Securities Arbitration Lawyers Blog

SEC Charges Texas Pastor and Former Louisiana Broker with Money Laundering and Wire Fraud

August 8, 2018 | Silver Law Group

The elder financial fraud allegations reportedly cost elderly investors over $1M of retirement savings

Once a prominent Methodist pastor in Houston, Texas, Kirbyjon Caldwell is now charged by the SEC with numerous counts of money laundering and wire fraud. The charges are directly related to a scheme Caldwell and his partner, Gregory Alan Smith – a self-proclaimed financial advisor who was also charged – allegedly used to defraud elderly investors by selling them an interest in defunct, pre-Revolutionary Chinese bonds.

It is alleged that in 2013 and 2014, Caldwell and Smith singled out vulnerable investors to invest in bonds that had no more value than being collectible memorabilia – promising instead that they were worth millions.

Silver Law Group Investigates Perry Santillo Jr. of High Point Wealth Management

August 7, 2018 | Silver Law Group

Silver Law Group continues to investigate Perry Santillo Jr. (“Santillo”), founder and chief executive of High Point Wealth Management. According to a recent Investment News article, Santillo was barred by Maryland regulators for “dishonest and unethical trade practices,” that included selling unregistered securities by fraudulent means. Santillo allegedly solicited clients from an investment advisory business he acquired last year from its barred owner, Philip Rousseaux. Santillo faces almost $3.5 million in civil penalties and fines. Santillo acquired Everest Investment Advisors after its owner, Mr. Rousseaux, had his registration as an investment adviser revoked in March for deceptive securities sales practices. Mr. Rousseaux previously recruited clients through his popular infomercials featuring “The Money Guys.” Santillo, according to the order barring him, in November began soliciting former Everest clients through e-mails explaining how their transition would work in regards to their investments. He would then advise them to sell securities and transfer assets to a self-directed IRA. He also asked client to sell their annuities in face-to-face meetings. Then, Santillo would recommend the clients invest in unsecured promissory notes that were used to finance his own companies.

S What-Keeps-a-Ponzi-Scheme-Running-300x200 antillo, Chris Parris and others are accused of running a massive Ponzi scheme and paying former stockbrokers and investment advisors to retire and send their clients to their companies. Silver Law Group is assisting investors who were encouraged to liquidate retirement accounts and other investments to invest in the First Nationle Ponzi scheme.

Silver Law Group is representing investors in claims against their former advisors who recommended that their clients invest with Santillo, Chris Parris, Nationle or United RL. Investors allege that their former advisors failed to inform them that their stockbrokers failed to tell them that they had received money for the recommendation or that their financial advisor had failed to conduct reasonable due diligence into Santillo and his partners.

Criminal Charges And Additional Complaints Against Former Broker Matthew Eckstein

August 7, 2018 | Silver Law Group

In June, we told you about Matthew Evan Eckstein (CRD #2997245), who was a previously registered broker with Sisk Investment Services, Inc. (CRD #19406) of Syossett, NY. In addition to being registered there since 2015, Eckstein owned Sisk and was its CEO. FINRA also expelled Sisk Investment Services on 6/22/2018. Eckstein was previously employed by Gould, Ambroson & Associates Ltd. (CRD #17412) of Garden City, NY since he began working in the industry in 1998.

There have been some new developments with this broker since our last blog post.

SEC-Charges-Paul-Mata-David-Kayatta-Mario-Pincheira-With-Fraud-and-Freezes-Assets-300x199 On 6/12/2018, the Nassau County (New York) District Attorney filed multiple criminal charges against Eckstein:

Broker Cindy Chiellini Subject Of Three Customer Disputes

August 7, 2018 | Silver Law Group

Cindy Lucille Porto Chiellini (CRD #1015592) is a currently registered broker with Centaurus Financial, Inc. (CRD #30833) of Lexington, SC, since 2015. Previously, she worked with J.P. Turner & Company, L.L.C. (CRD #43177), Gunnallen Financial, Inc. (CRD #17609) and First Allied Securities, Inc. (CRD #32444), all of Lexington. She has been in the industry since 1984.

