Articles Tagged with investments

Former Ameritas Investment Corporation broker Daniel Kittner, out of Mesa, Arizona, recently resigned from his firm. He was “permitted to resign” from his position at Ameritas “during the firm’s investigation into a customer’s verbal complaint.” In December 2016, a customer alleged that Kittner, while employed at Edward Jones, did not properly advise him with respect to unsuitable investments in mutual funds, stocks, certificates of deposit and variable annuity products. This is against securities laws, and internal firm rules. Ameritas can be held liable for investment losses on a contingency fee basis in the Financial Industry Regulatory Authority (FINRA) arbitration forum because the firm did not reasonably supervise Mr. Kittner while he was employed there.

According to FINRA records, Mr. Kittner was previously registered with Edward Jones in Prescott Valley, Arizona from May 2001 until March 2006, Wells Fargo in Mesa, Arizona from March 2006 until December 2011 and Ameritas Investment Corp in Mesa from December 2011 until November 2017. He has one customer dispute against him. He is not currently registered as a broker.

The Securities and Exchange Commission (SEC) charged former Lynnwood, Washington-based Mutual of Omaha broker Ronald Fossum, with fraud. In December 2017, the SEC alleged that Mr. Fossum participated in a scheme to defraud “three pooled investment funds, as well as investors in those funds.” Allegedly, from March 2011 until June 2016, he raised more than $20 million from more than 1,000 investors in three pooled funds: Smart Money Secured Income Fund, Turnkey Investment Fund, and Accelerated Asset Group, all managed by Fossum himself. Smart Money’s holdings were mostly in real estate, websites, oil and gas and other securities, Turnkey’s were mostly in oil and gas ventures, and Accelerated’s were mostly in distressed consumer debt.

While raising money for and managing these funds, Mr. Fossum allegedly misappropriated funds for his personal use, commingled fund assets, transferred monies between the funds in an indiscriminate manner and hid one of the fund’s “inability to redeem investments,” which its offering documents promised. He also allegedly offered and sold interests in Turnkey Fund and Smart Money without a registration statement or exemption from registration, and he allegedly acted as an unregistered broker when he executed transactions in Turnkey Fund. He also took compensation for those transactions. The funds filed for bankruptcy in June 2016 because of Mr. Fossum’s violations, mismanagement and fraud.

Ronald Fossum was previously registered with Mutual of Omaha Investor Services in Lynnwood, Washington from July 2000 until August 2008. He has one civil claim pending against him. He is not currently registered as a broker, according to his online, public record with the Financial Industry Regulatory Authority (FINRA). You may be able to recover your investment losses with Ronald Fossum by bringing a claim against Mutual of Omaha in the FINRA arbitration forum on a contingency fee basis. The firm had a duty to reasonably supervise Mr. Fossum while he was registered there.

If you or someone you know invested money with Richard Shotz, a former broker with Morgan Stanley, you may be able to recover your investment losses on a contingency fee basis in the Financial Industry Regulatory Authority (FINRA). According to a Letter of Acceptance, Waiver and Consent (AWC) with FINRA, Mr. Shotz was accused of engaging in an unsuitable pattern of short-term trading of unit investment trusts (UITs) in 486 customer accounts. Shotz allegedly repeatedly recommended that the customers purchase UITs and then sell these products well before their maturity dates. The majority of them had maturity dates of at least 24 months and carried sales charges. Shotz continually recommended that his customers sell their UIT positions less than a year after purchase. The average holding period for these was 143 days. On 1,200 occasions, Shotz recommended that his customers use the proceeds from the short-term sale of a UIT to purchase another UIT with identical investment objectives. For this, he was suspended from the industry for four months and fined $7,500.

A broker must take into account a customer’s age, net worth, investment objectives and investment risk tolerance before recommending or selling an investment and must do his due diligence on the product. If he does not, his brokerage firm may be liable for losses on a contingency fee basis. UITs are not suitable for every customer because they can be illiquid and risky investments. You may be able to bring a claim against Morgan Stanley for not reasonably supervising its brokers.

Richard Shotz was previously registered with Raymond James in St. Petersburg, Florida from July 1987 until February 1994, Citigroup Global Markets in Ormond Beach, Florida from February 1994 until September 2008, Morgan Stanley & Co. Inc. in Ormond Beach from August 2008 until June 2009 and Morgan Stanley in Ormond Beach from June 2009 until October 2015. He is currently registered with Wells Fargo in Daytona Beach, Florida and has been since October 2015. He has five customer disputes against him, alleging misrepresentations, unsuitable investments, and other things, all against securities laws and internal firm rules. This is according to his public, online BrokerCheck report with FINRA.

