John Krohn of Principal

John Krohn of Principal Securities located in West Des Moines, Iowa is accused of illegally “selling away” investments.  If you have suffered losses with Mr. Krohn call 303-300-5022 for a free and confidential initial consultation.

Selling away is the process of selling investments to investors outside of a broker’s employment and beyond the supervision of the brokerage firm.  While this may sound harmless, there is little reason for a broker to recommend such a sale absent an intent to deceive or defraud the investor.

The review of an investment by a brokerage includes a due diligence investigation to ensure that the investment is legitimate or that its financials are not falsified.  Ponzi schemes often start by a broker selling “away.”  The review of the broker’s brokerage also ensures that the investment is suitable for the investor and that the broker is not charging an excessive commission.

Regulators take selling away accusations seriously because of this.  Regulations not only strictly forbid the practice, but they also require firms to conduct audits and investigate brokers routinely to prevent the practice from occurring.

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Krohn is accused of “selling away” millions in investments.

Krohn was known as a top seller at Principal.  He also ran a purported investment capital firm called Spotlight Innovations and other investing companies on the side.  He generated a high volume of small investments through his firms into may small, unknown companies.  The victims are largely Iowa residents.

We are aware that Principal knew that Krohn had been selling away and failed to supervise appropriately.  Krohn was previously fined and suspended by regulators for engaging in selling away in 2018.

As of March 2021, there are currently three investor suits pending against Principal concerning Krohn.  These claims seek damages in excess of $39 million.  An SEC suit is also currently pending.

Charles Bonilla Energy Investments

Charles Bonilla of David Lerner and Prudential inappropriately recommended energy sector investments.  If you were a Bonilla investor recommended energy investments please call 303-300-5022  

Between December 2015 and December 2017, while associated with David Lerner Associates, Bonilla recommended investments in energy sector securities without having a reasonable basis to believe those investments were suitable.  This means that Bonilla had insufficient knowledge or that the investments had insufficient financials to be recommended to investors with even the highest risk tolerance.

While these actions occurred while Bonilla was at David Lerner, it is possible that such offending trades also were recommended while Bonilla was a representative for Prudential.

Due to Bonilla’s failure to conduct reasonable diligence in investigating the investments, there were potential risks and costs of the investments, among other things, that Bonilla did not adequately understand. Accordingly, Bonilla violated the rules of FINRA, the regulator overseeing securities brokerages.

Bonilla did not perform reasonable diligence on the fund prior to recommending it to customers. Bonilla could describe little about the fund’s holdings, beyond that some of the fund holdings were “midstream” energy companies.

Bonilla did not know how the fund paid its monthly distributions. Further, Bonilla did not know what, if any, diligence David Lerner Associates performed on the fund or its holdings prior to offering shares of the funds to customers. During the period between the fund’s initial offering in July 2014 and December 2015, the fund’s net asset value declined by more than 40%.

Bonilla also recommended illiquid investments in a limited partnership sold to customers of David Lerner Associates. Limited partnerships are known to be extremely risky investments.  The limited partners for the partnerships in question invested in common unit ownership interests in the partnership. The limited partnership was formed to acquire and develop oil and gas properties located onshore in the US. The partnership was a “blind pool”, meaning at the time of the initial offering the partnership had not identified any properties for acquisition.

Just as with the funds, Bonilla did not perform reasonable diligence on the limited partnerships prior to recommending to his investors. Finra regulators stated, “Bonilla did not know how the partnership generated funds to pay investors monthly distributions. Bonilla did not know how the price of the common units reflected on customer account statements were calculated. Bonilla did not read the full prospectus nor did he review the partnership’s financial statements.”

These offenses constitute suitability fraud.  These high risk investments carry higher commissions with their higher risks.


Gary Hammond of MML

Gary Wayne Hammond, a Charlotte, NC advisor with MML Investor Services has been barred by regulators.  Please call 303-300-5022 to speak to a private attorney for a free and confidential initial consultation about loss recovery.

The Financial Industry Regulatory Authority (FINRA) is a regulator under the oversight of the Securities and Exchange Commission.  FINRA alleged that Hammond referred investors to businesses of his half-brother in exchange for a commission.  The businesses of his half-brother were Ponzi-type schemes.

Hammond’s activity is referred to as “selling away.”  When a broker recommends an investment not offered or vetted by his employer to obtain a heightened commission or to share in the fraudulent proceeds of that investment.  The lack of vetting allows  a company to run as a fraud since there is no review by a brokerage firm as to financials and operations.  Such due diligence by a brokerage is essential to verify that the representations of the company are correct.

MML, like all brokerage firms, have duties to prevent its advisors from selling away.  Audits and other mechanisms are required to be conducted on the operations of advisors by their brokerage.  This is to verify that the advisors, such as Hammond, are not participating in outside business activity or recommending private offerings.  Situations like the one Hammond put his investors rarely happen when such supervisory procedures are met.

Jeffrey Pederson has handled numerous such cases involving selling away.  Call for a consultation.

Ryan Raskin Churning Losses

If you suffered losses due to account churning by Merrill Lynch broker Ryan Raskin, please call 303-300-5022.  Initial consultations are free and all consultations are private.


Merrill broker accused of churning.

On March 26, 2020, Merrill Lynch discontinued its relationship with Raskin.  Raskin worked in the Beverly Hill, California office of Merrill.  In the termination form submitted to securities regulators, Merrill stated the termination was for “conduct involving business practices inconsistent with firm standards [...]”

On August 31, 2020, FINRA, the federal regulator overseeing securities brokers under the oversight of the SEC, sent Raskin a request for documents and information.  Raskin never responded.

The result of the regulatory action, which Raskin did not fight, was Raskin’s bar from the financial industry.

Merrill Lynch employed Raskin from May of 2016 to March of 2020.  Previously, he worked for Morgan Stanley in its Woodland Hills, California office.

Churning is the excessive trading of an account that has the result of generating commissions at the expense of the investor.

In September 2020, Merrill received a customer complaint demanding payment for churning and excessive trading  by Raskin.

Jeffrey Pederson PC works with investors across the country in the recovery of losses due to fraud, such as churning.

Worden Capital Lack of Supervision

If you have suffered as the result of the lack of supervision at Worden Capital – commonly in the form of either excessive broker trading or failing to transfer your funds – call 303-300-5022.  Jeffrey Pederson is an attorney who represents investors.  Initial consultation is free and confidential.

On December 31, 2020, FINRA, the Financial Industry Regulatory Authority, ordered Worden to pay restitution of over $1 million to investors.  The order stems from systemic problems in supervision of Worden brokers.

FINRA found that from January 2015 to October 2019, Worden and the firm’s owner and CEO, Jamie Worden, failed to establish and enforce a supervisory system to achieve compliance with regulatory rules relating to excessive trading, also known as “churning.” As a result, Worden’s brokers and advisors made more than $1.2 million in excessive commissions. In one instance, a Worden investor paid $205,557 in commissions in the course of one year. Worden did not take action to investigate or stop the trading in this investor’s account and others like it.

The Head of FINRA’s Department of Enforcement said, “FINRA has an unwavering commitment to protect investors from excessive and unsuitable trading. Firms must ensure they establish systems and procedures reasonably designed to supervise representatives’ recommendations to their customers, and firms’ supervisory personnel must have in place the necessary tools and training to address red flags.”

FINRA also found that Worden and its CEO interfered with customers’ requests to transfer their accounts to another brokerage.

Gregory Walter McCloskey (Meier)

The Financial Industry Regulatory Authority (FINRA) alleges that between 2008 and 2018, Respondent Gregory Walter McCloskey, also known as Gregory Meier, is alleged to have defrauded at least one and possibly more elderly investor.

While associated with FINRA member firms, including Westpark Capital and Newport Coast Securities, McCloskey participated in two undisclosed private securities transactions (“PSTs”) involving an elderly, retired widow, and then sought to conceal these transactions from his member firms and FINRA.  There are very few legitimate reasons for not disclosing such transactions and create a strong inference of fraud.

McCloskey has been alleged to have committed such actions in the past.  He previously consented to the sanctions and to the entry of findings that he participated in a series of private securities transactions without providing written notice to or receiving approval from his member firm to engage in such activity. The findings stated that specifically, McCloskey, without his firm’s approval, personally invested $50,000 in a lighting and energy networking company and introduced two of his customers to the company, and they invested a total of $50,000.   For this he received a 15-day suspension and his firms were required to give him heightened supervision.  

In October 2019, McCloskey was permitted to resign from Westpark Capital.  This was in response to allegations that he failed to abide by the heightened supervision placed upon him.

If you were sold investments suffering substantial losses or that are illiquid call 1-866-817-0201 for a free and confidential consultation.

Fraud of Keith Ashley

Parkland Securities adviser, Keith Ashley, 48, is accused of incapacitating and murdering an investor associated with Ashley’s Ponzi-type fraud.  Authorities arrested Ashley on November 4, 2020, on wire fraud charges.  These charges that stem from an FBI investigation, according to a statement by the Carrollton Police Department. Carrollton is a suburb north of Dallas.

The victim, James “Jim” Seegan, 62, an investor of Ashley’s.  He was found dead of a gunshot wound to the head by his wife when she returned to their home on the evening of Feb. 19, 2020. Next to Seegan was a typed suicide note.

Over the course of a nine-month investigation, detectives found evidence that Ashley incapacitated, then murdered his investor to gain control of Seegan’s finances.

“Ashley was a friend and financial adviser of Seegan’s who would visit the Seegan home periodically,” according to the police. “During the course of the investigation, detectives also identified several other victims of a Ponzi scheme Ashley orchestrated.”


The FBI has take Ashley into custody concerning potential wire fraud.

The fraud occurred while Ashley was a registered representative, a securities broker, of Parkland Securities.  Parkland, formerly known as Sammons Securities, terminated him on October 27, 2020.  The reason for the termination was “undisclosed outside business activity.”

