Tag Archives: lawyer

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.

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 William McWilliams

Jeffrey Pederson PC is investigating and interested in speaking to investors of William H. McWilliams, formerly of Raymond James and currently of Stifel Nicolaus.  This is in wake of a regulatory AWC entered into by William McWilliams with FINRA that alleges unauthorized trading by McWilliams.  FINRA is the regulatory agency that oversees investment brokers.

FINRA alleged that from August 2014 through December 2014, McWilliams exercised discretionary trading authority without obtaining prior written authorization from the customers and the Firm at least 28 times in eight customer accounts. As a result of such conduct, McWilliams violated regulatory rules NASD Rule 2510(b) and FINRA Rule 2010.  These are rules that all securities brokers must follow.

NASD Rule 2510(b) mandates, “No member or 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, as evidenced in writing by the member or the partner, officer or manager, duly designated by the member, in accordance with Rule 3010.”

NASD Rule 2510(d)(I) states, that the written authorization requirement does not apply to “discretion as to the price at which or the time when an order given by a customer for the purchase or sale ofa definite amount ofa specified security shall be executed, except that the authority to exercise time and price discretion will be considered to be in effect only until the end ofthe business day on which the customer granted such discretion, absent a specific, written contrary indication signed and dated by the customer.”

FINRA Rule 2010 requires associated persons to observe high standards of commercial honor andjust and equitab!e principles oftrade.

During the Relevant Period, while employed at Raymond James, McWilliams exercised discretionary trading authority in response to customer liquidation requests at least six times in four Firm customer accounts without obtaining prior written authorization from the customers and without having the accounts accepted as discretionary accounts by Raymond James.

McWilliams also inappropriately exercised discretion at least 22 times in four other customer accounts. ln these instances, McWilliams failed to discuss the subject trades with the customers on the day ofthe transaction and the Firm prohibited the use ofdiscretion in these circumstances. By virtue ofexercising discretion in the accounts of eight customers without written authorization, McWilliams violated NASD Rule 2510(b) and FlNRA Rule 2010.

Robert “Rusty” Tweed

Jeffrey Pederson PC is interested in speaking to investors of Robert “Rusty” Tweed as part of an investigation into the broker.  Tweed was previously with Cabot Lodge, Concorde Investment Services, and MAM Securities.  Please call 1-866-817-0201 for a free and private consultation with an attorney.  Many issues which may entitle investors to recovery against Tweed’s former employers, have been brought to light by a recent FINRA complaint against Rusty Tweed.  However, time is running on the ability to recover.

FINRA alleges in a complaint that between November 2009 and March 2010, Rusty Tweed obtained more than $ 1.6 million from his retail customers through a false and misleading private placement memorandum (“PPM”) he used to offer and sell interests in his Athenian Fund LP, a pooled investment fund that he both created and controlled.

Tweed drafted and circulated the private placement memo (PPM), a document that is supposed to provide investors with significant information to evaluate the investment, that misrepresented and failed to disclose material information to investors, and twenty three customers invested in the Fund without the benefit of complete and accurate information.

The misrepresentations included: (1) the total potential fees and costs associated with the Fund? (2) Tweed himself, and (3) the entities and individual who would ultimately have immediate control over the money that customers invested.

According to the Complaint, Tweed and the PPM misrepresented or failed to disclose to retail customers the following material facts:

a. First. Tweed and the PPM misrepresented the total potential costs of an investment in the Athenian Fund. opting to disclose certain costs and fees while oniitting others that would reduce any return on investment.

b. Second, Tweed and the PPM also failed to disclose that the omitted fees and costs were added only after Tweed discovered that arbitration (complaints) against him would prohibit him from opening a trading account for the Fund directly and require the use of a more expensive master fund structure.

c. Third, Tweed and the PPM failed to disclose that Tweed had replaced the Fund’s identified master fund with another entity controlled by an undisclosed person (ER). who would now have immediate control over the Fund’s assets. Tweed and the PPM likewise provided no information sufficient for investors to evaluate the risk ofentrusting their capital to ER and his company, such as relevant background. other business activities, and qualifications.

d. Fourth, Tweed and the PPM failed to disclose the additional management fees and perforniance allocations that arose when he granted control to ER and his management company, and Tweed’s own interest in those fees, which would further reduce any return on the retail investors’ capital.

As a result of these material misrepresentations and omissions. Athenian Fund investors could not evaluate the true costs and risks associated with the Fund, including those relating to the individual or the entities with immediate control over their capital.

 

Anne Marie Comcowich Loss Recovery

Anne Marie Comcowich, a Scranton, Pennsylvania area securities broker, has agreed to a sanction to resolve a FINRA investigation.  The underlying investigation concerned the unauthorized withdraw of funds, theft, from investor accounts.  Ms. Comcowich was previously with Prudential.

In 2017, while being investigated in connection with unauthorized withdrawals, Comcowich, through her lawyer, informed FINRA staff that she would not produce information and documents requested pursuant to FINRA Rule 8210. Comcowich thereby violated FINRA Rules 8210 and 2010.

