Current Investigations

Texas Investors Awarded $2.57M in Second FINRA Arbitration Win Against LPL

Published on: August 7, 2022 | by Shepherd Smith Edwards & Kantas, LLP

Claimants also name former LPL Financial brokers Edward Miller and Antonio Reyna

Two investors were awarded $2.57m in their Financial Industry Regulatory Authority (FINRA) arbitration case against LPL Financial and Financial Resources Group. Also named as respondents but who were not ordered to pay damages are two former ex-LPL financial advisors. Antonio Reyna is now a Securities America broker in Texas, and Edward Bruce Miller is currently registered with Financial Resources Group Investment Services in South Carolina.

This is the investors’ second FINRA arbitration case against LPL Financial. They are alleging unauthorized trading, fraud, breach of fiduciary duty, and breach of contract. Financial Resources Group and LPL were both ordered to pay over $1.6M in compensatory damages and nearly $850K in the claimants’ legal fees. Arbitrators have recommended expunging the case from Reyna’s CRD while Miller continues to deny allegations.

Following SEC Charges Related To GWG L Bonds, CFP Board Suspends Western International Securities Broker Patrick Egan

Published on: August 6, 2022 | by Shepherd Smith Edwards & Kantas, LLP

California investment advisor accused of best interest violations

The Certified Financial Board has suspended Western International Securities financial advisor Patrick Michael Egan from using his CFP designation. The decision comes after the US Securities and the Exchange Commission (SEC) charged him, the broker-dealer, and four other Western International brokers with alleged Regulation Best Interest (Reg BI) violations related to their sale of GWG Holdings L Bonds.

The SEC contends they sold investors these risky, illiquid junk bonds despite the fact these investments were not in the latter’s best interests, given their investing profiles, financial goals, and risk tolerance levels. The CFP Board is the non-profit organization that administers the Certified Financial Planner Certification program.

Ex-Summit Brokerage Services Financial Advisor Francis Velten Barred Following Churning Allegations in Elderly Customers’ Accounts

Published on: August 5, 2022 | by Shepherd Smith Edwards & Kantas, LLP

Former New Port Richey, FL broker is also accused of selling away

Francis Joseph Velten, most recently an Ameriprise Financial Services broker, is now barred by the Financial Industry Regulatory Authority (FINRA). He’s accused of churning in older investors’ accounts and encouraging them to surrender their annuities and mutual fund holdings to buy bonus annuities. This caused them to pay surrender fees while he earned commissions from the transactions.

Churning, which involves excessively trading in customer accounts, is one of the ways many brokers will try to earn additional money through resulting commissions and fees. Unfortunately, this can cause investors substantial losses, especially if done in excess.

Centaurus Recommended GWG Holdings L Bonds To Houston Investor Who Was Saving For Retirement

Published on: August 4, 2022 | by Shepherd Smith Edwards & Kantas, LLP

Claimant files FINRA arbitration claim for up to six figures in damages

A Houston, Texas investor has filed a Financial Industry Regulatory Authority (FINRA) arbitration claim against Centaurus Financial after he sustained losses in GWG Holdings L Bonds. These risky junk bonds were unsuitable for this inexperienced retail investor, yet his Centaurus broker allegedly recommended and sold L Bonds to this claimant.

GWG Holdings, Inc., which sold $1.6B of L bonds to investors through brokerage firms like Centaurus, filed for Chapter 11 bankruptcy protection in April 2022. Thousands of investors seek to recover losses in these complex, speculative, and illiquid high-yield bonds.

Lawdragon Acknowledges SSEK Law Firm Partners and Securities Fraud Lawyers Kirk Smith and Sam Edwards In Their 2022 Leading Plaintiff Financial Lawyers List

Published on: August 3, 2022 | by Shepherd Smith Edwards & Kantas, LLP

Award Names The Top Investor Attorneys in The US

Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) is pleased to announce that Senior Partners and Investor Attorneys Kirk G. Smith and Samuel B. Edwards have been named in the 2022 Lawdragon 500 Leading Plaintiff Financial Lawyers List. The award is for their work successfully representing investors in FINRA arbitration and litigation in pursuing damages from the broker-dealers, including the big firms on Wall Street, responsible for their investment losses.

Lawdragon publishes a 500 Leading Lawyers in America list each year. 2022 is the first time the legal media company created a curated list of plaintiff financial attorneys. Final candidates are vetted by competitors and peers.

