Library - Law Offices of Robert Wayne Pearce

Former Wells Fargo Representative Barred for Mismanaging Client’s Will

Wonnie Short of Nashville, Tennessee submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly failing to ensure that a Wells Fargo Advisors LLC, (Wells Fargo) customer received the funds they were due from an annuity. Between November 1996 and November 2011, Mr. Short was registered with Wells Fargo. In October 2006, while Short was registered with Wells Fargo, a firm customer executed a will naming Mr. Short as executor. When the customer passed away in November 2008, Mr. Short petitioned the court and was appointed executor of the client’s estate. As executor, Mr. Short facilitated the pay out on three of the client’s annuities. For one of the annuities, the client’s estate was a 10% beneficiary and a local foundation, which was also a Wells Fargo customer, was a 90% beneficiary.

Aug 22, 2016

Former Miami UBS Financial Representative Suspended for Unauthorized Trading

James Scullin of Miami, Florida submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly placing an unauthorized trade in a customer’s account in violation of FINRA Rule 2010. Mr. Scullin was a general securities representative for FINRA member firm UBS Financial Services (UBS) from June 2011 through November 2014. FINRA Rule 2010 reads that “a member, in the conduct of his business, shall observe high standards of commercial honor and just and equitable principles of trade.” In mid-2011, Mr. Scullin became a registered representative at UBS for the account of a firm customer. FINRA investigators found that on or about September 12, 2014, Mr. Scullin placed a $5,000,000 trade without informing the two individuals with authority to place trades in the customer account or seeking their authorization. Mr. Scullin did not have discretionary authority for any of the customer’s accounts.

Aug 19, 2016

Dalton Strategic Representative Barred for Unsuitable Investment Recommendations

Michael DeBoer of Trinity, Florida submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly not disclosing his participation in a transaction that recommended customers make an unsuitable securities transaction. Mr. DeBoer was registered with former FINRA member firm Dalton Strategic Advisors Investment Services Inc. (Dalton Strategic) from November 2009 to April 2013. In June 2010, while registered with Dalton Strategic, Mr. DeBoer recommended that two customers invest a total of $200,000 in securities offered by a software development company. Mr. DeBoer received $32,000 in commissions for the securities transaction. However, the investors ultimately lost the entirety of their investments in the securities. FINRA alleged the securities were not offered through Dalton Strategic, and Mr. DeBoer did not disclose his participation in the transactions to his associated firm. FINRA further alleged that before making his recommendation, Mr. DeBoer also failed to reasonably investigate the software company or its securities and therefore lacked a reasonable basis to believe the securities were suitable investments for his clients.

Aug 17, 2016

Feltl & Company Representative Fined and Suspended for Unsuitable UIT Switching

Lance Ziesemer of Waconia, Minnesota submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement for the Financial Industry Regulatory Authority (FINRA) for allegedly implementing a trading strategy and making unsuitable recommendations to two customers in connection with Unit Investment Trusts (UITs). From May 2007 until February 3, 2016, Mr. Ziesemer was registered with Feltl & Company (Feltl) as a General Securities Representative (GSR) and General Securities Sales Supervisor. During his association with Feltl, Mr, Ziesemer recommended that a number of his customers buy and sell UITs. Between January 2011 and December 2012, Mr. Ziesemer recommended that two customers repeatedly sell UITs that they had held for a short time only to repurchase different UITs. The customers following Mr. Ziesemers recommendations made 36 short-term UIT switches.

Aug 16, 2016

FINRA Fines and Suspends Deutsche Bank Broker Gregory Barr for Discretionary Trade Violations

Gregory Barr., a Boca Raton, Florida based broker formerly employed with Deutsche Bank Securities, Inc. (Deutsche Bank) and 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 Financial Industry Regulatory Authority’s (FINRA) findings that he entered discretionary trades in the accounts of four customers without the necessary prior written customer authorization. FINRA found that while employed as a General Securities Representative with Deutsche Bank, Gregory Edward Barr exercised discretion in four of his customers’ accounts. He placed sell orders for the customers in the same stock. Although these customers had allegedly given Mr. Barr verbal authorization to sell their positions if the stock decreased in price, he allegedly failed to discuss the transactions with his customers on the day of the sell orders. FINRA further alleged Deutsche Bank had not approved the customers’ accounts for discretionary trading. Therefore, none of the accounts had been approved for the discretionary trades made by Mr. Barr.

