Articles Tagged with Securities America

Chicago-based Stoltmann Law Offices has represented investors who’ve suffered investment losses from “rogue” brokers. Without question, securities firms are legally obligated to protect your money from brokers who run afoul of the law. Yet these “rogue” brokers often get away with theft right under the noses of their employers.

The case of Hector May, a former broker with Securities America, is a case in point. May, who was employed by Securities America from 1994 to 2018, pled guilty to stealing some $8 million from his clients in 2018, according to Investment News. May was sentenced to 13 years in prison and ordered to pay $8.4 million in restitution in 2019. Was May’s firm responsible for protecting his clients? In charging Securities America for “allegedly failing to safeguard clients” from May, the U.S. Securities and Exchange Commission (SEC) fined Securities America $1.75 million. Securities America Advisors neither admitted to nor denied the SEC’s findings.

The SEC reported that Securities America had knowledge that May wasn’t doing right by his clients. “The SEC alleged that one Securities America surveillance system generated multiple alerts for potentially suspicious withdrawals from client accounts, but its analysts failed to carry out the prescribed processes for investigating those alerts,” Investment News reported. “The commission also alleged that the firm permitted disbursements without the required signatures, and another group failed to contact clients to verify that they had initiated disbursement requests.”

Chicago-based Stoltmann Law Offices has represented investors who’ve suffered losses in the LJM Preservation and Growth Fund. When broker-dealers sell you investments, they are responsible for fully informing you of the risks at the point of sale. When they fail to give you an honest, transparent disclosure on what they are selling – and the investments tank — you may have an arbitration case that you can pursue to get your money back.

Cambridge Investment Research, Merrill Lynch, and other brokerage firms sold a mutual fund called the LJM Preservation and Growth fund to their customers. The fund’s “value plummeted 80% over two days in early February 2018, after brokers in the previous two years sold $18 million of its shares to more than 550 customers, prompted by sales calls in May 2016 from an LJM wholesaler,” the securities regulator FINRA stated. “The fund was liquidated and dissolved in March 2018.”

What made the fund so volatile that led to its demise? It employed a risky strategy called “uncovered options,” but failed to tell investors that it was a highly complex vehicle prone to catastrophic losses.

FINRA permanently barred former Securities America financial advisor, Bobby Wayne Coburn (“Coburn”) on August 27, 2019 after he failed to appear at the disciplinary hearing. This came after Securities America terminated Mr. Coburn on March 20, 2019 for soliciting multiple clients to invest in an unapproved private securities transaction. He also tried to settle a complaint made by a customer without notifying the firm. According Mr. Coburn’s FINRA BrokerCheck report, the securities were in the form of promissory notes and real estate securities.

On notice of Coburn’s violations, FINRA promptly initiated an investigation into Coburn in July 2019. According to the Acceptance, Waiver, and Consent (“AWC”) FINRA entered against Coburn, Securities America learned in January 2019 that Coburn sold unregistered securities to clients in 2010 and 2011. Securities America also discovered the Coburn settled a customer complaint relating to this scheme in 2016 without providing the required notice to his firm and FINRA.  When FINRA requested documents and information from Coburn, he informed FINRA that he was no longer working in the securities industry and refused to produce the documents and information, in violation of FINRA Rule 8210. FINRA also found that Coburn violated Rule 2010, which is a “catch all” rule requiring that brokers and firms conduct business with “high standards of commercial honor” and maintain “just and equitable principles of trade”. FINRA permanently barred Coburn from the securities industries for violating these rules.

Coburn’s career in the financial services industry began in 1986 at Ameritas Investment Corp. During his thirty-three year career, he bounced from firm to firm, and landed at Securities America in January 2009. He worked from the Fort Meade, Florida branch office. Two customers have filed complaints against Coburn, including one complaint related to the real estate investment scheme. According to his BrokerCheck report, Coburn sold the client an investment in a Costa Rica real estate development, which did not make the required payments pursuant to the promissory note. The complaint for $32,000 was settled for $7,000. The entire settlement was paid by Coburn. Another client of Coburn and Securities America formally complained about an unsuitable variable annuity that Coburn sold, and the $5,000 complaint was settled for nearly $55,000, with Coburn contributing $5,000.

AdobeStock_35532974-1-300x200Stoltmann Law Offices continue to investigate Securities America, after it was fined $175,000 by FINRA. Between August 2014 and January 2016, FINRA charged that brokers with Securities America, overlooked or violated suitability concerns with two classes of variable annuities that were sold.  During this time frame, FINRA alleged that Securities America received close to $53 million from sales of share class variable annuities, including over $6 million from the sale of 1,904 L-share contracts.  These products have shorter surrender periods, and are therefore more expensive.  Investors pay a higher fee in exchange for increased liquidity which is unsuitable for many investors.  Firms that fail to disclose to investors these risks and fees, are more likely to be confronted with allegations of misconduct in the course of their business.

