Securities Arbitration Lawyers Blog

Antonio Costanzo Permanently Barred by FINRA After Alleged Churning in Customer Accounts

October 9, 2015 | Silver Law Group

Broker failed to respond to FINRA information requests after allegations of excessive trading in numerous customer accounts

After 19 years in the securities industry, Antonio Costanzo has received a permanent bar from FINRA from acting in the capacity of a broker or other financial adviser, according to the FINRA website. The sanction, levied in May, came after a 2014 allegation that Costanzo was involved in churning, or excessive trading, in several customers’ accounts while employed at Newport Coast Securities.

Churning is, unfortunately, a common form of stockbroker misconduct in which a financial adviser makes excessive trades in an account in an effort to generate greater commissions without actually benefiting the customer. In fact, the buying and selling activity involved in churning is unsuitable to the investor’s goals and serves no practical purpose to the investor but generates substantial commission for the stockbroker.

Stifel Nicolaus & Co.’s Michigan Broker Kenneth Hornyak Permanently Barred By FINRA

October 9, 2015 | Silver Law Group

Michigan broker Kenneth Hornyak (“Hornyak”)(CRD# 2990144), was permanently barred by the Financial Industry Regulatory Authority (“FINRA”) and is no longer licensed to act as a broker, or otherwise associate with firms that sell securities to the public. Hornyak is barred from association with any FINRA member in any capacity.

According to FINRA, while employed as a broker at member firm Stifel, Nicolaus & Co., Inc. (“Stifel Nicolaus”), Hornyak exercised discretion in a client’s account without written authorization from the client. In January 2014, Stifel Nicolaus discharged Hornyak based on those allegations for violating firm policy. FINRA further alleged that Hornyak engaged in unauthorized trading and unsuitable short-term trading in Unit Investment Trusts (“UIT”). FINRA requested on-the-record testimony from Hornyak, however, Hornyak refused to comply and failed to appear for that questioning. As a result of his failing to cooperate with an investigation, FINRA permanently barred Hornyak from the financial industry. Hornyak consented to FINRA’s findings while neither admitting nor denying the allegations against him.

Hornyak was employed as a registered representative by Stifel Nicolaus from March 2006 through January 2014. Prior to that, Hornyak was employed in Purchase, New York by Morgan Stanley, Inc., from January 1998 through March 2006. According to FINRA, Hornyak’s CRD shows several customer complaints against him accusing Hornyak of securities violations including excessive trading (“churning”), unsuitable investments and unauthorized trading. He was also the subject of two employment terminations for cause (one as noted above). Furthermore, customers have settled disputes against Hornyak in the amounts of $90,000, $50,000 and $10,000.

Florida Broker Salim Lyazidi Permanently Barred by FINRA

October 8, 2015 | Silver Law Group

Broker Salim Lyazidi (CRD# 4617448) was permanently barred by FINRA commencing on March 9, 2015, for failing to respond to a FINRA request for information, pursuant to FINRA Rule 9552(d). Lyazidi is barred from association with any FINRA member in any capacity. Lyazidi failed to request termination of his suspension within 3 months of the date of his Notice of Suspension, and therefore, was automatically barred by FINRA (FINRA Rule 9552(h)).

Lyazidi first became a registered securities broker in 2003 and was employed by the following broker-dealers from 2003- 2014: Citigroup Global Markets Inc. (Coral Gables, FL), Banc of America Investment Services, Inc. (Miami, FL), Pointe Capital, Inc. (Boca Raton, FL), JHS Capital Advisors, LLC (Coconut Grove, FL), Kovack Securities Inc. (Coconut Grove, FL), and Cabot Lodge Securities LLC (New York, NY).

According to FINRA, in 2014 a customer accused Lyazidi of irregular transactions and false documentation apparently created and submitted by Lyazidi himself. Lyazidi settled the claim with the customer. Furthermore, felony criminal charges are currently pending against Lyazidi for credit card or debit card abuse in a Texas court.

Silver Law Group Investigates Arthur Jacob, CPA and Innovative Business Solutions, LLC

October 8, 2015 | Silver Law Group

According to recent SEC allegations, from approximately mid-2009 through at least July 2014, Jacob and Innovative Business Solutions, LLC (“IBS”), which Jacob owns and controls, engaged in a fraudulent scheme involving material misrepresentations and omissions and other deceptive devices and practices. Jacob engaged in this scheme in order to obtain and retain investment advisory clients and thereby collect advisory fees.

