Tag Archives: Investment Fraud

John Henry Swon IV

If you were an investor with John Henry Swon IV and suspect irregularities in your portfolio please call 303-300-5022.   Consultations are free and confidential.

Swon was previously a broker with Royal Alliance and Focus Financial.  In July 2021 the Financial Industry Regulatory Authority (FINRA) the regulator, under the oversight of the SEC, banned Swon from the securities industry.  Swon consented to the underlying allegation that he misappropriated funds from the account of an investor.

The settlement was entered into after Swon refused to produce documents in defense of his actions.  The ban prevents Swon from ever working in the securities industry in the future.

In June 2021, the employers of Swon, Royal Alliance and Focus, each terminated Swon for inappropriate outside business activity.  Brokers are required to disclose all outside business activity to their brokerage firms.  This allows the brokerage firms to supervise those outside business activities.  The violation of this requirement is often referred to as “selling away.”

The “selling away” rule is very important.  The trappings of being affiliated with a brokerage firm gives legitimacy to the investments that the broker sells.  Often brokers will use this to their advantage and sell investments that are not approved by their brokerage.  The brokers will sell fake investments or unstable investments where they are paid high commissions but no brokerage firm has investigated the financials.  Many Ponzi-type scams start with a licensed securities broker “selling away” the investment to those believing the investment had been approved by a brokerage.

 

Misdeeds by Charles Euler

If your were an investor of Charles J. Euler, Jr. with Janney Montgomery Scott of Radnor, PA please call 303-300-5022.  Charles Euler has a long history of being a broker but he also has a long history of lawsuits concerning alleged fraud in the form of selling unsuitable investments.

On March 27, 2020, Mr. Euler surrendered his license rather than defend a regulatory investigation.   The investigation was initiated by the Financial Industry Regulatory Authority (“FINRA”).  This is the self-regulatory organization that is empowered by the Securities and Exchange Commission to oversee securities brokers in the United States.  The agreement was that Mr. Euler consents to “A bar from associating with any FINRA member firm in any capacity.”

The investigation followed the filing of Janney that Mr. Euler was permitted to resign in April 2018.

The history of suits against Mr. Euler for similar actions is long.  In all, there are seven suits.  All the suits alleged that Mr. Euler allege that he made unsuitable recommendations.

Regulations, state and federal laws all prohibit the sale of unsuitable securities.  Unsuitable securities or investment plans are recommendations by a broker that are higher risk or inconsistent with an investors investment objectives.  This can be the result of high risk investments being placed in the portfolio of someone looking for moderate risk.  It can also occur when a broker recommends too high a concentration of a particular stock, industry, or too high a concentration in stocks compared to bonds, cash and CDs.

There are various reasons for the sale of unsuitable securities.  Many times high risk investments pay a higher commission than suitable investments.  Unsuitable recommendations can also be the result of negligence on the part of the broker.

FINRA requires brokerages to give a broker heightened supervision if the brokerage employs a broker with a customer complaint history.  The general number of suits or complaints triggering such supervision is four.    That means heightened supervision was required and the employer of Euler, Janney, is largely to blame for the actions of Euler.

Even before Euler reached the threshold of four complaints, Janney had a duty to supervise.  Each trade by a broker is to be reviewed by the employing brokerage for suitability.

Investors should speak to a lawyer familiar with FINRA regulations to determine if they are entitled to compensation.

 

James Davis Trent

Investors suffering losses with James Davis Trent may be entitled to recovery from his brokerage employers, AXA, Proequities and Allstate.  Please call 1-866-817-0201 for a free consultation with a private attorney.

investingstockphoto 1Trent entered into a regulatory settlement with FINRA in which Trent was suspended from
association with any FINRA member in all capacities for six months. In light of Trent’s
financial status, no monetary sanction has been imposed. Without admitting or denying
the allegations, Trent consented to the sanction and to the entry of findings that he
engaged in a pattern of recommending unsuitable short-term trading of Class A mutual
fund shares to customers, resulting in the customers (all of whom were retired) incurring
approximately $6,362.50 in unnecessary sales charges, while Trent received approximately
$2,910 as his commission from the sales loads.

Short-term trading of mutual funds is a form of churning, an action where there is very little benefit to the investor but significant commissions to the broker.  Such actions are in violation of FINRA rules and the anti-fraud provisions of state and federal securities laws.

The regulatory findings stated that Trent recommended all of the transactions that were executed in the customers’ accounts at the firm, including short-term trading involving Class A front-end-loaded mutual funds. In the transactions at issue, Trent recommended the purchase of Class A mutual fund shares and, within less than a year, recommended the sale of the positions, resulting in an average holding period for the customers’ accounts of six months. Given the long-term nature of investments in Class A mutual fund shares and the customers’ investment profiles, Trent lacked a reasonable basis to believe that the recommended securities transactions were suitable for the customers.

 

Losses with Larry Charles Wolfe

Jeffrey Pederson PC assists investors in recovering losses such as those incurred as the result of the misdeeds of brokers, such as the alleged misdeeds of Larry Charles Wolfe.  Currently with Stoever, Glass & Co., Wolfe was previously with Aegis Capital Corp., and Herbert J. Sims & Co. Those suffering losses with this broker are likely entitled to recovery from either Wolfe or his employer.  Call 1-866-817-0201 for a free and confidential consultation.

Invest photo 2FINRA has announced that it has entered into a settlement with Larry Charles Wolfe for making unauthorized transactions in his clients’ accounts.  The allegations are that between November 10, 2015 and November 16,2015, Wolfe inappropriately exercised discretion in the accounts of 39 investors without obtaining prior written authorization from the customers or written approval of the accounts as discretionary from his employing member firm, in violation of numerous state and federal securities laws.

A securities broker must obtain authorization from an investor prior to making a securities transaction in the investor’s account unless that broker has written authorization to make such a trade.

Additionally, MSRB Rule G-17 and FINRA rules require that each broker or dealer in municipal securities to deal fairly with customers and prohibits registered representatives from engaging “in any deceptive, dishonest, or unfair practice.”

The trades are believed to involve municipal bonds and other securities.

In addition to this regulatory action, Wolfe has been sued by investors at least ten (10) times, primarily for allegations of unauthorized, excessive, or unsuitable trades.  Additionally, at least two (2) other investors have threatened suit.  Despite Mr. Wolfe being accused of wide-scale fraud he has not yet lost his license and is still working in the securities industry.