sentence of 287 ½ years in prison.

The question for investors is the question of why Thrivent did not detect this level of theft.  All firms have a duty to take reasonable steps to detect and prevent broker theft.

Jeffrey Pederson has handled numerous cases concerning the theft and outside activity of brokers and have helped investors obtain favorable judgments and settlements.  Please call for a free consultation.

Losses at LPL Financial

LPLIf you have lost money with LPL you may be entitled to recovery of some or all of your losses.  Please call 1-866-817-0201 toll-free to speak to a lawyer for more information.

In May 2016, LPL broker Brian David Smit of Sioux Falls, South Dakota was barred from the securities industry.  This was pursuant to an agreement reached between Smit and FINRA regulators, an agreement referred to as an “AWC.”  The allegations concerned the sale of unapproved private securities.  His record also reflects that Smit was under investigation for such sale when he left LPL.  The sale of unapproved investments is a matter of concern since it is commonly a vehicle for fraud.

On May 6, 2015, the Financial Industry Regulatory Authority Inc. (“FINRA”), ordered LPL Financial to pay $11.7 million in fines and restitution for what it deemed “widespread supervisory failures” related to sales of complex investment products.  Such products are suitable for only a limited portion of the investing public and FINRA prohibits the sale of such products to investors to whom such investments would not be suitable.

From 2007 to as recently as April 2015, LPL failed to properly supervise sales of certain complex investments, including certain exchange-traded funds (“ETFs”), variable annuities and nontraded real estate investment trusts (“REITs”), and also failed to properly deliver more than 14 million trade confirmations to customers, according to the regulator.

LPL did not have a system in place to monitor the length of time customers held securities in their accounts or to enforce limits on concentrations of those complex products in customer accounts, FINRA said.  Such issues can lead to the sale of unsuitable investments and put such portfolios in a position of greater risk than the investor may have wanted or could afford to take.

The systems that LPL had in place to review trading activity in customer accounts were plagued by “multiple deficiencies,” Finra said. The firm failed to generate proper anti-money laundering alerts, for instance, and did not deliver trade confirmations in 67,000 customer accounts, according to the settlement letter.

The regulator also charged the firm for failing to supervise advertising and other communications, including brokers’ use of consolidated reports.

The penalty includes a $10 million fine and restitution of $1.7 million to customers who were sold certain exchange traded funds (“ETFs”). FINRA said the firm may pay additional compensation to ETF purchasers “pending a review of its ETF systems and procedures.”  As such, investors should speak to an attorney to maximize recovery of losses.

Content from this post from Investmentnews.com.