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Articles Tagged with 2008

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Two Chattanooga, Tennessee-based brokers, James Hugh Brennan III and Douglas Albert Dyer are under investigation for securities fraud by the Securities and Exchange Commission (SEC), the Tennessee Department of Commerce & Insurance (TDCI) and the FBI. Both operated Broad Street Ventures in Chattanooga, Tennessee, and allegedly raised more than $5 million from investors without using the money as promised. In February, the TDCI failed a cease-and-desist order against Broad Street, Brennan and Dyer, alleging that they had sold unregistered securities, were not registered to sell securities in Tennessee, and had engaged in fraud by failing to disclose the existence of a desist-and-refrain order previously issued in California. The SEC issued an asset freeze on July 22nd. The TDCI then referred the case to the SEC and FBI for further action.

Both men allegedly sold shares in eight similarly named companies to more than 240 investors since 2008 without ever registering the stock they promised. They then transferred the money to personal accounts or to those belonging to their wives. They failed to tell investors that Brennan was banned from the brokerage industry and Dyer was suspended and fined for executing unauthorized transactions in customer accounts. If you believe you are a victim of Brennan or Dyer, or Broad Street Ventures, please call our securities law offices in Chicago at 312-332-4200. The call is free with no obligation. Attorneys are standing by to take your call.

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The Financial Industry Regulatory Authority (FINRA) recently brought a regulatory action against ProEquities. FINRA accused ProEquities of failing to supervise the sales of non-traditional ETFs, failing to supervise the dissemination of consolidated report, failing to supervise variable annuity switching and failing to properly supervise the investment advisory conduct of certain advisors. FINRA alleged that the firm failed to have procedures in place to adequately supervise the sales of inverse and leveraged ETFs, from 2008 to April 2012. The firm agreed to pay a $200,000 fine. ETFs can be very risky investments, not suitable for all investors. A brokerage firm can be responsible for investor losses if it allows for its brokers to sell unsuitable securities to its clients.

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The Securities and Exchange Commission (SEC) recently charged two ex-brokers, James Hugh Brennan III and Douglas Albert Dyer, with a court order to stop them from taking more client money. The SEC is alleging that the men took $5 million in client money, some of which they allegedly transferred to their wives’ bank accounts. The men owned a company called Broad Street Ventures, which they operated out of their hometown of Chattanooga, Tennessee. Through Broad Street, they allegedly raised money to fund a series of other ventures, collectively known as the Scenic City Companies. The men collected from 240 investors starting in 2008. Most of the money collected was kept for themselves, or was hidden in their wives’ bank accounts. Both men had been unregistered in the industry for years.

Brennan was registered with Reynolds Securities, Dean Witter Reynolds Inc., Robinson-Humphrey/American Express, Raymond James, Mid-Atlantic Securities, Keogler, Morgan & Company, and First Allied Securities in San Diego, California from February 1996 until September 1996. He is not licensed within the industry. Dyer was registered with Raymond James, Mid-Atlantic Securities, Keogler, Morgan & Company and First Allied Securities, also in San Diego, from February 1996 until February 1997. He has one regulatory action against him, and is not licensed. Information for both men was obtained through FINRA’s BrokerCheck website.

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Todd Dyer, a Lake Geneva, Illinois man, who previously served time for a ponzi scheme, has been accused again of scamming individuals. An Illinois family claims that Dyer stole $1 million from them. The family was told that their insurance company had stolen their life insurance policy and Dyer promised to get them their money back in exchange for a fee. In 1999, he was convicted of running a $2.2 million ponzi scheme and spent 70 months in prison for it. He was then indicted for an alleged scheme beginning in March of 2008. Dyer told investors that their money would be used to purchase farm property or interests on farm property. In reality, that was not the case. In October 2012, he was accused of taking $250,000 from an individual who was interested in building a manufacturing facility and using the money for personal purposes.

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The Securities and Exchange Commission (SEC) announced that it has barred Jeffrey E. Gallagher from the securities industry. Gallagher pleaded guilty to one count of wire fraud, three counts of engaging in monetary transactions in property derived from specified unlawful activity and two counts of tax evasion. Gallagher was sentenced to three years in prison, followed by three years of supervised release. He was ordered to pay $616,535 in restitution to his victims and $69,377 in restitution to the IRS. Gallagher had acted as an unregistered broker-dealer from 2008 until 2012 and was accused of running an investment scam during that time. A total of $617,475 of investor money was lost and he also used $249,703 of the 23 victim’s money for his own personal benefit. He did not report the money to the IRS. Gallagher pled guilty to one count of mail fraud and three counts of interstate transportation of stolen property based on his illegal and unauthorized options trading while employed as a stockbroker at PaineWebber Inc. He was sentenced to 15 months in prison. The SEC barred Gallagher from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent or nationally recognized statistical rating organization, and from participating in the offer or trading of any penny stocks.

