Securities Fraud and Mismanagement

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Smith, Brown & Groover ETN Strategy

Smith Brown & Groover, a brokerage firm headquartered in Macon, Georgia, settled allegations by FINRA, the Financial Industry Regulatory Authority, the regulator overseeing brokerages, that the firm recommended a trading strategy that the firm did not understand and that caused near-total losses for 350 clients.

The FINRA states the firm had consented to $2 million payment, with only a portion of this going to pay its investors, to and a censure, and fines. censures and suspensions against key officers and employees participating in this failed investment strategy.

Raymond Hill Smith, president of a Smith Brown & Groover, developed and implemented a trading strategy for their investors of using exchange traded notes (“ETNs”). This was done without fully understanding the features and risks of the strategy or the ETN that the strategy primarily invested in, and without having a reasonable basis to recommend the strategy to any investor despite appetite for risk. FINRA stated that the ETN was high-risk, complex, and designed to manage daily trading risk and not to be help more than a few days, at most.

Despite developing and implementing the trading strategy at the firm, Smith and others at the firm did not fully understand the ETN, and thus, did not understand the strategy. This includes the ETN’s basic features, such as how the issuer maintained its inverse exposure to the underlying volatility index or that the ETN was designed to achieve its stated investment objective on a daily basis. The issuers of these investments designed the investments as intra-day hedges. Holding longer than this created substantial exposure to exponential loss.

Furthermore, contrary to the guidance in the ETN’s disclosure documents, the firm and Smith invested customers in the ETN for extended periods of time, an average of 72 days, including through periods of high volatility.

Please call us for more information on this matter.

Smith, Brown & Groover is alleged to have mismanaged investor money.
Smith, Brown & Groover is alleged to have inappropriately invested in a strategy it did not understand.

Matthew Ian Turner

Please contact us if you were an investor of Matthew Ian Turner of Westpark Capital and suffered losses. Allegations against Turner and his employer include trading without authorization and excessive trading of investments for the purpose of paying Turner a higher commission.

Turner first became a broker in 2000. Since November 2012, Turner has been registered as a GS through WestPark Capital, Inc.

Between September 2018 and December 2020, Turner is alleged to have recommended trading in accounts held by three investors that was excessive, unsuitable, and not in their best interest. By this conduct, Turner willfully violated Rules under the Securities Exchange Act of 1934 (Reg Best interests) and FINRA Rule 2111. Turner exercised discretionary authority to effect 148 trades in four customers’ accounts without obtaining sufficient authorization from the customers.

Securities brokers, like Matthew Ian Turner, are required to have a reasonable basis to believe that a recommendation of a transaction or investment strategy involving a security or securities to any customer is suitable for the customer. This includes persons with actual or de facto control over an investment account having a reasonable basis for believing that a series of
recommended transactions is not excessive in light of the customer’s investment profile. Those in the securities industry commonly refer to such actions as “churning.”

This is not the first time Turner has been accused of churning. Turner’s employers settled a suit by an investor claiming similar action for $103,000 in 2018.

We have handled many churning cases of the past 20 years. Please contact us for a free initial consultation if you believe you have been the victim of churning.

Don't let fraud of Matthew Ian Turner destroy your savings.
Matthew Ian Turner is accused of multiple misdeeds that impacts investors.

Silver Bonds from BMO

Silver Bonds are a type of collateralized mortgage obligation (CMO) sold by BMO Capital Markets. Please contact us if you suffered losses in such investments.

BMO agreed to pay more than $40 million to settle charges by the Securities and Exchange Commission (SEC) concerning these investments. The SEC asserted that BMO misrepresented the Silver Bonds. The time period of the alleged misrepresentation is December 2020 and May 2023, though a larger time period may exist.

Representatives of BMO provided investors with offering sheets that misrepresented, per the SEC, important characteristics of the investment’s underlying collateral. BMO structured the bonds, in a way that caused third-parties to inaccurately portray the investments.

Pools of residential mortgages backed the investments, and BMO structured the bonds using a small sliver of higher-interest mortgages. BMO represented this sliver of mortgages in a way that caused the systems of third-party data providers to generate inaccurate information about the bonds’ overall composition.

In about two and a half years, BMO sold $3 billion worth of these investments. The SEC’s found that BMO’s supervisory policies and procedures did not include guidance concerning the structure and sale of these bonds. BMO also did not have a process for reviewing the type of information firm representatives shared with investors about the investments or a process for reviewing bond structures against marketing communications.

The underlying SEC matter focuses BMO’s failure reasonably to supervise certain BMO agents with a view towards preventing and detecting their violations of the federal securities laws while offering and selling certain Collateralized Mortgage Obligation. The SEC alleges that BMO failed to institute supervisory procedures to prevent its agents from providing misleading information in the sale.

