Articles Tagged with fraud

AdobeStock_199789587-300x200According to a recent Letter of Acceptance, Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA), RBC Capital Markets broker Cheryl George has violated securities laws and internal firm rules. Allegedly, George received an email from an individual purporting to be a customer of RBC requesting that she transfer funds for a wire transfer. In order to generate funds for that request, Cheryl George sold securities from the customer’s account without authorization from the customer or from the firm. She told RBC that she had received the customer’s transfer request verbally, when, in fact, she had only received the request over email. This is against securities laws. A broker must receive a verbal request from a customer in order to transfer funds. This misconduct occurred in June of 2017. She was suspended from associating with any Financial Industry Regulatory Authority (FINRA) member firm in any capacity for 20 days and was fined $5,000.
According to her online, FINRA BrokerCheck report, Cheryl A. George was previously registered with Citigroup Global Markets in Williamsville, New York from March 2001 until June 2009, Morgan Stanley in Williamsville from June 2009 until December 2009, and RBC Capital Markets in Williamsville from December 2009 until April 2018. She is not currently registered as a broker within the industry.

AdobeStock_200379710-300x200Stoltmann Law Offices is investigating Kovack Securities. A customer claimed that Kovack allegedly broke securities laws by failing to perform necessary due diligence on these investments:

Marathon Patent Group Inc.

TrovaGene, Inc.

AdobeStock_41845221-300x212Stoltmann Law Offices is interested in speaking to those investors who may have suffered losses with Beverly Hills Wealth Management (BHWM) broker Margaret Mulligan Black (aka Margaret Mulligan Scott). Ms. Black recently entered into a cease-and-desist order with the Securities and Exchange Commission (SEC). The cease-and-desist order claims that Black withheld prepaid, unearned advisory fees totaling $131,000 from 63 departing clients who requested terminating their advisory relationship with BHWM despite representations made in its Form ADV brochures and advisory agreements. Specifically, Black and the firm refused to recognize clients’ e-mails and mailed requests as proper termination notices. They instead demanded that the clients send written requests with a “wet signature.” Between March 2013 and April 2018, BHWM and Black continually omitted material facts and made false and misleading statements regarding BHWM’s financial condition in its Firm Brochures. The firm failed to disclose that it was unable to repay its loans during this entire time. BHWM had borrowed $700,000 in order to keep the firm afloat. The firm also owes an additional $75,000 in unpaid interest. These are against securities laws.
Margaret Mulligan Black, according to publicly available records with the Financial Industry Regulatory Authority (FINRA), is not currently registered as a broker. She was previously registered with Calton & Associates, Mutual Securities, Purshe Kaplan Sterling Investments and Morgan Stanley from 1979 until 2008, all in Beverly Hills, California. Beverly Hills Wealth Management may be liable for any losses sustained, because the firm had a duty to reasonably supervise Ms. Black while she was registered there. We take cases on a contingency fee basis only.

AdobeStock_194438920-300x200Stoltmann Law Offices is interested in speaking to those individuals who may have lost money in Future Income Payments, LLC, also known as Pensions, Annuities, and Settlements, LLC. Future Income Payments and its owner, Scott Kohn, have been subject to regulatory action in numerous states including, Washington, California, Colorado, Iowa, Indiana, North Carolina, New York, Massachusetts, Pennsylvania and Virginia. The Consumer Financial Protection Bureau (CFPB) served Future Income Payments with a Civil Investigative Demand in November 2016. It is alleged that Future Income Payments engages in agreements that are sales of pensions and not loans. Regulators have claimed that the company misstates the effect of the contract and that, in fact, pensioners are entering into a consumer loan and not a sale.
The purpose of these misrepresentations is to try to exempt Future Income Payments’ loans from consumer lending laws and regulations and to collect interest on loans at illegal rates. The consumer receives a sum of money that he is obligated to repay. The company’s contract specifies the consumer’s future pension payments that actually constitute a repayment schedule for a loan. Interest rates for the loan in some examples reached 130% a year. Regulators state that hundreds of retirees have been subject to the alleged fraud. 282 New York pensioners allegedly received amounts anywhere from $2,500 to $58,000 while being charged interest rates as high as 130% a year between March 2012 and April 2015. The state of Virginia stated that elderly veterans with military pensions were being targeted for the illegal loans by Future Income Payments.
FIP Investments were sold primarily by insurance agents, and were, in some cases, at the behest of their Independent Marketing Organization (IMO). Customers were sold this product as an investment vehicle targeted to grow income. This income was then used to fund insurance products, such as index universal life insurance policies (IULs), or to supplement the customer’s income. You may be able to recover your losses if you were sold FIPs by your insurance agent.

AdobeStock_198259345-300x200Stoltmann Law Offices is interested in speaking to those individuals who may have suffered investment losses with Westpark Capital broker Patrick Maddren. Maddren has been subject to two customer disputes that allege false representations, excessive trading, unauthorized trading, unsuitable recommendations, and breach of contract. A separate complaint alleges unauthorized trading in a customer’s account. Maddren has been subject to two tax liens, according to his online, BrokerCheck report with the Financial Industry Regulatory Authority (FINRA).
These are all against securities laws and internal firm rules and Patrick Maddren’s brokerage firm, Westpark Capital, may be liable for investment losses, because the firm has a duty to reasonably supervise its brokers so they do not violate securities laws. If the brokerage firm does not, and the broker is guilty of misconduct, the firm may be sued in the FINRA arbitration forum on a contingency fee basis.
Patrick Maddren was previously registered with Dawson James Securities in Boca Raton, Florida from August 2009 until August 2012 and Laidlaw & Company in Ft. Lauderdale, Florida from August 2012 until September 2017. He is currently registered with Westpark Capital in Ft. Lauderdale and has been since August 2017. He has two customer complaints against him and two judgments/liens.

