Securities Arbitration Lawyers Blog
Broker Michael B. Barnett Allegedly Invests Client Funds in Speculative Securities
Michael Barnett (CRD #5792242) is a currently registered broker and investment advisor working with J.J.B. Hilliard, W.L. Lyons, LLC of Marion, IL (CRD #453). He has been with Hilliard Lyons since 2012. Previously, Barnett was registered with Edward Jones (CRD #250) of Herrin, IL. He has been in the industry since 2010.
Barnett has three pending customer complaints in 2018, with the damages requested totaling $133,529.56. Two of these claims involve allegations of over-concentration and losses related to a company called Breitburn Energy (BBEP), and that the company was unsuitable for the clients. Both complaints include allegations of breach of contract and fiduciary duty, violation of Kentucky Consumer Protection Act, Kentucky Blue Sky Law, and the Illinois Consumer Fraud Act. The third 2018 complaint, also pending, allege “breach of fiduciary duty, violation of Illinois’ Securities Act (Section 815 ILCS 5/12 et al.), negligence/negligent misrepresentation/omission, breach of contract, restitution, common law fraud, and negligent supervision.”
In 2017, Barnett had two additional customer complaints. In one case, the client alleges “unauthorized trading in an unsuitable security.” The second complaint alleges “misrepresentation, unsuitable investments, and unauthorized trading in a single security beginning in 2014 through 2015.” The client has requested damages of $1.5 million.
n 5/17/18, no additional information is available.
Fitz-Gerald is the subject of six disputes, dating back to 1987. The latest, filed on 6/6/2018, is pending, and requesting damages totaling $240,000 and allege, “inter alia, unsuitability with respect to investments in accounts -2014 to 2015.” 
According to some reports, nearly 1/3 of National Securities brokers have had regulatory issues, legal disputes, or personal financial problems that have been disclosed to investors
Even when Liberty’s internal processes should have triggered a review, Fanning did not adequately address the trading issues. Fanning was, for a time, a 50% owner in Liberty, as well as Liberty’s CEO, CFO and FINOP. Fanning failed to establish and maintain written supervisory procedures (WSP) for the company to ensure that any excessive trading was reviewed, what the red flags were, and when to notify the customer of the potential for excess trading in their account.
FINRA recently suspended Parker for one month, and fined him $7,500 related to his activities with a client’s accounts. Parker made a number of recommendations to a client that she immediately begin investing in “alternative investments.” This client had very little prior investing experience, particularly with alternative investments. She was 64 at the time the account was opened. He recommended that she invest $290,000 into four of these illiquid