Broker Misconduct - Law Offices of Robert Wayne Pearce

Dec 3, 2015

Ameriprise Financial Broker Suspended for Failing to Supervise Private Securities Transactions

John Joseph Kilinofsky Jr., a broker with the Plano, Texas branch of Ameriprise Financial Services, Inc. (Ameriprise), submitted a Letter of Acceptance, Waiver, and Consent (AWC) in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) findings that he failed to reasonably supervise a registered representative’s outside business activities. According to FINRA, John Kolinofsky, the branch manager and supervisory principal of the Plano, Texas Ameriprise office, failed to supervise a broker’s participation in private securities transactions and outside business activities in compliance with his firm’s written supervisory policies and procedures. FINRA found that a registered representative, whom Mr. Kolinofsky had a duty to supervise, was allegedly involved in the sale of nearly $1.72 million of preferred shares issued by the biopharmaceutical company BioChemics Inc. FINRA further found that Mr. Kolinofsky knew that the registered representative was engaging in outside business activity with BioChemics and approved the disclosure forms which failed to note the unauthorized securities activity as required by FINRA Rule 2010. Moreover, FINRA found that Mr. Kolinofsky personally invested $10,000 in BioChemics without giving the required written notice to Ameriprise.

Dec 1, 2015

Cabot Lodge Securities Registered Principal Suspended for Failure to Supervise

Paul Reid Richardson, of Temple Terrace, Florida, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) in which he was suspended for 60 days for failing to supervise wire-transfer activity in customer accounts. Paul Richardson, a former registered principal with the Tampa, Florida branch of Cabot Lodge Securities LLC (Cabot), consented to, without admitting or denying, the sanctions and FINRA’s findings that he approved third-party wire transfers totaling nearly $89,000 from two customer accounts, which were later found to have been made by an imposter. By authorizing the wire-transfers, Mr. Richardson allegedly failed to properly review the distribution requests for funds. According to FINRA, Mr. Richardson relied on the representations of a firm broker as opposed to verbally confirming the wire instructions with the customers.

Nov 23, 2015

Royal Securities Broker Barred by FINRA for Unsuitable ETF Recommendations

Allen Michael Green, a former registered representative with the Ypsilanti, Michigan branch of Royal Securities Company (Royal Securities) submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) findings that he made unsuitable non-traditional exchange traded funds (ETF) recommendations to a disabled customer who had limited financial resources, causing the customer massive investment losses. According to FINRA, Allen Green believed that the world economy was on the brink of collapsing and recommended almost exclusively to invest in securities with precious metals, natural resources, commodities, and energy. Mr. Green allegedly recommended that his customer liquidate her existing variable annuity, which included a surrender charge of $59,583. As a result of following Mr. Green’s unsuitable recommendations, his client lost at least $193,165 which does not include the variable annuity surrender charge.

Nov 18, 2015

Merrill Lynch Broker Permanently Barred by FINRA for Unauthorized Trades and Unsuitable Recommendations

Thomas Joseph Buck, a former registered representative with the Carmel, Indiana branch of Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch), consented to, but did not admit to or deny, the sanction and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he made unsuitable account recommendations and exercised discretion in clients’ accounts. Thomas Buck, of Carmel, Indiana, allegedly conducted business under the designation “The Buck Group” with more than 3,000 accounts and $1.3 billion under management. According to FINRA, Mr. Buck neglected to adequately assess the suitability of the fee structure for certain clients – using commission-based accounts when it would have been less expensive for the clients to maintain fee-based accounts. FINRA found that in some instances, Mr. Buck’s clients paid substantially more in commissions than they would have if they were in fee-based accounts. Further, Mr. Buck allegedly misled clients about the potential advantages of fee-based accounts so that the clients remained in the higher-cost commission-based accounts. Mr. Buck also made unauthorized trades in certain customer accounts, allegedly neglecting to get the customers or Merrill Lynch’s prior written authorization as required by FINRA Rule 2010. Consequently, Mr. Buck was permanently barred from association with any FINRA member in any capacity.

Nov 13, 2015

LPL Financial Representative Suspended for Unauthorized Securities Transactions

Walter Rae Chao, a former broker with the San Mateo, California branch of LPL Financial, LLC (LPL Financial), 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 participated in private securities transactions totaling $1.27 million without the required approval from LPL Financial. FINRA found that Walter Chao, of Redwood City, California, introduced at least 13 clients to purchase interest in special purpose vehicles (SPV), which were created by another firm, in order to purchase pre-initial public offering (IPO) shares of Facebook, Inc. Nine of the 13 clients invested a total of $1.27 million in the Facebook SPVs. FINRA stated that although Mr. Chao did not receive direct compensation from the other firm for the transactions, approximately $8,000 in fees associated with Mr. Chao’s mother’s purchase of the Facebook SPV were waived.

