Securities Arbitration Lawyers Blog

Florida Broker Peter Gouzos Banned by FINRA

September 18, 2015 | Silver Law Group

His most recent employing firm was expelled by FINRA in October

After 22 years in the securities industry, FINRA permanently barred Peter Gouzos in February from acting as a broker or selling securities to the public. The final straw in a career full of customer dispute disclosures was his alleged failure to respond to FINRA requests for information, according to FINRA reports.

Gouzos most recently worked for Hunter Scott Financial in Delray Beach, Florida, which FINRA expelled in October. Before that, he worked for Dawson James Securities in Boca Raton and Emerson Bennett & Associates in Fort Lauderdale. Earlier in his career, he worked at various firms in New York, New Jersey, Georgia and Missouri.

Bryan Carnahan Barred From Practice in Securities Industry Following Allegations of Scheme to Defraud Customers

September 17, 2015 | Silver Law Group

Carnahan allegedly converted almost $170,000 in misappropriated customer funds

After 16 years and five disclosure events in the securities industry, Bryan Andrew Carnahan was barred permanently by FINRA on May 1 following allegations that he converted $169,500 in funds from a customer at his firm, The Huntington Investment Company, between September 2013 and March 2015. Prior to being employed by Huntington, Carnahan worked for John Hancock Distributors, Inc., in 1998.

According to FINRA reports, Carnahan transferred the customer’s funds and asked her to write cashier’s checks that were supposedly to be used for an investment. He then allegedly caused the checks to be re-issued fraudulently in the amount of $169,500. It is purported that he then made those checks payable to his own account and to the accounts of other customers who lost money in investments. FINRA reports that at least 13 additional customers were involved in the alleged scheme.

SEC Report Finds Flaws in the Retail Sales of Structured Securities Products

September 16, 2015 | Silver Law Group

35 percent of structured products at the firms investigated were liquidated below 80 percent of their face value, allegations of unsuitable recommendations and sales limit abuse raised

The Securities and Exchange Commission reported Monday that it has spotted failures in many broker-dealers controlling the retail sales of structured products, leading to unsuitable recommendations and potential abuse of limits to sales.

Structured products, according to Investopedia, are the result of taking traditional securities and replacing their typical payment features with other features that are meant to make an investor’s risk-return objectives more customizable than they would be with only traditional securities.

Timothy DiBlasi Under FINRA Scrutiny for Lack of Compliance Supervision

September 15, 2015 | Silver Law Group

Disciplinary action is pending as DiBlasi’s involvement in the sale of over 74 million shares of unregistered stock is investigated

After 11 years in the securities industry, Timothy D. DiBlasi may be facing a FINRA disciplinary action for his alleged involvement in the sale of more than 74 million unregistered stock shares. As the chief compliance officer at Scottsdale Capital Advisors, FINRA alleged that he failed to enforce a system of supervision and anti-money laundering compliance, leading to the alleged illicit trades.

DiBlasi has been registered with the firm since 2012, and FINRA is implicating him in the case due to his failure to prevent fraud and illicit activity relating to a penny stock, according to the report. Since October 2013, DiBlasi has served as the chief compliance officer at Scottsdale, making him responsible for written supervisory procedures, or WSPs, which detail how supervisors should handle any “red flags” that suggest improper trading activity, particularly in regards to unregistered securities. However, according to FINRA, DiBlasi’s system was not up to par when it came to verifying ownership of securities and their registration exemptions.

FINRA Orders Interactive Brokers LLC to Pay Hedge Fund $667,000

September 15, 2015 | Silver Law Group

Alleged wrongful auto-liquidation made accounts subject to additional margin calls, which continued a death spiral of financial loss.

The turmoil in the market over the last two weeks has likely had significant impact on investors. For investors trading with margin accounts through Interactive Brokers LLC, this could mean even greater financial loss due to the firm’s practice of automatic liquidation.

When trading on margin, an investor borrows funds from the brokerage firm with the agreement that a “maintenance margin,” or minimum account balance must be maintained. If the account value is at risk of falling below the maintenance margin, the firm can require investors to either deposit more funds or make a margin call where the broker exercises their right to sell the stock, or liquidate, to pay down the loan.