Aug 15, 2016

Feltl & Company Fined for Failing to Apply Sales-Charge Discounts to UIT Customers

Feltl & Company (Feltl) of Minneapolis, Minnesota submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement for the Financial Industry Regulatory Authority (FINRA) for allegedly failing to apply sales-charge discounts to certain customers’ eligible purchases of unit investment trusts (UITs) and for failing to establish, maintain, and enforce a proper supervisory system. Feltl has been registered with FINRA and the NASD since 1975 and has faced three similar FINRA disciplinary actions in the past. UITs are generally issued by a firm representative that assembles the UIT’s portfolio of securities, deposits the securities in a trust, and sells units of the UIT in a public offering. UIT units are redeemable securities that are issued for a specific term, and entitle an investor to receive his or her proportionate share of the UIT’s net assets on redemption or at termination.

Aug 12, 2016

Oriental Financial Services Fined for Municipal Securities Mismanagements

Oriental Financial Services Corp. (OFS) of San Juan, Puerto Rico submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Market Regulation of the Financial Industry Regulatory Authority (FINRA) for allegedly purchasing municipal securities for its own account from customers and then selling those municipal securities to other customers at prices that were not fair or reasonable. Between July 1, 2013 and September 30, 2013 FINRA investigators found multiple transactions in which OFS was not fair or reasonable to its customers. FINRA alleged OFS failed to take into consideration all relevant factors, including the best judgment of the broker as to the fair market value of the securities at the time of the transaction and of any securities traded in connection with the transaction. Additionally, FINRA alleged that OFS didn’t account for the expense involved in effecting the transaction, the fact that the broker is entitled to a profit, and the total dollar amount of the transaction.

Aug 10, 2016

TradeSpot Markets and Owner Under FINRA Investigation for Unsuitable Penny Stock Transactions

TradeSpot Markets Inc. (TradeSpot) and its President, Chief Operating Officer and owner Mark Beloyan of Davie, Florida were named as Respondents in a Financial Industry Regulatory Authority (FINRA) complaint that alleges the firm, acting through its representatives, engaged in penny stock transactions without complying with Section 15(h) and Rule 15g-9 of the Securities Exchange Act of 1934 and FINRA conduct rules. Section 15(h) of the Exchange Act prohibits brokers and dealers from “using the mails or any means or instrumentality of interstate commerce to effect any transaction in penny stock by any customer except in accordance with the requirements of Section 15(h) and the rules and regulations prescribed thereunder.” Rule 15g-9 of the Exchange Act makes it “unlawful for a broker or dealer to sell a penny stock to, or to effect the purchase of a penny stock by, any person unless, prior to the transaction, the broker or dealer has approved the person’s account for transactions in penny stocks and has received from the person an agreement to the transaction.”

Aug 8, 2016

Meyers Associates of New York and Co-Founder Fined for Misleading Investors

Meyers Associates, L.P. (the firm) and Bruce Meyers of New York, New York were subject to disciplinary action from the Financial Industry Regulatory Authority (FINRA) for allegedly misleading prospective investors in connection with claims surrounding a medical drug company. Meyers Associates has been a FINRA member since 1994 and has faced 10 FINRA disciplinary actions similar to this case. Mr. Meyers, cofounder of the firm, entered the securities industry in 1982 and acted as a General Securities Representative (GSR) and General Securities Principal (Principal). Between May 2008 and September 2011, Meyers Associates began to raise between $1.5 million and $6 million for SignPath Pharma, Inc. (SignPath) through a private offering of convertible preferred stock and warrants. SignPath had not generated revenue and had an accumulated deficit of over $13.4 million. Meyers Associates and Mr. Meyers collectively owned more than 60 percent of shares in SignPath’s common stock during which time Mr. Meyers sent over 1,037 emails about SignPath to potential investors with whom he had no pre-existing or substantive relationship.

Aug 5, 2016

BancWest and US Bancorp Representative Name in FINRA Complaint Alleging Unsuitable Broker Activity

John Hudnall of Pacifica, California was named a Respondent in a Financial Industry Regulatory Authority (FINRA) complaint that alleged he participated in undisclosed and/or unapproved outside business activities while associated with a FINRA member firm. Mr. Hudnall entered the securities industry in 2000 and was associated with FINRA member firms BancWest Investment Services, Inc. (BancWest) and US Bancorp Investments, Inc. (US Bancorp) during the relevant period. FINRA alleged that Mr. Hudnall, while associated with US Bancorp and Bancwest, participated in an undisclosed and unapproved private securities transaction, made unapproved and undisclosed financial sales promotions to firm customers, recommended and sold an unsuitable variable annuity product and provided false information in response to FINRA information requests. FINRA’s investigators also alleged that in connection with an undisclosed securities transaction in May 2012, Mr. Hudnall artificially split a customer’s $400,000 REIT investment into two parts and submitted only the smaller part ($40,000) to his firm for supervisory review and approval generating himself $25,000 in ill-gotten commissions.

Blog

Recent Posts