Securities Arbitration Lawyers Blog

SEC Halts South Florida-based $4.8 Million Boiler Room Scheme Involving State Lottery Tickets

June 6, 2017 | Silver Law Group

The SEC filed charges against a Pompano Beach, Florida-based company, its CEO and its top sales agent in late March 2017, accusing them of conducting a boiler room operation that bilked investors out of almost $5 million.

According to the SEC’s complaint, CEO David Gray and sales agent Joseph A. Vitale (CRD# 5223467), aka Donovan Kelly, were the primary figures in carrying out the scheme.

According to the complaint, the company, LottoNet Operating Corp. (“LottoNet”), purported to be in the business of facilitating the purchase of lottery tickets from lotteries in various states online.

SEC Halts Chicago-based Fraud Targeting Seniors Involving Daniel H. Glick, Formerly of Transamerica Financial Advisors

June 6, 2017 | Silver Law Group

The SEC announced an emergency asset freeze and temporary restraining order against a Chicago-based investment adviser and his financial management company accused of scamming elderly investors out of millions of dollars.

In the SEC’s complaint, the SEC alleges that Daniel H. Glick (CRD# 2175655) and his unregistered investment advisory firm Financial Management Strategies (“FMS”) took advantage of seniors who entrusted him with millions of dollars’ worth of their retirement savings.

According to the SEC complaint, Glick and his companies raised over $6 million from elderly investors, with most of the money coming from two families. Glick first raised money though Glick & Associates until dissolution in 2014, then through Glick Accounting Services and FMS.

FINRA and SEC Adopt New Rule to Help Curb Elder Financial Fraud

June 6, 2017 | Silver Law Group

FINRA and the SEC adopted and approved a new rule that is intended to help curb elder financial fraud.

In March 2017, FINRA adopted FINRA Rule 2165. Financial Exploitation of Specified Adults. Shortly thereafter, the SEC approved the rule with an effective date of February 2018 set in place.

FINRA Rule 2165 allows a FINRA member firm that reasonably believes financial exploitation may be occurring or has occurred to place a temporary hold of up to fifteen (15) business days on the disbursement of funds or securities from the account of a “Specified Adult” customer. A Specified Adult is either (a) a person aged 65 or older; or (b) a person, aged 18 or older, who the firm reasonably believes has a mental or physical impairment that renders the individual unable to protect his or her own interest.

FINRA Adopts Amendment to Rule That Would Provide Trusted Contact for Seniors with Diminished Capacities

June 6, 2017 | Silver Law Group

FINRA recently amended a rule that would require brokerage firms to establish a contact for at-risk seniors.

In March 2017, FINRA amended FINRA Rule 4512 to require member firms to make reasonable efforts to obtain the name and contact information for a trusted contact person upon the opening of a customer’s account.

The proposal to amend the rule was initially pitched in late October 2016 and has gone through the comment phase up until FINRA adopted and the SEC approved it.

Robert N. Tricarico, Formerly of LPL Financial, Under Investigation After He Pled Guilty Misappropriating $1.2 Million from an Elderly Client

June 6, 2017 | Silver Law Group

Silver Law Group is investigating former LPL Financial LLC (CRD# 6413) broker Robert N. Tricarico (CRD# 1500863) after he pled guilty to one count of wire fraud against an elderly investor in a federal court in Connecticut.

According to Tricarico’s FINRA BrokerCheck, Tricarico pled guilty in June 2016 in a Hartford, Connecticut federal court to one count of wire fraud related to his misappropriation of more than $1.2 million from an elderly client.

According to court documents and statements made in court, from January 2010 to June 2013, Tricarico served as the financial advisor for an elderly investor who had significant assets. Tricarico misappropriated more than $1.1 million from the senior by writing numerous checks to himself or for his benefit without the victim’s authorization. Additionally, Tricarico liquidated the senior’s coin collection and cashed checks for himself that were made payable to the senior.

