Disciplinary Actions

FINRA Arbitration Award Against Interactive Brokers

Published on: July 18, 2024 | by Greco & Greco, P.C.

In June of 2024 Scott Greco represented a client who received a FINRA arbitration award of her full damages, interest, and attorney’s fees against Interactive Brokers regarding an unauthorized money transfer from the client’s account. The case involved the unauthorized access of the Virginia customer’s online account by criminals who transferred funds without the customer’s authorization to an account in the UK. Notably, Interactive Brokers (IB) took no responsibility for its actions and compliance failures and attempted to blame the customer. Read the award here.

FINRA securities brokerage firms such as Interactive Brokers have various duties under FINRA Rules and federal law to safeguard customer assets and guard against money laundering.

The U.S. Bank Secrecy Act (BSA) is set out in 31 U.S.C. Sec. 5311 – 5330. Securities Broker-Dealers such as IB are defined as a “financial institution” under the BSA. 31 U.S.C. Sec. 5312(a)(2). “Money Laundering” is defined in 31 U.S.C. Sec. 5340 as “the movement of illicit cash or cash equivalent proceeds into, out of, or through the United States, or into, out of, or through United States financial institutions…”

Bethesda, Maryland Stock Broker Barred by FINRA

Published on: July 12, 2024 | by Greco & Greco, P.C.

FINRA recently issued a Letter of Acceptance, Waiver, and Consent (AWC) against financial advisor Andrew J. Egber which results in his bar from the industry by FINRA. According to FINRA’s Brokercheck report, Mr. Egber had previous offices in Rockville and Bethesda, Maryland and was previously registered to sell securities with Wells Fargo Clearing Services, Raymond James Financial, and Steward Partners Investment Solutions. Brokercheck further reports two customer complaints regarding “outside investments.”

The AWC which can be found here states that “On March 3, 2024, Wells Fargo filed an amendment to Egber’s Form US, which stated that the firm had initiated an internal review and was “reviewing allegations of possible theft of client funds” by Egber.” It further states that Mr. Egber refused to provide information and documents to FINRA and further refused to appear for on the record testimony in violation of FINRA Rules 8210 and 2010.

Greco & Greco have been representing harmed customers in the Maryland/Virginia/DC area for over 25 years. Many of our cases have involved financial advisors selling investments that were not approved for sale by their FINRA firm, or using alleged investments as means to convert and steal customer funds. In these situations the firms that have a duty to supervise their advisor can and should be found liable for the wrongdoing of their advisor. If you were harmed by the actions of your stockbroker, please contact Scott Greco for a free attorney consultation regarding your potential case.

FINRA bars Alexandria, Virginia Wells Fargo advisor

Published on: May 17, 2024 | by Greco & Greco, P.C.

The Financial Industry Regulatory Authority (FINRA) recently barred a financial advisor from Alexandria, Virginia who had been registered with Wells Fargo Clearing Services LLC. According to the FINRA AWC (Letter of Acceptance, Waiver, and Consent), FINRA began an investigation into whether Paul Trimber “converted a senior customer’s funds for his personal use and benefit…” Mr. Trimber allegedly refused to produce documents in response to FINRA’s requests in the investigation, resulting in FINRA’s bar from Mr. Trimber associating with any FINRA member.

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.

Roanoke, Virginia Financial Advisor Barred by FINRA

Published on: March 29, 2024 | by Greco & Greco, P.C.

FINRA has reported on the Brokercheck report for former advisor Shane Wilhelm that he has been permanently barred from registration with a FINRA Broker-Dealer. The Report states that Mr. Wilhelm was previously registered with Fortune Financial Services and Truist Investment Services, and that he previously had offices in Roanoke, Virginia, Moneta, Virginia, and Lynchburg, Virginia.

FINRA states “Pursuant to FINRA Rule 9552(h) and in accordance with FINRA’s Notice of Suspension and Suspension from Association letters dated June 2, 2023, and June 26, 2023, respectively, on September 5, 2023, Wilhelm is barred from association with any FINRA member firm in all capacities. Wilhelm failed to request termination of his suspension within three months of the date of the Notice of Suspension; therefore he is automatically barred from association with any FINRA member in all capacities.”

The Virginia-based securities fraud lawyers at Greco & Greco have been representing wronged customers of financial advisors for decades, including many clients from southwest Virginia including Roanoke. We have extensive experience for cases of securities fraud, breach of fiduciary duty, churning, broker theft, false statements, unsuitable recommendations, and unauthorized trading. If you believe you may have been victimized by your investment advisor, please contact Scott Greco for a free attorney consultation.

North Carolina Advisor Barred After Being Fired by Truist

Published on: March 29, 2024 | by Greco & Greco, P.C.

FINRA, a regulator of the securities industry, recently barred North Carolina broker Christina Peterman after she failed to respond to a FINRA request for information and documents. The Letter of Acceptance, Waiver, and Consent states that the investigation related to a filing by her Broker-Dealer firm, Truist Investment Services, Inc. stating that she had been discharged based on the allegation that she “accessed client information without a business purpose and engaged in unauthorized client transactions.”