The settlement sought to compensate harmed investors. The SEC is establishing a fair fund to pay some investors.

Jeffrey Pederson represents investors suffering losses from misrepresentations and have over 20 years of experience doing so.

The inappropriate actions of BMO caused investors considerable losses with its Silver Bonds.
BMO is accused by regulators of fraudulently selling Silver Bonds.

George Herman Snyder Losses

George Herman Snyder IV previously served as an Ameriprise broker in Springfield, Missouri.

On October 11, 2024, FINRA, a regulator overseeing securities brokerages, issued a settlement, an AWC, which assessed Snyder with penalties. The regulator issued a deferred fine of $10,000, suspended from association with any FINRA member in all capacities for five months, and ordered to pay deferred disgorgement of commissions received in the amount of $3,699.03, plus interest.

If you are a Snyder investor, please call to discuss your rights. We have helped investors for over 20 years recover similar losses due to mismanagement or fraud. Either Snyder or Ameriprise may have obligations to compensate you depending on your loss.

Without admitting or denying the findings, George Snyder consented to the AWC sanctions and to the entry of findings that he willfully violated Regulation BI. Reg BI is the obligation that securities brokers have to act in the best interests of their investors. The violation of Reg BI occurred by Snyder recommending that 13 of his investors make purchases of securities without Snyder having a sufficient understanding of the risks and features associated with the products he recommended, and without Snyder analyzing whether the recommendations were in the best interest of his customers.

The findings stated that George Herman Snyder recommended the customers invest in leveraged exchange traded funds, also known as Non-Traditional Exchange-Traded Products. Leveraged funds can fluctuate wildly. This is generally not in the interests of retired individuals or those looking for moderate or conservative investments.

In addition, George Snyder recommended that 11 customers, including almost half of the 13 customers, invest in equity securities of two companies engaged in crypto asset mining. Investment in crypto mining is a highly speculative venture.

Snyder did not have an understanding of the features and risks associated with the investments,
including the holding-period risk of NT-ETPs or the volatility of the commended
stocks, and he was unfamiliar with the strategies or relative costs of the product he
recommended.

Snyder’s investors had minimal or no experience investing in these
products, and he did not consider his customers’ specific investment profiles, this can include proximity to retirement. Six of the customers were senior investors, two of whom had a moderate risk tolerance, and five additional customers had conservative or moderate risk tolerances.

Seniors distressed over investment fraud and negligence of George Snyder of Ameriprise.
Regulators allege George Snyder of Ameriprise made investments not in his investors’ best interest.

Union Capital and Leveraged Funds

Please contact us if you are or were with Union Capital and suffered losses despite being a conservative or moderate risk investor.

From January 2019 through at least December 2021, Union Capital failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures (WSPs), reasonably designed to achieve compliance with the suitability requirements of FINRA, the regulator overseeing brokerage firms, Rule 2111 and the Care Obligation of Rule 15l-1 of the Securities Exchange Act of 1934 (Regulation Best Interests or “Reg BI”) with respect to its financial advisors’ recommendations of leveraged and inverse exchange-traded funds and leveraged and inverse mutual funds (Non-Traditional Funds). This is the finding of the FINRA.

As of June 30, 2020, and continuing through at least December 2021, Union Capital also failed to comply with Reg BI’s requirements by not establishing, maintaining, and enforcing supervisory procedures reasonably designed to achieve compliance with Reg BI with respect to recommendations of Non-Traditional Funds.

Non-Traditional Funds are complex financial instruments designed to return a multiple of the performance of an underlying index or benchmark (leveraged funds), the opposite of the daily performance of the index or benchmark (inverse funds), or both (leveraged inverse funds), usually over the course of a single day. As such, Non-Traditional Funds typically rebalance their portfolios on a daily basis (also known as the daily reset), which means they are designed to achieve their stated objective on a daily basis.

It is generally inappropriate to hold such investments for more than a single day. The investments are intended to be a single-day hedge. The losses can accumulate exponentially if held for more than a single day. This means that the investment is only appropriate for investors willing to take the highest risks.

In June 2009, FINRA issued Regulatory Notice 09-31 to caution member firms that, due to the effect of compounding, the performance of leveraged and inverse products, like Non-Traditional Funds, for periods longer than the intended holding period “can differ significantly from the performance (or inverse of the performance) of their underlying index or benchmark during the same period of time” and therefore “typically are not suitable for retail investors who plan to hold them for more than one trading session.” The Notice specified that this applies equally to leveraged and inverse exchange-traded funds and leveraged and inverse mutual funds, which raise many of the same issues. Non-Traditional Fund prospectuses typically provide similar warnings concerning the suitable holding period for retail investors.

