New York Securities Fraud Lawyers Blog

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EMPLOYEE RECOVERY $2M FOR A WHISTLEBLOWING TRADER

INVESTOR RECOVERY $7.2+M FOR PONZI SCHEME VICTIMS

INVESTOR RECOVERY $3.9M FOR TAX SHELTER FRAUD VICTIMS

BROKER PONZI SCHEME $7.4 MILLION

FAILURE TO SUPERVISE $4+ MILLION

BROKERAGE THEFT $3.8 MILLION

PONZI AT MAJOR FIRM $4+ MILLION

FAILED PRODUCT 28 EXPUNGEMENTS

WHISTLEBLOWER AWARD MAX 30% BOUNTY

NO ACTION INSIDER TRADING CASE

NO ACTION EMBEZZLEMENT CASE

NO ACTION MARKET MANIPULATION

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New York Securities Fraud Lawyers Blog

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.

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.

BROKER REPORT: Joseph A. Miles Is the Subject of Third Customer Complaint

September 4, 2015 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Joseph A. Miles. Mr. Miles is believed to be currently employed and registered with St. Bernard Financial Services, Inc. based in Russellville, Arkansas. He was also previously registered with Clearing Services of America, Inc., American Capital Equities, Inc., Dominick & Dominick, Inc. and David Lerner Associates, Inc., according to industry records.

According to his BrokerCheck, as maintained by the Financial Industry Regulatory Authority (FINRA), Mr. Miles has been the subject of three recent customer complaints, including one complaint seeking $169,865.70 alleging that Mr. Miles sold bonds that declined in value, with damages granted of $100,000. The second most recent customer complaint alleged securities fraud, breach of fiduciary duty, common law fraud, and breach of contract related to South African Bonds which was settled for $75,000, according to FINRA records. The third complaint involved allegations of fraud, breach of contract and negligence and was settled after the death of the customer, per BrokerCheck records.

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