Unauthorized trading by investment advisors is generally considered to be a fraudulent activity. Typically, unless discretion to trade without speaking to the customer is granted to the broker in writing, the broker is required to obtain permission for all transactions for the customer after discussing the relevant factors which form the basis for a recommended trade.

Greco & Greco has represented North Carolina investors for decades in FINRA arbitrations based on wrongful conduct by stock brokers and their brokerage firms. If you believe you may have been harmed by a broker’s bad acts, please contact Securities Fraud Lawyer Scott Greco for a free attorney consultation about your case.

LPL Financial sanctioned by FINRA for BDC supervisory failures

Published on: March 7, 2024 | by Greco & Greco, P.C.

The Financial Industry Regulatory Authority (FINRA) has issued a Letter of Acceptance, Waiver, and Consent (AWC) against LPL Financial LLC, a notable member firm in the securities industry. The AWC alleges a series of alleged rule violations that occurred over several years, painting a picture of insufficient supervision and inaccurate information dissemination to customers. Let’s delve into the details of this regulatory action and what it means for investors and the securities industry at large.

Background: LPL Financial LLC

LPL Financial LLC, a long-standing member of FINRA since 1973, operates as a significant player in the securities industry and is one of the larger “independent” FINRA firms. Headquartered in Fort Mill, South Carolina, LPL boasts a considerable network, with over 27,000 registered representatives across more than 18,000 branch offices. Most advisors who are registered with independent firms operate out of small one or two advisor offices. Although independent firms have the same supervisory duties and more traditional firms with big branch offices, proper supervision does not always occur.

Maryland/DC Area Transamerica Agent Barred by FINRA

Published on: October 17, 2023 | by Greco & Greco, P.C.

Lickhai Quach, a Silver Spring, Maryland broker/agent of Transamerica Financial Advisors, Inc., was recently barred by FINRA from association with any FINRA firm. The FINRA Letter of Acceptance, Waiver, and Consent states that Mr. Quach refused to produce documents or information to investigators as required by FINRA Rule 8210.

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.

Rockville, Maryland Morgan Stanley Broker Barred by FINRA

Published on: October 13, 2023 | by Greco & Greco, P.C.

Miche Jean was a registered securities salesperson with Morgan Stanley in Rockville, Maryland since 2015. However, on November 12, 2020, Morgan Stanley submitted a Termination Notice (Form U5), indicating that they terminated Jean’s employment due to concerns related to his trading strategy for certain clients, potential unauthorized discretion in specific accounts, and incomplete and delayed communication with clients regarding transactions. Furthermore, on March 30, 2021, an amended Form U5 disclosed a customer complaint alleging unauthorized trading with exchange-traded funds (ETFs) during Jean’s tenure at Morgan Stanley.

Then, on November 15, 2022, the Maryland Securities Commissioner issued a Consent Order in which Jean admitted to fraudulent actions during his time with Morgan Stanley in Maryland. Specifically, he was found to have initiated four ACH transfers, totaling $10,182, from a Morgan Stanley customer’s brokerage account to cover his personal credit card expenses.

FINRA, a national self-regulatory securities regulator, recently barred Mr. Miche from the industry pursuant to a decision by its Office of Hearing Officers.

SEC Orders Sanctions Against New York Investment Adviser for Allegedly Misusing Client Funds

Published on: September 28, 2023 | by Greco & Greco, P.C.

The Securities and Exchange Commission (SEC) has taken significant action against Bruderman Asset Management, now known as Gary Goldberg Planning Services, LLC (BAM), and its founder, Matthew J. Bruderman. The SEC has instituted public administrative and cease-and-desist proceedings against these entities, with a final Order found here, citing violations of the Investment Advisers Act of 1940. The proceedings revolve around the alleged misuse of client funds by BAM, which raised over $6.1 million from investment advisory clients and directed these funds towards entities with ties to Bruderman. The SEC alleges that these actions violated various sections of the Advisers Act, including Sections 206(2) and 206(4), and Rule 206(4)-7.

According to the SEC Order, between February 2017 and August 2021, BAM, under Bruderman’s direction, persuaded at least thirteen investment advisory clients to invest substantial amounts totaling $6.1 million in entities where Bruderman had significant ownership and decision-making authority. Shockingly, these clients were not informed that their investments would temporarily be diverted to cover expenses unrelated to their intended investments or to repay loans made by Bruderman himself.

One particularly concerning example involved a $500,000 equity investment, where $400,000 was transferred to Bruderman’s personal bank account to repay a loan owed by one of the entities. The clients invested based on BAM’s advice, unaware of the temporary diversion of their funds. Despite BAM’s written policies requiring disclosure of material conflicts of interest, these conflicts remained undisclosed, leaving clients in the dark about the use of their investments.

FINRA Disciplinary Action Against LPL Financial LLC Related to Broker Theft

Published on: September 20, 2023 | by Greco & Greco, P.C.

On July 25, 2023, the Financial Industry Regulatory Authority (FINRA) issued a Letter of Acceptance, Waiver, and Consent (AWC) against LPL Financial LLC, a prominent independent securities broker headquartered in Fort Mill, South Carolina. This disciplinary action followed a series of egregious violations that involved the conversion/theft of approximately $2.4 million of customer funds by two of the firm’s brokers.

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: