Stanley C. Niekras, of Liverpoll, New York, a stockbroker formerly associated with MML Investors Services, LLC, was charged by Financial Industry Regulatory Authority (FINRA) Department of Enforcement in a Complaint alleging that Niekras made misrepresentations to elderly customers pertaining to investments. Department of Enforcement v. Niekras, No. 2013037401001 (Nov. 7, 2016).
According to the Complaint, from 2001 to 2013, an elderly married couple, DP and VP, were customers of Niekras. Apparently, Niekras indicated in a 2011 internal memorandum that DP and VP were physically and mentally deteriorating; that VP did not comprehend DP’s and VP’s financial affairs. The Complaint stated that in December of 2012, MML brokerage accounts in the couple’s children’s names were opened by Niekras and funded with $500,000.00 in securities and cash that DP and VP gifted to their children.
The Complaint alleged that in February of 2013, the couple’s children were advised by Niekras to buy variable annuity products with the funds that their parents provided them. FINRA claimed that Niekras made misrepresentations to the children in reference to the variable annuities, in which Niekras apparently claimed that the children would not be subject to commissions because of purchasing the variable annuities. Apparently, Niekras projected that he would receive $75,000.00 in commissions associated with the sales.
FINRA alleged that the couple’s children refused to buy the variable annuities which Niekras recommended. The Complaint revealed that on March 27, 2013, Niekras provided DP with documentation purporting to be a billing estimate, in which Niekras stated that he was owed for record keeping and estate planning services which Niekras claimed to have provided to the couple between 2010 and 2013. According to the Complaint, Niekras informed DP that he was owed $69,330.17, broken down by providing over 264 hours of estate planning services at a rate of $250.00 per hour.
The Complaint further indicated that Niekras offered to relieve DP and VP of the proposed $69,330.17 bill, so long as the couple’s children moved forward with the purchase of the variable annuity investments. Niekras allegedly lied to DP regarding his company’s demand to be compensated for keeping him on the entity’s payroll, as justification for the bill. Apparently, DP was provided with another billing estimate on April 29, 2013, in which Niekras claimed to be owed $72,636.18 based upon financial planning services.
FINRA alleged in the Complaint that Niekras never had an agreement with DP and VP providing for financial planning or investment advisory services to be provided by him. Niekras allegedly knew that he could not expect to receive fees associated with such. The Complaint revealed that Niekras admitted that the only purpose of the bill was to provide Niekras with commissions he would have generated through selling the couple’s children the variable annuities.
Apparently, MML Investor Services was not apprised of the bill that Niekras provided DP and VP. The firm reportedly never agreed for DP and VP to be charged for Niekras’ alleged services pertaining to financial or estate planning. FINRA claimed that Niekras violated FINRA Rule 2010 due to his misrepresentations in this regard.
FINRA Public Disclosure reveals that Niekras has been subject to seven customer initiated investment related arbitration claims. Particularly, on May 28, 2002, a customer filed an investment related arbitration claim involving Niekras’ conduct, in which the customer requested $145,000.00 in damages based upon allegations that Niekras made unsuitable investment recommendations to the customer.
On November 12, 2003, a customer initiated investment related arbitration claim involving Niekras’ conduct was settled for $342,000.00 in damages based upon allegations that Niekras provided customers with poor investment advice concerning their investments.
On December 28, 2010, three customer initiated investment related arbitration claims involving Niekras’ conduct were settled for a total of $518,750.00 in damages based upon allegations that Niekras made misrepresentations to customers concerning withdrawal rates of variable annuities, and made unsuitable investment recommendations concerning annuities.
After Niekras’ termination from MML Investor Services in January of 2014, he became registered with Purshe Kaplan Sterling Investments from May of 2014 to October of 2015.
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