FINRA

SEC Announces 2016 Priorities that Involve Securities Industry Participants

February 5, 2016 | Malecki Law Team

The sad truth is that the Government loves the easy kill. It is often easier for regulators to extract settlements and punishments against smaller market participants, including brokers, traders and analysts, than the giant wire houses, because large companies can match the resources of the Government.

The Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA), among other regulators, regularly engage in investigations to explore, deter and punish market conduct that violates the securities laws and industry rules. While it can be hard to know what those investigations will be, the regulators like the SEC disclose regulatory priorities on an annual basis. These examination priorities are areas where the SEC will be dedicating resources throughout 2016.

Of the 2016 Priorities announced by the SEC, the following may lead to broad investigations:

A Summary of FINRA’S Regulatory Priorities in 2016

February 5, 2016 | Malecki Law Team

Recently, FINRA issued the 11th Regulatory and Examination Priorities Letter that addresses issues in the financial industry, if left unaddressed could adversely effect market integrity and investors. In 2016 their key points of emphasis have been identified as (1) culture, conflicts of interest and ethics; (2) supervision, risk management and controls; and (3) liquidity. The Letter also highlights specific policies and procedures the FINRA will use to ensure that member firms are compliant with the priorities identified.

According to Richard G. Ketchum, CEO and Chairman, FINRA, “ Firm culture, ethics and conflicts of interest remain a top priority for FINRA. A firm’s culture contributes to, and is also a product of, a firm’s supervision and its approaches to identifying and managing conflicts of interest and the ethical treatment of customers. Given the significant role culture plays in how a firm conducts its business, this year the letter addresses how we will formalize our assessment of firm culture to better understand how culture affects a firm’s compliance and risk management practices.”

Culture, Conflicts of interest and Ethics

FINRA FOCUS: Senior Investors

February 4, 2016 | Malecki Law Team

FINRA’s recently released Regulatory and Examinations Priority Letter made specific mention of multiple critical areas that the regulator will be focused on for the upcoming year. The one that we will focus on today is the Senior investor and the steps that are and should be taken to prevent elder abuse.

As we have discussed here before, with the growing population of senior aged investors, this demographic is becoming increasingly significant in the retail investor pool nationwide. Baby boomers are beginning to hit retirement age just as advancements in technology and medicine are leading to longer and longer lifespans.

Per 2012 census data, there are 76.4 million baby boomers which represent close to one-quarter of the then estimated U.S. population of 314 million. These figures have coupled with longer lifespans across the boards, means that there is the potential for disaster if baby boomers’ retirement savings are not properly managed. FINRA recognizes that “the consequences of unsuitable investment advice can be particularly severe for this investor group since they rarely can replenish investment portfolios with fresh funds and lack the time to make up losses.”

Investor Recovery Options As Tortoise Capital Advisor Funds Suffer Losses

January 29, 2016 | Malecki Law Team

The securities and investment fraud attorneys at Malecki Law are interested in hearing from investors in Tortoise Capital Advisors and explore their potential options for recovering their losses.

The Kansas-based Tortoise Capital Advisors is a “privately owned investment manager . . . that primarily provides its services to high net worth individuals . . . and caters to corporations, pooled investment vehicles, investment companies, and pension and profit sharing plans . . . typically invest[ing] in [the] energy and infrastructure sector,” per Bloomberg Business.

Among Tortoise’s portfolio of funds, a number of them declined between 17% and 36% in 2015 alone, per Morningstar.

BROKER REPORT: M&T Securities Financial Advisor Christopher T. Fenton

January 26, 2016 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Christopher T. Fenton. Mr. Fenton is currently employed and registered with M&T Securities, Inc., a broker-dealer, working out of the Buffalo, New York office, according to his publicly available BrokerCheck, as maintained by the Financial Industry Regulatory Authority. He was also previously registered with Pruco Securities Corporation.

