stockbroker misconduct

Martin Knapp, Formerly a Broker with Syndicated Capital, Barred from Industry by FINRA

September 9, 2015 | Silver Law Group

A former broker with Syndicated Capital in Great Neck, New York, Martin Knapp, was permanently barred by FINRA. This action occurred because Knapp failed to respond to a FINRA request for information in which he was suspended in April 2015. Because Knapp did not request termination of his suspension within three months, he was automatically barred from association with any FINRA member in any capacity.

Knapp was with Syndicated Capital from March, 2010 when he entered the securities industry.

Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Spartan Securities Broker Scott Reynolds Fined by FINRA

September 8, 2015 | Silver Law Group

Miami, Florida based broker Scott Reynolds was fined by FINRA for allegedly failing to report an outside brokerage account to his member firm, Spartan Securities, violating FINRA rules. Reynolds was censured fined $10,000 for this violation.

Reynolds has been employed by Spartan Securities since 2005. Prior to working at Spartan, he was with Empire Financial Group, Park Financial Group and Advantage Trading Group.

Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Should You Trust Penny Stocks Endorsed by Celebrities?

July 24, 2015 | Silver Law Group

A big name may not always equal big opportunity.

It’s all around us. Branded tennis shoes, hats and apparel worn by top-ranked, world-famous tennis players. NASCAR drivers and their cars blanketed in corporate logos. Famous models and actresses designing and promoting furniture lines. Top-selling country singers performing with beverage company logos adorning their stages, their tour buses and their fan t-shirts. Everywhere we turn, companies are promoting themselves with the help of famous people.

Why should penny stocks be any different?

Investor Update: What You Need to Know About Churning

July 21, 2015 | Silver Law Group

Churning is a Type of Securities Fraud

What is churning?

Simply put, churning is defined as excessive trading.

New York Broker Raymond Thomas Clark Permanently Barred by FINRA

June 9, 2015 | Silver Law Group

Broker Raymond Thomas Clark (CRD# 3120696) was permanently barred by FINRA for failing to appear for FINRA-requested on-the-record testimony related to an investigation into whether he executed excessive and/or unauthorized transactions in customer accounts, exercised discretion without authorization, and accepted trade instructions from an individual who was not authorized to exercise trading authority in a customer account.

Clark first became a registered securities broker in 1998 and was employed by the following broker-dealers from 1998- 2014: Global Capital Markets, LLC (Melville, NY), Global Capital Securities Corp. (Englewood, CO), J.P. Turner and Co., LLC (Atlanta, GA), Bathgate Capital Partners LLC (Buffalo, NY), J.P. Turner and Co., LLC (Buffalo, NY), Paulson Investment Co., Inc. (Buffalo, NY), First Midwest Securities, Inc. (Buffalo, NY), and Dynasty Capital Partners, Inc. (Buffalo, NY).

In 2011 and 2014, Clark was suspended for using his personal email account to communicate with customers regarding business-related matters, in violation of FINRA rules and the firm’s procedures. Investors should be weary when their broker uses a personal email account to communicate with them. In many cases, the broker is doing so in order to circumvent FINRA rules and to hide illegal activities from his employer. This was the case with Clark, who by using his personal email account, bypassed the firm’s supervisory review of emails and caused the firm to fail to preserve required records, as well as not reporting a customer’s complaint concerning overcharging of commissions.

FINRA Hits Newport Coast Securities and Its Representatives with Churning Charges

August 14, 2014 | Silver Law Group

Last week, the Financial Industry Regulatory Authority (FINRA) filed charges against Newport Coast Securities, Inc. (“Newport Coast”) and some of its current and former registered representatives, accusing them of using margin and risky securities to artificially generate huge commissions for themselves while wiping out most of their customers’ investment capital.

Newport Coast, a New York-based broker-dealer, by and through brokers Douglas Leone, Andre LaBarbera, David Levy, Antontio Costanzo, and Donald Bartlet, allegedly churned the accounts of twenty four customers — many of whom are retirees — causing more than $1,000,000 in losses to the investor-clients. “Churning,” as it is known in the industry, is the act of a broker who excessively and needlessly engages in trading in a client’s account primarily to generate commissions for the broker on each trade without regard for the client’s financial well-being. Churning is an illegal and unethical practice that violates SEC rules and securities laws. The brokers are also purported to have created new account forms for their victimized clients that misstated the clients’ net worth, investment experience, and objectives; and two of the brokers (Levy and Costanzo) attempted to dissuade several customers from cooperating with FINRA’s investigation into the matter — all of which was done to cover up the illegality of the brokers’ excessive activity in the client accounts.