New York Broker Nathalo Menendez Permanently Barred By FINRA

September 14, 2015 | Silver Law Group

New York broker Nathalo Menendez (CRD# 4882003), was permanently barred by FINRA and is no longer licensed to act as a broker, or otherwise associating with firms that sell securities to the public. Menendez is barred from association with any FINRA member in any capacity.

According to FINRA, during the period 2007 through 2010, while employed as a broker at iTRADEdirect.com, Menendez engaged in unauthorized trading and excessive trading (“churning”), and unauthorized account openings, in violation of FINRA Rule 2010 and NASD Rules 2110, 2310, and 3110. The assertions against him involved the excessive buying and selling of stock for the purpose of generating commissions, and not for the benefit of the client.

Menendez was registered with nine firms between 2004 and April 26, 2013 [Salomon Grey Financial Corp., Westpark Capital, Inc., Fordham Financial Management, Inc., iTRADEdirect.com Corp., EKN Financial Services Inc., John Thomas Financial, Laidlaw & Company LTD., and A & F Financial Securities Inc.], and left the securities industry on April 26, 2013. Four out of the nine firms he worked for have been expelled from the brokerage industry by FINRA for violations of the law and misconduct. Additionally, Menendez has other claims against him including a customer award dated August 22, 2013, in the amount of $166,000.00 plus interest against Menendez and EKN Financial Services Inc., jointly. This suit was for unsuitability, fraud, excessive trading, and breach of fiduciary duty, among other claims.

FINRA Has Darrel Michael “Mike” Cruz Under Fire After Alleged Supervisory Failings

September 14, 2015 | Silver Law Group

Regulatory action pending against president of Scottsdale Capital Advisors

D. Michael Cruz, president of Scottsdale Capital Advisors, is involved in a pending regulatory action by FINRA after his alleged involvement in the sale of more than 74 million unregistered shares between three microcap stocks.

Cruz has been registered with the firm since 2008, and FINRA is implicating him and Chief Compliance Officer Timothy DiBlasi in the case due to their alleged failure to enforce supervisory procedures that prevent fraud and illicit activity, according to the report.

Scottsdale Capital Advisors Awaiting FINRA Disciplinary Action After Alleged Scheme

September 11, 2015 | Silver Law Group

The company’s Chief Compliance Officer and President may be implicated in the case

Scottsdale Capital Advisors, an Arizona brokerage firm established in 2001, is pending disciplinary action by FINRA after allegations of inappropriate business conduct by a client, the firm’s compliance officer and the then-president of the firm.

In May, FINRA filed a complaint against the firm as well as individuals John Hurry, Timothy DiBlasi and Mike Cruz in regards to allegations that these individuals and the firm violated FINRA rules by being involved in the sale of more than 74 million unregistered shares of three separate stocks, resulting in proceeds of more than $1.7 million for the customer and $170,000 in commissions for the firm, according to FINRA.

John Hurry May Face FINRA Charges, Sanctions Following Allegations

September 10, 2015 | Silver Law Group

Allegations include sales of millions of unregistered stock shares

John Hurry, a broker investment adviser who has been in the securities industry for 20 years, is pending disciplinary review by FINRA following allegations of his involvement with the illicit sale of more than 74 million unregistered shares through Arizona-based firm Scottsdale Capital Advisors.

In May, FINRA filed a complaint against the firm, Hurry and two of the firm’s higher-ups in regards to allegations that the individuals and the firm violated FINRA rules by selling 74 million unregistered shares of three separate stocks, resulting in proceeds of more than $1.7 million for the customer and $170,000 in commissions for the firm, according to FINRA.

Richard Gomez Allegedly Involved With Fraudulent Company

September 10, 2015 | Silver Law Group

Alleged damages are estimated to be at least $499,000

According to FINRA, in April 2015, Richard Gomez, currently registered with Avenir Financial Group, was named as a respondent to a complaint regarding a fraudulent foreign company called Praetorian whose shares he sold to investors, allegedly causing nearly $500,000 in financial losses.

The complaint alleges that he did not disclose the adverse information available about the company, resulting in his earning at least $14,950 in commissions. Gomez maintains that even though the company was fraudulent does not mean his business activities relating to the company were problematic.