All Releases

Silver Law Group Investigates Aventura, Florida-based Michael R. Smith After UBS Termination

May 25, 2017 | Silver Law Group

Silver Law Group is investigating former UBS Financial Services Inc. (CRD# 8174) broker Michael R. Smith (CRD# 428405) after UBS terminated the broker.

UBS terminated Smith, based out of Aventura, Florida, in October 2015 after he failed to disclose to the firm that he was named trustee for the trust of an unrelated client on two occasions.

In May 2016, FINRA barred Smith from the selling securities after Smith failed to respond to a FINRA request for information.

Misconduct-Riddled Former Ohio-based Broker Under Investigation Amidst Pending FINRA Arbitrations

May 25, 2017 | Silver Law Group

Silver Law Group is investigating former Ohio-based Concorde Investment Services, LLC (CRD# 151604) broker Larry S. Werbel (CRD# 828351) for three pending FINRA arbitrations and a litany of disclosures on his FINRA BrokerCheck report.

According to Werbel’s FINRA BrokerCheck report, Werbel has three pending FINRA arbitrations filed in the last four months that allege unsuitable recommendations, failure to supervise, fraud, breach of duty of loyalty, and negligence for an aggregate amount of over $1.25 million. At least one of the complaints alleges securities violations spanning back to Werbel’s employment with LPL Financial LLC (CRD# 6413) from February 2009 to February 2011.

FINRA’s BrokerCheck tool is a valuable way to examine a broker’s background. The investor tool discloses FINRA arbitrations that have been settled, are pending or have been denied; bankruptcies, civil judgments and tax liens; employment separations and other discharges; criminal proceedings; and regulatory actions. According to an InvestmentNews report, only about 12 percent of financial advisors have any type of disclosure events on their records.

Former Concorde Investment Brokers Richard and Jill Cody Under Investigation for SEC Allegations and FINRA Bar

April 3, 2017 | Silver Law Group

Silver Law Group is investigating former New Jersey-based Concorde Investment Services, LLC (CRD# 151604) brokers Jill M. Cody (CRD# 4333419) (also known as Jill Tramontano (“Tramontano”)) and Richard G. Cody (CRD# 2794558) (“Cody”) after the SEC filed charges against Cody and FINRA barred Tramontano.

In December 2016, the SEC filed charges against Cody alleging he defrauded at least three of his clients for years. According to the complaint, Cody’s clients suffered massive losses in their accounts and, rather than notifying his clients, Cody depleted his clients’ retirement savings by making monthly withdrawals

According to the SEC complaint, Cody concealed the clients’ substantial losses from approximately 2004 through 2016 by making materially misleading statements, leading the clients to believe that their investments were maintaining steady value and that their monthly withdrawals were being financed by investment gains.

Nicholas Schorsch and Associates Sued; Alleged to Have Looted RCS Capital and Public Investors

March 28, 2017 | Silver Law Group

A group of investors has accused former head of Cetera Financial Group Nicholas “Nick” Schorsch and his partners of shaving off revenues of RCS Capital (“RCAP”), a company once controlled by Schorsch that went into bankruptcy, for their own benefit.

The complaint was filed on March 8, 2017 by RCS Creditor Trust as a damages suit in the RCAP bankruptcy case, according to an InvestmentNews report. The complaint accuses Schorsch and some of his associates and companies of essentially looting RCAP and its public investors. According to a Law360 report, RCS Creditor Trust ties many of its allegations of “disloyal self-dealing” to Schorsch.

The complaint accuses the Schorsch and his associates of breaching or aiding breaches of fiduciary duty, duty of care, and duty of loyalty, as well as wasting corporate assets. Further, it alleges that nearly $1 billion in public stakeholder investments in RCAP were destroyed. One of the individuals named in the suit, Brian S. Block, was arrested on conspiracy, securities fraud and related charges in September 2016 in connection to a Schorsch-owned company, American Realty Capital Properties.

Catalyst Hedged Futures Strategy Fund (HFXIX) Under Investigation Over Recent Drop in Value and Misclassification

March 15, 2017 | Silver Law Group

Silver Law Group is investigating Catalyst Capital Advisors LLC (CRD# 139895/ SEC# 801-66886) (“Catalyst”) and one of its mutual funds, Catalyst Hedged Futures Strategy Fund Class I (“HFXIX”) after the fund lost approximately 30 percent of its value in the span of three months.

HFXIX is a fund that seeks to provide positive returns in all market conditions with low volatility and low correlation to the equity markets by investing in option strategies on equity index futures contracts, according to the fund’s fact sheet. The fund primarily invests in long and short call and put options on U.S. Stock Index Futures contracts, and lists the primary reason for investing as capital appreciation and preservation.

