Articles Tagged with Beverly Hills

Chicago-Based Stoltmann Law Offices has been representing California investors before FINRA arbitration panels for many years. We are looking into allegations made by an investor that allege that Ryan Raskin, who was registered with Merrill Lynch until he was discharged for cause in March 2020, executed unauthorized trades for a client. Merrill Lynch denied that complaint outright, which is a common practice used by brokerage firms when clients come to them with a complaint without being armed with an experienced FINRA investor-rights lawyer.

According to a story published by AdvisorHub.com, Raskin was employed with Merrill Lynch since 2016. On January 13, 2021, Mr. Raskin was barred by FINRA for failing to respond to requests for information. FINRA has the authority, under FINRA Rule 8210, to seek information and documents from any licensed, registered representative, even after the are terminated or are not working in the securities industry. As part of their enforcement mandate to enforce securities law and regulations, FINRA is given pretty broad discretion to seek out information related to its investigations, and in the event a broker like Raskin refuses to cooperate or ignores a valid request for information from FINRA, the penalty is a lifetime ban from the securities industry.  Sometimes brokers do this because they are out of the business and don’t really care if they lose their license to provide investment advice. Sometimes brokers ignore FINRA because they have something serious to hide.

Mr. Raskin was discharged from Merrill Lynch in March 2020 for “conduct involving business practices inconsistent with Firm standards, including inappropriate investment recommendation.” The impetus for FINRAs Rule 8210 request was this discharge by Merrill Lynch, which was reported to FINRA on Form U-5. Although the FINRA Acceptance, Waiver, and Consent (AWC), which was signed by Mr. Raskin, does not state any specific allegations with respect to misconduct. Still, Merrill Lynch discharged Mr. Raskin for “inappropriate investment recommendations” and one customer did make a complaint against him for unauthorized trading.

The Financial Industry Regulatory Authority (FINRA) fined StockCross Financial Services $800,000. StockCross Financial is owned by David Gebbia, the husband of the former “Real Housewives of Beverly Hills” star Carlton Gebbia. It is alleged that StockCross engaged in naked short selling, which is the practice of short selling shares that have not been affirmatively determined to exist. Due to various loophoes in the rules and discrepancies between paper and electronic trading systems, naked short selling is possible. Many short sales fail to deliver from the seller to the buyer within the mandatory three-day stock settlement period as evidence of naked shorting. Naked shorts may represent a major portion of these failed trades. FINRA claims StockCross violated regulations requiring that they deliver shares of a security they had sold short, and had inadequate supervisory systems that went back three years or more.

The Securities and Exchange Commission (SEC) have rules in place to stop “abusive” short selling. FINRA also found that from November 2009 until May 2013, the firm’s system to monitor and track the sales of securities it sold short was “fundamentally flawed.” FINRA claims that because of this failed system, StockCross failed to deliver the shares for seven or more consecutive settlement days in 2,000 instances. The firm also executed over 4,000 short sales without delivering or borrowing the security.

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