Gleason’s career spanned several decades, commencing in 1985 when he first registered with FINRA. However, recent disclosures by former employers have brought his practices under scrutiny by FINRA. According to his FINRA Brokercheck report, his association with Cantella & Co., Inc., ended with him being “discharged” due to “Concerns regarding the origin of notations added to firm-requested Active Account and Concentration client letters.”

The AWC focused on Gleason’s actions between July 2020 and June 2021, during which he allegedly breached the Best Interest Obligation under Rule 15l-1(a)(1) of the Securities Exchange Act. This rule mandates that brokers prioritize clients’ interests over their own when recommending investments. According to the AWC: “Gleason recommended to a retail customer (Customer A) a series of transactions that were excessive in light of the customer’s investment profile. In so doing, Gleason placed his interests ahead of the interests of the customer.” The AWC further stated that this pattern of behavior resulted in significant costs for Customer A, including substantial commissions despite modest account balances.

The AWC sanctioned Mr. Gleason with a three month suspension of his license and a $5,000.00 fine.

Greco & Greco has extensive experience representing customers in churning claims against their financial advisors and firms. Churning occurs when the advisor engages in excessive trading for the purpose of generating commissions or fees, without regard for the suitability of the trading for the customer. If you believe you may have been the victim of churning, please contact Scott Greco for a free securities fraud attorney consultation about your case.

According to FINRA’s Brokercheck report, Mr. Trimber was terminated by Wells Fargo in February 2024 for the following reason: “Financial Advisor discharged after he admitted during review to making unauthorized transfers of client funds to recipients outside of the Firm.”

Financial Advisors occupy positions of trust and access to accounts that unfortunately can result in the theft of customer funds. In such situations, the brokerage firms for which the advisor is registered also bear responsibility for their advisors’ criminal actions, and also can be found liable for failures to supervise the wrongful activity.

The Virginia Securities Fraud Lawyers of Greco & Greco have been representing the interests of wronged customers in Virginia and across the country for over thirty years. These cases, many of which end up in FINRA arbitration, have often involved the fraudulent theft of funds by trusted financial advisors and brokers. If you believe you may have been victimized by your advisor, please contact Scott Greco for a free attorney consultation about your case.

Of particular note is The Huntington Investment Company’s case, which stands out due to its self-reporting and cooperation with the SEC. As a result, Huntington was ordered to pay a lower civil penalty compared to other firms, totaling $1.25 million. This demonstrates the importance of voluntary disclosure and cooperation in regulatory investigations.

The investigations uncovered widespread use of unapproved communication methods, such as personal text messages, across all sixteen firms. Employees at various levels, including supervisors and senior managers, were involved in these violations. The failure to maintain and preserve required records potentially deprived the SEC of crucial information in various investigations.

Each of the firms involved was charged with violating recordkeeping provisions of relevant securities laws and failing to reasonably supervise to prevent and detect such violations. In addition to the financial penalties, the firms were ordered to cease future violations, receive censures, and engage independent compliance consultants to review and enhance their policies and procedures.

Most securities brokerage firms and investment advisory firms prohibit texting between financial advisors and brokers and their customers because of the difficulty of supervising those communications. The reality is, however, that many brokers and advisors don’t follow these rules and often will send texts that can be used against them and their firms in related securities fraud actions. For this reason, customers who have been damaged by the wrongdoing of their advisors should take care to preserve all communications with their advisors including texts. If you believe you may have a claim against your financial advisor, broker, or their firm, please contact securities fraud attorney Scott Greco for a free attorney consultation.

Mr. Quach was allegedly under investigation by FINRA as a result of being permitted to resign “while under review by the firm for violating firm’s policy related to borrowing funds from a client.” Mr. Quach’s FINRA Brokercheck report states that he was registered with Transamerica since 2012. The report further states that he had one recent customer complaint relating to borrowed funds that settled, and that he was permitted to resign in March, 2023.

Registered financial advisors are generally prohibited from borrowing money from customers under FINRA Rule 3240 except in limited circumstances such as from a family member or other personal relationship. The loan must also be disclosed and approved by the advisor’s firm.

The reasons behind the rule include the myriad of conflicts of interest associated with an advisor recommending to a customer that they pay the advisor their funds, and further include the fact that such loans can be cover for thefts by financial advisors.

The Maryland Securities Fraud attorneys at Greco & Greco have decades of experience representing customers who have been defrauded by their financial advisors through loan schemes or actual thefts. Please contact Scott Greco for a free attorney consultation if you may have been a victim of such a scheme.

As shown by Mr. Starke’s FINRA Brokercheck report, found here, in the last two years customers have filed seven complaints against Mr. Starke, most involving allegations of the sale of illiquid, unsuitable, and high-risk investments.

Alternative Investments, which include REITs (Real Estate Investment Trusts), are often sold as an alternative to more traditional stocks, bonds, and stock and bond funds. These higher-risk investments are often touted for their high returns, especially in a low interest rate environment, however those high returns are accompanied with corresponding high risk.

In addition to their often high-risk nature, alternative investments may also have significant liquidity risk. Because they are typically not traded on an exchange, investors may not be able to determine the actual value of the investment, and further if the investment experiences problems, investors may not be able to sell or otherwise get out of the problem investment.

Pursuant to the Virginia Securities Act, financial advisors are required to disclose the risks associated with investments that are being recommended, and the Act provides for an award of rescission or losses, interest, and reasonable attorneys fees.

Prior to recommending the purchase of specific investments or a specific investment strategy to a customer, a stockbroker / financial advisor such as Mr. Starke is required to determine that the investments are suitable to that particular investor (or in the “best interest” of the customer after 2020). A suitability determination is based upon many different factors such as age, investment objectives, risk tolerance, employment situation, needs, income, assets, and investment experience. If an advisor’s recommendations of unsuitable investments result in the investor incurring significant losses, that investor may have a suitability, negligence, and breach of contract claim against the broker and his/her firm.

Generally, retirees and those on a fixed income should not have their life savings concentrated in high-risk illiquid investments due to the risk of loss as well as the difficulties of selling the investments.

Greco & Greco’s local Virginia-based lawyers have been representing Virginia residents for decades in claims against their financial advisors and brokerage firms. If you have suffered losses in unsuitable high-risk and illiquid investments and wish to discuss your potential claims with a local lawyer, please contact Scott Greco for a free attorney consultation about your potential case.

Greco & Greco is investigating investor losses in the following alternative investments:

• GWG L Bonds
• Moody National REIT
• Mobile Infrastructure
• Parking REIT
• Necessity Retail REIT
• American Finance Trust
• Silver Star Properties REIT
• First Capital Real Estate Trust
• Priority Income Fund
• American Hospitality Properties Fund
• Phoenix American Hospitality
• Commonwealth Capital
• Hospitality Investors Trust
• American Realty Capital Hospitality Trust

Background

The AWC against LPL Financial LLC was the result of a failure to reasonably supervise the transmittal of customer funds, which enabled two firm registered representatives to convert substantial sums of money for their personal use. The findings by FINRA in the AWC are outlined below:

1. Improper Transfers of Customer Funds: One representative persuaded nine customers, five of whom were seniors, to issue checks from their brokerage accounts payable to an undisclosed entity controlled by the representative. Instead of investing these funds, the representative used them for personal and business expenses, totaling approximately $550,000.
2. Wire Transfers for Personal Use: Another representative convinced four customers, three of whom were seniors, to wire money from their firm accounts to an outside business he controlled, purportedly for investment purposes. However, he misappropriated around $675,000 of their funds for personal use. Furthermore, this representative electronically forged a senior customer’s signature on a wire transfer form to transfer approximately $1.2 million for his personal real estate purchase.
3. Lack of Reasonable Supervisory Systems: LPL Financial LLC failed to establish a reasonable supervisory system to review transmittals of customer funds to third parties by wire or check. Their automated tool for reviewing checks only examined the second line of the recipient’s address, missing discrepancies in the address on the fourth line. Additionally, the firm did not monitor transmittals from unrelated customer accounts to the same third party.
4. Failure to Respond to Red Flags: The firm did not adequately respond to red flags indicating potential conversion/theft, such as all third-party checks being mailed to the undisclosed entity and flagged wire transfers. They also failed to detect instances of signature forgery or falsification and did not verify questionable transfers adequately.
5. Unauthorized Electronic Signatures: At least 50 firm representatives electronically signed customers’ names on over 1,000 firm documents without proper verification.

