Tag Archives: FINRA

Virgin Galactic (SPCE) Losses

Virgin Galactic (SPCE) has been recommended and sold to moderate and conservative investors in violation of FINRA and SEC regulations.  These regulations require that brokers and advisors only make investment recommendations consistent with the objectives and risk tolerance of an investor.  SPCE has always been an extremely risky investment.

SPCE saw its value pushed by analysts such as Morgan Stanley, who had given it an oversize price target.  The stock proceeded to gain 200%.  The stock crashed to Earth when Morgan Stanley reversed its analysis.

Recovering investment losses through FINRA is a specialty skill few attorneys possess.

Recovering investment losses through FINRA is a specialty skill few attorneys possess.

Unfortunately, smaller investors who should have never been invested in SPCE are the ones paying the price.  Many investors will blame themselves for not timing the market better; however, investment suitability is not about time timing but whether the investor should have been in the investment at all.  Even if an investment had or did increase in value, risky investments are not suitable for moderate investors because such investments have the substantial potential for such volatility.

Recommending such an investment to a moderate or conservative investor creates liability on the part of the broker or advisor.  Such violation of industry regulations can be both negligence and fraud.

If you have lost principal in the SPCE or other speculative investments despite being a moderate to conservative investor please give us a call at 866-817-0201.  You need to retain an attorney that understands the FINRA arbitration process which is different than the litigation process.  Jeffrey Pederson is an attorney that has helped investors recover millions through FINRA.

 

Kari Bracy – Future Income Payments (FIP)

Kari M. Bracy, formerly of NY Life, recently lost her securities license rather than cooperate in an investigation into her sale of unapproved investments in future income payment streams.   These investments are alleged to be part of an elaborate Ponzi scheme.  Our firm represents individuals in such suits and other Ponzi-type frauds.  Call 1-866-817-0201 for a free and confidential consultation.

On December 30, 2019, in connection with an investigation by the regulator FINRA, the Financial Industry Regulatory Authority, of Bracy’s sale of a Future Income Payments, LLC’s (“FIP”) structured cash flow investment comprised of pension streams, FINRA staff sent a request to Bracy directing her to appear for on-the-record testimony on January 16, 2020 pursuant to FINRA Rules. On December 31, 2019, Bracy acknowledged during a telephone call with FINRA staff that she received request letter and did not intend to appear for testimony.

FINRA is the regulator that is charged by the Securities and Exchange Commission with the oversight of all securities brokers in the United States.  The failure to cooperate led FINRA to bar Bracy from the securities industry.

FIP diverted new investor funds flowing into the business to fund payments to earlier investors in order to keep the scheme operational, which is the definition of a Ponzi scheme. When FIP ceased doing business in early 2018, investors were owed approximately $300 million.

This is not the first time Bracy has faced legal issues concerning these  FIP investments.  An investor initiated suit against NY Life concerning Bracy’s sale of these FIP investments in future income streams.  The investor filed for arbitration with FINRA in July 2018.

That lawsuit, which alleged damages in the amount $142,000, settled for $80,000.  The investor alleged that in December 2017 her investment in FIP, a private securities transaction, was misrepresented as a conservative and safe investment with a 7.5% annual return for ten (10) years.  The FIP investment is not a conservative investment and was known to be highly aggressive and inappropriate for most, if not all, investors.  

 

 

 

Attention Stokesbary Investors

If you were one of the investors of Arlyn Roy Stokesbary, formerly of Thrivent Investment Management, please call 1-866-817-0201.   Initial consultations with an attorney are free and confidential.

The Financial Industry Regulatory Authority (FINRA) accused Stokesbary of a large number of unauthorized trades in the accounts of his investors.  FINRA is the regulatory arm of the New York Stock Exchange and the NASDAQ, and is overseen by the SEC.  FINRA alleged that Stokesbary took such fraudulent actions in the accounts of 20 separate investors.   The actual number may be much higher.

In August 2017, Thrivent identified Stokebary trading for two unrelated investors within several minutes of each other, actions which raise a red flag that appropriate authorization was not obtained.  Stokesbary confessed to his employer, Thrivent, that he did not speak to either customer prior to the trades.  Thrivent warned him of the need for contemporaneous authorization of trades, but did not fire him at the time.