For at least five years, Jacob (alone and acting through IBS) routinely made false statements and omissions to current clients, prospective clients, and others, where he:

concealed his 2003 disbarment by the State of Maryland for misappropriating client funds, making false statements under oath, making numerous false statements to Bar Counsel, filing false tax returns on behalf of a client, willfully violating a court order, and

Palm Beach Gardens Broker Ralph Oelbermann Permanently Barred by OFR And FINRA

October 7, 2015 | Silver Law Group

Broker Ralph Oelbermann (CRD# 1962900) was permanently barred by the Florida Office of Financial Regulation (“OFR”) and fined $110,000 by state regulators commencing on October 24, 2014, for failing to respond to a Complaint by the OFR . He was terminated after customers allegedly reported unauthorized trading in their accounts. The Complaint that was brought by the OFR alleged that Oelbermann falsified customer account documents and conducted fraudulent securities transactions. Furthermore, Oelbermann was permanently barred by FINRA commencing on May 20, 2015, for failing to respond to a FINRA request for information, pursuant to FINRA Rule 9552(d). Oelbermann is permanently barred from association with any FINRA member in any capacity. He failed to request termination of his suspension within 3 months of the date of his Notice of Suspension, and therefore, was automatically barred by FINRA (FINRA Rule 9552(h)).

Oelbermann first became a registered securities broker in 1989 and was registered with the following securities firms from 1989-2013: Hibbard Brown & Co., Inc. (New York, NY ), Corporate Securities Group, Inc. (St. Louis, MO), Investors Associates, Inc. (Hackensack, NJ), Worthington Capital Group, Inc. (Garden City, NY), First Union Securities Financial Network, Inc. . (St. Louis, MO), Gunnallen Financial, Inc. (Palm Beach Gardens, FL), National Securities Corp. (Boca Raton, FL), Securities America, Inc. (Palm Beach Gardens, FL), LPL Financial LLC (Palm Beach Gardens, FL), and J.W. Cole Financial, Inc. (Palm Beach Gardens, FL).

According to FINRA, in September, 2013, Oelbermann was discharged by his employer, LPL Financial, for unauthorized trading involving mutual funds. He also had additional customer complaints filed against him in 2001 and 2002 for allegations concerning misrepresentation, fraud, excessive and unauthorized trading, and unsuitability. In these cases, the customers were awarded reparations.

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.

Hindsight Is 20/20: Famous Ponzi Schemes and Why They Weren’t Obvious

October 2, 2015 | Silver Law Group

Throughout history, promises of high returns and low risk have lured investors to financial peril

If they only used their brilliance for good and not evil, what a better world we all might live in. Unfortunately, the brilliant businessmen behind some of the most famous Ponzi schemes, both in the past and more recently, chose to use their intelligence to prey upon all of society—from the poor elderly to the rich and famous.

The Man Who Started It All: Charles Ponzi

6 Questions You Must Ask Potential Brokers Before Handing Over Your Money

October 1, 2015 | Silver Law Group

It’s time to start looking beyond low commissions

Maybe you’re a new investor. Maybe you’re looking for a new broker after getting burned. Either way, you’re entitled to know a few things about the person you’ll trust to act as the guiding intermediary between you and securities traded on the market. But what questions will really help you vet this person? What answers are just big red flags? While the following questions are absolute musts, don’t be afraid to ask more and dig deeper. The only brokers who fear your inquiries are those with something to hide.

1. Do you owe me a fiduciary duty?

SEC Alleges Broker William Quigley Schemed to Defraud Investors

October 1, 2015 | Silver Law Group

Quigley and his two brothers are accused of running a fraudulent offering scheme

After a 24-year career in the securities industry checkered with allegations of misconduct and unauthorized trading, broker William Quigley has not only been barred permanently by FINRA, he also faces fraud charges brought by the SEC.

According to the SEC administrative proceeding, the SEC “deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be…instituted” against Quigley. It is alleged that William Quigley, along with his two brothers, Michael Quigley and Brian Quigley misappropriated investor funds from 2003 through 2012.

Samuel Borger Suspended by FINRA for Two Months

September 30, 2015 | Silver Law Group

FINRA did not impose a fine though Borger failed to report outside accounts

After 43 years in the securities industry, Samuel Jacob Borger was hit with a two-month suspension from FINRA on May 29 following allegations that he failed to inform his employing firm of outside accounts over which he had authority, according to FINRA reports.

From November 2003 to April 2014, Borger allegedly failed to disclose his association with several outside accounts to any of his employing firms in that time period. These allegations violate rules under both FINRA and the National Association of Securities Dealers (NASD). He accepted the two-month suspension without admitting or denying the findings, and he submitted a statement regarding his finances and inability to pay a fine, so a fine was not imposed.