The Securities and Exchange Commission (SEC) recently barred New Hampshire investment advisor, Nicholas Rowe, after charges surfaced claiming he allegedly used leveraged and inverse exchange-traded funds (ETFs) in a manner that was unsuitable for his clients. Rowe was the former owner of registered investment advisor Focus Capital Wealth Management. The state also alleged that he made misrepresentations regarding the fees to be charged and regarding his qualifications as an investment advisor, violating laws prohibiting advisors from engaging in unethical practices. The state launched an investigation into Rowe and his company in 2011, after claiming that they placed assets from elderly investors with low risk tolerances into unsuitable strategies without informing the clients. Many of the clients were widows between the ages of 60 and 74 who allegedly lost $1.9 million among them. The state then revoked Focus’s registration in March 2013 and ordered Rowe to pay $20,000 in fines and investigation costs, as well as more than $2 million in restitution to investors. Other investor claims against Rowe and Focus included Financial Industry Regulatory Authority (FINRA) claims alleging negligence and civil fraud, resulting in one ruling against the RIA that forced it to pay $1.8 million in restitution payments. Rowe was also registered with Jefferson Pilot Securities Corp in Bedford, New Hampshire from December 1990 until January 2006 and he has one customer dispute against him. The SEC permanently barred him from the industry.
On Wednesday, LPL agreed to pay $750,000 to settle charges related to the sale of nontraded real estate investment trusts (REITs) to an 81-year-old investor in New Hampshire. The state claims that the sale of the REITs was unsuitable and unlawful. The Bureau of Securities Regulation says the broker-dealer sold unsupervised nontraded REITs to the investor and this resulted in losses that were significant. For this, LPL was fined $750,000. Nontraded REITs can be very risky investments and are not suitable for every investor. When recommending a security, the broker must take into account the customer’s age, net worth, investment portfolio and investment objectives. If he does not, his brokerage firm can be held liable for investment losses, as they had a duty to reasonably supervise him while he was employed there. LPL settled a $1.43 million multi-state case brought by the North American Securities Administrators Association for certain nontraded REIT sales and inadequate supervision of the transactions. The firm also agreed to pay $1.8 million in fines to Massachusetts and $200,000 in fines to Delaware for unsuitable sales of leveraged exchange-traded funds. Finally, in May, the Financial Industry Regulatory Authority (FINRA) ordered LPL to pay $11.7 million in fines and restitution for “widespread supervisory failures” related to the sale of its products.
Stoltmann Law Offices is investigating Lucian D. Hodgman and his firm, Newport Coast Securities, in New York, New York. Hodgman was accused of sending 40,000 copies of an advertisement postcard to be send out by mail through a third party marketing company without the approval of his member firm. He also allegedly made a phone call to a firm compliance officer in which he impersonated a representative of the marketing company and made false statements regarding the mailing of the postcards. Previously, he was fined $5,000 and suspended from the Financial Industry Regulatory Authority (FINRA) for unauthorized trading, failure to execute trades and excessive trading.
Hodgman was registered with Painewebber Inc. in Weehawken, New Jersey from October 1991 to January 2001, Moors & Cabot Inc. in Boston, Massachusetts from February 2001 until September 2013, Investors Capital Corp in Exeter, New Hampshire from September 2013 until March 2014, White, Weld & Co. Securities in Boston from April 2014 until August 2014 and Newport Coast Securities in Boston from October 2014 until February 2015. He has four customer disputes against him. He is not currently licensed within the industry.
Because brokerage firms have a responsibility to adequately supervise their representatives, and must take steps to ensure their representatives follow rules and regulations, they can be sued in the FINRA arbitration forum if they do not. Stoltmann Law Offices sues firms such as Newport Coast Securities for not adequately supervising their representatives, so please call us at 312-332-4200 for a free consultation with an attorney. There is no obligation and we take cases on a contingency fee basis only.
Stoltmann Law Offices is investigating Michael Brunelli and his firm, LPL Financial. Mr. Brunelli was accused by LPL for accepting a check made payable to himself for investment services allegedly unrelated to LPL. He was also the subject of a tax lien of almost $50,000. LPL suspended Brunelli because he failed to respond to a Financial Industry Regulatory Authority (FINRA) request for information. Michael Brunelli was registered with Signator Investors Inc. in Boston, Massachusetts from November 2002 until April 2004, New England Securities in Manchester, New Hampshire from May 2004 until January 2007, Legacy Financial Services in Milford, Massachusetts from January 2007 until June 2007, SII Investments in Westborough, Massachusetts from June 2007 until May 2012 and LPL Financial in Waltham, Massachusetts from April 2012 until June 2014. He is not currently licensed within the industry.
If you invested money with Mr. Brunelli, you may be entitled to recover your money in the FINRA arbitration process by suing LPL Financial. The firm had a duty to reasonably supervise him while he was registered with them, and, because they did not, can be held liable for financial losses. Please call our securities law firm in Chicago, Illinois for a free consultation with an attorney. 312-332-4200.
The Financial Industry Regulatory Authority (FINRA) barred Paul Leon White from the securities industry in 2010 for allegedly recommending unsuitable real estate investment trust (REIT) investments to his customers. One of them was a non-profit animal shelter tenant-in-common (TIC) interest in undeveloped rural land that Mr. White had an interest in. He also recommended the shelter invest in non-traded REITs. He also had a complaint against him that alleged he recommended unsuitable investments to a customer from 2004 to 2009. He was terminated from his former firm, Equity Services, Inc. in 2003 for using unauthorized sales literature.
Mr. White was registered with Equity Services in Montpelier, Vermont, Berthel, Fisher & Co Financial Services in Marion, Iowa, Alternative Wealth Strategies in Melville, New York, Heritage Financial Systems in Melville and Halcyon Capital Markets in Meredith, New Hampshire. He has five customer disputes against him. He is not licensed as a broker and he was permanently barred from the industry. If you would like to find out how to sue Paul Leon White, and his former firm, for failing to supervise him, you may call us at 312-332-4200 to speak with one of our securities attorneys.