Category: Stockbroker Misconduct

FINRA Issues Supervision Fines to 4 Banks

FINRA Issues Supervision Fines to 4 Banks

dkradmin

FINRA Issues Supervision Fines to Top Financial Institutions

The Financial Industry Regulatory Authority (FINRA) has come to an agreement with four financial institutions including Deutsche Bank and JPMorgan to end claims related to failed supervision.

The four financial institutions, including Deutsche Bank Securities Inc., Citigroup, JPMorgan Chase and Institutional Brokers, LLC will collectively pay $4.75 million for violations of the Market Access Rule. FINRA claims the institutions failed to have adequate risk controls in place when letting customers access markets through their systems.

In each case, the institutions neither confirmed nor denied the charges but consented to the findings. Between May and July of this year, the institutions paid the following:

• Deutsche Bank was fined a total of $2.5 million.
• Citigroup was fined a total of $1 million.
• J.P. Morgan was fined a total of $800,000.
• Interactive Brokers was fined a total of $450,000.

The SEC Market Access Rule requires that broker-dealers that access an exchange or an alternative trading system or provide their customers with access to trading venues must properly control the financial and regulatory risks of providing such access.

In this case, the firms in question provided market access to numerous clients that executed millions of trades per day without adequate supervision.

Why Supervision is Important

The purpose of the Market Access Rule is to prevent financial institutions from risking their own financial condition and that of other participants in the market. The rule also helps to ensure the stability and integrity of the financial system and the securities markets.

Are You a Victim of Stockbroker Misrepresentation?

If you invested with the Chans or think you may be involved in a scam, you may have certain legal rights that require your immediate attention.

Call an Investment Fraud Attorney Today

If you are looking for an attorney to review your rights and options, the securities lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from for clients for wrongful actions.

With offices in Los Angeles, New York, West Palm Beach and Miami, our securities attorneys represent clients nationwide and may be able to help you recover your investment losses.

Contact an attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

Wells Fargo Broker Barred by FINRA Over Improper Transfers.

FINRA Barred a Wells Fargo Broker

dkradmin

Wells Fargo Broker Barred by FINRA Over Improper Transfers

A former Wells Fargo broker has consented to sanctions from the Financial Industry Regulatory Authority (FINRA), banning him from the securities industry after he transferred client money to his own accounts to pay credit card bills. Scott Polish of Mentor, Ohio consented to the settlement with FINRA after admitting he made transfers from the accounts of elderly clients and used the proceeds for himself

Protect Yourself from Stockbroker Misconduct

Brokers like Scott Polish, although rare, do exist. There are several steps in an attempt to avoid becoming the victim of a similar scheme. Below are three steps that can help you avoid stockbroker misconduct.

  • Receive and Review Statements | For starters, make sure you receive and review your monthly account statements, and pay particular attention to securities purchases and sales and to withdrawals from your account. Make a point to ask questions about trades or activity that seems out of the ordinary.
  • Trade Authorization | Next, never allow your broker to make trades on your behalf without your permission. If your broker is required to obtain your permission before any trade, the likelihood of being victimized is reduced drastically.
  • Contact an Attorney | Finally, if you suspect your broker of committing fraud, consider closing your account and contacting an experienced securities fraud attorney.

Did You Invest with Wells Fargo Broker Scott Polish?

If you invested with Scott Polish or someone like him, and believe that you have been the victim of a similar kind of fraud, contact an experienced securities fraud attorney today.

Call a Securities Fraud Attorney Today
If you are looking for an attorney to review your rights and options, the securities lawyers at Dimond Kaplan & Rothstein, P.A. have recovered over $100 million from banks and brokerages firms for their wrongful actions.

With offices in Los Angeles, they have helped stockbroker fraud victims throughout Bel Air, Santa Barbara, Newport Beach and Laguna Beach.

Stockbroker Charged with Making Volatile Trades

Stockbroker Charged with Making Unsuitable Investments

dkradmin

Stockbroker Made Risky Trades and Paid Personal Bills

A New York-based broker has been charged with using client funds to make very risky and highly volatile trades without their knowledge and using clients’ money to pay his credit card bills and other personal expenses.

SEC Claims Stockbroker Made Unsuitable Investments

According to the Securities & Exchange Commission (SEC), Demitrios Hallas used client money to make trades that were not suitable to their risk tolerance and portfolio. Hallas lost more than $150,000 this way. According to the SEC, Hallas also allegedly stole more than $170,000 from a single client over a period of two years.

From 2001 through 2015, Hallas was registered at 11 different brokerage firms, including Santander Securities LLC and Forefront Capital Markets. Between September 2014 and October 2015, he is alleged to have bought and sold 179 daily leveraged exchange-traded notes (ETNs) and exchange-traded funds (ETFs) with savings entrusted to him by five different clients – four of whom he began representing while at Santander. Because of the complexity and inherent risk of leveraged ETFs and ETNs many brokerage firm strictly prohibit brokers from selling these investment products to retail investors.