Brokers are required to identify all outside business activity to their brokerage firms.  Outside business activity of a broker is an area of significant concern.  Brokers often use their status as a broker to engender trust of the investing public.  This trust leads the investors to believe the investment opportunity offered by the broker to be legitimate.

There are very few reasons for a broker to not disclose outside business activities to his brokerage.  Failing to disclose outside business activities allows a broker to perpetuate Ponzi-type frauds.  The firm is unable to conduct due diligence to prevent the sale of investments with weak financials or that have no legitimate business operations.

A brokerage firm is still required to monitor for such activities though the activities may be undisclosed.  Audits and other reasonable measures are required to identify such activities.  A firm cannot sit content with a broker’s representation of not engaging in outside business activities.

Victims of the Ashley securities fraud should call 303-300-5022 for a free and confidential consultation.

Suspension of Christopher Hildebrandt

If you were an investor of Christopher Hildebrandt of Principal Securities and suffered losses please call 303-300-5022 to discuss your rights and potential recovery.  Initial consultations are free.

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Investors have rights to recover losses from fraud or negligence.

Mr. Hildebrandt agreed to a four-month suspension and a $5000 fine for the altering of investor documents.  Between 2009 and 2017 he altered over 90 investor documents.  These documents include new account documents, documents that identify an investors risk tolerance and investment objectives, along with money transfer forms and other documents.  This was done as an accommodation to approximately 30 investors and FINRA acknowledges that many, if not all, were authorized.

The regulatory action was finalized on July 30, 2020.

This was not the first time he was warned not to alter investor documents.  Additionally, four customer complaints were filed by investors against Hildebrandt or his employer concerning the investment sales practices of Hildebrand.  This includes allegations misrepresentations as to accounts, tax ramifications and investment products such as annuities.  Additionally, he was accused multiple times of misappropriating funds.

In 2018, he ceased working with Principal and his CRD, his record maintained by the Financial Industry Regulatory Authority, does not indicate current employment with a licensed securities firm.



The Fraud of Michael Barry Carter

If you were a client of Morgan Stanley broker Michael Barry Carter, better known as Mike Carter, please call 303-300-5022 for a free and confidential consultation to determine whether you have been a victim of fraud.

The Securities and Exchange Commission on Monday, July 20, 2020, charged a former Morgan Stanley representative with stealing approximately $6 million from brokerage customers and an elderly investment advisory client.

Investors have recourse when investment professionals turn bad.

Investors have recourse when investment professionals turn bad.

Mike Carter was a financial advisor in the McLean, Virginia office of a Morgan Stanley.  He falsified internal documents in order to effect dozens of unauthorized wire transfers, totaling millions of dollars, from the accounts of brokerage customers to his own personal bank accounts.  

“As a financial advisor, Carter was entrusted with millions of dollars belonging to his brokerage customers, his advisory clients, and their families,”  stated SEC’s New York regional office director in a press release. “As alleged in our complaint, Carter instead took advantage of that trust for his personal gain.”

Morgan Stanley also failed to adequately monitor money transfers to accounts of its brokers.  Adequate supervision would have stopped most, if not all of these transfers.

Carter attempted to hide his fraud with the circulation of false account statements to his investors.  He then used the stolen funds to pay his credit cards and his mortgage.

Carter has been charged by federal authorities with wire fraud and other criminal counts.

Len Marzocco Churning Fraud

If you were an investor of Len Marzocco please call 303-300-5022 to discuss whether you have been a victim of churning.  Churning is a type of fraud and investors who are victims of churning are entitled to recovery.

Churning is the action of a securities broker making excessive trades in an account that benefit the broker more than benefiting the investor.  Regulators require that trades be quantitatively and qualitatively suitable.  When a broker makes excessive trades, such trades are quantitatively unsuitable.

Regulators stated that Marzocco engaged in quantitatively was-unable trading in the accounts of multiple customers.

One way of determining the existence of churning is by analyzing the “turnover” in the account.  Turnover rate represents the number of times that a portfolio of securities is exchanged for another portfolio of securities. The cost-to-equity ratio measures the amount an account has to appreciate just to cover commissions and other expenses. In other words. it is the break-even point where a customer may begin to see a return. A turnover rate of six or a cost-to-equity ratio above 20 percent generally indicates that excessive trading has occurred.

Regulators found violations in at least three accounts:

• The first account exhibited an annualized cost-to-equity ratio of 179.29%. JMS’s accouim incurred losses of 5135.;: OD and paid 553,232 in commissions and 11et.s ($36,824 was charged at First Standard and $16,408 was charged at Spartan).’

• The second account exhibited an annualized turnover rate of 39.30 and an annualized cost-to-equity ratio of 76.86%. CR’s account incurred losses of 524.542 and paid $9,647 in commissions and fees.

• The third account exhibited a turnover rate of 37.88 and a cost-to-equity ratio of 54.44%. DG’s account incurred losses of 535.989 and paid 518,644 in commissions and fees.

Marzocco has a history of investor lawsuits, regulatory actions, felony criminal actions, and job terminations for fraud.  His employers had a duty to provide heightened supervision if they were to hire him at all.

Call for a free and confidential consultation.  Most representations handled on a contingency basis.