Securities Fraud & Unsuitable Investments

BROKER REPORT: Customer Complaints Against James Bracey

September 14, 2015 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints regarding former stockbroker James J. Bracey IV. According to his BrokerCheck report maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Bracey is no longer FINRA licensed to sell investments. He has reportedly been the subject of no less than four customer complaints.

Mr. Bracey has also reportedly been barred by FINRA for his conduct related to real estate projects. FINRA reports that this misconduct involved Mr. Bracey receiving an unapproved loan from a customer in violation of FINRA rules and falsifying a customer document. Per FINRA, Mr. Bracey was discharged from LPL Financial, where he had worked since 2010, “after allegations.”

In 2010, Mr. Bracey was the subject of two customer complaints, per FINRA. One complaint alleged “misrepresentation and suitability issues,” while the other alleged “misrepresentation of the REITs she purchased and the fees involved.” FINRA records indicate that one customer recovered $105,000 as a result of their complaint.

Leveraged ETFs Remain a Risky Investment, Not Suitable for Most Individual Investors

September 8, 2015 | Malecki Law Team

Investors who have been watching the recent financial news know that securities markets have become very volatile over the past month. Increased volatility in the markets makes leveraged products like Exchange Traded Funds (EFTs) and Exchange Traded Notes particularly risky for most individuals investors, as noted in a recent Wall Street Journal article published on September 4, 2015.

These securities products incorporate borrowed money (termed leverage in the securities industry), which has the effect of amplifying gains and losses tied to baskets of securities that are often concentrated in one industry or commodity.

Malecki Law has written about these products in the past, noting that broker-dealer firms such as Stifel, Nicolaus & Co., Inc. and Century Securities Associates Inc. were fined by the Financial Industry Regulatory Authority (FINRA) for making unsuitable recommendations to investors.

BROKER REPORT: Customer Complaints Against Financial Adivisor Jared Cohen

September 8, 2015 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Jared Cohen. Mr. Cohen is reportedly registered with Ameriprise Financial Services, Inc., based out of Armonk, NY. He has also recently been registered with IDS Life Insurance Company, according to industry records.

According to BrokerCheck, as maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Cohen has been the subject of two customer complaints in the past six years. Mr. Cohen has been the subject of complaint alleging misrepresentations of investment risk and over-concentration in non-traded Real Estate Investment Trusts (“REITs”), as well as misrepresentations surrounding the sale of preferred stock recommendations, per FINRA records.

Of these customer disputes, FINRA records indicate that one customer initiated a FINRA arbitration and recovered $25,000 in a settlement with Ameriprise.

BROKER REPORT: John Smallwood of Commonwealth Financial

September 5, 2015 | Malecki Law Team

The securities fraud attorneys are interested in hearing from investors with complaints involving John Smallwood of Commonwealth Financial Network. Per his BrokerCheck Report, maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Smallwood is a registered stock broker with Commonwealth, based out of Red Bank, NJ.

Mr. Smallwood’s BrokerCheck Report indicates that he has been the subject of at least two customer complaints in the past three-plus years. Per FINRA, the complaints against Mr. Smallwood have alleged unsuitable investment recommendations and breach of fiduciary duty, among other things.

FINRA records indicate that Mr. Smallwood’s customers have recovered $90,000 and $97,500 respectively in connection with their complaints.

FINRA Cautions Investors of Financial Fraud On WhatsApp

September 4, 2015 | Jenice L. Malecki, Esq.

Financial Industry Regulatory Authority (FINRA ) issued a new investor alert this week, Messaging Apps Are Latest Platform for Delivering Pump-And-Dump Scams, warning investors to be wary of investment schemes forwarded to them on the popular messaging platform WhatsApp.

Recently, there were messages forwarded on the WhatsApp platform, claiming that the stocks of the microcap company Avra Inc (OTC: AVRN) were set for double digit growth. FINRA’s Senior VP for Investor Education, Gerri Walsh warned that financial schemers are keeping up with times and leveraging popular technology platforms to bilk investors. In this instance, the financial prediction about AVRA stocks appeared to be coming from well-known brokerage firms.

In traditional pump and dump schemes, microcap stocks are artificially inflated by fraudsters through false and misleading statements, to sell their cheaply purchased stocks at a high price. Once all the overvalued stocks are “dumped” by them, the prices crash and investors lose their money. This latest Avra scam is a variation of the pump-and-dump, where they were trying to use the mass message push feature to inflate the price of the stock and then leave investors holding nearly worthless investments.

Senior-Aged Investors and other Conservative Investors Likely at Risk in Current Low-Yield Environment

August 26, 2015 | Malecki Law Team

The recent market correction has caused many people to worry about the performance of their securities accounts. Senior-aged investors (and other conservative investors) are particularly at risk for losses in their accounts if they were inappropriately invested too heavily in equities and other alternative investments.

The Op-Ed published in the Wall Street Journal on August 24, 2015 notes that the low-yield bond environment has enticed some investors to “climb on the bandwagon of rising share prices.” Brokers may be similarly tempted to recommend risky stocks to their conservative investors, and to recommend concentrated levels of stocks. However, what may be suitable for a middle-aged investor may not be suitable for an senior-aged investor.

Suitability is an important investor-specific inquiry both the broker and broker-dealer must perform to ensure the investments that are recommended are appropriate given the age, relative wealth, experience and risk tolerance of each investor, among other factors. A broker’s unsuitable recommendations could be especially problematic for those investors seeking stability and safety of principal, including senior-aged investors who rely on their securities portfolios to generate income.

BROKER REPORT: Former Financial Advisor Manuel Dopazo

August 25, 2015 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in investigated possible claims on behalf of investors who have complaints regarding former stockbroker Manuel Dopazo. According to his BrokerCheck report maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Dopazo has been the subject of multiple customer disputes in just the past ten years.

Per FINRA, in 2015 a customer complaint involving Mr. Dopazo alleged misrepresentations, omissions, failure to supervise, and the recommendation of unsuitable investments seeking $640,000 in damages.

In 2009, Mr. Dopazo was involved with another customer dispute alleging a $30,000 loss, per BrokerCheck. Another customer complaint, in 2008, alleged more than $50,000 in losses stemming from suitability violations.

BROKER REPORT: Over Ten Customer Complaints Against Michael Fasciglione

August 20, 2015 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Michael Fasciglione. Mr. Fasciglione is believed to be registered with National Securities Corporation, based out of Mineola, NY. He has also recently been registered with Oppenheimer & Co. and First Montauk Securities, according to industry records.

According to BrokerCheck, as maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Fasciglione has been the subject of more than 10 customer complaints. Stretching back as far as 1995, Mr. Fasciglione has been accused of recommending unsuitable investments to customers, breach of fiduciary duty, churning, excessive trading, fraud, unauthorized trading, taking excessive risk, misrepresentations, allowing a customer’s account to exceed comfortable margin balances, and charging excessive commissions, per FINRA records.

Of these customer disputes, FINRA records indicate that some customers received back tens of thousands of dollars in connection with their complaints. One customer reportedly received back $300,000 in connection with an unauthorized trading complaint, while another reportedly received $120,000 in a suitability claim.

Citigroup Affiliates Charged With Defrauding Investors Settle with SEC For $180 Million

August 18, 2015 | Jenice L. Malecki, Esq.

The Securities and Exchange Commission (SEC) announced this week that two Citigroup Affiliates, Citigroup Global Markets Inc. (CGMI) and Citigroup Alternative Investments LLC (CAI), agreed to pay $180 million to settle charges of defrauding investors with false and misleading claims. According to allegations, these Citigroup affiliates had claimed that their hedge funds, Falcon fund and ASTA/MAT, were low-risk products safe for traditional bond investors, however, these funds collapsed during the financial crisis.

According to SEC’s investigations, the above mentioned Citigroup affiliates raised almost $3 billion from 4,000 investors by making false and misleading representations for their hedge funds. They are reported as having continued to claim that these funds were low-risk and made false assurances about liquidity even as the funds started collapsing. The investigation also revealed that CAI raised $110 million in additional investments even when the fund was in dire situation and Citigroup employees presented the funds to investors in a manner that was at odds with the fine print in the written and marketing materials provided to investors. The Citigroup affiliates consented to settle without admitting or denying the findings that they willfully violated Sections 17(a)(2) and (3) of the Securities Act of 1933, GCMI willfully violated Section 206(2) of the Investment Advisers Act of 1940, and CAI willfully violated Section 206(4) of the Advisers Act and Rules 206(4)-7 and 206(4)-8. The firms have also consented to censure and will cease and desist from future violations.

Malecki Law takes a proactive and informed approach to national and international financial news of today. This represents a classic case of Securities Fraud where investors are misled into investing in unsuitable products. SEC holds investment firms and brokers accountable for looking out for investors’ best interests and the team at Malecki Law represents and guides investors who have been victimized by false claims, false assurances and misrepresentations. For a comprehensive list of kinds of Securities Fraud please click here and contact us if you feel you have suffered similar losses.

BROKER REPORT: Churning Complaints Regarding Dwarka Persaud

August 18, 2015 | Malecki Law Team

The securities fraud attorneys are interested in hearing from investors with complaints involving Dwarka Persaud. Per his BrokerCheck Report, maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Persaud is a registered stock broker with Buckman, Buckman & Reid, based out of Shrewsbury, NJ.

Mr. Persaud’s BrokerCheck Report indicates that he has been the subject of at least six customer complaints. At the center of several of these complaints was churning and excessive commissions. Churning is the frequent,over-trading of a customer’s account by the broker to generate high commissions paid by the customer, benefitting the broker and the firm. Churning is against the law and industry regulations.

Mr. Persaud is reportedly the subject of at least two currently pending customer complaints, each alleging and “unauthorized trading.” One of these complaints also alleges churning. The other alleges that the unauthorized trading caused more than $45,000 in losses.