Securities Fraud Attorneys Blog
Alexander L. Martin, a broker with CSSC Brokerage Services was recently hit with a $20,000 fine by the Financial Industry Regulatory Authority (FINRA) and suspended from the industry for 20 business days. According to a recent Letter of Acceptance, Waiver and Consent (AWC) with FINRA, Alexander Martin allegedly failed to reasonably supervise registered representatives selling two private offerings. One of the representatives lacked a reasonable basis for recommending the offerings to his customers, and caused two specific customers to over-concentrate their accounts in illiquid private offerings that were inconsistent with their investment objectives and tolerance. A broker must only recommend those investments that are suitable for his clients, based on their age, net worth, investment objectives and investment risk tolerance, among other things. If he does not, and the client loses money, the brokerage firm may be liable for losses on a contingency fee basis. Alexander Martin had a reasonable duty to oversee the brokers at CSSC, in order to make sure that they did not violate securities laws or internal firm rules.
Alexander Llyod Martin, according to his online, FINRA BrokerCheck report, was previously registered with FSC Securities Corp in Atlanta, Georgia from February 1998 until August 2001, Mutual Service Corp in Troy, Michigan from August 2001 until March 2007, and CSSC Brokerage Services in Troy from December 2006 until June 2016. He has one financial matter against him. He is not currently registered as a broker within the industry. CSSC Brokerage Services may be held liable for investment losses on a contingency fee basis in the FINRA arbitration forum.
CSSC Brokerage Services Broker Hit With $20,000 Fine By FINRA
According to Financial Planning online, former Cambridge Investment Research broker Ralph Savoie faces prison time for his role in a three-month scheme in which he allegedly used client money toward his rent, credit card bills and jewelry purchases. Mr. Savoie pleaded guilty to wire fraud and could possible forfeiture $1.05 million to clients. He promised investors that he could guarantee 11.4% return on their $50,000 investment, but never invested the money. Savoie, 70, pleaded guilty to one count of wire fraud on March 26th in Baton Rouge, LA, in federal court. He was charged by authorities in December with two counts of wire fraud and one count of identity theft. He was fired by Cambridge in August 2015 and the Financial Industry Regulatory Authority barred him from the industry in September of that same year.
FSC Securities Corp has reached a $5.7 million settlement with the Montana Securities Commissioner after a broker, Barry Hartman, allegedly recommended and sold investments in Invizeon. These activities were illegal and many investors were harmed by his misconduct. The company was listed as a software business that develops platforms to manage information from sensing and detection technology. Hartman allegedly peddled illegal investments in Invizeon, without the knowledge of FSC, leaving his clients unable to access their investment proceeds. Hartman was a beneficial owner and director of Invizeon at the time. The company closed in 2015, and investors lost their entire investment as a result. Twelve clients of Hartman’s had purchased the investment, many of them in the Missoula, Montana area. 26 clients were said to have held bad investments based on their financial objectives, age and needs.
Stoltmann Law Offices is investigating Jeffrey Delone, a former registered representative with FSC Securities Corporation. According to his Financial Industry Regulatory Authority (FINRA) Letter of Acceptance, Waiver and Consent (AWC), Mr. Delone allegedly participated in private securities transactions without notifying or obtaining approval from FSC, which is in violation of FINRA rules and securities laws. A private securities transaction is defined as “any securities transaction outside the regular course or scope of an associated person’s employment with a member.” For this, he was fined $10,000 and suspended for six months. According to his online FINRA public BrokerCheck report, Jeffrey Delone was previously registered with Cigna Securities in Radnor, Pennsylvania from February 1988 until March 1992, Mony Securities Corp in New York, New York from March 1992 until March 2005, Park Avenue Securities in Blue Bell, Pennsylvania from April 2005 until June 2007 and FSC Securities in Malvern, Pennsylvania from May 2007 until February 2017. He has one criminal final disposition against him. He is currently not registered within the industry.
According to a recent Letter of Acceptance, Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA), Richard Gholson was accused of not properly supervising the sale of unit investment trusts (UITs) by a registered representative at CUSO Financial Services. At the time, Gholson was a principal at the firm and was responsible for reviewing and approving securities transactions for certain registered representatives. Gholson allegedly reviewed and approved the broker’s recommendation and sale of 70 UITs that invested in closed-end bond funds to 45 CUSO customers, some of whom were elderly. For this, Gholson was fined $5,000 and suspended for 30 days. UITs can be risky and illiquid investments that are not suitable for all investors, especially the elderly. A broker and his firm have a duty to only recommend and sell investments that are suitable for investors. If they do not, the brokerage firm can be held liable for investment losses.
