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Greco & Greco recently obtained a 3.24 million dollar arbitration award on behalf of a retired Northern Virginia man against his stockbroker and brokerage firm. The case involved churning, unauthorized margin trading, unsuitable recommendations, and securities fraud. In addition to $1,003,725 in compensatory damages, the arbitration panel awarded $1,300,000 in punitive damages, $774,863 in attorneys fees, and pre-award interest. Read the NASD award or read the Virginia Lawyers Weekly article about the case.

A New York FINRA arbitration panel entered an award for over two million dollars ($1,875,000 in damages plus interest) for five Greco & Greco clients against a Denver, Colorado securities broker. The customers incurred severe losses over a short time frame in their accounts involved in a leveraged U.S. Treasury trading program. Read the FINRA award.

A FINRA arbitration panel issued an award of damages to Greco & Greco clients against UBS of Puerto Rico on February 23, 2018. The arbitration involved multiple Puerto Rico customers of UBS who had been invested primarily in UBS Puerto Rico Closed-End Mutual Funds and Puerto Rico Bonds.

The award, totaling $521,075.00 in damages, was significant because most of the damages were incurred in investments that UBS claimed were conservative (the Puerto Rico AAA Portfolio Bond Fund and COFINA bonds), and UBS further unsuccessfully claimed that the customers had not lost any money because of the interest/dividends they had earned over the years in the investments.

Read more at InvestmentNews

In this FINRA Arbitration held in Jackson, Mississippi, Greco & Greco represented a retiree who was cold-called by a New York broker. The broker’s investments ultimately lost a significant amount of the client’s savings in several overconcentrated stock positions. The FINRA panel awarded $80,000 in damages, $15,000 in punitive damages for “reckless disregard of Claimant’s rights,” and expert witness costs. Read the FINRA award.

W. Scott Greco, working with local Puerto Rico co-counsel, represented multiple customers in FINRA arbitration hearings in 2019 against UBS of Puerto Rico that resulted in monetary awards to the customers.

The first, a case involving overconcentration in risky UBS Puerto Rico closed end funds, resulted in an award of $4,813,161.00 which were the principal losses from February, 2013 forward, despite UBS’s claims that the accounts had a net out of pocket profit.

The second FINRA arbitration award in 2019 involved overconcentration in a few Puerto Rico bonds, and resulted in an arbitration award of $195,000 including attorney fees, again despite UBS claims of a net out of pocket profit.

In this case taken pro bonoby Greco & Greco, the FINRA arbitrator awarded the full amount of compensatory damages and interest requested based on claims of negligence, breach of fiduciary duty, and unsuitable recommendations. The arbitrator found that the brokerage firm “failed to recommend suitable investments based on [Claimant’s] request, age, needs, income status, and need for security.” The firm had ignored Claimant’s request for safer investments as her IRA declined with the market in 2008. Read the FINRA award.

McLean, Virginia based law firm Greco & Greco, P.C. is currently investigating the activities of Ameriprise and its former financial advisor, James W. Dunn, who operated out of an office in Vienna, Virginia.

As more fully set out in his FINRA Brokercheck Report (www.brokercheck.finra.org), former Ameriprise financial advisor James W. Dunn resigned in October, 2021 while under review for “potential violation of company policy related to suitability, unauthorized trades and texting with clients.”  The Brokercheck report also reveals that Mr. Dunn was terminated by Wells Fargo in May 2019 regarding “concerns regarding mutual fund trades that were marked unsolicited.”

Mr. Dunn currently has 11 customer complaints listed on his Brokercheck report, totaling alleged losses of over three million dollars.  The complaints reference allegations of unauthorized trades in 2021 in stocks and foreign securities.

A FINRA arbitration panel issued an award last month to a client of Greco & Greco who had filed securities fraud, breach of fiduciary duty, negligence, unsuitability, and other legal claims against UBS related to its Yield Enhancement Strategy, also known as YES.  The award totaled approximately $300,000.00 and included damages, attorney’s fees, and costs.

The attorney’s fees were awarded pursuant to the Washington D.C. Securities Act.

The YES strategy was a high-risk overlay strategy that allegedly was to “enhance” the yield in UBS customers’ accounts through the use of actively managed Iron Condors (an options strategy).  Despite claims of limited risk, the strategy caused significant losses in customer accounts in 2018.

The U.S. Securities Exchange Commission charged multiple Investment Advisory Firms and Broker-Dealers with unsuitable sales of exchange traded products to their customers.

According to the SEC Press Release, the firms recommended the purchase and holding of these products, despite the fact that the products were only supposed to track the short term volatility in the market, and would likely decline if held long term.

The exchange traded funds (ETFs), attempted to track the short term volatility expectations of the market. Examples referenced in the SEC Orders were iPath S&P 500 VIX Short–Term Futures ETN (“VXX”), Velocity Shares Daily Inverse VIX Short Term ETNs linked to the S&P 500, VIX Short-Term Futures Index (“XIV”), and another volatility-linked security called the ProShares VIX Short-Term Futures ETF (“VIXY”).

In a recent disciplinary action against Cadaret, Grant & Co., Inc., FINRA discusses various red flags that should have been investigated by the firm to discover and prevent the sale of a ponzi scheme investment to its customers.

The Letter of Acceptance, Waiver and Consent (found here) states that the firm “failed to reasonably supervise the activities of a registered representative even after becoming aware of red flags of sales practice violations.”  According to the AWC, a securities salesperson at Cadaret, Grant created and controlled three ponzi scheme entities, promising annual returns as high as 8% despite the fact that the entities were shell companies with no revenues or business operations.  The broker never disclosed he was selling the investments to his customers at the firm, however, the AWC found the firm liable for failing to supervise his activities.

The AWC discusses various red flags that should have been discovered and investigated by the firm when complying with its duty to supervise under FINRA Rule 3110, including the following:

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