SEC Claims Hallas was Reckless

According to the complaint, Hallas either knew or was reckless in not knowing, that he had no reasonable basis to make such trades, and should have known that these trades were not consistent with his clients’ needs and risk tolerance.

For clients with little to no investing experience, trading ETNs and ETFs can be particularly risky. Knowing that Hallas would meet clients in neutral venues and have his clients sign account forms that contained inflated or inaccurate information regarding their income, net worth, and risk tolerance.

Further, the SEC claimed that Hallas himself lacked the understanding necessary to trade leveraged ETFs and ETNs. As such, Hallas would not have been able to properly explain the nature and risks of leveraged ETFs and ETNs to his clients. In one instance, he lost one client $61,492 in a single day.

In addition to his risky trading, Hallas is accused of pocketing more than $100,000 from a client while he was working at Chase Investment Services Corporation.

Stockbroker Faced Prior Claims

Hallas also was investigated in 2014, ultimately settling with FINRA after he recommended that two clients liquidate their securities and invest in mutual funds. He was suspended for 30 days and ordered to pay restitution exceeding $11,000.

Are you a Victim of Securities Fraud?

Unfortunately, some brokers may act in an unscrupulous fashion, preying on inexperienced investors. And some brokers may not even understand the investment products that they recommend and sell to their clients. If you feel that you have been victimized by a negligent stockbroker or by investment fraud, you should consult an experienced securities attorney to make sure that your broker is acting with your best interests in mind.

Call a Securities Attorney Today

Contact an attorney at The Fraud Report’s partner law firm, Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options. DKR’s lawyers have helped investors recover leveraged ETF investment losses from some of the largest brokerage firms on Wall Street.

With offices in Los Angeles, our securities lawyers throughout Santa Monica, Beverly Hills, and Hollywood they assist you with any securities issues that you may be facing.

Former Philly Stockbroker Sentenced for Securities Fraud

Former Philly Stockbroker Sentenced for Securities Fraud

dkradmin

Stockbroker Sentenced to Prison for Ponzi Scheme

A former Philadelphia-based stockbroker was sentenced to 6 ½ years in prison after defrauding investors of more than $3.2 million, according to a recent statement from the U.S. Attorney’s Office.

William Bucci pled guilty to securities fraud and other related charges. Among his victims were a Catholic priest and retired firefighter, whom he told that he was starting a business to import high-end olive oil and wine from Italy. In fact, Bucci never set up any business of the sort.

Stockbroker Scammed Friends and Classmates

In addition to his prison sentence, Bucci also was ordered to pay more than $3 million to his victims and the IRS. Bucci served as the president of the Order Sons of Italy from 2003 to 2007, the oldest and largest Italian-American fraternal organization in the U.S., through which he met several of his victims. In addition to those he met through the Order, he solicited old classmates and friends, promising to give them as much as 10 percent interest annually with a return the principal within a few years.

Instead of paying back friends and family, Bucci used investors’ money to support his lifestyle and pay off earlier victims, in Ponzi-scheme fashion. According to FINRA, Bucci was licensed at various brokerage firms between 2002 and 2012. His stockbroker’s license has since been revoked.

Call a Ponzi Scheme Attorney Today

If you invested with William Bucci or believe you have been the victim of a similar Ponzi scheme, you may have legal rights that require your attention and you should contact a qualified investment fraud attorney immediately.

Call a Ponzi Scheme Attorney Today

Contact an attorney at The Fraud Report’s partner law firm, Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

With offices in Los Angeles, our securities lawyers throughout Santa Monica, Beverly Hills, and Hollywood they assist you with any securities issues that you may be facing.

Merrill Lynch Broker Fined by FINRA

Merrill Lynch Broker Guilty of Stealing $1 Million from Clients

dkradmin

Merrill Lynch Broker Illegally Moves Money

A former Merrill Lynch broker pled guilty to stealing more than $1 million dollars from two of his clients by illegally withdrawing funds without permission.

Former Merrill Lynch adviser Alec Rivera pled guilty to committing wire fraud between October 2010 and September 2013, when he was a Merrill Lynch employee in Chicago.

Merrill Lynch Broker Alec Rivera Caught 

Rivera illegally withdrew funds from client accounts and then passed them through a Chicago-based chamber of commerce, before moving the money to his own account.

Rivera convinced colleagues at his brokerage firm to make over 100 cash transfers by telling them he had the authorization to do so. He then issued checks from the chamber of commerce to himself, claiming he had to make payments for various obligations, such as “IRS attorney payment.”

To hide his fraud, he had the clients’ real statements mailed to his address and created fake account statements that he provided to the two clients.

FINRA barred Rivera from acting as a securities broker in 2014 after his theft came to light and he failed to provide information related to the stolen funds.

Although he faces a possible 20-year prison sentence, he likely will receive between 3 ½ and 4 years under federal sentencing guidelines for cooperating.

Did You Invest with former Merrill Lynch Broker Alec Rivera? 

Whether you invested with Alec Rivera or someone like him, you may have certain rights that require your immediate attention.