The Law Offices of Jeffrey Pederson fights to protect investors. Please call for a free and confidential initial consultation.

Union Capital likely committed investment fraud and negligence have ruined the savings of many investors by recommending complex, leveraged investments.
Leveraged investments, like those sold by Union Capital, have risks which unsuspecting investors are unaware.

VRSP – Variable Rate Structured Products

A Variable Rate Structured Product (VRSP) is a complex investment vehicle that places an investor in unnecessary risk but pays a high commission to the broker of the product. The financial incentive often causes advisors to place investors in such investments despite the investment being inconsistent with the risk tolerance of the investor. Such an action constitutes fraud and we can help recover losses in VRSP investments.

The investments are sold inappropriately if sold to moderate or conservative investors. VRSPs are high-risk structured products and pay interest at a fixed rate for an initial period, usually 1-3 years. After the initial period, the investments are not guaranteed to pay any interest. The recovery of the principal at maturity is based on the operation of complex, derivative items. So the principal is not secured. Additionally, a secondary market may not exist for VRSPs. This means that there may be little to no way to sell these investments after purchased.

Recent regulator action highlights the issue. On September 5, 2024, the Financial Industry Regulatory Authority (FINRA) entered into a settlement with Newbridge Securities concerning its unsuitable sales of VRSP investments.

Shortly thereafter, on September 18, 2024, Wedbush Morgan entered into a similar settlement with FINRA. Wedbush agreed to a $50,000 fine and to pay $77,736 to investors for losses. The charges were initiated based upon Wedbush’s sale of such investments to investors with low or moderate risk profiles. The regulator also found that a lack of supervision contributed to these fraudulent sales violations.

The U.S. Securities and Exchange Commission (“SEC”) issued a warning about these products back in 2022. It has become increasingly concerned about the sale of complex investment products to retail investors. These types of products use option strategies, investments tied to unusual indices, and other exotica. The securities industry has known of the risks associated with this investment vehicle for some time.

We represent investors nationwide and help them recover losses in such unsuitable investments.

VRSP investments may not  be for your benefit.
VRSP investments are highly complex and this complexity disguises a high-risk, high-commission investment.

Peter Joseph Glowacki

Peter Joseph Glowacki is accused of making trades in the accounts of his clients without sufficient authority. This violates the federal securities rules and the securities rules of most states. We are a firm that helps investors recover losses from such misdeeds.

From January 2022 through December 2023, as alleged by regulators, Peter Joseph Glowacki exercised discretionary authority when placing 105 trades in fourteen customer/investor accounts belonging to nine customers/investors without first obtaining prior written authorization from the customers and having the accounts accepted as discretionary by his employer.

In addition, from December 2021 through January 2023, Glowacki communicated with 12 investors about securities business via text messages sent through his personal cell phone- even though RBC, his employer, had not approved Glowacki’s use of this channel for business communications.

This is troublesome because a) securities firms are required to keep written communications with their investors, and b) many complex investment fraud schemes start with brokers communicating with their investors through unapproved channels.

Although Glowacki discussed his trading with the investors generally, he did not speak with the customers about the specific trades on the dates of the transactions. This falls outside of the time/place discretion that a broker has. In addition, RBC did not accept the accounts as discretionary.

Regulators handed Glowacki a two-month suspension from the securities industry and a fine of $10,000.

Don't let fraud destroy your savings.
Peter Joseph Glowacki is accused of multiple misdeeds that impact investors.

Collateralized Loan Obligations (CLOs)

Collateralized Loan Obligations, also known as CLOs, are a popular new investment being sold to retail investors despite their high risk. As reported in the Wall Street Journal on October 17, 2024, Wall Street is trying to sell ordinary investors “low-rated corporate loans” by packaging them as CLOs. Such sales are largely inappropriate unless the investor is fully aware of the risk, the investor had the means to financially withstand a high risk of loss, and the investor is looking to speculate.

BlackRock, Nuveen, and other asset managers have recently asked permission from the Securities and Exchange Commission (SEC) to launch new exchange-traded funds (ETFs) of collateralized loan obligations. CLOs are made by bundling bonds rated as junk. Those asset managers will join about $16 billion in assets of other CLO funds that have already entered the market.

These investments are especially vulnerable to economic downturn. CLOs contain loans to companies with weaker credit ratings. Like its cousins, the collateralized debt obligation (CDO) and collateralized mortgage obligations (CMO), those obligated to pay CLO investors are usually the first hit and first to fail during times of recession.  