By failing to participate in the regulatory action, Comcowhich received a bar from FINRA which Bull pictureprohibits her from working with any other securities brokerage.

Details of the FINRA action can be found in its AWC.  In the AWC, Comcowich neither admits nor denies the allegations.

Comcowich was suspected of processing 13 unauthorized withdrawals from customer accounts. In an email and follow up telephone call with FINRA staff on April 3, 2017, and by this agreement, Comcowich acknowledges that she received FINRA’s requests and will not produce the information and documents requested.  The actions of Comcowich are in violation FINRA Rule 2010 provides that “[a] member in the conduct of its business shall observe high standards of commercial honor and just and equitable principles of trade.” A violation of FINRA Rule 8210 is also a violation of FINRA Rule 2010.

Jeffrey Pederson is an attorney who has represented investors similarly victimized.  A limited number of attorneys have such experience in front of FINRA, where such cases would need to be brought.  Please call for a free and confidential consultation.

 

Invement losses with John Blakezuniga

John Blakezuniga, formerly of Vanguard Capital, recently entered into a settlement agreement with FINRA regulators, where he agreed to a fine but did not admit or deny fault, concerning alleged fraudulent activity in the portfolios of his investors.  Blakezuniga sometimes goes by the name of John Blake, sometimes by the name John Zuniga, and sometimes by John Blake-Zuniga.

Jeffrey Pederson, PC helps investors recover such losses.  For a free and confidential consultation with a lawyer, please call 1-866-817-0201.

As identified in the FINRA regulatory settlement, referred to as an AWC, between 2007 and 2013, Blakezuniga borrowed $775,000 (which he has not fully repaid) from two firm customers Invest photo 2in violation of the firm’s policy. As a result, Blakezuniga violated NASD Rules 2370 and 21 10 and FINRA Rules 3240 and 2010.

Blakezuniga separately violated FINRA Rule 2010 by falsely answering “no” to a question on the firm’s 2013 annual compliance questionnaire that asked if he had ever borrowed money from a customer.

In addition, from 2010 to 2014, Blakezuniga recommended approximately 1,280 transactions in inverse and inverse leveragedExchange Traded Funds (“nontraditional ETFs”) in 85 customer accounts without a reasonable basis for the recommendations. By doing so, Blakezuniga violated NASD Rule 2310 and FINRA Rules 2111 and 2010.

Borrowing funds from an investor/customer is fraudulent because of the discrepancy in the bargaining power between broker and investor.  The prohibition is codified in NASD and FINRA rules.  NASD Rule 2370 and FINRA Rule 3240′ generally prohibit registered representatives from borrowing money from any customer subject to limited exceptions and in accordance with firm procedures.

Likewise, lacking a reasonable basis for the recommendation of an investment is violative. NASD Rule 2310 and FINRA Rule 21113 require registered representatives to have reasonable grounds for believing that a recommendation is suitable for a customer based upon the customer’s disclosed security holdings and financial situation and needs. A violation ofthese rules also constitutes a violation of FINRA Rule 2010.

Kris Etter of IMS Securities

If you have suffered investment losses with Kris Etter of IMS Securities, particularly if you suffered losses in UDF, please call 1-866-817-0201 for a free consultation with an attorney.  We have suit filed against IMS and are currently investigating whether other claims may exist.

It is believed that Etter had an undisclosed conflict of interest in his recommendations of UDF.  Upon information and belief, Mr. Kris Etter sold a substantial amount of UDF to his clients and is the son of Todd Etter.  Todd Etter is the Chairman of UDF IV, one of the top officers of the company.  Mr. Todd Etter also serves as Chairman of the general partner of UDF I and UDF II and Executive Vice President of the general partner of UDF III.  This creates a substantial conflict of interest in UDF recommendations by Kris Etter.

Kris Etter and IMS also failed to properly investigate UDF before recommending it, likely because of the Etter conflict and the heightened commission paid by UDF.  IMS is one of the top four leading sellers of UDF IV in the United States.

The bottom fell out for UDF when it was revealed in December 2015 to be a Ponzi scheme. The offices were raided by the FBI, received a Wells notice, unable to release quarterly reports and was ultimately delisted for a time. Reasonable investigation into the investment of other financial firms revealed that the illegitimacy of the investment. Had IMS done sufficient due diligence it would have likewise discovered that the investment was not suitable for any investor. Instead, IMS and Etter turned a blind eye to the problems of UDF and instead focused on the profits that it was receiving from this high commission product.

The individual ultimately in charge of all IMS offices is the CEO of IMS, Jackie Wadsworth.  Ms. Wadsworth has seven customer complaints naming her for insufficient supervision of representatives under her oversight. These complaints largely concern the inappropriate recommendation by her representatives of unsuitable variable annuity and REIT investments, just like the investments sold clients of Kris Etter and IMS.

As reported in Investmentnews.com in August 2016, the balance sheet of IMS is tilted heavily toward high-commission products like variable annuities and non-traded REITs. Approximately 86% of its revenue of IMS in 2015 came from commissions from such products.