Investigation

Owensboro, Kentucky Financial Advisor suspended by FINRA

Published on: July 19, 2024 | by Greco & Greco, P.C.

A long-time investment advisor with Cantella & Co. based in Owensboro, Kentucky was recently suspended by FINRA for alleged wrongful conduct. Pursuant to FINRA Rule 9216, Gleason submitted a Letter of Acceptance, Waiver, and Consent (AWC) aimed at settling alleged violations and avoiding future repercussions from FINRA based on the same findings.

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.

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.

The SEC fines multiple financial firms for failing to preserve text communications.

Published on: March 8, 2024 | by Greco & Greco, P.C.

The Securities and Exchange Commission (SEC) recently announced significant penalties against sixteen firms for widespread recordkeeping failures, amounting to over $81 million in combined fines. Among the firms involved were Northwestern Mutual Investment Services LLC, Guggenheim Securities LLC, Oppenheimer & Co. Inc., Cambridge Investment Research Inc., Key Investment Services LLC, Lincoln Financial Advisors Corporation, U.S. Bancorp Investments Inc., and The Huntington Investment Company. The penalties stem from the firms’ failure to maintain and preserve electronic communications, a violation of federal securities laws. These actions highlight the SEC’s commitment to enforcing compliance with recordkeeping requirements essential for monitoring and enforcing securities laws.

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.

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.

Claims against Richmond, Virginia Centaurus Broker John Starke

Published on: October 3, 2023 | by Greco & Greco, P.C.

The local Virginia Securities Fraud Lawyers of Greco & Greco are currently representing multiple Virginia customers of Richmond, Virginia based broker John Starke. These claims for investment losses have been filed in FINRA arbitration against Mr. Starke’s brokerage firm, Centaurus Financial.

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.

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:

Tennessee Financial Advisor Barred By FINRA

Published on: September 3, 2023 | by Greco & Greco, P.C.

FINRA has announced on its website that it has barred Tennessee financial advisor D. Wray Rodgers of Collierville. According to FINRA’s Letter of Acceptance, Waiver, and Consent, Mr. Rodgers was registered with the firm Vining-Sparks IBG, LLC, and FINRA had begun an investigation regarding “whether Rodgers engaged in an outside business activity without providing prior written notice to his member firm and whether he misused customer funds.”

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.

California Broker Chris Kennedy with Multiple Customer Complaints

Published on: June 16, 2023 | by Greco & Greco, P.C.

The online FINRA Brokercheck report for former Western International broker Chris Kennedy shows eleven different customer complaints. These complaints include allegations of unauthorized trading, unsuitability, breach of fiduciary duty, and other wrongful conduct. Many of the complaints have been settled, with one settled for over 2.7 million dollars.

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.

Scott Jay Matalon Barred by FINRA

Published on: June 12, 2023 | by Greco & Greco, P.C.

Former RBC and Ameriprise securities broker Scott Jay Matalon of Jericho, New York was recently barred from the industry by FINRA, a securities regulator. The Letter of Acceptance, Waiver, and Consent states that Mr. Matalon failed to produce documents or information in response to an investigation regarding an arbitration Statement of Claim which was filed.

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.