Ingram Financial Group’s Donna Seymour in Winter Haven Accused of Unsuitably Selling GWG L Bonds To Florida Retirees

Published on: August 2, 2022 | by Shepherd Smith Edwards & Kantas, LLP

Claimants File FINRA Arbitration Claim Against Centaurus Financial

A Florida couple who suffered losses in GWG Holdings L bonds has filed a Financial Industry Regulatory Authority (FINRA) arbitration claim against Centaurus Financial. In the claim, they are seeking up to six figures in damages for their losses. The investors are retirees and worked with Centaurus broker Donna Maria Seymour, who presents herself as part of IngramFinancial Group in Winter Haven, FL.

The claimants say that they made it clear from the start that they needed to make conservative investments because they were no longer working, had a family history of health issues, and wanted to preserve their finances to support themselves. Instead, Seymour allegedly recommended that they invest in L Bonds, which are risky, speculative, and illiquid.

SEC Accuses Barred LPL Financial Broker Eric Hollifield of Misappropriating $1.7M From Retail Customers

Published on: August 1, 2022 | by Shepherd Smith Edwards & Kantas, LLP

Ex-Windsor, Georgia Investment Adviser Was Fired by Hamilton Investment Counsel and LPL

The US Securities and Exchange Commission (SEC) has filed civil charges against Eric Shea Hollifield, a former LPL Financial broker and registered investment adviser with Hamilton Investment Counsel, LLC in Georgia. The regulator contends that he allegedly misappropriated at least $1.7M from one brokerage investor and two investment advisory clients. He then used their money to pay for his personal expenses, including a 37-acre property with a house.

According to the SEC, Hollifield allegedly moved customers’ funds without permission to an outside business controlled by him. On top of that, he sent some of those funds to his account. Allegedly, Hollifield sold securities in the brokerage client’s account and suggested that the customer move $1.24M to a different financial institution to earn more interest. After gaining the client’s consent, he transferred the money to a real estate closing agent to buy his house. Due to this, the Commission is seeking permanent injunctions and monetary relief.

UBS Financial Ordered to Pay Punitive Damages in $1.3M Arbitration Ruling Over YES Strategy

Published on: July 28, 2022 | by Shepherd Smith Edwards & Kantas, LLP

Broker-Dealer Losses Yet Another Investor Claim Involving Its Yield Enhancement Strategy

A Financial Industry Regulatory Authority arbitration panel has awarded investors $1.34M, including punitive damages, for losses sustained in the UBS Yield Enhancement Strategy. This is the latest award related to UBS Financial’s complex options trading strategy that has cost investors over $1B.

In June 2022, UBS agreed to pay $25M to settle Securities and Exchange Commission (SEC) fraud charges accusing the firm with failure to provide its brokers with proper training and oversight in the YES program even as they sold this strategy to hundreds of investors. This purportedly caused many of the firm’s financial advisors to not fully comprehend the risks involved and affected their ability to determine whether the Yield Enhancement Strategy was, in fact, in the best interests of these customers.

Investors of Nelson Partners’ Skyloft Austin May Be Owed At Least $74M

Published on: July 27, 2022 | by Shepherd Smith Edwards & Kantas, LLP

Broker-Dealers Sold Private Placement Shares In Texas Luxury Student Housing To Retail Customers, Including Retirees

Our Texas brokerage firm of investment lawyers and arbitration attorneys are looking into claims of losses involving Nelson Partners’ Skyloft Austin investors. Many of those who invested in this troubled luxury student housing building close to the University of Texas have sued Nelson Partners. Which is the property management firm that marketed this deal in 2019. They sued Axonic Capital, the hedge fund that provided $30M in additional financing to buy the 18-story property.

Skyloft investors, each invested $100K to $500K, accuse Nelson Partners CEO Patrick Nelson of fraud and allegedly diverting some of their funds to pay for operations at his other properties.

UBS To Pay $25M To Settle SEC Charges Involving Its Yield Enhancement Strategy

Published on: July 26, 2022 | by Shepherd Smith Edwards & Kantas, LLP

Firm Accused of Inadequate Training And Poor Supervision of Brokers That Sold YES

UBS Financial Services has consented to pay about $25M to settle US Securities and Exchange Commission (SEC) charges related to the firm’s Yield Enhancement Strategy (YES). The regulator contends that the broker-dealer, which marketed and sold $2B of UBS YES to about 600 high-net-worth individual investors between February 2016 and February 2017, allegedly failed to adequately train its financial advisors in and supervise this complex iron condor strategy.

This purportedly included the firm knowing about— documenting—the “possibility of significant risk” but not notifying many of its brokers and clients about this.