Category: FINRA Securities Arbitration

As one Court has recently observed, “herculean efforts” by securities broker-dealers “to avoid resolution of disputes through arbitration” is not new. The brokerage industry is responsible for the creation of mandatory arbitration. Arbitration agreements are contained in virtually every customer agreement with every broker-dealer carrying securities in America. The duty to submit to arbitration all…

On December 7, 2017, the United States Securities and Exchange Commission and the Department of Justice, through the United States Attorney for the Eastern District of Pennsylvania filed a civil action and a criminal indictment against Paul Wescoe Smith fomerly associated with Bolton Global Capital. On May 24, 2017, the Guiliano Law Group filed a…

In 2002, in the wake Worldcom and Enron the United States Congress among other things amended the United States Bankruptcy Code to provide that Bankruptcy Code does not discharge an individual debtor from any debt incurred in connection with the violation of any of the Federal securities laws (as that term is defined in section…

By: Dana N. Pescosolido We’ve all heard the warnings, for many years now. The population is aging, the baby-boomers are starting to retire, and as they age, the opportunities for exploitation by unscrupulous brokers will increase exponentially. Some sources say that upwards of $7 trillion in retirement assets will be in play. States like Florida…

Heath Marell, Susan Marell and James Marell filed a claim in March 2016 against Mark Allan Plummer and Texas E & P Partners, Inc., alleging breach of contract, failure to supervise, negligence, intentional fraud and misrepresentation, among other claims. The claims related to Chestnut GEB Joint Ventures and Chestnut 2007 4×4 Joint Venture. The Washington…

Federal prosecutors and the SEC recently filed separate but related complaints against Dawn J. Bennett, a 28-year industry veteran, alleging that she conducted a Ponzi-like scheme through her investment company, DJB Holdings, LLC. Bennett worked out of Washington, DC. According to the complaints filed in Maryland federal court, Bennett and her firm sold convertible notes…

Adam K. Veron, a broker formerly employed at Questar Capital Corporation in Lake Charles, LA, has agreed to be barred from the securities industry. In mid 2015, Veron formed Contract Funding & Corporate Management LLC (“CFCM”), naming himself as president. From July 2015 until December 2016 he then sold approximately $1.8 million of shares of…

William H. Merriam IV recently signed a letter of acceptance, waiver and consent (“AWC”) with FINRA agreeing to be barred from the securities industry. Merriam joined Merrill Lynch in June 2014 to work in the Jacksonville FL branch office of Merrill Lynch. He worked with his father. In January 2017 Merriam voluntarily resigned from Merrill…

An Omaha Nebraska FINRA panel has awarded $440,000 if favor of the beneficiaries of an estate. Kari Larson opened two individual retirement accounts with Ameriprise in Nebraska in 2013. She later opened a third non-retirement account with the firm. The claimants Tab and Jan Larson were named as beneficiaries for the IRAs. After Kari Larson…

A FINRA hearing panel has barred broker Edward Byen and his two supervisors, Craig Scott Taddonio and Brent Morgan Porges, from the securities industry. They all previously worked at Craig Scott Capital of Uniondale, NY. FINRA filed an enforcement complaint in December 2015 alleging that the “firm and its owners had fostered a culture of…

Anthony Vincent Ferrone entered into an acceptance, waiver and consent agreement (“AWC”) with FINRA and has been barred from the securities industry. Ferrone was the subject of a FINRA investigation concerning the unsuitable sales of unit investment trusts to customers. Ferrone was actually in the middle of an on the record interview (“OTR”) being conducted…

In an arbitration award dated June 27, 2017, a three-member panel awarded Oregon investors Scott and Jan Tullis $192,103 in damages and interest against Ameriprise Financial Services, Inc., and its broker, Andrew Joseph Hall. Hall worked in Portland, Oregon. The panel gave a one-paragraph explanation for the award. The panel determined that respondents engaged in…

David Leonard Sheppard, a former broker who worked in New York and Massachusetts, was barred from the securities industry in April 2017. Sheppard was in the middle of a FINRA inquiry. FINRA was investigating Sheppard for potential excessive trading and churning in multiple customer accounts. In conjunction with its investigation, FINRA requested that Sheppard appear…

On July 24,2017 a FINRA arbitration panel in Wyoming awarded John and Kathleen Keck $559,612 based on their claim of negligence against RBC Capital Markets LLC and three RBC brokers, Jacqueline Sarette Georgio, Paul Samuel Howard and Brian Kristian Pedersen. The award was joint and several against the four respondents. They worked out of an…

By: Dana N. Pescosolido Overall win rates for the first six months of 2017 are consistent with the past, but All-Public Panels gave awards to Claimants more often than in the past, and almost twice as often as did Majority-Public Panels. Recovery Rates are running higher this year, with compensatory awards averaging 63% of the…

RBC Wealth Management has settled a customer complaint filed by a prominent Indianapolis, IN family for $3.5 million. The settlement occurred in April of this year. According to news reports and FINRA filings, the family of the late Robert Skinner, co-founder of Skinner and Broadbent, Inc., a prominent shopping center developer in the Midwest, settled…

Aaron Robert Parthemer was barred from the securities industry by FINRA in 2015. The bar resulted from Parthemer’s unapproved outside business activities, inappropriate and unapproved loans to customers and unapproved private securities transactions. Parthemer worked in Ft. Lauderdale, FL, at Morgan Stanley from June 2009 to October 2011. He then worked at Wells Fargo, also…

These are only allegations, these are only allegatons, there are only allegations. FINRA filed a complaint in February, 2017, alleging that former Edward Jones broker Austin Morton of Sallisaw, Oklahoma, converted $36,000 from an elderly former client. This tale of woe begins in November 2016, when the daughter of the client, with a power of…

A FINRA arbitration panel from New York issued an award dated July 10, 2017, in favor of customer Timothy McLaughlin against Northeast Securities, Inc., and three of its employees, Steven Joseph Perrone, Diane Hawkins and Jonathan Michael Zucker. Northeast Securities and the three employees were all named as respondents in the claim.  FINRA Arbitration No….

On July 13, 2017, a FINRA arbitration panel issued an award finding that Wedbush Securities and its former broker, Mark F. Augusta, “engaged in improper conduct” regarding two elderly customers, Agatha and John Dancy, 16-00847. The hearing took place in Los Angeles, CA. Augusta worked out of Wedbush’s Solana Beach, CA office. The arbitration claim,…

On June 2, 2017, Nevada Governor Brian Sandoval signed Senate Bill 383, which amends the Nevada Securities Act to include broker-dealers, investment advisors and their individual representatives as fiduciaries. The bill went into effect on July 2, 2017. Under Nevada securities law, “financial planners” are defined and considered to be fiduciaries in relation to their…

Former Sterne Agee Baton Rouge, LA broker James K. Cox recently submitted a letter of Acceptance, Waiver and Consent (“AWC”) to settle a regulatory investigation with FINRA. In the fall of 2014, Cox, then employed at Sterne Agee, convinced a client to switch from one variable annuity (“VA”) to another. He also had the client…

In early June, FINRA filed a regulatory complaint against former Morgan Stanley broker Kim Dee Issacson. Issacson had worked in Morgan Stanley’s Salt Lake City branch from December 2008 until February 2014. The regulatory complaint is apparently related to a customer arbitration claim filed against Issacson by Keith Melton and seven related entities in 2014…

The Financial Industry Regulatory Authority or FINRA, and its President and Chief Executive Officer, Robert Cook, recently announced that FINRA is implementing various measures to rein in high-risk brokers and brokerage firms (also referred to as “rogue” brokers and firms). In fact, in recent months, there have been an interesting trend in particularly the New…

Securities regulations, and their enforcement, impede capital formation. Must be time for a cocktail party for crowd funding in Harisburg. The Pennsylvania Department of Banking and Securities Bureau of Securities recently completed an investigation and obtained a consent order against of Premier Innovations Group, Inc. , Clique Vodka Ltd. and Noah Cohen. Premier has offices…

On May 24, 2017 David Lerner Associates (“DLA”) signed a consent order with the New Jersey Bureau of Securities involving the company’s sales of non-traded REITs. DLA is a broker-dealer with offices in New York, New Jersey and Boca Raton, Florida. Since 1992, DLA has been the underwriter and sole distributor of 10 Apple non-traded REITs….

Unfortunately, for what is a substantial percentage of claimants who win arbitration awards against their brokers and/or their brokerage firm, FINRA has declined to address an all to common situation that investors face – that of unpaid arbitration awards. Last week, FINRA’s governing board failed to significantly address the problem of unpaid arbitration awards that…

By: Dana N. Pescosolido Once again, the author analyzes FINRA customer arbitration awards in his unique way, and draws comparisons between 2015 and 2016.  Bottom line, customers won “something” a little less often in 2016, but won a little more money when they did.  Read on for a detailed analysis. FINRA’s published statistics are accurate…

As a matter of firm policy, we have always recommended that our clients cooperate with securities regulators. Since 2009, the Central Review Group, Office of Fraud Detection and Market Intelligence of the Financial Industry Regulatory Authority or FINRA “performs preliminary investigations on certain matters and analyzes regulatory filings, investor complaints and other sources of regulatory…