Tag Archives: Phoenix

First Financial Equity Corp. Losses

Please call for a free consultation with an attorney if you suffered losses First Financial Equity Corp., particularly if you suffered losses in ETF or annuity investments.

First Financial Equity, a securities brokerage firm headquartered in Scottsdale, Arizona, as identified by FINRA in February 2017, entered in a regulatory settlement with FINRA regulators concerning allegations that financial advisers were receiving excessive commissions and selling unsuitable ETF investments and annuities.  The suit also revealed that systemic problems existed in the supervising of the advisers that would prevent such violations.

A FFEC broker who typifies the problems at FFEC is John Schooler.  This FFEC broker has 26 customer complaints.  Such complaints generally evolve into arbitration lawsuits against the firm.  The complaints against Schooler involve TIC, oil/gas and other inherently aggressive investments.

Under the terms of the Offer of Settlement with FINRA, the firm consented to, without
admitting or denying the same, the entry of the following findings. The findings
stated that First Financial Equity failed to establish, maintain, and enforce an adequate supervisory system, including written procedures, designed to ensure that the firm’s sales of leveraged and inverse ETFs (nontraditional ETFs) complied with applicable securities laws, and
NASD and FINRA rules.

The findings also stated that First Financial Equity failed to establish, maintain,
and enforce an adequate supervisory system and written procedures related to the sale
of multi-share class variable annuities and to maintain records supporting customer
suitability determinations with respect to variable annuity purchases.

Leveraged and inverse ETF are a high risk investment that pays advisers a high commission.  This creates a problem in that it provides motivation for advisers to recommend such investments to investors not seeking high risk.  Such suitability violations are in violation of FINRA rules in addition to the anti-fraud provision of federal and most state securities laws.

 

The firm failed to provide sufficient training to its registered representatives and principals on the sale and supervision of multi-share class variable annuities. The findings also included that the firm failed to implement a reasonable supervisory system and procedures to supervise variable annuity exchanges.

Recovery of ARCP Losses

If you have suffered losses in ARCP, please call 303-300-5022 to speak to an attorney about potential recovery of your losses.

guy in handcuffsThe Department of Justice and the Securities Exchange Commission on September 8, 2016 charged the former chief financial officer of American Realty Capital Properties Inc., (“ARCP”) a large traded REIT now known as Vereit Inc., with overstating the financial performance of the company by purposefully inflating a key metric used by analysts and investors to assess ARCP.

According to the SEC’s complaint, ARCP’s former CFO, Brian S. Block and then chief accounting officer Lisa McAlister devised a scheme to manipulate the calculation of the REIT’s adjusted funds from operations, or AFFO, a non-GAAP measure used when the company provided earnings guidance.

Block was arrested Thursday morning on conspiracy, securities fraud, and other charges at his home in Hatfield, Pa., according to a statement from the U.S. Attorney’s Office for the Southern District of New York.

McAlister pled guilty on June 29, 2016 to one count of conspiracy to commit securities fraud and other offenses, including one count of securities fraud, one count of making false filings with the SEC, and one count of making false statements in a matter within the jurisdiction of the executive branch of the U.S. government. The securities fraud and false filings charges each carry a maximum prison term of 20 years. The conspiracy and false statements charges each carry a maximum prison term of five years.

Jeffrey Pederson, PC represents investors in the recovery of investment losses through fraud and mismanagement.  Most cases resolve by means of FIRNA arbitration.

Information for this post obtained from Investmentnews.com.