Articles Posted in Brokers

Scott Wayne Reed (“Agent Reed”), of Scottsdale, Arizona, has been engaging in various misconduct in customer accounts for years now. Most recently, earlier this year Wells Fargo customer alleged that Agent Reed solicited him to invest in “an investment opportunity in a company not offered by Wells Fargo Advisors”, Reed broker-dealer at the time. Upon information and belief, Reed tried to solicit several customers to invest in outside business activities sponsored by Hollywood producers. This “selling away” activity led to Reed’s departure from Wells Fargo on April 7, 2020.

Several of Agent Reed’s customers have complained that he sold them unsuitable investments in private placements, oil and gas investments, hedge funds, and mutual funds and over-concentrated their accounts in private placements. In 2017, elderly clients of Reed filed a complaint against Reed’s previous brokerage firms, Accelerated Capital Group (“ACG”) which is now out of business, and Coastal Equities, and later adding him personally to the complaint, for selling them several unsuitable investments. Included in these investments were various Staffing 360 issuances, Aeon Multi-Opportunity Fund, which became Kadmon, and Aequitas, which ended up being a Ponzi scheme. The clients lost their entire investment in Aequitas. They lost between 92% to 99% of their investments in Staffing 360 and lost 70% of their investments in Aeon/Kadmon. Reed sold these investments to his clients even after there were red flags that these companies were completely failing and drowning in debt.

Agent Reed has bounced around several brokerage firms, and has also worked as a registered investment advisor. From 1999-2001, he was registered with Ameritrade. His longest tenure was at Fidelity from 2001 through July 2010. He had brief stints at Strategic Advisors, Inc. and Meridian United Capital before joining Accelerated Capital Group from 2010 through 2015. Agent Reed was registered with Coastal Equities for only five months then joined Wells Fargo from April 2016 through April 2020. While his CRD Report states that he “voluntarily resigned” from Wells Fargo, the explanation details that his resignation came while he was under investigation for selling away. He has been registered with First Financial Equity Corporation since April 2020. Reed was also a dually registered RIA with Gentry Wealth Management from July 2010 through April 2016, which became Ashton Thomas Financial in 2015. According to his FINRA BrokerCheck Report, Mr. Reed operates as “Reed Private Wealth”.

Chicago-based Stoltmann Law Offices has been representing investors nationwide against unscrupulous brokerage firms and their financial advisors for more than fifteen years. Sometimes one of the best ways to avoid bad brokers is to do a little homework. Doing a simple background check can reveal a number of red flags that will help you steer clear of bad actors. All broker records are publicly accessible through the regulator FINRA’s website on a service called BrokerCheck.

What does BrokerCheck tell you? While it may not give you a complete background profile, it will show you if they have been disciplined or fined by FINRA, the US Securities and Exchange Commission (SEC) and other agencies. A pattern of multiple violations is a sure signal that you should avoid them. BrokerCheck will also give you an employment history and information on the firms that employed them. Although it’s not unusual for brokers to jump from one firm to another, repeated employment disruptions may be a warning sign as well.

As the prime securities brokerage regulator, FINRA can fine, sanction and bar brokers from the industry. Complaints about brokers must be investigated – and recorded – by FINRA. If brokers refuse to cooperate with the regulator, they can lose their securities licensing and be expelled from the business.

Chicago-based Stoltmann Law Offices has represented investors who’ve suffered losses from dealing with unscrupulous investment brokers selling exchange-traded products. Many of these high-risk products are unsuitable for retail investors.

With the COVID-19 crisis roiling financial markets, many investors have been sold products that rise when market indexes or individual securities fall. Many “exchange-linked products” (ETPs) often use borrowed money, or leverage, to magnify gains when the market drops, but they can also increase losses. They are generally only suitable for sophisticated investors and are linked to complex underlying futures contracts.

When the coronavirus crisis first made major headlines in the U.S. in early March, the stock, bond and commodities markets crashed. Since markets over-react to widespread greed and fear, traders went into mass selling mode over (later justified) expectations that demand for nearly everything from luxury goods to commodities would drop dramatically.

Recent records published by the Financial Industry Regulatory Authority (FINRA) indicated that former MML Investors Services broker Clifford Marks has received numerous resolved or pending customer disputes. These allege him taking unauthorized loans against his customer’s insurance policy while he was registered with NYLife Securities, and another customer alleged that Marks “made him sign blank forms and then attempted to coordinate a 401k rollover” without the customer’s authorization or knowledge. He also allegedly did not clearly explain unsuitable investments and provided misinformation and misdirection in the process of overselling him insurance products. These are all against securities rules and regulations and internal firm policies.

According to public, online records, Mr. Marks was previously registered with NYLife Securities in Mobile, Alabama from May 2011 until July 2016 and MML Investors Services in Mobile from August 2016 until January 2017. He has 10 customer disputes against him, one of which is currently pending. He is not currently registered as a broker within the industry.

According to a recent Financial Industry Regulatory Authority (FINRA) Award, Robert W. Baird was forced to pay Wells Fargo Advisors $10,856,166 in compensatory damages and the same amount in punitive damages, among other costs. Wells Fargo Advisors asserted unfair competition, breach of contract, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, conspiracy, tortious interference with actual and prospective business and tortious interference with contractual relations, violations of FINRA rules of conduct and unjust enrichment. The firm alleges that these raids that resulted in the accusations, occurred at a Wells Fargo branch office in Wichita, Kansas. If you suffered losses with Robert W. Baird, you may be able to recover them in the FINRA arbitration forum on a contingency fee basis. We help investors recover their losses by bringing legal action against the firm. The call to us is free with no obligation.

And why it still has so many holes in it.   Unfortunately, investors’ due diligence on a broker often starts, and ends, with a BrokerCheck review.  The entire article can be viewed at the link below.

http://www.chicagotribune.com/business/yourmoney/sc-cons-0611-journey-20150606-column.html

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