Penalties

As a result of these violations, FINRA imposed significant sanctions on LPL Financial LLC:

1. Censure: The firm was officially censured by FINRA.
2. Financial Penalty: LPL Financial LLC was fined a substantial amount of $3,000,000.00.
3. Restitution: The firm was ordered to pay $100,000 plus interest in restitution to affected customers who suffered financial losses due to the actions of the two representatives.
4. Remediation and Supervision: LPL Financial LLC must undertake a review to identify and rectify any additional improper transfers of customer funds, establish a supervisory system designed to monitor customer fund transmittals and electronic signatures to ensure compliance with securities laws and FINRA rules.

This disciplinary action against LPL Financial LLC underscores the importance of robust supervisory systems, diligent monitoring, and quick response to red flags.

Here are some key takeaways for FINRA securities firms:

1. Enhance Supervision: FINRA Broker-Dealers must implement robust supervisory systems that can detect and prevent unauthorized transfers of customer funds.
2. Vigilance with Red Flags: Red flags indicating potential misconduct should never be ignored. Firms must respond promptly and thoroughly investigate any suspicious activity.
3. Authentication and Verification: Verification procedures for electronic signatures and fund transfers must be stringent to prevent forgery and misappropriation.
4. Regular Audits and Reviews: Regularly audit and review transactions and documents to ensure compliance and prevent unauthorized actions.

Greco & Greco’s securities fraud lawyers have extensive experience pursuing legal recovery of monies stolen by customers’ financial advisors. Although criminal advisors may not be able to repay the monies they have stolen, their securities firms bear responsibility for the fraud and theft under multiple legal theories. This includes liability by the firm’s for the actions of their agents related to investments, as well as direct liability by the firms for supervisory failures and failures to follow up on red flags as discussed herein. If you have been defrauded by your financial advisor or firm, please contact Scott Greco for a free attorney consultation.

Vining-Sparks had filed a U-5 filing for Mr. Rodgers stating that he had voluntarily resigned from the firm in May 2022. According to the AWC, Mr. Rodgers failed to appear for related on the record testimony, and he and FINRA agreed to a sanction of a bar from registering with FINRA securities Broker-Dealers.

Mr. Rodgers’ FINRA Brokercheck report shows one customer complaint relating to an alleged failure to disclose risk from 2011, with a $105,000.00 settlement.

Greco & Greco’s lawyers have extensive experience with securities fraud cases involving outside business activities of brokers which have not been disclosed to their firms. If you have suffered losses due to your broker’s recommendation to invest in an investment that turned out to be fraudulent, and wish to discuss the matter for free with an attorney, please contact Scott Greco for a free securities fraud attorney consultation.

The Brokercheck report also states that Western International discharged Mr. Kennedy in 2021 after allegations were made about unauthorized options trading.

Mr. Kennedy was registered with Western at a branch office in Woodland Hills, California and Tarzana, California.

The securities fraud attorneys at Greco & Greco have extensive experience arbitrating claims on behalf of customers against Western International. One can also read here about a recent FINRA action against Western International regarding supervisory failures in the sale of GWG L bonds by Western brokers, and another related to non traded REIT sales.

