Investors Topics

BROKER REPORT: Timothy L. Pilkington Is Barred from the Securities Industry

October 9, 2015 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Timothy L. Pilkington. Mr. Pilkington was employed and registered with Stephens, a broker-dealer with an office in Memphis Tennessee from January 2012 through March 2015, according to his publicly available BrokerCheck, as maintained by the Financial Industry Regulatory Authority (FINRA). He was also previously registered with Morgan Stanley Smith Barney, according to industry records.

According to his BrokerCheck, Mr. Pilkington was the subject of one customer complaint in 2009. More recently, a Letter of Acceptance, Waiver and Consent (AWC) was accepted by FINRA stating that Mr. Pilkington was barred from associating with any broker-dealer for failing to respond to the FINRA 8210 request for information. 8210 Requests require that people registered to recommend and sell securities must provide documents, testimony and information regarding matters under investigation. According to the AWC, Mr. Pilkington failed to disclose two FDIC orders to FINRA. One of those orders disclosed that Mr. Pilkington agreed to pay $2,500, where “the FDIC considered the matter and determined it had reason to believe that the [he] has engaged or participated in violations of law, unsafe or unsound banking practices and/or breaches of fiduciary duty.” In another FDIC order, Mr. Pilkington was “prohibited from participating in the conduct of affairs of, or exercising voting rights in, any insured institution without the prior written approval of the FDIC.”

If you or a family member lost money that was invested with Mr. Pilkington, you are encouraged to contact the securities fraud lawyers at Malecki Law for a free consultation and case evaluation at (212) 943-1233.

BROKER REPORT: Robert Emmet Gill Is Fined $5,000 and Suspended from the Securities Industry for 30 Days

October 7, 2015 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Robert Emmet Gill. Mr. Gill is employed and registered with Chelsea Financial Services, a broker-dealer with an office in Tinton Falls, New Jersey, according to his publicly available BrokerCheck, as maintained by the Financial Industry Regulatory Authority (FINRA). He was also previously registered with J.P. Turner & Company, LLC, Grayson Financial, LLC, M.S. Farrell & Company, Inc. and Investors Associates, Inc. Grayson and Investors Associates were expelled from FINRA in 2006 and 1998, respectively.

According to his BrokerCheck report, a Letter of Acceptance, Waiver and Consent (AWC) was accepted by FINRA stating that Mr. Gill was fined $5,000 and suspended from associating with any broker-dealer for borrowing $100,000 from a customer without notifying his then-employer J.P. Turner & Company, in violation of industry rules. Mr. Gill’s BrokerCheck report also discloses that he was “permitted to resign” from J.P. Turner based on the same allegations as those set forth in the AWC.

Mr. Gill’s BrokerCheck report sets forth that he was the subject of four customer disputes involving allegations of unsuitable investment recommendations, misrepresentations made and churning. Three of those four disputes resulted in settlements of $700,000 (with Mr. Gill contributing $50,000 personally), $32,500 and $35,610, respectively, according to industry records.

BROKER REPORT: Jeffrey G. Lyon, formerly of Joseph Gunnar & Co.

October 2, 2015 | Malecki Law Team

The securities fraud attorneys are interested in hearing from investors with complaints involving Jeffrey G. Lyon. Per his BrokerCheck Report, maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Lyon is no longer a registered stock broker. Per BrokerCheck, Mr. Lyon was last licensed to sell investments through FINRA in 2013 when he was registered with Joseph Gunnar & Co LLC.

Mr. Lyon’s BrokerCheck Report also indicates that he has been the subject of at least two customer complaints in his final three years in the brokerage industry. Per FINRA, the complaints against Mr. Lyon have alleged unsuitable investment recommendations and unauthorized trading.

In addition to Joseph Gunnar & Co., Mr. Lyon has also reportedly been registered with Charles Vista LLC and John Thomas Financial. Both of these firms were expelled by FINRA in 2014 and 2013, respectively, per FINRA records.

