Broker Misconduct - Law Offices of Robert Wayne Pearce

Oct 28, 2016

Merrill Lynch Broker Named in FINRA Complaint Amid Allegations of Misrepresented Investment Recommendations

Landon L. Williams, a former Daytona Beach, Florida-based registered representative with Merrill Lynch, Pierce, Fenner & Smith, was named a respondent in a Financial Industry Regulatory Authority (FINRA) complaint alleging that he made false and/or misleading statements to customers regarding the securities transactions he was recommending. According to the FINRA complaint, Mr. Williams participated in phone conversations with five different customers and allegedly made misleading and/or false statements and/or failed to disclose material information about securities recommendations. While employed as a Financial Solutions Advisor in the firm’s Merrill Edge Advisory Center (Merrill Edge), Mr. Williams, working in a Merrill Edge call center, allegedly recommended that a customer sell her positions in the Blackrock Core Bond Fund Class C and invest in the Blackrock Funds Diversified Portfolios IV (Growth) Class A. Mr. Williams allegedly told his client that by switching to the “A” share, she would realize a 2% increase in her annual rate of return. This statement was alleged by FINRA to be false and misleading.

Oct 24, 2016

FINRA Files Complaint Against Bay Mutual Financial Broker For Alleged Unsuitable Recommendations

Christopher Ariola, of Santa Monica, California, was named a respondent in a Financial Industry Regulatory Authority (FINRA) complaint alleging that he made unsuitable recommendations to elderly retirees to invest in gold and energy stocks. As a result of his unsuitable recommendations, FINRA alleges that his customers suffered combined losses totaling approximately $140,000. Formerly registered with Bay Mutual Financial, LLC, a Santa Monica, California based broker dealer, the now unlicensed Christopher B. Ariola is alleged to have recommended to three elderly retirees to invest a substantial portion of their limited retirement assets in gold and energy stocks. Mr. Ariola’s alleged recommendations were unsuitable in light of the customers’ financial circumstances, investment objectives, and low to moderate risk tolerances.

Oct 21, 2016

MetLife and Pruco Securities Broker Barred by FINRA for Misrepresentations in Connection with Variable Annuities

Winston Turner, a former broker at Pruco Securities LLC, and MetLife Securities, Inc., was permanently barred from acting as a broker or associating with firms that sell securities to the public by the Financial Industry Regulatory Authority (FINRA) due to findings that he made fraudulent misrepresentations and omissions in connection with variable annuity investments. FINRA found that Winston Turner, of Tampa, Florida, induced three customers to purchase securities by intentionally making misstatements regarding the earnings to be generated by their variable annuities. According to FINRA, Mr. Turner falsely told three customers that their variable annuity investments would earn a “guaranteed” minimum annual interest and misrepresented to a customer the tax implications of her variable annuity purchase. FINRA also found that Mr. Turner attempted to circumvent his member firm’s supervisory system by misrepresenting the source of funds in connections with variable annuity applications. Further, Mr. Turner misrepresented to his firm his personal email address as the email address of his customers in order to ensure that the customers were not contacted.

Oct 20, 2016

Allstate Financial Services Broker Suspended by FINRA for Forging Customers’ Signatures

William Kerschbaumer, a broker formerly employed by the Carrollton, Ohio branch of Allstate Financial Services, LLC, submitted a letter of Acceptance, Waiver, and Consent (AWC) in which he consented to, but did not admit to or deny, the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he forged two customers’ signatures without the customers’ knowledge or consent. William Fredrick Kerschbaumer Jr., of New Philadelphia, Ohio, was found by FINRA to have forged the signatures of two customers on four documents which were related to their annuity investments. FINRA’s findings state that Mr. Kerschbaumer forged a customer’s signature on two variable annuity distribution forms and, approximately three months later, again forged the same customer’s signature on a letter requesting restoration of a rider to an annuity investment without the customer’s knowledge or consent. Further, FINRA found that Mr. Kerschbaumer forged the signature of a second customer on a letter to the firm requesting a distribution from the IRA account of the customer’s ex-husband, once again without the customer’s knowledge or consent.

Oct 14, 2016

FINRA Files Complaint Against Newport Coast Securities Broker For Allegedly Converting Customer Funds

David Braeger, of Bayside, Wisconsin, was named a respondent in a Financial Industry Regulatory Authority (FINRA) complaint alleging that he converted $33,000 of his customers’ funds and misrepresenting to the customers, through falsely stated quarterly reports and tax documents, that their investment funds were invested as they had instructed. Formerly registered with Newport Coast Securities, Inc., an Irvine, California based broker dealer, the now unregistered David Oscar Braeger is alleged to have obtained a total of $30,000 from his customers, who instructed him to invest the funds in a private offering for Rubicon Capital Appreciation Fund (Rubicon), an entity that Mr. Braeger founded and managed. However, Mr. Braeger allegedly never invested the customers’ funds as instructed and allegedly never returned the funds to his customers.