If you have lost money as a result of unauthorized trading or unsuitable options trading by your financial advisor, please contact Scott Greco for a free attorney consultation about your case. We have represented wronged customers from California and across the country for decades.

Mr. Matalon’s FINRA Brokercheck report lists a criminal charge, as well as a customer complaint seeking $2,500,000 in damages. The Brokercheck description of the customer complaint references allegations of conversion of funds from the now deceased customer.

Firms that employ securities salespersons can be held liable for the conversion (theft) of customer funds even if the firm claims that its supervisors were not aware of the theft. Please read here about broker theft and failure to supervise. If you were a victim of a financial advisor who stole funds from your accounts or investments, please contact our securities fraud lawyers for a free consultation about your case.

These investments obviously carry higher risks than if an investor just invests in a single stock, and can include similar risks to using margin to purchase more shares of a stock than you can afford with cash, or risk shorting a stock in the hope that the price declines. Additionally, similar to inverse and leveraged ETFs that are spread over a sector of stocks, these ETFs reset daily, so if they are held for more than a day the price of the ETF can diverge significantly from the price of the underlying stock.

Financial advisors should not be recommending or purchasing these types of ETFs for retail investors unless the investor understands the risks involved and can afford to take those risks. Such a recommendation should be suitable and in the best interest of the customer. If you have lost monies in a single stock ETF that you did not understand or that was not suitable for your risk tolerance, please contact W. Scott Greco for a free attorney consultation about your potential case.

According to the AWC, Mr. Smith borrowed money in five different loans from a single customer without advising his firm about the loans. Loans from customers to stock brokers are generally prohibited unless they fall into several limited exceptions such as when the customer is a family member. The loans were allegedly discovered when the customer died and the estate raised questions about the loans. Mr. Smith subsequently resigned from Edward Jones while under investigation.

The FINRA AWC imposed a year suspension on the financial advisor, and a $10,000 fine.

Greco & Greco has previously recovered funds for multiple customers who knowingly or unknowingly were involved in loans to the financial advisors in violation of industry rules and brokerage firm policies. In some situations advisors may attempt to cover up broker theft from customers through the use of claimed loans. If you or someone you know was a victim of such misconduct, please contact Scott Greco for a free attorney consultation about your case.

Mr. Craffy’s Brokercheck report from FINRA discloses that he was discharged by Monmouth for failing to “disclose Outside Business Activity.” It also states that he has one customer complaint pending with allegations of negligence, fraud, breach of contract and breach of fiduciary duty.

The FINRA Letter of Acceptance, Waiver and Consent states that Mr. Craffy failed to appear to testify regarding his “potential conversion of customer money, loans or gifts from customers, active trading in customer accounts, and failure to fully disclose certain outside business activities.” He was barred from associating with any FINRA member in all capacities.

The Washington Post has reported that Mr. Craffy allegedly lost large amounts of monies paid in life insurance proceeds to grieving Army families.

FINRA advisors such as Mr. Craffy are required to invest customer monies in a suitable manner that is in the best interest of the customer, and in a manner that complies with the level of risk appropriate for the customer. If you are a victim of Mr. Craffy or any other broker who has lost monies as a result of the wrongdoing of the broker, please contact Scott Greco for a free attorney consultation about your case.

The letter alleges that Mr. Turley has been registered with J.P. Morgan Securities LLC since 2009, and that he was terminated by J.P. Morgan in 2021 for “[l]oss of confidence concerning adherence to firm policies and brokerage order handling requirements.” According to FINRA, Mr. Turley has had five FINRA multi-million dollar arbitrations filed in 2020 – 2021 relating to allegations regarding sales practice violations and unsuitable trading. One of these resulted in an arbitration award.

Mr. Turley apparently refused to provide on the record testimony to FINRA in response to a Rule 8210 Request.

Investors who lost money as a result of wrongful conduct (including unsuitable trades, unauthorized trades, or churning) at J.P. Morgan or other firms should contact securities attorney W. Scott Greco for a free consultation about your potential case. Greco & Greco, Securities Fraud Lawyers, represent harmed investors across the country in cases against their financial advisors and firms.

