fraud

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.

Atlanta Investment Adviser Sentenced for Ponzi Scheme

Published on: February 9, 2024 | by Greco & Greco, P.C.

An Atlanta, Georgia area investment adviser, John Woods, was recently sentenced to 8 years in prison for his role in operating a ponzi scheme. Operating over a staggering 13-year period, Woods defrauded more than 400 individuals, including retirees, seniors, and military veterans, resulting in a loss exceeding $49 million. Under the guise of his fund, “Horizon Private Equity,” Woods promised lucrative returns of six to seven percent to potential investors, claiming minimal risk and a diverse portfolio. However, investigations revealed that the money collected from new investors was used to pay returns to earlier investors, constituting a classic Ponzi scheme.

The case underscores the importance of regulatory vigilance in the investment industry. Despite assurances of safety and profitability, Woods’s actions demonstrated a flagrant abuse of trust, ultimately causing financial ruin to hundreds of victims across 20 different states.

Investment Advisers are fiduciaries, and as such they owe their customers duties of care and loyalty, both of which were flagrantly breached in this situation. Mr. Woods was a longtime investment adviser representative at Oppenheimer & Co., Inc.

Los Angeles, California Western International Broker barred for Churning

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

The Financial Industry Regulatory Authority (FINRA) recently issued a disciplinary order against Christopher Booth Kennedy, a former registered representative with Western International Securities, for a series of egregious violations. The order which can be found here, stemming from a complaint filed by FINRA’s Department of Enforcement, outlines Kennedy’s misconduct between July 2020 and July 2021. During this period, Kennedy engaged in churning and excessive trading in the accounts of six customers, resulting in significant financial losses. The Order bars Kennedy from associating with a FINRA firm.

Kennedy’s actions, as detailed in the findings and conclusions of the order, paint a troubling picture of misconduct and deceit. He directed over 5,300 trades totaling more than $350 million in the accounts of six customers, with an average of 102 trades per account each month. These excessive transactions generated substantial commissions for Kennedy while causing substantial losses for his clients. Moreover, Kennedy went to lengths to conceal the true extent of these losses by fabricating account statements and providing false information to his clients.

The disciplinary order found Kennedy in violation of several securities regulations, including Section 10(b) of the Securities Exchange Act of 1934, Regulation Best Interest, and various FINRA rules.

NASAA Warns Investors About Single Stock ETFs

Published on: May 5, 2023 | by Greco & Greco, P.C.

Our securities fraud blog has previously addressed the risks to investors regarding inverse and leveraged ETFs. A new type of ETF has emerged, however, which can carry even higher risks. The North American Securities Administrators Association recently issued an advisory to investors regarding single stock ETFs. Inverse and leveraged single stock ETFs are complex instruments which attempt to multiply the returns of a single stock when it goes up (leveraged) or down (inverse).

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.