BROKER REPORT: Rudolf Malebranche Is Fined $5,000 and Suspended from the Securities Industry for Three Months

October 1, 2015 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Rudolf Malebranche. Mr. Malebranche was employed and registered with Santander Securities LLC. He was previously registered with J.P. Morgan Securities LLC, Chase Investment Securities Corp., Wachovia Securities, Morgan Stanley DW, Inc., Prudential Securities, Inc. and Whale Securities Co., L.P., according to his publicly available BrokerCheck, as maintained by the Financial Industry Regulatory Authority (FINRA).

According to his BrokerCheck report, a Letter of Acceptance, Waiver and Consent (AWC) was accepted by FINRA stating that Mr. Malebranche was fined $5,000 and suspended from associating with any broker-dealer for three months as a result of submitting a switch form, which authorized the sale of two mutual funds, after himself filling in the customer’s initials on the form without the authorization from the client. As a result of this conduct, Mr. Malebranche was also discharged from employment with J.P. Morgan Securities LLC, according to industry records.

Mr. Malebranche also was the subject of a customer complaint alleging unsuitability in connection with the sale of a fixed annuity, resulting in $15,892.28 repaid to the customer (more than the $15,650 requested), according to the BrokerCheck report.

BROKER REPORT: Ameriprise’s Thomas E. Stratton-Crooke of Ohio Suspended By FINRA

September 25, 2015 | Malecki Law Team

The investment fraud attorneys at Malecki Law are interested in hearing from investors who have complaints financial advisor Thomas E. Stratton-Crooke of Ameriprise Financial Services, Inc., based out of Beachwood, OH.

Records from the Financial Industry Regulatory Authority (“FINRA”) indicate that Mr. Stratton-Crooke has been suspended by FINRA for 10 business days and fined $10,000 for improperly executing discretionary transactions in customer accounts without prior written authorization from the customer or authorization from his firm.

According to his BrokerCheck Report, Mr. Stratton-Crooke was discharged by Merrill Lynch in 2014, after 25 years with the firm, for what is believed to be the same misconduct that led to his suspension by FINRA.

LPL Financial Settles Disputes at Tune of $3.2 Million, More Fines May Be Coming

September 24, 2015 | Malecki Law Team

LPL Financial LLC has agreed to pay two more settlements, and these are big ones. On September 23, 2015, it was announced that LPL Financial entered into two settlements for disputes arising from the firm’s supervisory system over recommendations of alternative products, including non-traded real estate investment trusts (REITs). This time, LPL has agreed to pay $1.425 million to 48 States, the District of Columbia, Puerto Rico and the U.S. Virgin Islands, according to a news release put out by the North American Securities Administrators Association (NASAA). Separately, it was reported that LPL agreed to pay Massachusetts and Delaware Attorneys General $1.8 million for placing 200 clients into leveraged exchange traded funds (ETFs). To top it off, it appears New Hampshire regulators continue to seek approximately $3.6 million from LPL arising from the sale of non-traded REITs, according to the Think Advisor article.

LPL Financial is no stranger to substantial fines for supervisory failures tied to alternative products. In May 2015, the Wall Street Journal reported that the Financial Industry Regulatory Authority (FINRA) fined LPL Financial $11.7 million over failing to properly supervise complicated products such as nontraditional ETFs. Malecki Law also noted in March 2014 that LPL was fined $950,000 by the over its supervisory failures stemming from recommendations of non-traded REITs and other illiquid investments. At that time, we posited the question whether the fines being assessed are large enough to deter future bad conduct? Time will tell. Malecki Law continues to represent and recover money for investors that suffered losses as a result of unscrupulous recommendations in non-traded REITs and other alternative products such as leveraged ETFs.

Non-traded REITs are particularly problematic and unsuitable products for many investors. Brokers like to recommend them because the products typically pay a high commission, but non-traded REITs are illiquid and may cause a substantial loss to the investor’s principal payment when buyers on secondary markets will only accept the products at a drastic discount to the actual price initially paid.

BROKER REPORT: Cambria’s Robert H. Potter, Discharged and Barred

September 24, 2015 | Malecki Law Team

The investment fraud attorneys at Malecki Law are interested in hearing from investors who have complaints regarding former stockbroker Robert H. Potter. According to his BrokerCheck report maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Potter has been permanently barred by FINRA. He has also reportedly been the subject of no less than three customer complaints.

