Articles Tagged with advisor

AdobeStock_41845221-300x212If you lost money because of a recommendation by Horter Investment Management, please call our Chicago-based law firm today. We are securities attorneys who help clients bring claims against firms like Horter Investment Management. Horter sold shares of LJMIX as part of its “sleeves” investment philosophy. Notwithstanding the name of the fund, LJMIX was not focused on capital preservation and left investors exposed to an unacceptably high risk of catastrophic losses. This occurred on February 5th, 2018, when the S&P 500 fell 4.6% and by the close of trading on February 6th, LJMIX had lost 88%. It was an inaptly named Fund, as it actually pursued the opposite of a capital preservations and growth strategy, and was implementing an options trading strategy with unlimited downside (in other words, no preservation) and limited upside (no growth). A professional investment advisor like Horter must understand the options strategy employed by a fund like LJMIX and not simply relied on the name of the fund when it selected it as part of the firm’s “sleeves” strategy.

Hundreds of clients of the Cincinnati, Ohio-based Registered Investment Advisor (RIA) had LJMIX in their portfolios. This investment was unsuitable for many clients due to its speculative nature, which included the risk of total loss. As a fiduciary investment advisor, Horter had a legal obligation to understand LJMIX prior to selecting it as part of its “sleeves” strategy.

This is not the first time Horter has been in hot water in connection with a mutual fund. According to an Order Instituting an Administrative Cease and Desist against Horter brought by the Securities and Exchange Commission (SEC) last year, Horter Investment Management was accused of making misstatements to clients concerning F-Squared Investments, Inc. (F-Squared), which materially inflated performance track record for its AlphaSector strategy. These alleged misstatements were made between January 2012 and October 2013, and resulted in a $250,000 fine to Horter.

AdobeStock_762441-1-300x225If you were recommended a long term care insurance policy by your financial advisor, and that policy has lapsed, you might be able to recover the premiums paid against the brokerage firm who recommended it. Many brokers recommended long-term care insurance policies with promises and representations that the premiums would not change or fluctuate much. In reality, many of the policies purchased had premiums that have skyrocketed in recent years. This means many of the people who were recommended these policies can no longer afford the payments on the premium. This means despite paying tens of thousands of dollars for years, these policies are now worthless. The brokerage firms who peddled these products had a duty and obligation to disclose all material risks, including the fact that the premiums would skyrocket in price. Some of the major policies pedaled by financial advisors at firms like Merrill Lynch, Morgan Stanley, and UBS were Geneworth, Penn Treaty and John Hancock Policies. Many of these policies have now lapsed. In other instances the insurance companies refused to pay out legitimate claims.

If you were recommended long term insurance policies by your financial advisor and these policies have a lapse please contact our Chicago-based securities fraud law firm at 312. 332. 4200 for a no-cost review by an attorney as to whether these losses can be recovered.


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Investors who had their account churned at Wells Fargo can sue the firm to recover the losses sustained or the commissions charged. With the stock market at record high, we have seen a surge in churning claims against brokers and brokerage firms. There are multiple different definitions of churning depending on what state an investor lives in. Some states define churning in the context of excessive trading (See Illinois Securities Law of 1953, Regulation 103.850). A common definition of churning, however, is when a broker or advisor overtrades the securities in a customer’s account for the purpose of generating commissions. Churning is a synonym for over-trading where the stockbroker advances his or her interests over the interests of the client Clients of Wells Fargo who had their account churned can recover those losses through the FIRNA arbitration claims process. We represent churning fraud victims on a contingency fee basis. To learn more, please check out the video below and call us for a free review by an attorney.

Dougherty & Co. was fined by the Financial Industry Regulatory Authority (FINRA) $50,000 for serving as an underwriter for 54 issuers with which it had ongoing “blanket” financial advisory agreements. The fine is the largest of its kind in recent years. It was one of the largest violations of Municipal Securities Rulemaking Board Rule on the activities of financial advisors. The rule (Rule G-23) is designed to avoid the conflict of interest that would exist if a muni securities professional were to act as both a municipal advisor and underwriter on the same issue. The underwriter’s primary role is to purchase or arrange for the placement of securities in an arms-length transaction with an issuer and underwriter. A dealer that has a municipal advisory relationship with an issuer is prohibited from acquiring any portion of issue from that client either directly or indirectly. FINRA found that the firm was only compensated as an underwriter for the issuances it carried out with the 54 issuers during the review period. The SEC recently brought a similar case against Central States Capital Markets, a Kansas-based municipal advisory firm and three of the firm’s employees. FINRA found that the firm and its employees breached their fiduciary duty to their client after serving as financial advisor for the unidentified issuer in a muni transaction and selecting a broker-dealer where the employees also worked, to underwrite the bonds.

According to a recent InvestmentNews article entitled “Raymond James, Baird to pay $850,000 for SEC wrap-fee violations,” the Securities and Exchange Commission (SEC) fined Raymond James and Robert W. Baird $850,000. The SEC accused both firms of failing to establish procedures needed to determine what their clients were being charged in commissions beyond their wrap-fee programs. The firms were not able to determine the fees charged to their clients when advisers “traded away” with a broker-dealer outside their wrap-fee program, making it impossible to determine a correct number. Raymond James will pay $600,000 and Baird, $250,000. A wrap fee is a comprehensive charge levied by an investment adviser to a client for providing a bundle of services, such as investment advice, research or brokerage services. They allow the advisor to simplify the exchange by charging one fee up front. Andrew Ceresney, director of the SEC’s enforcement division stated: “Baird and Raymond James lacked policies and procedures to consider an entire category of cost information and didn’t fully evaluate whether these wrap fee programs were a good fit.” Please call our Chicago-based law offices at 312-332-4200 for a free consultation with an attorney to discuss your options of suing Raymond James or Robert W. Baird for investment losses. We take cases on a contingency fee basis only.

Last month, the state of Connecticut Department of Banking issued a cease-and-desist order against John Rafal, founder and former chief executive of Essex Financial Services. Essex is a registered investment advisor and broker-dealer owned by Essex Savings Bank. In 2015, Mr. Rafal was suspended from the industry, after charges against him that he wrote checks from his personal account to a lawyer who was not an investment advisor, in exchange for a referral of a large account. He was subsequently fired from Essex that same year. The state of Connecticut recently charged him with omitting material facts and unethical business practices.

According to his Financial Industry Regulatory Authority (FINRA) BrokerCheck report online, Rafal was registered with Cigna Securities, Integrated Resources Equity Corp, Broad Reach Capital, Raymond James and Essex in Essex, Connecticut from September 2003 until December 2015. He has one customer dispute against him. He is not licensed within the industry. Please call us today if you invested money with John Rafal. You may be able to sue Essex Financial Services for not properly supervising Rafal and allowing him to make transgressions. The call to us is free with no obligation. 312-332-4200.

Stoltmann Law Offices is investigating Gary Bradshaw, a financial advisor with First Dallas Securities. Bradshaw was accused of concentrating large portions of an elderly customer’s portfolio into risky oil and gas investments. Allegedly, by 2014, Bradshaw had concentrated over 100% of the client’s account into three oil and gas investments: CVR Partners, LP, Kinder Morgan, and Legacy Reserves LP. Due to the losses in oil and gas stocks, the customer suffered over $160,000 in losses to her retirement savings. In all, because of his unsuitable investment recommendations, the client suffered over $250,000 in losses. Advisors such as Bradshaw have a duty to only recommend those securities that are suitable for investors. The broker must take into account the client’s age, net worth, investment objectives, and other things before recommending and selling securities. If he does not, his brokerage firm can be responsible for losses.

Bradshaw was registered with Rauscher Pierce Refsnes in Dallas, Texas from August 1985 until March 1990 and is registered with First Dallas Securities Inc. in Dallas, Texas and has been since February 1990. He has one customer dispute against him. Please call our securities law offices in Chicago at 312-332-4200 to speak to an attorney about your options of suing First Dallas Securities for investment losses on a contingency fee basis in the FINRA arbitration process. The call is free with no obligation.

Stoltmann Law Offices is investigating Mark Beloyan, who recently had a complaint filed against him and his firm, TradeSpot Markets, by the Financial Industry Regulatory Authority (FINRA). Beloyan was the President, Chief Operating Officer, Chief Compliance Officer and owner of TradeSpots. FINRA alleged that Beloyan and another financial advisor at the firm recommended penny stocks to customers without affirming suitability. This misconduct occurred while he and the advisor were trading shares of Mondial Ventures Inc. and STW Resources Holding Corp. Allegedly, Beloyan often entered information on customer suitability forms after the customer had signed it. For these transgressions, TradeSpot agreed to pay a $10,000 fine and will not solicit or recommend the purchase of penny stock for one year. Beloyan was suspended from the securities industry in all capacities for 10 days with an additional 50 days in a principal capacity. Penny stocks are those stocks which are typically exchanged at a relatively low price, and, therefore, highly speculative and high risk because of their lack of liquidity. They are not suitable for all investors.

Beloyan was registered with Rutherford, Brown & Catherwood from February 1986 until October 1988, Escalator Securities from November 1988 until May 1990, Sunpoint Securities in Longview, Texas from May 1990 until January 1992 and Corporate Securities Group in St. Louis from January 1992 until March 1992. He is currently registered with TradeSpot in Davie, Florida, and has been since March 1992, according to his online, public FINRA BrokerCheck report. Please call our securities law offices in Chicago, Illinois today to speak to an attorney about your options of suing Mark Beloyan and TradeSpot Markets in the FINRA arbitration forum on a contingency fee basis to recover your investment losses. The call to us is free with no obligation so please call today. 312-332-4200.

A Financial Industry Regulatory Authority (FINRA) panel ruled that a former Stifel, Nicolaus broker, Christian Harkness, must pay the firm $439,706 in compensatory damages as well as interest at a rate of 4.5% per year of the award until it’s paid in full and any costs of collection. Stifel is the latest brokerage firm to get back money from a promissory note awarded to a former broker. Typically, FINRA panels side with brokerage firms over the advisor in cases involving promissory notes. But the past several months have seen large awards going to the brokers.

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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