Mr. Liddle’s FINRA Brokercheck states that Mr. Liddle was permitted to resign after allegations that he took GWG investment monies and deposited them in a Prosper Wealth Management Account. The Brokercheck further lists five customer complaints alleging the stealing of assets and issuance of promissory notes.

Greco & Greco has extensive experience representing customers of financial advisors across the country who steal funds and assets and/or borrow monies from customers. Please contact W. Scott Greco for a free attorney consultation if you believe you may be a victim of Mr. Liddle or other advisors who engaged in wrongful conduct.

Greco & Greco’s Wisconsin Investment Fraud page.

The Complaint alleges that Western and its brokers sold high risk and potentially illiquid L bonds issued by GWG Holdings, Inc., with many of the sales to customers on fixed incomes and with moderate risk tolerances. The SEC’s press release alleged that the Defendants “failed to comply with Reg BI’s “Care Obligation” both because they did not exercise reasonable diligence, care, and skill to understand the risks, rewards, and costs associated with L Bonds, and also because they recommended L Bonds to at least seven particular customers without a reasonable basis to believe the bonds were in their customers’ best interests.”

The SEC also claimed that the activities and sales violated the compliance component of Reg BI which requires firms to establish, maintain, and enforce written policies and procedures reasonably designed to achieve compliance with Reg BI.

Western’s advisors allegedly sold $13.3 million of the L bonds in 2020 and 2021.

Greco & Greco’ securities fraud lawyers regularly represent harmed individuals who were sold unsuitable investments that were not in their best interest, and has brought multiple FINRA arbitrations against Western International in the past. If you lost money in GWG L bonds sold by Western brokers or brokers from another firm, and wish to discuss your claims, please contact Scott Greco for a free attorney consultation.

According the the FINRA Letter of Acceptance Waiver and Consent found here, Mr. Rowe refused to provide documents in response to a request of FINRA investigators. The AWC, signed by Mr. Rowe, imposed a bar on Mr. Rowe’s association with any FINRA member in all capacities.

Mr. Rowe’s FINRA Brokercheck report reveals that he voluntarily resigned from Oppenheimer in May 2020 after an allegation that he took a loan from a client without disclosing it to the firm. The report also references multiple customer complaints related to alleged loans, as well as complaints related to unauthorized trading, and inappropriate margin use. Interestingly, a customer complaint regarding a loan made after his separation from Oppenheimer is still listed as “denied” by the firm.

Mr. Rowe’s Brokercheck also reveals two prior settlements of customer complaints in 2005 and 2009 related to allegations of unsuitable trades.

Loans from customers to FINRA registered financial advisors are generally prohibited by FINRA Rules, with a couple minor exceptions. Loans between customers and advisors may often be used by advisors to hide conversion, theft of monies, or other wrongful conduct. FINRA Rule 3240 sets out the limited exceptions to the general prohibition, including loans between family members, and situations involving relationships between the parties outside the customer-broker relationship. Even under those limited circumstances, the loans have to be allowed by the firm, and have to be approved by the firm.

Virginia securities regulations, and those of many other states, also prohibit loans between securities brokers and customers. See 21 VAC 5-20-280 which consider the following to be a violation of duties to observe high standards of commercial honor and just and equitable principles of trade: “1. Engage in the practice of lending or borrowing money or securities from a customer, or acting as a custodian for money, securities or an executed stock power of a customer.”

The Virginia securities fraud attorneys at Greco & Greco have represented multiple customers in FINRA arbitrations over the years involved in recommended loans to securities salespersons in violation of FINRA Rules and state regulations. If you would like to discuss your situation with an attorney at no charge, please contact Scott Greco for a free attorney consultation.

If you believe you may have a legal claim regarding investments with Mr. Watts or Lincoln Financial, please contact Scott Greco for a free consultation: Contact Us