Nov 11, 2015

J.P. Turner Broker Named in FINRA Complaint For Fraudulent and Unsuitable Mutual Fund Switching

Leonard Allen Goldberg, of Rancho Mirage California, was named a respondent in a Financial Industry Regulatory Authority (FINRA) complaint alleging that he caused over $123,600 in losses to five customers while making over $77,900 for himself and his employing firms, J.P. Turner & Company, LLP and Newport Coast Securities, Inc. According to FINRA’s complaint, Mr. Goldberg allegedly used discretion without the required written authorization to effect 300 mutual fund and exchange traded fund (ETF) transactions to the detriment of his customers. Additionally, the complaint alleges that Mr. Goldberg used that discretion to effect fraudulent and unsuitable short-term switches of Class A mutual funds in the same 5 customers’ accounts in order to generate commissions for himself. These mutual fund switches and short-term trading resulted in repeated fees and charges to his customers.

Nov 6, 2015

Fox Financial Representative Barred Amid Allegations of Unsuitable Life Settlement Recommendation

James Edward Rooney Jr., a former registered representative with Carrollton, Texas-based Fox Financial Management Corp. (Fox Financial) 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) sanctions in which he was permanently barred for refusing to provide documents and information requested in connection with an investigation regarding the suitability of his life settlement recommendation to a customer. FINRA’s investigation arose from a customer complaint regarding a life settlement investment recommendation. According to FINRA, Mr. Rooney allegedly made the life settlement recommendation without conducting the proper due diligence and expecting to receive a commission. The findings also state that Mr. Rooney allegedly misrepresented the investment and provided the customer with misleading sales materials which were oversimplified and incomplete.

Nov 4, 2015

Cambridge Investment Representative Barred Amid Allegations of Converting Client Funds

Glenn Allen Moffitt, a former registered representative with the Henderson Nevada branch of Cambridge Investment Research, Inc. (Cambridge) 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) sanctions and findings that he failed to appear for on-the-record testimony which was requested amid allegations that he converted approximately $370,000 from an elderly customer. FINRA Rule 8210 requires registered representatives to appear as requested for on-the-record testimony at any time. According to FINRA, Mr. Moffitt acknowledged that he received FINRA’s request for his testimony in conjunction with the conversion allegations investigation, but Mr. Moffitt refused to appear. Consequently, Glenn Moffitt, of Henderson Nevada, was barred from association with any FINRA member in any capacity.

Nov 2, 2015

Patrick Garrett Barred by FINRA for Misrepresenting Customer Account Value

Patrick Landon Garrett, a former Registered Representative with the Nashville, Tennessee branch of Robert W. Baird & Co. Inc., 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) sanctions and findings that he intentionally and knowingly misrepresented his customer’s account value and attempted to make the customer whole by misusing other customers’ funds. According to FINRA, Patrick Garrett, of Franklin, Tennessee, misrepresented his customer’s account value by approximately $200,000 in order to conceal the decreased value of her investments. Mr. Garrett allegedly told his customer that her printed and online statements were not accurate due to settlement date issues, which was false. Additionally, FINRA found that Mr. Garrett attempted to make the customer whole by misusing other customers’ funds to buy the initial public offering (IPO) shares in the first customer’s account, resulting in investment losses of over $34,000 to the other customers. Consequently, Patrick Garrett was permanently barred from association with any FINRA member in any capacity.

Oct 30, 2015

Louis Tinoco Permanently Barred by FINRA for Falsifying Account Summaries to Hide Losses

Louis Anthony Tinoco Jr., a former Registered Representative with Miami, Florida-based Barclay’s Capital Inc. (Barclay’s), 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) sanctions and findings that he provided a false account summary to his customer in order to conceal the losses incurred due to his trading activity. According to FINRA, Louis Tinoco provided his customer with a chart that supposedly reflected the monthly value of the customer’s Barclay’s account. The chart, prepared by Mr. Tinoco, overstated the actual value of the customer’s account by more than $200,000. Additionally, Mr. Tinoco failed to respond to FINRA’s request to appear and provide testimony in connection with their investigation, which is a violation of FINRA Rule 8210. Louis Tinoco, of Miami Beach, Florida, was permanently barred from association with any FINRA member in any capacity.