Securities-Industry-Lingo-May-Interfere-With-Financial-Advising-300x161 Chiellini has three recent customer disputes in her long financial career, but no disciplinary actions. The first dispute was filed on 05/21/2018, from the beneficiaries of a deceased client. The claimants alleged that Chiellini recommended unsuitable investments that resulted in a loss when they decided to liquidate. They have requested damages of $100,000. Chiellini denies the allegations, and states that she not only reviewed the investments with her original client before they were purchased, but also discussed options with the beneficiaries after the client passed away. The beneficiaries decided to liquidate rather than wait, and signed statements that they understood the loss involved by immediate liquidation instead of waiting for these securities to reach full maturity. This claim is currently pending.

The second dispute was filed on 4/17/2018, alleging that his account had “less liquidity” than he told Chiellini he wanted, and lost principal when he sold. The client requested damages of $170,000. Chiellini’s response denied the accusations. After explaining the investment strategies and providing relevant documentation, as well as receiving the customer’s signature on forms certifying that he understood everything, the customer took the advice of a non-licensed securities and insurance individual to liquidate everything over the protests of Chiellini and Centaurus Financial. After the firm examined the evidence, they denied the claim.

Bank Of America Sued Over Ponzi Scheme

August 7, 2018 | Silver Law Group

Following the SEC charging five individuals with fraud related to a Ponzi scheme, Bank of America (“BOA”) has now been sued over its involvement with the First Nationle scheme. The class-action suit on behalf of multiple investors who lost money alleges that BOA provided more than 100 accounts for the individuals to perpetuate their scheme. Others charged in the scheme include Perry Santillo, Chris Parris, Paul LaRocco, Percipience and United RL.

Ponzi-Schemes2-300x150 According to the complaint, the brother and sister that sued to recover losses from their late father’s investment allege that the fraudsters “could not have perpetuated their scheme without the knowing assistance of their primary banking institution, Bank of America, which lent the scheme an air of legitimacy and provided critical support, including at times when the scheme would have otherwise collapsed.”

After promising to invest the monies into profitable and dividend paying companies, they used the funds for lavish personal expenses and to pay “dividends” to other investors. The bank is accused of failing to catch their suspicious activity, which included transfers of large amounts of cash into accounts with small, negative or even non-existent balances, and then transferring the cash out in the same week. The money was transferred to their personal accounts, or to that of some of the investors. This fraud occurred over a period of time beginning in or about 2011. By not alerting authorities or putting a stop to the fraudulent activity, BOA assisted in the perpetuation of the scheme.

Donald Fowler Charged With Excessive Trading And Churning

August 7, 2018 | Silver Law Group

Broker Donald Fowler (CRD #4989632) is a broker currently registered with Worden Capital Management LLC (CRD #148366) of Rockville Center, New York. He has been with Worden since 2014. He was previously employed by J.D. Nicholas & Associates, Inc. (CRD #44791) of Syosett, NY, and American Capital Partners, LLC (CRD #119249) of Wantagh, NY. He has been in the industry since 2005.

sec-300x198 Fowler, along with another Worden broker, is the subject of an SEC complaint regarding excessive trading, churning, and what the SEC calls an “in-and-out” trading strategy. This generated bigger fees for himself and the other broker who was charged, but caused clients to suffer significant losses as a result.

Fowler is alleged to have recommended the strategy to his 27 clients at now-defunct J.D. Nicholas & Associates without any reason to believe it would benefit any one of them. He knew, or should have known, that the cost structure and nature of the trading would cause them all to lose money. Furthermore, at least three of his 27 accounts were the subject of “churning” (excessive training to generate more commissions and fees.) Both of these practices violated antifraud provisions in federal trading laws. This action is listed as “pending.”