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Stoltmann Law Offices is investigating former Wunderlich Securities broker Bassam Salem, relating to alleged misconduct including failure to supervise, unauthorized trading, unsuitability, and breach of fiduciary duty over multiple accounts and damages in excess of $281,000. In another dispute, a customer was granted $92,500 in damages after it was alleged that Salem recommended unsuitable stocks and failed to diversify the customer’s accounts to minimize their risk between June 1, 2007 and June 30, 2008. Wunderlich Securities has a duty to reasonably supervise their registered representatives, and, if the firm does not, can be liable for losses sustained. If you invested money with Bassam Salem, you may be able to recover your losses in the Financial Industry Regulatory Authority (FINRA) arbitration forum on a contingency fee basis. We represent investors who have lost money because of brokers with firms such as Wunderlich Securities.

Salem was registered with First Heritage Corp from November 1986 until November 1988, Prudential Securities Inc. in New York, New York from November 1988 until March 1992 and UBS Financial Services in Farmington Hills, MI from March 1992 until January 2011. He is currently registered with Wunderlich Securities in Birmingham, Michigan and has been since January 2011. He has two customer disputes against him, one of which is currently pending.

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The Financial Industry Regulatory Authority (FINRA) announced yesterday that they fined Deutsche Bank Securities Inc. $6 million for failing to provide complete and accurate trade data in an automated format in a timely manner when requested by FINRA and the Securities and Exchange Commission (SEC). FINRA and the SEC request certain trade data known as “blue sheets” to assist in the investigation of market manipulation and insider trading. Federal securities laws require firms to provide this information to FINRA and the SEC regularly upon request. Blue sheets provide these regulators with detailed information about securities transactions, including the security, trade date, price, share quantity, customer name, and whether it was a buy sale or short sale. This information allows the regulators’ ability to discharge their enforcement and regulatory mandates. Firms must electronically submit these blue sheets when requested without exception.

FINRA found that from at least 2008 until 2015, Deutsche Bank experienced significant failures with its blue sheet systems used to compile and produce blue sheet data, including programming errors in system logic and the firm’s failure to implement enhancements to meet regulatory reporting requirements. This caused the bank to submit thousands of blue sheets to the regulators that misreported or omitted critical information on over one million trades. Also, a significant number of Deutsche Bank’s blue sheet submissions did not meet regulatory deadlines. Firms typically have 10 business days to respond to a blue sheet request. Between January 2014 and August 2015, more than 90 percent of Deutsche Bank’s blue sheets were not submitted to FINRA on a timely basis.

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The Financial Industry Regulatory Authority (FINRA) brought charges against Wedbush Securities for its alleged failure to comply with requirements related to the protection of customer assets. FINRA alleged that Wedbush Securities failed on multiple occasions from June 2009 through June 2012 to comply with requirements under applicable law and SEC rule to promptly obtain and maintain physical possession or control of fully-paid-for securities and excess margin securities carried for its customers. It also allegedly failed to set aside on at least a weekly basis in a special account (the “reserve account”) any amounts it owes customers in excess of amounts its customers owe it. FINRA claimed that Wedbush created and/or increased deficits in its segregation requirement by improperly delivering stock shares or returning stock shares borrowed for transactions, when it did not have sufficient excess shares above the firm’s segregation requirement. FINRA alleged that Wedbush failed to protect customer assets from as early as 2004, despite being put on notice beforehand. Webush also received a Letter of Caution from FINRA on the subject in 2008.

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Stoltmann Law Offices is investigating David Newman, who recently entered into a Letter of Acceptance, Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA). Newman was accused of participating in undisclosed private securities transactions by introducing a married couple and two other individuals to an outside investment between the fall of 2012 and the spring of 2015. During this time, Newman was registered with First Western Securities during this time period, from April 1, 2008 until January 5, 2016, which is when he was terminated.

The couple Newman convinced, invested a total of more than $895,000 in the outside investment, and Newman received 10% in commissions from that investment. The investment turned out to be part of a fraudulent scheme perpetrated by another individual. The couple was retired. For this, Newman was suspended from the industry for 15 months and fined $15,000. He was also ordered to disgorge the financial benefits received to be paid to FINRA in the amount of $89,500 plus interest.

David Newman was registered with A.G. Edwards & Sons in St. Louis, Missouri from September 1985 until April 1992, Raymond James in Duncan, Oklahoma from April 1992 until April 2008 and First Western Securities in Duncan from April 2008 until January 2016. He has one customer dispute against him and is not licensed within the industry, according to his online FINRA BrokerCheck report. If you invested money with David Newman, you may be able to sue his former firm, First Western Securities. Please call us for a free consultation with an attorney today. 312-332-4200.

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Recently, Feltl & Company, based in Minneapolis, Minnesota, was censured and fined $225,000 and made to make restitution to customers in the amount of approximately $13,000. According to Feltl & Company’s Letter of Acceptance, Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA), Feltl failed to establish and maintain a supervisory system reasonably designed to ensure that its sales of leveraged and inverse exchange-traded funds complied with applicable securities laws and FINRA rules. FINRA also alleged that it made unsuitable recommendations of those products to customers. In September 2014, Feltl and FINRA entered into a separate AWC that imposed a censure and fine of $1 million on the firm. FINRA found multiple failures by Feltl between 2008 and 2012 concerning supervision of transactions in penny-stock securities and annual testing and verification of supervisory procedures. This had to do with the sale of unit investment trusts (UITs).

Feltl-FINRA-AWC

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