Mr. Potter has reportedly been barred by FINRA for his failure to cooperate with an investigation into allegations that Mr. Potter comingled customer funds with his own personal funds. Per FINRA, Mr. Potter was discharged from Cambria Capital in August 2015, after the firm questioned the validity of certain transactions involving Mr. Potter and his customers.

In 1997, Mr. Potter was the subject of a customer complaint alleging unauthorized, excessive trading, per FINRA. FINRA records indicate that the customer recovered more than $66,000 as a result of their complaint.

New FINRA Rule Designed To Help Protect Seniors And Other Vulnerable Investors

September 23, 2015 | Malecki Law Team

The Financial Industry Regulatory Authority (“FINRA”) has just approved steps to help protect senior citizens and other potentially vulnerable adults from financial exploitation and abuse. Referred to by some as a“pause rule,” the proposal would permit brokerage firms to place a temporary hold (or “pause”) a disbursement from a customer’s account if they believed that the customer was being exploited. After pausing the disbursement, the firm would contact the customer’s “trusted contact” to notify them of the suspicious activity. While the new rule would not require firms to place a temporary hold on disbursements, it would provide them with a safe harbor if and when the firm did pause suspicious activity.

With the baby boomer generation at or near retirement age, the timing for FINRA could not be better. FINRA’s CEO specifically referenced the fact that for the next 15 years, roughly 10,000 Americans will be turning 65 each day.

Unfortunately, senior citizens are targeted specifically by financial scammers. Seniors typically have large amounts of liquid assets in the form of retirement savings. When coupled with the potential for diminishing mental abilities, this means an easy target and potentially big payday for a con artist with bad intentions.

BROKER REPORT: Former California-based Raymond James Broker James Belenis Suspended by FINRA

September 23, 2015 | Malecki Law Team

The investment fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker James D. Belenis of KMS Financial Services, Inc., based out of Davis, CA. and previously of Raymond James Financial.

Mr. Belenis has been suspended by the Financial Industry Regulatory Authority (“FINRA”) for a period of 20 days and fined $5,000 for his activities in connection with the improper raising of capital for a gold mining operation, according to FINRA.

Before joining KMS, Mr. Belenis was discharged from Raymond James for engaging in unauthorized private securities transactions away from the firm, per FINRA. These are believed to be the same activities for which he was suspended.

FINRA Crackdown on Broker Migration: 10 Former Global Arena Representatives Sanctioned After On-site exam

September 18, 2015 | Malecki Law Team

FINRA reported that it barred 10 former Global Arena Representatives including the former President of Global Arena Capital Corp., Barbara Desiderio, and five former representatives (David Awad a.k.a. David Bennett, James Torres, Peter Snetzko, Alex Wildermuth, and Michael Tannen) in all capacities; barred two former principals, Kevin Hagan and Richard Bohack, for supervisory failures; sanctioned two other former brokers, Niaz Elmazi a.k.a. Nick Morrisey and Andrew Marze, for failing to cooperate with FINRA’s investigation. FINRA had cancelled Global Arena’s membership and barred the owner and three other brokers for fraud in July 2015 in a separate action.

FINRA announced that a 2014 on-site audit and investigation at Global Arena Capital Corp had allegedly revealed several instances of securities fraud including product misrepresentation, use of misleading claims, account churning, unsuitability, and other misconduct like use of high pressure sales tactics to make sales of junk bonds to customers. FINRA reports that their business model involved cold calling vulnerable groups of investors including seniors to make solicited recommendations of securities. These sanctions reiterate FINRA’S focus on tracking down groups of brokers who migrate from one risky and problem-ridden firm to another, with questionable practices. In this instance reported by FINRA, seven of the ten individuals had moved to Global Arena’s new office from HFP Capital Market, a firm that was expelled by FINRA in 2013. Apparently, FINRA’s risk-based approach identified certain brokers who had moved from HFP for heightened regulatory investigation, which confirmed FINRA’s suspicions. In settling the actions, the respondents neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.

According to Susan Axelrod, FINRA’s Executive Vice President, Regulatory Operations, FINRA will continue will continue to monitor brokers who move from expelled or high-risk securities firms. They will use data leveraged from their study of broker migration to expedite investigations and sanction brokers who tend to prey on vulnerable investors.