AdobeStock_199789587-300x200According to public records with the Financial Industry Regulatory Authority (FINRA), Global Arena Capital Corp broker Erik Pica has customer complaints against him. In May 2018, a customer alleged that Pica recommended an unsuitable leveraged exchange-traded fund (ETF), was negligent in his supervisory duties, and over-concentrated the account. In April 2018, a customer alleged that Pica executed unauthorized trades of shares in Rite Aid Corporation and Valeant Pharmaceutical. In March 2018, a customer alleged that Pica recommended unsuitable and “highly speculative” investments, churned the account and was negligent in his supervisory duties. He was also accused of misrepresenting material facts. These are all against securities laws and internal firm rules.
Churning, also referred to as “excessive trading,” is a particularly egregious form of broker misconduct, and is when a broker trades in and out of securities, sometimes on a daily basis in order to generate commissions for himself. This typically results in the customer paying unnecessary fees. ETFs tend to be highly risky and illiquid investments that are not suitable for all investors based on their age, net worth, investment sophistication and investment risk tolerance and objectives. If the ETFs Erik Pica recommended for his clients were not suitable based on these factors, and others, his former brokerage firm, Global Arena, may be liable for customer losses on a contingency fee basis in the FINRA arbitration forum.
Erik Pica was previously registered with First Midwest Securities in New York, New York from August 2009 until February 2012 and Global Arena Capital in New York from January 2012 until April 2015. He is currently registered with Joseph Stone Capital in New York, and has been since April 2015. He has seven customer disputes against him, four of which are currently pending, according to FINRA records available to the public.

AdobeStock_66548440-1-300x169The Federal Senior Safe Act and FINRA’s new Rule, 2165, both designed to protect the elderly, and how they create a potential “legal minefield” for financial advisors. The complete story can be seen by clicking the link below:

AdobeStock_112465076-1-300x164James Flynn, a former registered broker with Voya Financial Advisors, has at least 10 customer complaints against him. Many of these concern alternative investments and direct participation products (DPPs) such as non-traded real estate investment trusts (REITs). These types of investments tend to be highly illiquid and risky ones that are not suitable for all investors. A broker such as Mr. Flynn must take into account factors such as a client’s age, net worth, investment risk tolerance, and investment sophistication before recommending or selling investments. If he does not, his brokerage firm may be liable for losses on a contingency fee basis. REITs and other alternative investments like oil, energy and gas offerings, and DPPs, typically underperform other investments, and are recommended by brokers because of the high commissions they offer. Voya may be held liable for alternative investment losses in the Financial Industry Regulatory Authority (FINRA) arbitration forum.
Mr. Flynn was discharged from Voya in February 2017 after the firm accused him of providing misleading information to the firm during a complaint investigation. He was then hired by IFS, but discharged a year later after he allegedly executed unauthorized trades. James Flynn was also subject to a tax lien totaling hundreds of thousands of dollars. In April 2005, Flynn disclosed a tax lien of over $256,000. He then declared bankruptcy in April 2013.
According to his online, FINRA BrokerCheck report, James Travis Flynn was previously registered with Capital Investment Group in Greer, South Carolina from July 2011 until June 2013, Voya Financial Advisors in Greenville, South Carolina from May 2013 until February 2017, and IFS Securities in Greenville from February 2017 until February 2018. He has 11 customer complaints against him, one of which is currently pending, one financial and regulatory matter and three judgments/liens. He has been suspended from the securities industry and is not currently registered as a broker.

AdobeStock_82110313-1-300x125A class action lawsuit has been filed against Aegean Marine Petroleum (NYSE: ANW) on behalf of investors in the company in connection to alleged violations of securities laws. Stoltmann Law Offices is interested in hearing from those investors who may have lost money with ANW. According to the complaint, ANW may have provided false and/or misleading material information, and/or failed to disclose adverse material information to the public. As of December 31, 2017, the company inaccurately accounted for $200 million in accounts receivable, the company did not have proper internal controls to govern its financial reporting, and the company’s statements to the public during the time period were false and misleading. On June 5th, 2018, the company stated that “approximately $200 million of accounts receivable owed the company will need to be written off,” and that it could not determine “the full impact on the financial statements or how this adjustment will be recorded…there could be other adjustments that result from the Audit Committee’s review that could impact the financial statements.”
According to ANW’s website, it is a “marine fuel Logistics Company that physically supplies and markets refined marine fuels and lubricants to ships in port and at sea.” It is the largest independent physical supplier that buys fuel from refiners, oil producers and other sources, which it then resells and delivers using its own double-hull fleet.

AdobeStock_41845221-300x212Stoltmann Law Offices is interested in talking to those individuals who may have investment losses in FS Energy & Power Fund, which is a business development company (BDC). According to the company’s website, it is a non-traded BDC that invests primarily in the debt, and, to a lesser extent, equity securities of private U.S. energy and power companies. This is a non-traded product so there is no market pricing for the value of its securities. BDCs, much like direct participation products (DPPs), real estate investment trusts (REITs), private placements and others, are alternative investments that may not be suitable for all investors because of their highly illiquid and risky nature. A broker must only recommend those securities that are suitable for his clients by taking into account their age, net worth, investment risk tolerance and other factors. If he does not, his brokerage firm may be liable for losses. Investments like FS Energy & Power Fund are in the oil, gas and energy sector, which, by nature, are highly risky and illiquid funds only for sophisticated investors who can withstand much risk. They are typically not suitable for the unsophisticated investor who cannot withstand risky investments.

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