According to FINRA, former Newport Coast supervisors Marc Arena and Roman Luckey saw what was transpiring but took no meaningful steps to curtail the misconduct. To the contrary, the firm’s managers, supervisors, and the former President of the company allegedly profited through overrides on the churned accounts.

Connecticut Securities Regulator Seeks to Bar Meyers Associates from Selling Securities in Connecticut

April 16, 2014 | Silver Law Group

If the Connecticut Department of Banking (the “Department”) has its way, Meyers Associates and its owner, Bruce Meyers, will be barred from selling securities in Connecticut. A February 2014 Order to Cease and Desist issued by the Department, charges Meyers Associates and Bruce Meyers (“Respondents”) with numerous violations of Connecticut securities laws. The Order states the Department’s intent to fine Respondents and revoke their registration to sell securities in Connecticut.

The present charges against Respondents stem from a 2012 examination by the Department, out of which the Department claims to have discovered multiple violations of the Connecticut Uniform Securities Act and FINRA rules. Notably, the Department alleges that Respondents failed to properly supervise employees with known disciplinary histories, violated an order from the Vermont securities regulator, and failed to completely respond to both the Department’s and FINRA’s requests for information and documents.

In seeking fines and revocation of Respondents’ licenses, the Department cites to Meyers Associates’ history of run-ins with the Department over allegations that it employed unregistered agents, offered and sold unregistered securities, engaged in fraud in connection with the sale of securities, engaged in dishonest and unethical practices, violated FINRA conduct rules, and failed to enforce and maintain adequate supervisory procedures. FINRA’s BrokerCheck report for Meyers Associates shows 14 final regulatory events, two pending regulatory events, and nine final arbitrations.

Reuters’ Article Highlights the Risks of Variable Annuities to Investors

March 28, 2014 | Silver Law Group

Of all the guarantees, bells and whistles associated with variable annuities, perhaps the biggest guarantee is the steep up-front commission the financial advisor can earn for selling the product.

According to a recent Reuters’ article, variable annuity sales in the U.S. totaled $142.8 billion last year, and brokers can earn 7 percent or more in commissions on the insurance products. Based on simple arithmetic, the commissions earned on an annual basis exceeds a billion dollars.

However, investors may be damaged when these complex products are not properly explained, tax or liquidity factors are not considered, or the advisor engages in “twisting” of improper annuity switching. “Twisting” happens when a broker encourages a client to trade in an older annuity to buy a different one, often at significant cost to the client and benefit to the broker.

Pending Credit Ratings Downgrades on Puerto Rico Municipal Bonds Weigh Heavily On Leveraged UBS Closed-End Bond Funds

January 14, 2014 | Silver Law Group

UBS Financial Services of Puerto (UBS )recently reported the net asset values (NAV) for their proprietary closed-end funds mat suffer future losses. These funds are a part of the UBS Puerto Rico Family of Funds which are marketed exclusively to Puerto Rico residents. The UBS Puerto Rico Fixed Income Funds and UBS Puerto Rico Investors Tax Free Funds, are leveraged 50% and concentrated in Puerto Rico issuers, continue to suffer losses with many Puerto Rico issuer credit ratings coming under review for potential downgrades. As of January 2, 2014, UBS reported the UBS Puerto Rico Fixed Income Funds and UBS Puerto Rico Investors Tax Free Funds have declined on average another 7.15% and 4.16%, over the last 22 days.

According to UBS Financial Services, Puerto Rico Municipal Bonds are currently under review for a downgrade in credit quality by Moody’s Rating Agency. The Moody’s Global Credit Research report dated December 11, 2013 stated that approximately $52 Billion in debt financing is affected by the downgrade review. During the review period, Moody’s reports the downgrade review will focus on the following:

The ability to access the debt market for more public finance;

UBS Bank Loans Created Unacceptable Risks for Puerto Rico Investors

December 20, 2013 | Silver Law Group

UBS Financial Services of Puerto Rico has received the attention of many market watchers in the media since their UBS Puerto Rico Family of Funds suffered a “meltdown” in value. What did not receive adequate media attention are UBS’ sales practices which through the zeal of its financial advisors has left Puerto Rico residents holding excessive amounts of a failed financial product, and in many instances laden with UBS Bank loans. We have learned firsthand the extent of the destruction experienced by Puerto Rican residents who have been targeted by UBS.

The UBS Puerto Rico Family of Funds, UBS Puerto Rico Fixed Income Funds and UBS Puerto Rico Investors Tax Free Funds, were designed to be sold exclusively to residents of Puerto Rico according to their Offering documents. The investment objective was tax free income consistent with preservation of capital. A closer look at the fine print deep in the Offering document tells investors a more cautious tale.

The Prospectus and Offering documents for the proprietary closed-end funds artfully disclose some of the potential risks deemed required by regulatory laws. The risks include: