Broker Misconduct - Law Offices of Robert Wayne Pearce

May 15, 2015

Former Fifth Third Securities Broker Permanently Barred For Misappropriating Investor Funds

Former Fifth Third Securities, Inc. (Fifth Third Securities) broker Steven Dunkelberg 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 misappropriated $4,970.08 of a customer’s bank account without the customer’s knowledge or consent. According to FINRA, Steven James Dunkelberg Jr., of Grand Rapids, Michigan, forged his customer’s name on five different occasions on bank account withdrawal slips. Mr. Dunkelberg allegedly made the withdrawals from his customer’s Fifth Third Securities account without the customer’s knowledge or consent. FINRA found that Mr. Dunkelberg misappropriated $4,970.08 from the customer’s account. Consequently, Steven Dunkelberg was barred from association with any FINRA member in any capacity.

May 4, 2015

Liberty Partners Stockbroker Barred by FINRA for the Fraud of an Elderly Client

Ronald Paul Rafaloff, a former registered representative with the Bakersfield, California branch of Liberty Partners Financial Specialists, LLC (Liberty Partners) 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 converted $168,000 of an elderly customer’s investment funds for his personal use and benefit. According to FINRA, Ronald Rafaloff’s only client, a 74 year old retiree, invested $405,000 of her retirement money into three speculative business entities. The business entities, for which Mr. Rafaloff claimed to provide consulting services, were actually founded and controlled by Mr. Rafaloff. In order to persuade his elderly client to invest, Mr. Rafaloff allegedly promised annual returns of 30-40% and a repayment of her principal in three years. He also allegedly provided the elderly investor with written guarantees against losses, agreeing to personally make payments to the investor if the business entities should default. FINRA found that none of the companies held sufficient funds to cover the return of principal or the high rates of returns promised by Mr. Rafaloff.

May 1, 2015

Former Morgan Stanley Broker Fined and Suspended for Discretionary Trade Violations

Debra Kaye Lyman, a former registered representative with the Holladay, Utah branch of Morgan Stanley, submitted a letter of acceptance, waiver, and consent in which she consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) findings that she entered discretionary trades in several customers’ accounts without the necessary prior written customer authorization. FINRA found that Debra Lyman, of West Jordan, Utah, neglected to obtain the necessary written customer authorization or the acceptance by her firm of the accounts as discretionary when she effected discretionary trades in at least six customers’ accounts. According to FINRA, Debra Lyman had been previously reprimanded and suspended by Morgan Stanley for engaging in similar broker misconduct. Further, Ms. Lyman allegedly misrepresented on a Firm Employee Sales Questionnaire that she had not transacted business on a discretionary basis for any accounts.

Apr 29, 2015

Michael Korson Barred by FINRA for Failure to Disclose Outside Business Activities

Michael Willard Korson, a former registered representative with PFS Investments, Inc. (PFS Investments) and HBW Securities, LLC (HBW Securities) has been barred from association with any Financial Industry Regulatory Authority (FINRA) member in any capacity for allegedly failing to report his outside business activities and other industry violations. Without admitting or denying FINRA’s findings, Michael Korson consented to the sanctions and to the findings that he neglected to timely and accurately notify his member firm of his outside business activities. Mr. Korson also falsely stated when his involvement with the outside business first began. According to FINRA, Mr. Korson participated in private securities transactions, involving his outside business, with sales of convertible debentures to firm customers. He also participated in the sale of preferred stock to a non-customer without providing the necessary prior written notice to his firm.

Apr 27, 2015

Former NYLIFE Securities Broker Barred by FINRA for Converting Funds of an Elderly Investor

William Robert Kinyon, a former registered representative with the Castleford, Idaho branch of NYLIFE Securities LLC (NYLIFE Securities) 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 converted funds from an elderly customer’s account for personal use. According to FINRA, William Kinyon’s elderly brokerage customer told him that she wanted to deposit $3,000 into one of her variable annuity accounts. Mr. Kinyon, however, deposited the check into his personal checking account and allegedly used the funds to make multiple personal purchases at stores such as Walmart and Costco.

Apr 24, 2015

Former Edward Jones Broker Fined by FINRA for Unsuitable Investment Recommendations

Dalas L. Gundersen, a former Registered Representative with the Willows, California branch of Edward Jones, 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) sanction and findings that he made unsuitable investment recommendations to his customers in light of their financial goals. FINRA’s findings alleged that Dalas Gundersen, of Arbuckle California, recommended that a married couple invest in an intermediate municipal bond mutual fund, even though the investor couple had inquired about investing in oil and gas master limited partnerships. According to FINRA, the couple acted upon Mr. Gundersen’s recommendation and purchased nearly $1.26 million in mutual fund, which represented 80% of their net worth.

Apr 23, 2015

Former Wells Fargo Broker Barred by FINRA for Soliciting Customers into Unapproved Investments

Douglas Jay Melzer, a former broker with the Sewickley, Pennsylvania branch of Wells Fargo Advisors, LLC (Wells Fargo), 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 solicited his firm’s customers to invest $2 million in an unapproved outside investment. According to FINRA, Douglas Melzer, aka Dutch Melzer, solicited four of his Wells Fargo customers to invest $2 million in an investment contract that had not been approved by the firm. Mr. Melzer received at least $27,000 for his participation in the securities transactions and a 2.5% member interest in the investment. Further, FINRA found that Mr. Melzer caused the registered representative code on some customer accounts to be changed, which resulted in the firm paying him over $9,500 in commissions that should have gone to his partners. Consequently, Douglas Melzer, of Mars, Pennsylvania, was permanently barred from any association with any FINRA member in any capacity.

Mar 30, 2015

Complaint Filed Against Former Arete Wealth Management Representative for Misrepresenting Debentures

A complaint filed by the Financial Industry Regulatory Agency (FINRA) against Jonathan Jay Greenfield of West Hills, California alleges the former representative of Arete Wealth Management (AWM) made fraudulent misrepresentations and omissions through emails with clients regarding features of renewable secured debentures. FINRA alleges that during the period of March 2012 to October 2012, Mr. Greenfield made material and sometimes intentional misrepresentations to three customers regarding connections with their purchases of GWG Renewable Secured Debentures. According to FINRA, Mr. Greenfield made similar misrepresentations to more than fifty other clients who did not end up buying the debentures during this period. In addition, FINRA alleges that between September 2012 and November 2012, Mr. Greenfield “provided twelve customers with GWG sales literature that stated GWG was secured by life insurance policies owned by GWG.” However, the debentures were not secured by insurance policies. These alleged misrepresentations and omissions are violations of NASD Rule 2210 and FINRA Rule 2010. FINRA’s enforcement department has requested sanctions to be imposed and for further findings into which Mr. Greenfield willfully violated the Exchange Act.

Mar 27, 2015

Complaint Filed Against Allstate Representative for Fraud

A complaint filed by the Financial Industry Regulatory Agency (FINRA) against Philip Leonard Grasso Jr. alleges that he, a representative of Allstate Financial Services, LLC (Allstate Financial) “inserted himself into the lives of two elderly customers in order to defraud them of their funds.” FINRA alleged that while Mr. Grasso was on a medical leave of absence from Allstate Financial, he inserted himself into the lives of two elderly customers (ages 89 and 91) in order to defraud them financially. Between December 2013 and January 2014, Mr. Grasso allegedly convinced the two elderly clients to liquidate their various life insurance policies and annuities (approximately $227,150) and open a brokerage account. Mr. Grasso allegedly then took all the funds from the brokerage account and put them in his own bank account. Mr. Grasso used these client funds for personal expenses like his mortgage and stock investments. In an attempt to hide the misconduct, Mr. Grasso allegedly created false documents for his clients and misrepresented their investment. Mr. Grasso was terminated by Allstate Financial due to allegations that he “commingled the customers’ funds” in May 2014. As it’s a current investigation, FINRA has requested sanctions and restitution to be imposed upon Mr. Grasso.

Mar 23, 2015

USA Financial Securities Representative Fined by FINRA For Outside Business Activities

Darrell Vanpamel of Cape Coral, Florida submitted a Letter of Acceptance, Waiver and Consent, in which he consented to, but did not admit to or deny, the described sanctions and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he engaged in outside business activities for which he received compensation without the approval of member firm, USA Financial Securities Corporation. Between April and May 2013, Mr. Vanpamel allegedly engaged in outside insurance activities with four clients without his firm’s approval. Mr. Vanpamel received approximately $1,400 in total from his four clients for “account set-up fees.” FINRA found that Mr. Vanpamel failed to provide written notice to USA Financial Securities Corp. (USA Financial) for his outside business activities or for his compensation. According to FINRA, Mr. Vanpamel violated FINRA Rules 3270 and 2010. Mr. Vanpamel was fined $5,000 and was suspended from association with any FINRA member in any capacity for one month.