FINRA, the entity that oversees securities brokerages, strictly regulates CLOs and CDOs. FINRA Rule 2111 states that a securities broker can only recommend high risk investments to suitable investors. That means that an investor must understand the investment, the investment must be consistent with the objectives of the investor, the investor must be able to financially withstand the risk of such investment, and that the investor must be looking to incur such risk.

Brokers incentives are significant, and not necessarily legitimate, to recommend unsuitable CLOs. The investments generally pay a much higher commission than a traditional investment such as a stock or bond.

We have represented investors for over 20 years in claims concerning investment suitability. Call for a free consultation toll-free at 844-253-5858.

Collateralized Loan Obligations are the new darlings of Wall Street.
Collateralized Loan Obligations are loved by Wall Street but are generally inappropriate for ordinary investors.

Losses with Jeffrey Perryman of NYLife

We are handling multiple claims against Northern Colorado investment advisor and insurance agent Jeffrey Perryman. Perryman was previously employed by New York Life Insurance, NYLife Securities and Eagle Strategies, LLC. Please call 303-300-5022 or 1-844-253-5858 if you were a customer / investor of Perryman’s for a free and confidential consultation.

In October 2024, FINRA, the Financial Industry Regulatory Authority, entered into a settlement with Perryman. Under the terms of the settlement, Perryman agreed to a lifetime ban from employment with any securities brokerage in the United States.

Jeffrey Perryman is alleged to have committed multiple misdeeds in insurance and securities sales. As to insurance, he is alleged to have oversold life insurance to customers, misrepresented the cost of the policies, and inappropriately sold policies by convincing customers to take loans against other policies.

Perryman focused on companies located in Northern Colorado, selling them large numbers of unsuitable and unnecessary insurance products. He also charged management fees for the sale of these products despite prohibitions against such actions.

In October of 2024, financial industry regulators barred Perryman from the securities industry. Perryman failed to cooperate with regulators or otherwise provide a sufficient defense to deny that he engaged in inappropriate business practices.

He is also alleged to have charged investment management fees to customers to oversee insurance policies where he had already been paid a hefty commission. Perryman billed customers through his company, Legacy Wealth. This created an unreasonably high payment for his services and constituted a “double-dip” of compensation.

As to securities, Perryman is alleged to have committed fraud in the misrepresentation of variable annuities, inappropriate sales of A-share mutual funds, and churning of mutual funds.

Perryman ultimately was permitted to resign and lost his employment with New York Life and NYLife Securities for charging clients for unapproved activities.

Industry standards require life insurance and annuity sales to be suitable. Securities regulations require securities sales to be in the best interests of the investor. Fiduciaries like Perryman, who operated as a “registered investment advisers”, are required to go above and beyond that. Registered investment advisers are required to put their client’s interests ahead of their own and fully disclose all material facts. Perryman’s failure to do this has led to substantial losses by his clients.

We are located in the Denver Tech Center and have represented Colorado residents for over 20 years concerning fraud and negligence by the financial services industry. Please contact us to determine your rights in recovering your losses.

Jeffrey Perryman has caused the unnecessary loss of some of his client's savings.
Jeffrey Perryman is accused of misleading and overcharging customers in insurance and securities sales.

Jim Geake investment fraud

Jim Geake inappropriately sold investors illiquid investments. These include Real Estate Investment Trusts (REITs) and Business Development companies (BDCs). Please contact us if you lost funds or cannot access your savings. We have represented investors for inappropriate BDC and REIT sales for over 20 years. Call us toll-free at 1-844-253-5858.

Geake is a financial advisor with Madison Avenue Securities in Skokie, Illinois. He or his employer has been sued, or threatened with suit, fifteen times concerning Geake’s inappropriate investment recommendations.

Fifteen legal suits is excessive under any measurement. A brokerage firm is required to give heightened supervision when a financial advisor has excessive complaints. Generally, the level considered excessive is anything above four complaints.

One such suit concerning a REIT that Geake sold an investor settled in 2021. The investor received $450,000 in the settlement.

There are many reasons that these investments are inappropriate for many investors. Regulators have highlighted the problems with non-traded REITs for years. These include the high commissions paid to advisors, inability to trade or sell the investment, lack of guarantee as to distributions, inability to value the investment, and inability to determine the health of the investment.

The individual investments sold by Geake include NorthStar Healthcare REIT, Hospitality, Investors Trust (HIT), and other non-traded REITs. Complaints also include inappropriate sale of variable annuities. Like REITs and BDCs, these investments pay the broker an unreasonably high commission for selling investments that meet the needs of very few investors.

Investors allege Jim Geake did not make complete disclosures in the sale of alternative investments.
Jim Geake received a lot of incentive to sell REITs and BDCs. He did not disclose these commissions or the problems with the investments.