Worden Capital’s Broker Gregory Dean Charged With Churning

August 7, 2018 | Silver Law Group

Stockbroker-Misconduct-1-300x150-300x150 Gregory Dean (CRD #4922996), currently employed with Worden Capital Management of Rockville, NY (CRD #148366) is the subject of multiple disclosures, mostly customer complaints. He is also the subject of a civil SEC complaint and one regulatory complaint, going back to 2013.

Dean’s previous employers include:

D. Nicholas & Associates, Inc. (CRD #44791) of Syosett, NY, from 01/16/2007 through 11/24/2014

Morgan Stanley Advisor Barry Garapedian

July 31, 2018 | Silver Law Group

Barry Garapedian (CRD #1039251) is a currently registered broker employed by Morgan Stanley (CRD #149777) of Westlake Village, CA. He has been with Morgan Stanley since 2009. He was previously employed by Citigroup Global Markets Inc. (CRD #7059), Lehman Brothers, Inc. (CRD #7506) and E. F. Hutton & Company, Inc. (CRD #235) He has been in the industry since 1982.

Garapedian has been the subject of three FINRA customer disputes in 2018, all with similar allegations of “unsuitability.” The first one, on 3/20/2018 was denied. The second was filed on 03/22/2018 and involves the period 2013 to 2015, and is listed as “pending.” The third claim, filed on 04/01/18, requests damages of $713,000.00. Garapedian’s statement denies the allegations, and maintains that everything was discussed with the customer prior to any transactions, and the investments recommended were suitable for the client. This claim is also listed as “pending.”

One claim was also filed in 2017, alleging the same “unsuitablility,” and was closed with no action.

Merrill Lynch Broker Anteneh Roberts Banned By FINRA After Misconduct Allegations

July 31, 2018 | Silver Law Group

Anteneh Roberts (CRD #6414549) is a former registered broker and investment advisor whose last known employer was Merrill Lynch, Pierce, Fenner & Smith Incorporated (CRD #7691) of Ann Arbor, MI, from 05/15/2015 through 08/10/2017. His previous employer was PNC Investments (CRD #129052) of Cleveland, OH. He is not currently registered with any FINRA broker, and no recent employment information is available.

Roberts has three disclosures, the first of which is a customer dispute filed on 03/29/2017. A court-appointed special representative for the customer’s conservator estate alleged that Roberts “misappropriated” monies from one of the customer’s accounts in September of 2015. The customer requested damages of $54,571.85, and the case was settled for $58,571.85.

The second disclosure involves Roberts’ discharge by Merrill Lynch on 7/17/2017, alleging “conduct inconsistent with firm standards regarding personal bank accounts.” Involvement in the customer dispute of 3/29/2017 is not mentioned.

Stockbrokers Selling Away Securities Arbitration Claims

July 31, 2018 | Silver Law Group

Former-New-York-Life-Broker-Jonathan-Williams-Barred-by-FINRA-as-a-Result-of-Outside-Business-Activities-300x200 If your financial advisor recommends an investment that is not approved by his firm, he may be selling away. Do you trust him or her to make the right investment decisions for you? Do they consult with you and allow you the freedom to review information on your own, and encourage you to communicate with him on a personal e-mail? Or do you just take it on faith, and wonder if you’ve been convinced with a winning smile, charming demeanor or an official-looking prospectus? Dishonest brokers do this every day, and are only found out when they slip up and do something wrong or the investor learns his money is gone.

Many people have a “side hustle” outside of their “day job” that they do for extra money, personal satisfaction or both. It may be as a part-time job in retail, freelancing after hours or starting a small business. You may even know someone holds parties to sell products directly. While there’s nothing inherently wrong with most side jobs, it’s entirely different when your broker does “something on the side.” These outside business activities, at a minimum, are supposed to be disclosed to the firm and approved for sale to the customer.

Anytime a broker does something else, they’re required to notify the firm and get permission, in case there is a conflict of interest and other reasons. (Most large companies require notification for any kind of “moonlighting.”) Some brokers have been known to sell securities outside of their firm—even legitimate ones—without notifying their firm of this outside business interest. A concept frequently referred to as selling away. That’s why research is so important.