Christopher P. Anthony, Formerly of Rhodes Securities, Under Investigation for a $2 Million Customer Dispute

June 6, 2017 | Silver Law Group

Silver Law Group is investigating former Texas-based Rhodes Securities, Inc. (CRD# 19610) broker Christopher P. Anthony (CRD# 1157930) after a customer filed a $2 million FINRA arbitration against him.

According to Anthony’s FINRA BrokerCheck report, a customer filed a FINRA arbitration complaint in January 2017 against Anthony alleging breach of fiduciary duty, negligence, breach of contract and damages in the amount of $2 million.

Another customer dispute was filed in August 2016 alleging unsuitable investments, churning, failure to supervise between the early 2014 to Spring 2015. The complaint alleges $100,000.00 in damages.

Former Puerto Rico-based Popular Securities Broker Manuel Angel Mejia-Gomez Under Investigation

June 6, 2017 | Silver Law Group

Silver Law Group is investigating former Puerto Rico-based Popular Securities, LLC (CRD# 8096) broker Manuel Angel Mejia-Gomez (CRD# 2259727) after FINRA suspended him.

According to Mejia-Gomez’s FINRA BrokerCheck report, FINRA suspended and fined Mejia-Gomez in December 2016 for three months and fined him $15,000. According to Mejia-Gomez’s BrokerCheck report, he exercised discretionary authority in customers’ accounts. On multiple occasions, Mejia-Gomez liquidates securities in the account of a customer in order to meet the customer’s cash flow obligations.

The FINRA suspension follows Mejia-Gomez’s resignation from Popular Securities in January 2015. Popular Securities permitted Mejia-Gomez to resign because he allegedly conducted unauthorized trades to amass commissions. Prior to that, in December 2014 a complaint alleging unauthorized trading against Mejia-Gomez was settled.

New York-based Beech Hill Securities Broker Frank Hamrak Under Investigation Over Unsuitability Allegations

June 6, 2017 | Silver Law Group

Silver Law Group is investigating New York-based Beech Hill Securities (CRD# 24771) broker Frank Hamrak (CRD# 1385077) after a customer complaint filed against him alleging unsuitable recommendations settled.

According to Hamrak’s FINRA BrokerCheck report, a customer complaint filed in November 2016 against Hamrak settled. The complaint alleged unsuitability and settled for $127,000.

In addition to the settled complaint, Hamrak has six other disclosures on his BrokerCheck report.

Edward Jones Broker Austin Wayne Morton Accused of Elder Fraud Involving 82-Year Old Client Diagnosed with Dementia

June 2, 2017 | Silver Law Group

The financial advisor’s alleged financial stress stemmed from gambling losses that exceeded his annual income.

The Financial Industry Regulatory Authority (FINRA) is currently investigating former St. Louis, MO- and Oklahoma-based broker Austin Wayne Morton after his dismissal from his member firm, Edward Jones, under suspicion of elder fraud.

According to FINRA, in September 2016, Morton allegedly accompanied his 82-year-old former client diagnosed with dementia to the bank to assist him in withdrawing over $20,000 in cash. Morton then allegedly left with $20,000 of the client’s money. The following month, the elderly client reportedly agreed to provide Morton with a loan for $6,000 to pay for medical expenses. The medical expenses, however, were never actually incurred.

Barry Franklin Connell Has Been Barred by FINRA and Charged by the SEC for Allegedly Stealing $5M from Elderly Clients

June 2, 2017 | Silver Law Group

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Connell is reported to have stolen $5 million from his elderly clients

In January, the Financial Industry Regulatory Authority (FINRA) permanently barred Barry Franklin Connell from working as a broker. The decision came after an investigation reported that he made numerous transfers from client accounts without authorization. FINRA first suspended Connell but had no choice but to ban him after he declined to offer the agency information it requested.

Within weeks of FINRA’s ruling, Connell was charged by the Securities and Exchange Commission (SEC) with stealing money from clients. Allegedly, the funds he was transferring were being used to settle a private lawsuit. The SEC alleges that for about a year, Connell moved money between accounts – many of which belonged to elderly clients – and also issued wire transfers and checks from those accounts to third parties.