Austin, Texas-based Purshe Kaplan Sterling broker Daniel Davila has been involved in resolved or pending complaints, according to the Financial Industry Regulatory Authority (FINRA). Davila allegedly recommended unsuitable investments in non-traded real estate investment trusts (REITs) and private placements, breached contract, committed fraud, breached fiduciary duty, engaged in conspiracy, employed deceptive trade practices and acted negligently. These are all against securities laws and internal firm rules. A brokerage firm has a reasonable duty to only recommend and sell those investments that are suitable for customers, by taking into account their age, net worth, investment objectives and investment sophistication. REITs and private placements tend to be highly illiquid and risky ones, and are not suitable for all investors.

FINRA public records indicate that Daniel Davila was previously registered with H.D. Vest Investment Securities in Irving, Texas from July 1987 until January 2001, National Planning Corp in Austin from January 2001 until October 2009, and Triad Advisors in Austin from October 2009 until October 2014. He is currently registered with Purshe Kaplan Sterling Investments in Austin and has been since October 2014. He has two customer disputes against him that are currently pending.

According to an Order with the Financial Industry Regulatory Authority (FINRA), Jeffrey Dragon, while registered with Berthel, Fisher & Co., as a broker, allegedly violated securities laws. Mr. Dragon was accused of recommending and engaging in short-term unit investment trust (UIT) trading in 19 accounts belonging to 12 of his customers. This occurred over a two-year period between 2013 and 2014. Over the two-year period, Dragon’s UIT trading in the customer’s accounts involved a total of 666 UIT purchases in 84 UITs, of which 73 were offered by Guggenheim Funds Distributors. His recommendations for the customers were to purchase UITs during their initial offering periods, liquidate them before the end of their term, usually after holding them for six months or less and using the proceeds from this liquidation to purchase other UITs, thereby incurring new sales charges.

In one instance, Dragon recommended that an 81-year-old customer make 177 separate UIT purchases during the two-year period. Of those, four positions were held for four days or fewer, 76 additional positions were liquidated 60 or fewer days after purchase, another 89 positions were liquidated between 61 and 90 days after purchase, only four positions were held for longer than 120 days and zero were held for longer than 294 days. Another 84 year-old client was recommended 82 UIT purchases, with similar holding periods. Only 20 of the UIT positions that resulted from the purchases were held for longer than one year or to termination. For this misconduct, Mr. Dragon was suspended from associating with a FINRA member in any capacity for 21 months and fined $5,000.

A broker must only recommend and sell those investments that are safe for his clients. He does so by doing his due diligence on every investment and by taking into account his customer’s net worth, age, sophistication and risk objectives. If he does not, his brokerage firm may be liable for losses. In this case, many of Mr. Dragon’s clients were elderly and the UITs were not suitable for them. Nor did he hold them for long enough. This resulted in losses for the customers. Berthel, Fisher may be sued in the FINRA arbitration forum on a contingency fee basis for losses.

According to a plea agreement filed January 9th, 2018 in U.S. District Court, Daniel Glick was charged with, and pleaded guilty to, wire fraud. He could potentially be facing up to 10 to 15 years in prison. These criminal charges were filed against him on November 15th, 2017. Glick, a former Orland Park, Illinois investment advisor, allegedly stole more than $5 million from clients, including his elderly in-laws, in order to use it to fund personal expenses. As stated in his plea agreement filed in Chicago, Illinois, Mr. Glick defrauded several clients and financial institutions by misappropriating at least $5.2 million from them during a six-year period, from 2011 until 2017. During this time, Mr. Glick owned and operated Financial Management Strategies Inc., Glick Accounting Services Inc., and Glick & Associates Ltd, which purported to provide investment and financial services to clients, as well as accounting and tax services.

Glick allegedly forged checks and other documents to financial institutions and falsely told his clients, which included his elderly mother and father in-law, and an individual in a nursing home, that their investments were safe and useful ones. Glick also allegedly obtained power of attorney from at least one of the clients. He used the ill-gotten gains to pay a home mortgage, two business loans and to purchase a Mercedes-Benz.