AdobeStock_194438920-300x200Stoltmann Law Offices is investigating Kestra Investment Services broker Mitchell Walk. According to his publicly available records with the Financial Industry Regulatory Authority (FINRA), Mitchell Walk has been subject to five customer complaints, two of which are currently pending. These allege that Walk misrepresented material facts about variable annuities in his investment recommendations to customers, and that Walk made unsuitable investment recommendations to a customer and that Kestra Investment Services failed to properly supervise this activity. Brokers have an obligation to treat investors fairly which includes obligations such as making only suitable investment recommendations for the client. In order to do so, the broker must meet certain requirements, such as take into account the customer’s age, net worth, investment objectives and investment risk tolerance, among other factors, and must disclose all risks and benefits associated with that investment. If he does not, his brokerage firm may be liable for losses because the firm has a duty to reasonably supervise its employees.
Before Kestra, Mitchell Walk was employed with Securities America in Lavista, Nebraska from March 2000 until January 2001. He is currently registered with Kestra Investment Services in Sarasota, Florida, Longwood, Florida and St. Augustine, Florida, and has been since January 2001. He has five customer disputes against him, one of which is currently pending. This is according to records available online.

Stoltmann Law Offices is investigating Richard Fichter, a registered representative with Securities America in Williamsville, New York. Mr. Fichter allegedly acted negligently in connection to alleged improper sales practices employed by the account’s previous representative, made unsuitable recommendations and trades, failed to follow instructions, executed unauthorized trades, placed trades for the primary purpose of generating commissions, failed to follow instructions, engaged in deceptive acts and practices and did not cancel a trade as requested, among other things. These are all against securities laws. Mr. Fichter was previously registered with First Investors Corp from June 1983 until November 1983, William Cadden from October 1983 until September 1985 and Dean Witter Reynolds in Purchase, New York from September 1985 until February 1991. He is currently registered with Securities America in Williamsville, New York and has been since March 1991. He has four customer disputes against him, one of which is currently pending.

Stoltmann Law Offices is investigating Scott Cody, a Securities America broker in Denver, Colorado. Mr. Cody allegedly sold an unsuitable variable annuity product for the purpose of increasing his commissions. He also failed to follow instructions to liquidate an account before a wire transfer. These are against securities laws, and internal firm rules. Mr. Cody, according to the Financial Industry Regulatory Authority (FINRA), was previously registered with New England Securities in New York, New York from September 1997 until May 2004 and Hornor, Townsend & Kent in Denver, Colorado from May 2004 until August 2008. He is currently registered with Securities America in Denver, and has been since July 2008. He has two customer disputes against him.

Bruce Page Barber, a former financial advisor with Securities America in Colorado Springs, Colorado, was barred from the securities industry. Barber allegedly solicited 15 firm customers to purchase an unapproved securities product in ABC, LLC, a company for which he served on the Board of Directors. Barber was terminated from Securities America in February 2017 after being investigated by the Financial Industry Regulatory Authority (FINRA) for this misconduct. If you would like to speak to an attorney about your options of recovering your losses with the firm on a contingency fee basis in the FINRA arbitration forum, please call our Chicago-based law offices today for a no-cost, no-obligation consultation. Attorneys are standing by.
According to online, public records with FINRA, Mr. Barber was previously registered with Lincoln Investment Planning, Inc. in Fort Washington, Pennsylvania from August 1998 until December 2000, and Securities America in Colorado Springs, Colorado from December 2000 until February 2017. He is currently not registered within the industry, and was barred by FINRA in September 2017.

AdobeStock_112465076-1-300x164Stoltmann Law Offices is investigating Michael Crowe, a former financial advisor with Securities America in Mesa, Arizona. Crowe was alleged to have solicited an investor to invest $50,000 in Simply Smart Homes, LLC, which was purported to invest in and flip residential property. Richard Smart, who ran Smart homes, had several tax liens against him in Utah, and the company had defaulted on at least two loans. Securities America allegedly did not give Crowe permission to sell investments in Simply Smart Homes, yet he did anyway. This is against securities laws. To find out how you may be able to sue Securities America for Michael Crowe losses, please call 312-332-4200 today. We are securities attorneys based in Chicago, Illinois and we sue firms in the FINRA arbitration forum on a contingency fee basis. The call is no-cost and no-obligation. Brokerage firms like Securities America have a duty to reasonably supervise their brokers in order to make sure that they do not do anything outside securities laws. If the firm does not, it can be held liable for losses. Crowe was also registered with Verus Capital Partners in Mesa. He was subject to two financial compromises, according to public records.

Stoltmann Law Offices is investigating Jesus Rodriguez, a broker with IMS Securities. Rodriguez is accused of acting negligently, misrepresenting material facts, and breaching fiduciary duty in connection to real estate investment trusts. These are all against securities rules and regulations. IMS Securities can be sued in the Financial Industry Regulatory Authority (FINRA) arbitration forum on a contingency fee basis in order to recover losses. Please call our securities law firm today to speak to an attorney about your options. The call is free with no obligation and we take cases on a contingency fee basis. Rodriguez was registered with Securities America in Lavista, Nebraska from November 1997 until March 2000 and is currently registered with IMS Securities in Miami, Florida and has been since March 2000. He has two customer disputes against him, one of which is currently pending.

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