Articles Tagged with Aegis Capital

Stoltmann Law Offices is representing investors whose brokers or financial advisors sold them GWG Holdings, Inc. L Bonds. Brokerage firms, including but not limited to Aegis Capital, recommended this speculative private placement to clients, collecting up to 5% of the Bond’s market price as their commission. The L Bonds are high-yield life insurance bonds used to finance the purchase of life insurance on the secondary market. Any type of investment in the secondary life insurance market is an extremely risky investment, and these bonds certainly were not suitable for many, if any, clients. Given recent events, default on the L Bonds seems to be imminent, and may leave investors with a total loss of their investments. These investment losses may be recoverable from the financial advisors who sold the L Bonds as a result of their due diligence failures, and for making unsuitable recommendations.

According to their filings with the Securities and Exchange Commission (“SEC”), GWG has halted the sale of the L Bonds and failed to issue $10.35 million of interest payments and $3.25 million of principal payments to L Bond investors by the January 15, 2022 due date. If these payments are not made by the end of the 30-day grace period on February 14, 2022, GWG will be in default. Pursuant to GWG’s Amended and Restated Indenture, when in default, noteholders or trustees holding at least 25% of the aggregate outstanding principal amount of the L Bonds may elect to accelerate liquidation of the Bonds.

By halting the sale of the L Bonds, GWG has also cut-off a main source of its liquidity. If the “interest” payments that GWG was making on the L Bonds was actually paid from incoming principal from new investors, rather than revenue, then GWG will not be able to make interest payments any time soon. GWG is underwater based on its balance sheets.  While it has close to $1 billion in tangible assets, GWG has over $1.5 billion in outstanding L Bonds, plus $327.7 million in senior credit facilities. Based on these numbers, if liquidation of the L Bonds is accelerated, GWG will not have enough in assets to cover the liquidation.

Chicago-based Stoltmann Law Offices is investigating financial advisors and brokers who trade excessively in client accounts.  “Churning,” or trading excessively to generate broker commissions, is one of the perennial abuses in the securities industry. Investors have been losing millions due to these practices.

FINRA, the U.S. securities industry regulator, said it has ordered New York City-based Aegis Capital Corp. to “pay approximately $2.8 million, including $1.7 million in restitution to 68 customers whose accounts were potentially excessively and unsuitably traded by the firm’s representatives.” FINRA also imposed a $1.1 million fine for Aegis’s supervisory violations, according to

“Aegis supervisors failed to detect or act on information that eight Aegis reps excessively and unsuitably traded customer accounts over a period of more than four years, generating $2.9 million in trading costs that would have required the investments to generate more than 71% returns to offset costs,” FINRA stated. FINRA found that “from July 2014 to December 2018, Aegis failed to implement a supervisory system reasonably designed to comply with FINRA’s suitability rule. As a result, Aegis failed to identify and address its representatives’ potentially excessive and unsuitable trading in customer accounts, including trading by eight Aegis representatives who excessively traded 31 customers’ accounts,” the regulator said.

The Financial Industry Regulatory Authority (FINRA) sanctioned former broker Keith Michelfelder for allegedly effecting “at least 16 transactions in the accounts of a member firm customer without having obtained prior written authorization from the customer and written acceptance of the accounts as discretionary by his firm. The findings stated that the firm’s policies prohibited the use of non-firm email addresses to conduct firm business. In 2010 and 2011, Michelfelder signed annual certifications agreeing to use the firm’s domain email only for communications with customers and concerning firm business. Nevertheless, during July 2012, Michelfedler knowingly used a non-firm email address to communicate with the above customer.” For this, Michelfedler was fined $10,000 and was suspended for 60 days. In November 2017, his FINRA registration was revoked for failure to pay fines.

According to online, public records with FINRA, Keith Michelfelder was previously registered with Joseph Gunnar & Co. in New York, New York from July 1998 until August 2012, Aegis Capital in New York from August 2012 until October 2016 and National Securities Corp in New York from September 2016 until October 2017. He has two customer disputes against him alleging unauthorized trading. He has four judgment/liens against him. He is not currently registered as a broker within the industry.

AdobeStock_66548440-1-300x169Stoltmann Law Offices is investigating Aegis Capital broker Paul Falcon. Falcon allegedly recommended unsuitable investments, executed unauthorized trades, made excessive transactions, recommended investments that performed poorly and failed to follow instructions. These are all against securities laws. His firm, Aegis Capital, may be responsible for losses and we sue firms in the Financial Industry Regulatory Authority (FINRA) arbitration forum to recover money for investors on a contingency fee basis. Please call our Chicago-based law offices today to speak to an attorney for free about your options.
Falcon was previously registered with The Equitable Life Assurance Society, Equico Securities, GKN Securities Corp, Waterhouse Securities, Citicorp Investment Services, First Union Brokerage Services, Wachovia, Allstate, Statetrust and Global Strategic Investments. He is currently registered with Aegis Capital in Boca Raton, Florida and Miami, Florida and has been since July 2013. He has five customer disputes against him, one of which is currently pending.

AdobeStock_66548440-1-300x169Recently, Gregg Templeton, a former advisor with Oppenheimer, was barred from the industry by the Financial Industry Regulatory Authority (FINRA). Mr. Templeton was barred after he failed to respond to an investigation against him. He allegedly misused customer funds and committed other violations between July 2010 and July 2015. Firms such as Oppenheimer have a responsibility to adequately supervise all representatives who are registered through their firm. The firms also must take steps to ensure that their financial advisors follow all securities rules and regulations as well as internal firm policies. When the firm fails to do so, it may become liable for investment losses sustained by customers.

Templeton was previously registered with Royce Investment Group, Gruntal & Co., State Capital Markets Corp, First Metropolitan Securities, GKN Securities Corp, Morgan Stanley, Oppenheimer & Co. in New York, New York from January 2007 until August 2015, FSC Securities Corp and Aegis Capital Corp. He has seven customer disputes against him, one of which is currently pending. Please call our Chicago-based law firm today at 312-332-4200 to find out how you may be able to bring a claim against Oppenheimer in the FINRA arbitration forum on a contingency fee basis. The call to us is free with no obligation so please do not delay as there is a statute of limitations on most cases.

According to a recent Disciplinary Proceeding with the Financial Industry Regulatory Authority (FINRA), James Larkin Powers, a former broker at du Pasquier & Co., was alleged to have violated securities laws. Powers allegedly created fictitious trades between his firm trading account and his personal account for his own profit, converted customer funds, caused his firm to create trade confirmations that misrepresented the prices of customers’ trades and hid a loss he incurred in a firm trading account by repeatedly entering unauthorized, fictitious customer trades and subsequently cancelled them before settlement. He allegedly received at least $388,133 in illicit trading profits from these transgressions. He also allegedly converted customer funds and made material omissions. These are all against securities rules and regulations.

Powers was registered with Kidder, Peabody & Co. in New York, New York from February 1994 until July 1994, Sharpe Capital in New York from June 1994 until October 2000, Magna Securities in New York from October 2000 until February 2005, Du Pasquier in New York from January 2005 until July 2014, Aegis Capital Corp in New York from July 2014 until December 2015, Celadon Financial Group in Chatham, New Jersey from January 2016 until February 2016 and IFS Securities in Atlanta, Georgia from February 2016 until September 2016. He is not licensed within the industry. Please call today for a free consultation with one of our attorneys. 312-332-4200.

Larry Wolfe, a former registered representative with Herbert J. Sims, was recently terminated by the firm for alleged exercised discretion, in a non-discretionary account, in making trades for an account without speaking with the client before the trades. He was also alleged to have made unauthorized trades, unsuitable investment recommendations, fraudulent misrepresentations and omissions of material information. These are all against securities rules. If you or someone you know invested money with Larry Wolfe, please call our Chicago-based securities law firm today to speak to an attorney for free. We can discuss your options of suing his former firm, Herbert J. Sims, in the Financial Industry Regulatory Authority (FINRA) arbitration forum on a contingency fee basis to recover your financial losses. The firm had a duty to reasonably supervise Wolfe while he was employed there, and they did not, so they can be liable for losses.

According to his FINRA BrokerCheck report, Wolfe was registered with Swanton Securities, Hannauer, Stern & Co., Befill, Bresler & Schulman Inc., Drexel Burnham Lambert Inc., EF Hutton & Co., Shearson Lehman Hutton, Raymond James, The GMS Group, Herbert J. Sims in Boca Raton, Florida from March 2000 until January 2016 and Aegis Capital. He is currently registered with Stoever, Glass & Co. in Boca Raton and has been since May 2015. He has eight customer disputes against him, one of which is currently pending.

Stoltmann Law Offices is investigating Nicholas Tsikitas, a broker with Aegis Capital. Tsikitas has been accused of making unsuitable investment recommendations, churning, overconcentrating investments, being negligent and failing to supervise, among other things. Another client alleged that he caused the filing of certain documents that were materially false or misleading. These are all against securities rules and regulations. Churning is an egregious tactic on a broker’s part that generates high commissions for the broker himself. Please call us today if you would like to sue Aegis Capital in the Financial Industry Regulatory Authority (FINRA) arbitration forum on a contingency fee basis. We may be able to help you bring a claim against the firm for not reasonably supervising Tsikitas and to recover your financial losses.

Nicholas Tsikitas was registered with Comprehensive Capital Corp in Great Neck, New York from May 1997 until January 1998, First Montauk Securities in Red Bank, New Jersey from February 1998 until June 2000, Trident Partners Ltd in Woodbury, New York from May 2000 until December 2002, American Capital Partners in Wantagh, New York from December 2002 until February 2007 and JD Nicholas & Associates in Syosset, New York from February 2007 until July 2015. He is currently registered with Aegis Capital in Melville, New York and has been since November 2014.

Stoltmann Law Offices is investigating Cory Bataan, who is currently registered with Aegis Capital in Melville, New York. He is the subject of customer complaints, including recommending unsuitable investments and charging excessive fees and commissions. He was terminated from his position with Aegis Capital for recommending unsuitable investments, executing unauthorized transactions, churning accounts and breaching fiduciary duty. Bataan was registered with Joseph Stevens & Co. in Brooklyn, New York from October 1996 until July 2001, Ameritas Investment Corp in New Hyde Park, New York from December 2007 until April 2008 and Empire Asset Management in New York, New York from April 2008 until August 2012. He is currently registered with Aegis Capital in Melville, New York and has been since August 2012. He has four customer disputes against him, one of which is currently pending. Please call today for a free consultation.

Stoltmann Law Offices is investigating Michael McDonald, a broker with Aegis Capital in Maitland, Florida. According to his Financial Industry Regulatory Authority (FINRA) BrokerCheck report, he has been the subject of at least five customer complaints that included churning and excessive trading, unsuitable investment recommendations, unauthorized trading, breach of fiduciary duty and fraud, among other things. He was accused of recommending a private placement called Xyience Inc. to a customer which caused the customer $450,000 in damages. This is commonly referred to as “selling away” and is when a broker recommends a security that is not held or offered by his brokerage firm. Selling away is against securities rules and regulations.

McDonald was registered with Chatfield Dean & Co. in Greenwood Village, Colorado from February 1993 until May 1993, Ole Discount Corp in Detroit, Michigan from May 1993 until November 1995, Empire Financial Group in Longwood, Florida from December 1995 until February 1996, Southern Financial Group in Columbia, South Carolina from March 1996 until March 2002, Advest Inc. in Hartford, Connecticut from March 2002 until December 2005 and JHS Capital Advisors in Tampa, Florida from November 2005 until February 2011. He is currently registered with Aegis Capital in Maitland, Florida and has been since February 2011.

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