FINRA Accuses Ex-Broker of Unsuitable Trading Involving Mutual Funds
David Randall Lockey, a former broker, is facing Financial Industry Regulatory Authority charges for allegedly engaging in improper trading of customer accounts while associated with SWS Financial Services Inc. He is no longer with that firm, now called the Hilltop Securities Independent Network. According to the regulator, Lockey took part in “unsuitable short-term trading and switching” involving unit investment trusts and mutual funds in four accounts between ’12 and ’14.
Lockey purportedly made about $75,730 for himself and the firm while engaging in improper trading. Meantime, three of the four customers whose accounts he used sustained losses of $15,699. The fourth customer made a gain of almost $5,000.
FINRA said Lockey has not been registered with any broker-dealer since 2014.
Ex-TV Commentator Settles Penny Stock Fraud Charges with the SEC
The U.S. Securities and Exchange Commission is charging former FOX commentator Tobin Smith with fraud. According to the regulator, Smith, who is also a market analyst, and his NBT Group fraudulently promoted a penny stock to investors.
The SEC said that both Smith and his firm received payments to prepare and distribute e-mails, articles, blogs, and other communication promoting IceWEB Inc. stock. They purportedly failed to fully disclose they were receiving the compensation.
The investors were not made aware of that part of what Smith and NBT were paid was linked to a sustained rise in the data storage company’s share price. The Commission said that marketing materials the investors received included misleading and false statements put there to artificially up the share price and trading volume of IceWEB stock. For example, payment for promotional efforts was $300K and IceWEB stock. NBT could also make over $250K if marketing campaigns proved successful.
Smith and NBT are settling the SEC case and will be barred from future penny stock offerings. They also have to pay $165,900 of disgorgement and $16,893 of interest. Smith has to pay a penalty of $75K.
Ex-New Jersey Investment Adviser is Sentenced in $1.1M Securities and Annuities Fraud
Janet Fooshee, a former investment adviser, was sentenced to seven years behind bars for organizing a $1,178,000 annuities and securities fraud scam. Fooshee admitted to fabricating and mailing over 100 account statements that inflated over a dozen clients’ accounts by about $818,000 in total. The statements was printed on documentation that came with logos belonging to Wells Fargo (WFC), Fidelity Investments, Bank of America/Merrill Lynch (BAC), Dreyfus, Transamerica Life Insurance Company, Alliance Bernstein, ING, JMP Reality Corporation, and AIG Life Insurance Company.
Fooshee acknowledged stealing about $151,000 from four clients and $81,000 from another, as well as receiving $191,539 in unlawful investment advisor fees. She also acknowledged stealing the identities of at least eight corporations and abusing her role as a fiduciary to a number of clients.
She pleaded guilty to bilking over two dozen retirees and other investors over 10 years starting in 2003. Prior to forming Janet Gurley Katz LLC in 2013, Fooshee worked at Wachovia Securities.
Shepherd Smith Edwards and Kantas, LTD LLP is a stockbroker fraud law firm.
Finra charges former broker with improperly trading customers accounts, InvestmentNews, April 4, 2016
Read the SEC Complaint in the Case Against Smith (PDF)
Former Investment Advisor Charged with Defrauding Two Clients in Excess of $100,000, NJ.gov, December 17, 2012