Securities Arbitration

William Slone’s 45-year Career Shows 14 FINRA Disclosure Events

February 16, 2016 | Silver Law Group

William Slone’s 45-year Career Shows 14 FINRA Disclosure Events on silverlaw.com

Broker William Slone’s most recent complaint alleges unauthorized securities trading.

Acting as a securities investment broker since 1969, William Slone faces yet another customer complaint regarding his activities. In November 2015, Slone consented to the sanctions and the entry of the findings that he effected discretionary transactions in the account of a customer without obtaining prior written authorization from the customer and without his member firm having accepted the account as discretionary in writing.

Throughout his career, Slone amassed a total of 10 customer disputes, 3 regulatory events, and 1 employment separation after allegations. Some of the allegations against him include unauthorized trading and forged margin form, unsuitability of investment and wrongful discretion, nondisclosure regarding receiving shares of company stock that he recommended to his customers to purchase, excessive trading, and effecting discretionary transactions without prior written authorization.

Did you lose investment money with Joshua Gladtke?

February 15, 2016 | Silver Law Group

Did you lose investment money with Joshua Gladtke? on silverlaw.com

This New York broker is permanently barred from the securities industry.

In November 2015, New York broker Joshua Gladtke consented to the sanction and entry of findings in a FINRA investigation. As a result, Gladtke is now permanently barred from the securities industry.

With 13 years in the securities industry, spent primarily with companies named with different versions of “Arjent” in their title and corporate filing, Gladtke’s record with FINRA began it’s decline in May 2015 when he was criminally charged with a felony in the New York State Supreme Court. According to BrokerCheck, the indictment included Gladtke and other defendants charged with a “number of criminal offenses related to a private placement offer of Pangaea Trading Partners, LLC conducted between 2010 and 2012.”

Merrill Lynch Broker Permanently Barred After Years of Allegations and Refusal to Respond to FINRA Requests for Information

January 10, 2016 | Silver Law Group

Merrill Lynch Broker Permanently Barred After Years of Allegations and Refusal to Respond to FINRA Requests for Information on silverlaw.com

Michael Highfill has been permanently barred from the securities industry

A former Merrill Lynch broker, Michael Highfill was permanently barred from the securities industry in July of 2015 after 16 years in the industry. His most recent position was with Merrill Lynch in Ridgeland, Mississippi. Before Merrill Lynch, he was a registered broker with Morgan Stanley in Ridgeland, Trustmark Financial Services in Jackson, Mississippi and with J.C. Bradford & Company in New York, New York.

His BrokerCheck report shows that Highfill is the subject of one regulatory sanction and one civil judgment. He was also terminated from Morgan Stanley and Merrill Lynch.

FINRA Permanently Bars Honetta C. Kao After Allegations of Unauthorized Trading and Mishandled Accounts

January 10, 2016 | Silver Law Group

FINRA Permanently Bars Honetta C. Kao After Allegations of Unauthorized Trading and Mishandled Accounts on silverlaw.com

Numerous customer complaints surface over the course of his work history with various firms

On August 4, 2015, Honetta C. Kao was suspended by the FINRA for failure to respond to their request for information. And in November, he was permanently barred from acting as a broker or otherwise associating with firms that sell securities to the public.

Kao’s industry experience incudes ten different firms and on record, dates back to 2005 when he worked for Custom Capital Corporation in Brooklyn, New York. Accused of mishandling accounts, giving bad investment advice, making unsuitable recommendations and unauthorized trades, Kao racked up numerous customer complaints and damages while working at Meyers Associates, L.P. and Caldwell International Securities, both in New York.

Have You Lost Money Investing With Bennett Broad?

January 10, 2016 | Silver Law Group

Have You Lost Money Investing With Bennett Broad? on silverlaw.com

As of August 2015, Broad is permanently barred from the securities industry by FINRA

According to his FINRA BrokerCheck report, Bennett Broad, who worked in the financial industry for more than 30 years, has amassed a 15-year history of allegations against him from clients. The complaints, which total 28, compelled the FINRA to sanction Bennett and permanently bar him from the industry in August of 2015.

While he spent much of his career working as a broker for Oppenheimer and Company in Jenkintown, Pennsylvania, Broad also spent several years working for other firms including UBS Financial Services based in Weehawken, New Jersey and Dean Witter Reynolds based in Purchase, New York.

Jose Irizarry Permanently Barred by FINRA After Involvement in UBS Puerto Rico Fiasco

January 9, 2016 | Silver Law Group

Jose Irizarry Permanently Barred by FINRA After Involvement in UBS Puerto Rico Fiasco on silverlaw.com

After 17 years in the securities industry, Irizarry has been permanently barred

Jose Irizarry began working in the financial services industry in the early 1990’s. During his long career, he worked for various firms, including Merrill Lynch, Pierce, Fenner & Smith in New York, PaineWebber in New Jersey and most recently for UBS Financial Services in San Juan Puerto Rico.

As of August, 2015, Irizarry has been permanently barred by the FINRA following a 3-month suspension in which he failed to request termination of his suspension in the specified time-frame.