The fund has performed well relative to other managed futures funds, which fell 2.8 percent. But according to an InvestmentNews report, the fund is actually an options writing fund, which opens up arguments of misclassification against Catalyst.

Meyers Associates Changes Name to Windsor Street Capital

March 14, 2017 | Silver Law Group

Meyers Associates, L.P. changed its name in 2016 from “Meyers Associates, L.P.” to “Windsor Street Capital, LP.”

Under the moniker Meyers Associates (CRD# 34171), the firm was known for hiring brokers whose FINRA BrokerCheck reports were riddled with disclosures. According to an InvestmentNews report in 2014, Meyers Associates “stands out as a haven for registered representatives with black marks on their employment histories.”

According to that InvestmentNews report, about 12% of registered securities professionals have some type of disclosure event on their records. The percentage of registered representatives with disclosure events at Meyers Associates was five times higher than the industry average. Additionally, according to the report, of the 63% of the firm’s brokers with disclosure on their BrokerCheck reports, the average amount of disclosures was 4.5 per broker.

FINRA Tips for Spotting and Preventing Elder Financial Abuse

March 14, 2017 | Silver Law Group

FINRA Tips for Spotting and Preventing Elder Financial Abuse

Elder financial abuse is a subject that has increasingly drawn scrutiny by regulatory bodies. The Financial Industry Regulatory Authority (“FINRA”) and the Securities Exchange Commission (the “SEC”) have published numerous investor alerts, regulatory guidance, and primers on the elder financial abuse. FINRA has even hosted panels to educate elderly investors and financial representatives on how to combat elder financial abuse. Our firm has launched a website targeting elder financial abuse as well at www.elderfinanci alfraudattorneys.com.

Most recently, as part of FINRA’s 2017 Regulatory and Examination Priorities Letter, the regulatory body announced its focus on senior investors. Among other things, FINRA will focus on the suitability of speculative and/or complex investment products recommended to elderly investors. But a big question for most elderly individuals and their loved ones is how they can avoid elder financial abuse in the first place. An SEC guide for seniors to protect themselves from elder financial abuse lists the following among other items to protect elderly investors:

SEC Charges Windsor Street Capital/Meyers Associates for Alleged Conduct in Pump-and-Dump Scheme

February 27, 2017 | Silver Law Group

The SEC announced charges against New York-based brokerage firm Windsor Street Capital (CRD# 34171), formerly Meyers Associates, L.P., for gatekeeper failures related to a pump-and-dump scheme. John D. Telfer (CRD# 1099745) was also charged as chief compliance officer and anti-money laundering officer of Windsor Street Capital from November 2013 to his separation from the firm in September 2016.

According to the SEC complaint, Windsor Street Capital (“Windsor Street”) violated Section 5 of the Securities Act after it facilitated the unregistered sale of hundreds of millions of penny stock shares without performing adequate due diligence regarding the Section 5 compliance of the shares.

The penny stock companies were MedGen, Inc.; Alternaturals, Inc.; Manzo Pharmaceuticals, Inc.; and Solpower, Inc. According to the complaint, Windsor Street Capital failed to file suspicious activity reports for $24.8 million in suspicious transactions, including those occurring in accounts controlled by microcap stock financiers Raymond H. Barton and William G. Goode, who were separately charged.

Missouri Files Complaint Alleging Theft from Elderly Customer by U.S. Bancorp Broker Broker Shannon K. Daniels

February 27, 2017 | Silver Law Group

Silver Law Group is investigating former Missouri-based U.S. Bancorp Investments, Inc. (CRD# 17868) broker Shannon K. Daniels (CRD# 4606771) after FINRA permanently barred the broker.

According to Daniel’s FINRA BrokerCheck report, FINRA permanently barred Daniels from acting as a broker or otherwise associating with firms that sell securities to the public in August 2016. According to the BrokerCheck report, Daniels failed to respond to a FINRA request for information.

U.S. Bancorp Investments discharged Daniels in June 2016 alleging the firm did so due to Daniels’ misappropriation of customer funds. Subsequently, in December 2016, the state of Missouri brought an action against Daniels.

Failure to Comply with FINRA Request Terminates Broker Lance Shaw’s Securities Industry Career – Follow Up

February 3, 2017 | Silver Law Group

Failure to Comply with FINRA Request Terminates Broker Lance Shaw’s Securities Industry Career – Follow Up on silverlaw.com

His former firm, LPL Financial, is facing serious accusations

In November, we chronicled the history of Lance Shaw and why FINRA barred him from ever working as a broker again. Over the course of his 15-year career, he was involved in eight customer disputes, with the majority of them related to unauthorized trading.

One of those disputes occurred while Shaw was working for LPL Financial, LLC, and it involved allegations of unsuitable investments and excessive trading of a client’s retirement account. The damages granted totaled $175,000.