Unauthorized trading is a form of fraud.  A broker can enrich himself at the expense of his investor when the broker makes unauthorized trades.  As such, a broker cannot exercise such control over an account absent written authorization.

Unfortunately, the warning from Thrivent was not heeded.  FINRA identifies that shortly thereafter, Stokesbary effected an additional 109 trades without contacting investors on the day of the trade.  Once again, this number may be much higher.

On September 20, 2018, Thrivent disclosed that it  terminated the employment of Stokesbary.  Thrivent stated the termination was for his  “failing to discontinue improper trading practices [in customer accounts] after being educated.”

Thrivent, and its predecessor Lutheran Brotherhood had been the employer of Stokesbary since 1987.

FINRA suspended Stokesbary for 15 days from the industry and imposed a $5000 fine.

Investors holding accounts at Thrivent should contact an attorney if they believe that Stokesbary effectuated trades in their accounts.

 

Jimmy Booth Investment Fraud

If you were with James “Jimmy” Booth, and question whether you are a victim of investment fraud, please call 1-866-817-0201.  Booth has previously been a broker for LPL, Invest Financial, and Cadaret, Grant & Co.  He did business for these firms under the name “Booth Financial Associates.”

In May 2019, FINRA, the regulator overseeing securities brokers, began an investigation into the Booth matter after receiving information from Booth’s former employer, LPL, following an internal investigation. During the Relevant Period, multiple customers of Booth gave him their savings totaling at least approximately $1,000,000 to invest on their behalf.

Booth, however, deposited the funds into an account he controlled and, instead of using the funds for investment purposes, used them for his own personal use. FINRA rules provides that “[n]o member or person associated with a member shall make improper use of a customer’s securities or funds” and that “[a] member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade. ”

FINRA barred Booth from ever serving as a securities broker as part of the settlement of the regulatory matter.

LPL has sent letters to some of the impacted investors to ask them if they authorized the withdrawals in their accounts.  For full recovery, investors should speak to an attorney.

Booth primarily worked in the Norwalk, CT area but it is believed that he had investors nationwide.

Booth has a history of customer disputes going back to 2004.

Recover Nina Jessee Investment Losses

Nina S. Jesse, formerly of National Capital Corp. and Cetera Advisors, has been sued over 20 times for her improper recommendation of unsuitable investments.  Her former employers are responsible for failing to supervise Jessee.  Please call 1-866-817-0201 for a free and confidential consultation with an attorney if you have suffered losses you believe were too aggressive or not appropriately investigated by Jessee or her employers.

Ms. Jesse is permanently barred from the securities industry.  FINRA, the regulatory body that oversees securities brokerage firms, investigated Jessee.  The focus of the investigation was the large number of complaints that Nina Jesse sold unsuitable investments.  The sale of unsuitable investments is a form of fraud.  A broker motivated by commission or other payment recommends investments that are overly risky or otherwise inconsistent with an investor’s objectives or tolerance for risk.  The investors then suffers losses as the result of the broker’s greed.

The bar of Nina Jessee was issued when Jessee failed to provide documents or otherwise contest the regulator’s allegations.  Her attorney acknowledged that she received the regulatory action but declined to participate.

Another subject of the investigation was undisclosed outside business activity of Jessee.  The reason that disclosure of such activity is important is that brokers will commonly use their access to investors to direct investment toward their own business or the business of a friend.  This is done despite the lack of oversight by the broker’s employer or verification that the business is worthy of anyone’s investment.

Suits concerning losses with investors such as Nina Jessee are largely handled through an arbitration process.  Investors suffering losses should speak to an attorney knowledgeable with the investment arbitration process.  Please call the number above to discuss Nina Jesse and the recovery process.

Christopher Duke Bennett Fraud Victims

If you have suffered losses with Christopher Duke Bennett of J.J.B. Hilliard, please call 1-866-817-0201.   Victims may receive a free and confidential consultation with an attorney.  Bennett is accused of participating in systemic fraud of his investors.

Bennett engaged in unauthorized trading, or churning.  This is where a broker makes trades in an account to effectuate commissions for himself without regard for the investor.  Between January 2014 and December 2015, Bennett violated federal and state securities laws by exercising discretionary trading authority in the accounts of several customers without written authorization, in violation of NASD Rule 2510(b) and FINRA Rule 2010.  This was the grounds for a regulatory action filed against Bennett by the Financial Industry Regulatory Authority (FINRA).

Between January 2014 and December 2015, Bennett made unauthorized trades in the accounts of four customers, one of whom was a senior investor, by placing approximately 75 total trades in those accounts. A broker is required to speak to an investor contemporaneously to a trade, or have written authorization that the broker has authority to make a trade at the broker’s discretion.  Bennett did not obtain express authorization from those customers for those trades prior to placing them, did not have written authorization from the customers to exercise discretionary authority in those accounts, and neither sought nor obtained from Hilliard Lyons prior written acceptance of the accounts as discretionary.

To date, at least 10 of Bennett’s former clients have filed suit, via FINRA arbitration, seeking redress.

Pagartanis Fraud

If you were a victim of Steven Pagartanis please call 1-866-817-0201.  The Law Offices of Jeffrey Pederson, PC is a firm that specializes in suits concerning securities brokers.

Pagartanis, the former Lombard and Cadaret broker from Long Island, N.Y., pleaded guilty Monday, December 10, 2018, in federal court to conspiracy to commit mail and wire fraud for running a Ponzi scheme over 18 years

Investors have recourse when investment professionals turn bad.

Investors have recourse when investment professionals turn bad.

Steven Pagartanis victims invested over $13 million and saw actual losses of more than $9 million,  according to the U.S. Attorney’s office.

This former licensed securities broker solicited elderly victims to invest in real estate-related investments, including those affiliated with publicly traded companies and an international hotel conglomerate, according to the Department of Justice. Pagartanis promised his investors returns consistent with conservative investments-that their principal would be secure and earn a fixed return of 4.5% to 8% annually.

The victims wrote checks payable to an entity secretly controlled by Mr. Pagartanis at his direction, according to the government. He utilized a network of bank accounts to launder the stolen funds, which he used to pay personal expenses, buy luxury items and make the phony interest or dividend payments to other victims, according to the Department of Justice. He faces up to 20 years in prison.

Recovery of these losses will focus on the employers of Pagartanis.  These employers are required to have supervisory safeguards in place to prevent such actions.  FINRA, the Financial Industry Regulatory Authority, has rules that require licensed brokerages to take steps to monitor and detect private securities transactions away from the firm.  Consequently, liability exists even if such actions were not taking place right under the nose of the firms.  FINRA offers an arbitration forum to recover such losses.

The SEC also filed a civil suit concerning this matter in May 2018.

On June 26, 2019, a FINRA arbitration panel awarded an investor a judgment in the amount of $1.46 million against Pagartanis for his role iin the multi-million dollar Ponzi scheme.

Jeffrey Pederson is an attorney who helps investors recover losses from brokerage firms through the FINRA arbitration process.  This is just one of the 17 customer complaint disclosures on his record.

DAVID FAGENSON LOSS RECOVERY

Call 1-866-817-0201 to learn about potential loss recovery for investors of David Fagenson.  Mr. Fagenson was previously with Newbridge, Merrill Lynch and UBS Financial.  Initial consultations are free and most representations are done on a contingency basis.

FINRA, the regulator that oversees securities brokers, alleged that Fagenson engaged in churning and unsuitable trading in the accounts of three senior customers during the period of January 2012 and September 2016.

We believe that the problem could be more widespread.  Churning is rarely restricted to just aInvest photo 2 small percentage of a broker’s clients.  An average broker usually has over 100 investors in that broker’s book of business.

Also, Fagenson has a long history of actions that question his veracity and ability to hand the savings of others.  In addition to a felony charge in 2010, Fagenson has been the subject of eight investor lawsuits/complaints, three regulatory actions, a termination of brokerage employment for cause, and one bankruptcy.

The history of Fagenson raises questions of how he was supervised and whether he should have ever been hired by the aforementioned brokerages.  UBS has acknowledged his issues and that he Fegenson required heightened supervision.  However, even that was not enough in light of the many red flags that existed.