State Securities Regulators Report High Number of Senior Financial Abuse Cases

October 7, 2015 | Silver Law Group

State Securities Regulators Report High Number of Senior Financial Abuse Cases on silverlaw.com

Securities regulators state that professionals should help seniors avoid being scammed

When it comes to investment scams, seniors are easy targets. According to a recent report from the North American Securities Administrators Association (NASAA), seniors were targeted in one-quarter of the enforcement actions in 2014, in cases where states track victims by age.

“Seniors remain a top target of investment fraud and protecting seniors from investment fraud and abuse is a key priority of NASAA and its members,” said William Beatty, NASAA President and Washington Securities Director. Beatty also noted that since 2008 when NASAA began tracking data collected by state securities agencies, one-third of all enforcement actions involved senior victims.

Jon Cox Barred From Securities Industry After FINRA Launches Investigation

July 28, 2015 | Silver Law Group

Investigation follows termination from LPL Financial

Jon Lawrence Cox, who has been in the securities industry since June 1990, according to FINRA documents, has been barred as of April 29 after allegedly failing to respond to three written requests from FINRA to provide information to aid an investigation into allegations against him.

Cox was discharged from LPL Financial after allegedly violating policies about outside business activities, according to a disclosure made by the firm. After receiving this information, FINRA launched its own investigation into whether those activities violated its rules as well. FINRA requested information from Cox, who allegedly did not provide it, leading to his barring.

Scott Silver Presents “How to Win an Alternative Investment Case” at the 2014 American Association of Justice Annual Convention

August 1, 2014 | Silver Law Group

Scott Silver, Managing Partner of Silver Law Group, is the current co-chair of the Securities and Financial Fraud group of the American Association of Justice (“AAJ”). On July 28, 2014, during the 2014 AAJ Annual Convention in Baltimore, Maryland, Scott gave a well-received presentation titled “How to Win an Alternative Investment Case.” AAJ, also known as the Association of Trial Lawyers of America, is the world’s largest trial bar and promotes justice and fairness for injured persons and safeguards victims’ rights.

The theme of the presentation focused on the rise of Alternative Investment or Product cases over the last several years. Driven by its desire to replace commissions lost as investors realize stocks and bonds can be traded at discount firms for less than ten dollars a trade, Wall Street has introduced many new Alternatives to investors. However, many of the new, complex Alternatives can be riddled with fees, conflicts of interest, and are frequently more speculative than marketed by the firms. Several recent FINRA arbitration claims focus on products which lose substantially all of their value in a short time. FINRA has seen a rise in arbitration claims where multiple investors all seek damages relating to the same Alternative Investments or Product and where one or more of the asserted claims center around allegations regarding the widespread mismarketing or defective development of a specific investment.

Alternative Investments which have been the subject of recent FINRA claims include:

FINRA Arbitration Panel Orders UBS to Pay $5.3 Million for Misleading a Financial Advisor and his Clients about a Proprietary Product Tied to Lehman Brothers

April 15, 2014 | Silver Law Group

A former UBS broker recently won a FINRA arbitration claim against UBS Financial Services for misleading him and his clients about the risks associated with structured notes tied to Lehman Brothers Holdings, which suffered significant losses in 2008. Silver Law Group primarily represents investors in claims against UBS and other brokerage firms. However, this award deserves attention because it highlights a fundamental flaw in Wall Street’s business model. UBS created a system to use its sales force to sell millions of dollars in Lehman Brothers debt. However, faced with undesirable evidence of Lehman’s financial problems, UBS knowingly chose to not inform its financial advisors or retail clients about the problems. Put differently, this was a “top down” problem because the misconduct was by UBS senior management. We are seeing the same set of facts in claims by investors against UBS in Puerto Rico, where UBS senior management served as the biggest supporters of proprietary UBS bond funds and UBS placed no restrictions on financial advisors or on the concentration levels in a customer’s portfolio.

The FINRA arbitration panel awarded $4 Million in compensatory damages, $1 Million in punitive damages and $335,000 in attorneys’ fees and costs, specifically finding UBS had “deliberately prevented the distribution of material information about Lehman Brothers sinking financial condition and continued to recommend the sale of Lehman Brothers [Notes] despite clear evidence of the company’s rapid decline.” The panel also ordered that the 39 complaints filed against this broker be erased from his record.

The backdrop leading to this award is eerily similar to what is happening today at UBS in Puerto Rico (“UBS-PR”). UBS-PR aggressively pushed the sale of closed-end bond funds (CEFs) involving Puerto Rican debt which were proprietary to UBS. UBS allegedly misled the majority of its brokers and clients concerning the risks associated with CEFs. UBS is also alleged to have withheld negative information about the CEFs from its brokers and its clients, thereby preventing a full understanding of Puerto Rico’s deteriorating economy and the effects that decline would have on the leveraged and illiquid CEFs. Could it be that the majority of UBS-PR brokers who now find themselves facing numerous customer complaints were simply following the instructions given by UBS and doing what they were trained to do—sell UBS recommended products?