Oct 12, 2016

Signator Investors Broker Suspended by FINRA for Allegedly Forging Customer Signature

Thomas Vigil, a General Securities Representative formerly employed with the Warwick, Rhode Island branch of Signator Investors, Inc. (Signator) and the Westboro, Massachusetts branch of MetLife Securities, Inc. (MetLife), submitted a Letter of Acceptance, Waiver, and Consent in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) findings that he impersonated a customer to obtain an annuity surrender form, falsified account documents, and forged a customer’s signature all without the customers’ knowledge or consent. Mr. Vigil consented to the sanctions described below. FINRA’s findings state that while employed by Signator, Thomas A. Vigil, of Saunderstown, Rhode Island, falsified a 403(b) rollover form for one of his customers by whiting out the date from an earlier, validly signed form and writing in the current date. Mr. Vigil allegedly did this without the customer’s knowledge or consent. Furthermore, Mr. Vigil allegedly forged the signature of another customer on a change of broker-dealer form without the customer’s knowledge or consent. In both instances, FINRA found that Mr. Vigil, when asked about the falsified documents, initially denied the actions, but later acknowledged the misconduct. FINRA also found that while employed by MetLife Securities, Mr. Vigil impersonated a customer on a call to an insurance company to obtain an annuity surrender form.

Oct 11, 2016

Raymond James Broker Fined and Suspended for Unauthorized Account Withdrawals

Paul Hack, a broker employed by Raymond James & Associates, Inc. (Raymond James), submitted a Letter of Acceptance, Waiver and Consent in which he consented to, but did not admit to or deny, the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he accepted instructions from a customer’s husband to withdraw account funds of at least $200,000 without that customer’s written authorization and sanctions described below. Paul Hack, of Bloomfield Hills, Michigan, was the registered representative for the accounts held by the customer involved in this matter. FINRA found that between January 2008 and December 2011, the customer’s spouse, who allegedly had no authority over the accounts, requested that Mr. Hack or his assistants withdraw funds from the customer’s accounts. The customer’s spouse allegedly requested these funds withdrawals on at least 20 occasions. Notwithstanding the policies of Raymond James, which required a written Letter of Authorization (LOA) from the customer and prior approval from the Branch Office Manager, Mr. Hack’s sales assistants delivered checks to the customer’s spouse which were drawn on the accounts of the customer. Consequently, Mr. Hack was fined $10,000 and suspended from association with any FINRA member in any capacity for 10 business days. The suspension was in effect from August 15, 2016 through August 26, 2016.

Oct 3, 2016

First Financial Equity and CCO Named in FINRA Complaint for Failure to Supervise Violations

Scottsdale, Arizona-based First Financial Equity Corporation (First Financial) and the firm’s Chief Compliance Officer (CCO), Melissa Ann Strouse, were named in a Financial Industry Regulatory Authority (FINRA) complaint alleging that the firm failed to establish and maintain a proper supervisory system with respect to the appropriateness of fee-based accounts and the monitoring of accounts for potential churning and excessive trading. Melissa Strouse was named in FINRA’s complaint amidst allegations that as the firm’s CCO, she was responsible for ensuring the firm’s compliance with supervisory procedures. According to the FINRA complaint, First Financial Equity had inadequate written supervisory procedures (WSPs) with respect to the appropriateness of fee-based accounts for the firm’s customers and had no system in place to address situations where excessive fees may have been charged. Further, the Complaint alleges that First Financial failed to maintain and enforce a supervisory system related to its options business and that the firm allegedly had no WSPs for the supervision, approval and sale of exchange-traded funds (ETFs). For her part, the Complaint alleges that Melissa Strouse failed to ensure that the WSPs covered all required areas and were amended as needed.

Sep 30, 2016

National Securities Broker Fined and Suspended for Fraudulent Wire Transfers

Stephanie Lynn Fagenson, of New York, NY, allegedly caused two fraudulent wire disbursements to be transferred from her customer’s account to a third-party bank. According to FINRA, Ms. Fagenson received an email from an imposter posing as her customer requesting $100,000 to be wired to a third-party bank account. Ms. Fagenson allegedly processed the wire request without orally confirming the request with the customer, as was required by her member firm. Two weeks later, Ms. Fagenson purportedly received another email from the imposter requesting another wire transfer. This time, the request was for $200,000 and, again, Ms. Fagenson allegedly processed the wire without orally confirming with her customer. Ten days following the second wire transfer, Ms. Fagenson supposedly found out in a conversation with her customer that the customer’s email account had been hacked and that none of the wire requests had come from the customer. FINRA assessed a fine of $5,000 and suspended Ms. Fagenson from association with any FINRA member in any capacity for 45 days. The suspension is in effect from August 15, 2016 through September 28, 2016.

Sep 28, 2016

Craig Scott Capital Broker Permanently Barred for Excessive & Unsuitable Trading

According to a Default Decision recently issued by the Financial Industry Regulatory Authority (FINRA), David Cannata, formerly employed by Craig Scott Capital, has been permanently barred from working as a stockbroker in the securities industry. Mr. Cannata was named in a FINRA Complaint for allegedly engaging in a pattern of unsuitable and excessive trading in accounts of three customers, one of whom was a 92 year old retiree, causing the clients to collectively suffer losses of $1,566,298.14. According to FINRA, Mr. Cannata had de facto control over the customers’ accounts and employed a trading strategy which generated extraordinary levels of activity and disregard of his customers’ interests and financial objectives, thereby maximizing his own compensation. For example, FINRA alleged with respect to the account of the 92 year old retiree, Mr. Cannata engaged in 128 trades in a span of 5 months, generating over $95,000 in commissions and fees. In another customer’s account, Mr. Cannata allegedly engaged in 1,680 trades in a nine month time span, generating over $690,000 in commissions and fees.