According to his BrokerCheck report, Mr. Fenton has been the subject of three customer complaints while employed by M&T Securities, Inc. The latest customer complaint led to a FINRA arbitration proceeding, according to BrokerCheck records. The BrokerCheck records reveal that the customer alleged that misrepresentations, breach of fiduciary duty and recommendation of unsuitable investments were made. The dispute resulted in an award to the customer, according to the BrokerCheck report.

A review of the award, publicly available from FINRA’s website, discloses that the claimant also alleged that the causes of action related to an M&T Portfolio Architect Account and Rochester Fund Municipals. The award also disclosed that Mr. Fenton and his firm were found to be jointly and severally liable to the claimant for the award, as well as a portion of fees the claimant incurred in bringing the claim.

BROKER REPORT: Wells Fargo’s Gregg Lazarescu

January 26, 2016 | Malecki Law Team

The investment and securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints about Wells Fargo stockbroker Gregg D. Lazarescu.

According to his BrokerCheck report maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Lazarescu has been the subject of at least two customer complaints while registered with his prior firm Morgan Stanley.

In addition to Wells Fargo and Morgan Stanley, FINRA reports that Mr. Lazarescu was registered with MetLife, Chemical Investment Services Corp., Citicorp Investment Services, and Chase Investment Services Corp.

How Can Securities Lawyers Be Better Prepared To Work With Diminished Capacity and Assess Financial Capacity?

January 21, 2016 | Malecki Law Team

According to FINRA’s estimates, for the next 15 years, an average of 10,000 Americans will turn 65. Those of us who work with the elderly regularly, need to be attuned to deciding whether our clients have the capacity to make decisions regarding their financial affairs? All lawyers, be it in the practice area of estates, securities, or virtually any other discipline often have to make a capacity determination, while contracting services and sometimes along the way. We often have to determine if our client has the capacity to have entered into certain legal transactions.

According to the American Bar Association, Rule 1.14 that provides guidance on Client With Diminished Capacity (ABA):

(b) When the lawyer reasonably believes that the client has diminished capacity, is at risk of substantial physical, financial or other harm unless action is taken and cannot adequately act in the client’s own interest, the lawyer may take reasonably necessary protective action, including consulting with individuals or entities that have the ability to take action to protect the client and, in appropriate cases, seeking the appointment of a guardian ad litem, conservator or guardian.

BROKER REPORT: John Keyser of Dawson James Customer Complaints

January 20, 2016 | Malecki Law Team

The securities and investment fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against Florida stockbroker John T. Keyser. Mr. Keyser is reportedly registered with Dawson James Securities, Inc. in Boca Raton, Florida. Industry records indicate that Mr. Keyser has also recently been registered with Viewtrade Financial and SAL Financial Services.

According to BrokerCheck, as maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Keyser has been the subject of three customer complaints and a suspension of his license.

In 1998, Mr. Keyser reportedly had his FINRA (then NASD) license to sell securities suspended for failing to pay an arbitration award against him.

BROKER REPORT: Scott Teich of Raymond James in Florida

January 15, 2016 | Malecki Law Team

The securities and investment fraud attorneys are interested in hearing from investors with complaints involving Scott Teich of Raymond James. Per his BrokerCheck Report, maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Teich is a registered stock broker with Raymond James, based out of Florida.

Mr. Teich’s BrokerCheck Report indicates that he has been the subject of at least six customer complaints. He has also reportedly been the subject of an “employment separation after allegations.”

In addition to Raymond James, Mr. Teich has also been registered with Gruntal & Co., First Colonial Securities, Paragon Capital Corp (which FINRA reports was “expelled” from FINRA in 2004).

Customer Complaints Against Brian J. Gold of UBS in Florida

January 14, 2016 | Malecki Law Team

The investment and securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints regarding Florida-based UBS stockbroker Brian J. Gold.

According to his BrokerCheck report maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Gold has been the subject of no less than five customer complaints and was discharged from Morgan Stanley DW in 2004.

In addition to UBS and Morgan Stanley, FINRA reports that Mr. Gold has also been registered with Merrill Lynch in Florida, Advest in Connecticut, and Prudential in New York City.