FINRA

FINRA Suspends Ex-Securities America Broker

Published on: December 13, 2018 | by Shepherd Smith Edwards & Kantas, LLP

The Financial Industry Regulatory Authority (FINRA) has suspended former Securities America broker Michael D. Jackson for six months following allegations that he traded options in one client’s account without telling the brokerage firm. Securities America has since fired Jackson.

According to the self-regulatory authority (SRO), in 2016, the ex-Securities America broker recommended that one customer set up an account at different firm to trade options. The customer followed his instructions. Over several months, Jackson allegedly:

Put in orders for over 42 options transactions sets—that’s over 100 orders—in the new account.

FINRA Bars Broker For Selling $10.8M of Notes in $1.2B Woodbridge Ponzi Scam

Published on: December 6, 2018 | by Shepherd Smith Edwards & Kantas, LLP

The Financial Industry Regulatory Authority (FINRA) has barred yet another ex-broker for selling promissory notes that have since been linked to the $1.2B Woodbridge Ponzi scam. The fraud is believed to have bilked around 8,400 investors.

According to the self-regulatory authority (SRO), broker Frank Dietrich sold 58 investors $10M of promissory notes that came from the Woodbridge Group of Companies. 30 of these investors were clients of Quest Capital Strategies, Inc., which was Dietrich’s brokerage firm at the time of the sales. FINRA said that the former Quest Capital broker earned $261K in commissions from selling the Woodbridge investments.

Quest Capital Strategies reportedly did not know that Dietrich was selling the Woodbridge notes to its customers. Earlier this year, the brokerage firm allowed him to step down after finding that he had sold a product it had not approved and for failing to disclose external business activities.

Investor Fraud: FINRA Awards Over $1M in Churning Case Against Legend Securities and Morgan Stanley Financial Adviser is Sentenced After Spending Over $950K of Clients’ Money

Published on: November 30, 2018 | by Shepherd Smith Edwards & Kantas, LLP

Legend Securities Ordered to Pay Client For Churning His Funds

A Financial Industry Regulatory Authority (FINRA) panel has awarded Herbert W. Voss $1.075M in his securities fraud case against Legend Securities Inc., its ex-chief compliance officer Frank Philip Fusco, and former Legend broker Danard Warthen Brown. Legend is no longer in operation and was expelled by the self-regulatory authority (SRO) in 2012.

Voss reportedly lost $375,000 while Legend was his brokerage firm. Of the more than $1M award granted to Voss, $700K is for punitive damages. His securities fraud lawyer contends that punitive damages were warranted because of how much turnover took place in Voss’s account.

H. Beck Ordered to Pay $400K for Unsuitable Variable Annuity Sales to Customers

Published on: November 27, 2018 | by Shepherd Smith Edwards & Kantas, LLP

The Financial Industry Regulatory Authority (FINRA) is ordering H. Beck to pay a $400K fine. The self-regulatory authority (SRO) contends that the independent brokerage firm sold variable annuities (VA) to clients even though they were not suitable for some of them.

According to FINRA, of the over 7,000 variable annuity contracts that H. Beck sold, making almost $34.9M in revenue between 1/2013 and 12/2014:

2,835 of those were L-share contracts with quite a number of them tied to long-term riders.

FINRA Bars Ex-Texas Based Brokers from Merrill Lynch and RBC Capital Markets

Published on: November 14, 2018 | by Shepherd Smith Edwards & Kantas, LLP

The Financial Industry Regulatory Authority has barred three more former brokers in the wake of fraud allegations against them. Two of them were based in Texas. They are:

Former Merrill Lynch broker Terrance Hood
Ex-RBC Capital Markets broker Jonathan Freehill

Ex-LPL Financial Broker Gets 20 Years in Prison for Securities Fraud

Published on: November 6, 2018 | by Shepherd Smith Edwards & Kantas, LLP

Sonya Camarco, an target=”_blank” rel=”noopener noreferrer”>ex-LPL Financial (LPLA) broker, has been sentenced to 20 years in prison after she admitted to stealing $1.8M from clients. Camarco, who worked for the brokerage firm in Colorado, was indicted by a grand jury last year on multiple counts of securities fraud. She pleaded guilty to one count of each.

According to the broker fraud case against her, between 2013 and 2017, Camaro stole over $1.8M from clients for her own use. In August 2017, LPL Financial fired her. That same month, the US Securities and Exchange Commission was able to get an emergency court order and asset freeze against Camarco. The SEC’s complaint said that the theft took place over 13 years and the ex-LPL broker lied to clients about the money she was taking from their accounts.

The SEC also accused Camarco of forging client signatures on checks and liquidating securities in their accounts so she could make unauthorized payments. When clients asked about the checks written to an entity named “C Investments”, Camarco lied by claiming that the entity was an outside investment she had made for them. The former broker also allegedly lied when LPL Financial confronted her about the fraud. All the while, she used client money to pay her mortgage and credit card bills.

FINRA Bars Another Ex-Morgan Stanley Broker

Published on: October 31, 2018 | by Shepherd Smith Edwards & Kantas, LLP

For the third time this month, The Financial Industry Regulatory Authority has announced that it has barred yet another Morgan Stanley (MS) broker. The brokerage firm had fired financial adviser Bruce Plyer in late 2016 in the wake of allegations that he executed trades in a client’s account without authorization. Now, the self-regulatory organization is barring Plyer after he failed to appear and give testimony into FINRA’s probe into the matter.

Plyer has accepted and consented to FINRA’s findings, but he is not admitting to or denying any of them.

After being let go from Morgan Stanley, he was registered for a short time with International Assets Advisory until he left the industry early last year.

Another Ex-Morgan Stanley Broker is Barred by FINRA

Published on: October 16, 2018 | by Shepherd Smith Edwards & Kantas, LLP

The Financial Industry Regulatory Authority has barred another former Morgan Stanley (MS) broker. John Halsey Buck III consented to the industry bar after he did not provide the information and documents that the self-regulatory organization asked for related to its probe into his alleged involvement in unapproved private securities sales. Buck, who has over 50 years experience in the industry, was let go by the brokerage firm earlier this year.

Morgan Stanley reportedly fired him in the wake of disclosure-related issues, including those involving private investments that did not involve the broker-dealer. According to InvestmentNews, the allegations against Buck have to do with “selling away.” This is a practice that happens when a stockbroker, financial adviser, or a registered representative solicits the sale of or sells securities that his or her brokerage firm does not offer or hold. Broker-dealers usually have a list of approved products that its brokers are allowed to sell to firm clients.

Buck had been with the industry since 1965. Previous to working with Morgan Stanley, he was a registered broker with UBS Financial Services (UBS), Wachovia Securities, Prudential Securities Incorporated, Loeb Partners, and Hornblower, Weeks, Noyes & Trask.

FINRA Bars Former Morgan Stanley and Wells Fargo Brokers

Published on: October 11, 2018 | by Shepherd Smith Edwards & Kantas, LLP

The Financial Industry Regulatory Authority announced this week that it is barring three former brokers. They are ex-Morgan Stanley broker (MS) Kevin Smith and former Wells Fargo (WFC) brokers Wilfred Rodriquez Jr. and Thomas A. Davis.

According to the self-regulatory authority’s order, the bar against Smith comes after he wouldn’t appear before FINRA to testify regarding allegations involving a structured products trade in a family member’s trust that he may have executed without checking with the client first.

Morgan Stanley fired Smith in 2016 in the wake of the broker fraud allegations.

Another Texas-Based Wells Fargo Broker is Barred by FINRA

Published on: September 12, 2018 | by Shepherd Smith Edwards & Kantas, LLP

The Financial Industry Regulatory Authority (FINRA) has barred Wells Fargo (WFC) broker Edward O. Daniel, after he failed to participate in a probe into allegations that he made unsuitable investments for one client. Daniel, a Texas-based broker, was with Wells Fargo Advisers for seven years before he stepped down in September 2016. He was a longtime broker of 41 years.

Soon after Daniel resignation two years ago, Wells Fargo disclosed that a customer had filed an arbitration complaint accusing him of making unsuitable investments over a several-year period. The dispute was resolved for $225K. His BrokerCheck record documents that Daniel has been named in eight disclosures, all involving complaints by customers.

Now, FINRA is barring him because he would not cooperate in the self-regulatory authority’s investigation into the unsuitable investment allegations.