According to the charges, Glick forged signatures on letters and checks, including those of his in-laws, in order to make transfers of hundreds of thousands of dollars from their checking account to his company’s own. Another family allegedly paid him $700,000 in fees, even though he had already misappropriated hundreds of thousands of dollars of theirs, unbeknownst to them. Glick then used inflated interest and overstated the amount of the investments in account statements that he sent to investors, in order to perpetrate the scheme. He also allegedly made ponzi-like payments to clients, taking newly acquired money and giving it to original investors.

The Financial Industry Regulatory Authority (FINRA) records indicate that Kenneth Savino, a former LPL broker, was suspended from the industry for 15 days and fined $5,000. He allegedly purchased shares of a security for $100,000 without providing prior notice to his member firm and inaccurately indicated on an annual compliance questionnaire that he had not participated in any private securities transactions. He was discharged from LPL in October 2015 for allegedly entering into a loan transaction with another company, receiving shares of the company in return, with no pre-approval by the firm. He also allegedly made private securities transactions that he did not have pre-approved by the firm and introduced a client to a potential outside investment opportunity that was not approved by the firm. These are all against securities laws and internal firm rules. Selling away refers to when a financial advisor solicits investments in promissory notes or companies that are not pre-approved by his member firm. He does this in order to not have to share the commissions he earns from the sale with his member firm. The firm can be held liable for losses in this case.

According to FINRA records, Mr. Savino was previously registered with Manequity Inc. from May 1983 until December 1988, Lincoln Financial Securities Corp in Windsor Locks, Connecticut from December 1988 until July 2010 and LPL Financial in West Hartford, Connecticut from July 2010 until November 2015. He is currently registered with FSC Securities in East Hartford, Connecticut, and has been since December 2015.

Recent records published by the Financial Industry Regulatory Authority (FINRA) indicated that former MML Investors Services broker Clifford Marks has received numerous resolved or pending customer disputes. These allege him taking unauthorized loans against his customer’s insurance policy while he was registered with NYLife Securities, and another customer alleged that Marks “made him sign blank forms and then attempted to coordinate a 401k rollover” without the customer’s authorization or knowledge. He also allegedly did not clearly explain unsuitable investments and provided misinformation and misdirection in the process of overselling him insurance products. These are all against securities rules and regulations and internal firm policies.

According to public, online records, Mr. Marks was previously registered with NYLife Securities in Mobile, Alabama from May 2011 until July 2016 and MML Investors Services in Mobile from August 2016 until January 2017. He has 10 customer disputes against him, one of which is currently pending. He is not currently registered as a broker within the industry.

According to records with the Financial Industry Regulatory Authority (FINRA), Oppenheimer broker Leslie Flaum has allegedly violated securities laws. He was accused of making unsuitable investment recommendations, churning accounts, breaching fiduciary duty, failing in supervisory duties from December 2010 through December 2016 in connection to investments in listed equities and closed-end funds, and other violations. These are all against securities laws. Churning, also referred to as excessive trading, is a particularly egregious violation, because it typically results in unnecessary fees for the client. It also typically results in large commissions for the broker. Leslie Brian Flaum was previously registered with David Lerner, Christopher Weil & Company, Integrated Resources Equity Corp, HYM Financial, Reich & Company, and Oppenheimer & Co. in Melville, New York from August 1994 until August 2017. He has two customer disputes pending against him and is not currently registered as a broker within the industry, according to FINRA records.

According to a recent Letter of Acceptance, Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA), Kevin Jedlicka allegedly violated securities laws. Mr. Jedlicka was previously registered through Chapin Davis. Allegedly, between January 30th, 2015 and January 22nd, 2016, he engaged in a pattern of unsuitable short-term trading of Class A mutual fund shares and Unit Investment Trusts (UITs) in customer accounts. This led to his suspension from the industry for six months. It was against securities laws and internal firm rules. UITs tend to be high-risk and illiquid investments that are not suitable for all investors, and a broker has a duty to only recommend and sell those securities that are suitable for the investor based on his age, net worth, investment objectives and investment sophistication. If he does not, his brokerage firm can be held liable for losses.

According to his online, FINRA BrokerCheck report, Mr. Jedlicka was previously registered with Alex Brown & Sons Inc., Global Financial Group, Dean Witter Reynolds, First Union Brokerage Services, Wells Fargo, Chapin, Davis in Baltimore, Maryland from October 2010 until July 2013, BB&T Securities, Chapin, Davis in Baltimore from January 2015 until February 2016 and Capital Portfolio Management. He is not currently registered as a broker.

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