Jeffrey Pederson is a private attorney handling FINRA arbitration cases for investors to obtain loss recovery.

 

 

 

Sean Kelly Theft

If you were an investor of Sean Kelly, previously of Center Street Securities, Capital Financial Services, and Lion’s Share Financial, please call 1-866-817-0201.  We are currently investigating his theft of investor funds.

Kelly, a Georgia stock broker, is facing criminal and SEC charges alleging that he stole at least $1 million from a dozen clients.  These clients include elderly widows and military veterans.  Kelly stole their savings and used the money for luxuries including Super Bowl tickets and vacations.

Sean Kelly, 49, of Marietta, Ga., and a stockbroker for Center Street Securities Inc., also is accused of falsely presenting himself to clients as both a brokerage firm and an investment advisor, according to the U.S. Securities and Exchange Administration.

Investors have recourse when investment professionals turn bad.

Investors have recourse when investment professionals turn bad.

The financial fraud of Kelly should have been foreseen by his employers.  The record of Kelly shows a broker with significant financial problems.  He has a history of multiple tax liens, a bankruptcy, and what is described as a “continuation of a prior bankruptcy.”

The U.S. Attorney’s Office for the Northern District of Georgia has filed criminal charges against Kelly and placed him under arrest, according to the SEC.

The SEC Complaint indicates that the fraud was fairly simple.  Kelly would have his clients make checks out to Lion’s Share.  The Complaint goes on state that Kelly used Lion’s Share as “his personal piggy bank.”

There has also been a temporary restraining order entered.  Such an order freezes the assets of Kelly.

Kelly, who has been a stockbroker for about 18 years, has been stealing money from clients since at least 2014, using recruiting techniques such as offering free tax preparation services for veterans and holding free retirement planning seminars in assisted living facilities, according to the SEC.

The theft could be well-above the $1 million currently estimated.   The number is reliant upon the documents the SEC has been able to obtain from the investigation of Kelly.  There are likely many more investors who will need to bring actions on their own to obtain recovery of their losses.

Brokerage firms have a duty to investigate and monitor outside business activities such as the activities of Kelly.  Further, FINRA requires securities brokerages to carry fidelity insurance.

Kelly’s use of Lion’s Share was well known to his employers.  Insufficient safeguard’s existed to protect the investors.

Ami Forte Investigation

If you suffered losses with Ami Forte, please call 1-866-817-0201 for a free and confidential consultation.  Jeffrey Pederson, PC handles claims against securities brokerages nationwide for unsuitable securities and unauthorized trading violations.

The Financial Industry Regulatory Authority (FINRA) announced on October 3, 2018 that it was widening the investigation of Ami Forte.  FINRA is the national regulatory agency that oversees securities brokerages.  It does so with the oversight of the SEC.

The October 3 notice advises Forte that the regulator will include additional potential violations of rules tied to conflicts of interest and fraud. Other violations included in the October 3 notice relates to rules tied to suitability, municipal securities advisory activities and books and records.

Forte, once Morgan Stanley’s most celebrated and prominent financial advisor with $2 billion in assets under management, lost her job at Morgan Stanley when an FINRA arbitration panel entered a substantial judgment against her.  The panel ordered her, her branch manager and Morgan Stanley to pay $34 million to the estate of Home Shopping Network co-founder Roy Speer in 2016. Lynnda Speer, Roy Speer’s widow, argued that the estate had been harmed by unauthorized trading, churning and elder abuse.

The initial investigation began in January 2018.  FINRA had made a preliminary determination concerning violations of multiple FINRA rules.  These rules concerning inappropriate exercises of discretion in an account and inappropriate recommendation of direct participation investments.

Forte had recently begun a career resurrection of sorts. In March 2018, Pinnacle Investments announced Forte as its chief business development officer.

This was short-lived.  BrokerCheck records indicate that the employment with Pinnacle ended Oct. 17,

Jeffrey Pederson has represented hundreds of investors over the past 15 years in FINRA arbitrations nationwide.  Time limitations may exist.  Investors suspecting wrongdoing should call at their earliest convenience