Call a Stockbroker Fraud Attorney Today

If you are looking for an attorney to review your rights and options, the securities lawyers at Dimond Kaplan & Rothstein, P.A. have recovered over $100 million from banks and brokerages firms for their wrongful actions.

With offices in Los Angeles, they have helped stockbroker fraud victims throughout Santa Monica, Beverly Hills, and Hollywood.

MLB Player Charged in Insider Trading Case

Former MLB Player Facing Insider Trading Charges

dkradmin

A former MLB player is facing insider trading charges in court. Former Major League Baseball player Doug DeCinces has been accused of trading on non-public tips regarding Abbot Laboratories takeover of Advanced Medical Optics Inc. He recently asked a California federal court to instruct the jury in his insider trading case that certain testimony at trial will not apply to him.

DeCinces argued that testimony presented from Brian Fogarty, an athletics manager at the University of San Diego, does not apply to him. DeCinces played professionally in the 1970s and 1980s for several teams, mainly the Baltimore Orioles and the California Angels.

Insider Trading Charges and What They Mean

Insider trading occurs when someone uses non-public information to buy or sell securities, or passes along that information to another, who then buys or sells the securities. If you act on information not publicly available to make a profit through the securities market, you may be guilty of insider trading.
In this case, Fogarty claimed that DeCinces provided him with information regarding the potential takeover and that Decinces had received the insider information from James Mazzo, then CEO of Advanced Medical Optics. DeCinces argued that Fogarty’s testimony is hearsay, and therefore should not be used as evidence against him.

Navigating an Insider Trading Case

The legalities around what constitutes insider trading can be difficult to navigate. If you received a “tip” or other information that you believe is confidential in nature and not public, you should consult a qualified securities attorney before trading to make sure that you are acting appropriately.

Call an Insider Trading Attorney Today

Contact an attorney at The Fraud Report’s partner law firm, Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

With offices in Los Angeles, our securities lawyers throughout Santa Monica, Beverly Hills, and Hollywood can assist you with any securities issues that you may be facing.

Protecting Your Money by Responding to Stockbroker Fraud

Part 3: Reacting and Responding to Stockbroker Fraud

dkradmin

Protecting Your Money by Responding to Stockbroker Fraud 

In Part 1 of this series, we identified a sampling of types of stockbroker fraud. In Part 2, we discussed ways to avoid becoming the victim of an investment scam or stockbroker fraud. In our final post, we discuss what to do if your preventative measures fail to keep you from falling prey to a stockbroker’s unscrupulous behavior. You can protect your money

Dealing with Stockbroker Fraud

There are several actions that can be undertaken after uncovering fraud, and some things that should be done to recover the money you’ve lost as a result of stockbroker fraud.

Call a Stockbroker Fraud Lawyer

If you think you have been someone’s prey in an investment fraud scheme, contacting a qualified investment fraud attorney first can be one the smartest and most important thing to do. Fraud, like many other illegal activities, has a statute of limitations. You need to make sure you protect your rights within the timeframe specified by the law or you could forfeit your right to recover anything, no matter how guilty the perpetrator is. An experienced stockbroker fraud lawyer should be able to review your case and provide you with advice on how to proceed.

Escalate Your Complaint to a Higher Level

If you are dealing with an individual stockbroker, you also can contact the broker’s supervisor to express that you believe the broker might have engaged in misconduct. If the supervisor doesn’t help, or will not help, which often is the case, you should immediately contact an investment fraud lawyer.

Importantly, even if the supervisor represents that they will investigate your claims, you still should contact a stockbroker misconduct lawyer. To avoid getting sued, many brokerage firms will not disclose to an investor that they believe that the broker did something wrong. An independent analysis of your claims by an experienced investment fraud lawyer likely will give you the most accurate opinion of the nature and extent of misconduct that has been committed.

File an Arbitration Claim or Lawsuit

Suing the brokerage firm may not be the first thing that should be done, but it often is the only means of recovering investment losses. Brokerage firms rarely offer to pay investors for investment losses if the investor has not forced the brokerage firm’s hand by filing a FINRA arbitration claim or lawsuit against the brokerage firm. [Note: Most brokerage firms require that disputes with investors be filed through FINRA’s arbitration system rather than through the court system.]

An Attorney May be Best at Responding to Stockbroker Fraud

This brings us back to our first tip, which is consulting an experienced investment fraud lawyer: an attorney can help you identify the nature and extent of the wrongdoing and the strengths in your case, and advise you on the best way to proceed. An experienced stockbroker fraud attorney can help you navigate the FINRA arbitration system.

Most stockbroker fraud lawyers work on a contingency-fee basis, which means that they only get paid when and if they help you recover money. Their fee typically is a percentage of the money that they recover for you.

Call a Stockbroker Fraud Attorney Today

If you have suffered a loss because your broker or brokerage firm misrepresented or omitted crucial information before you invested, you may have legal rights that require your immediate attention.

Contact an attorney today to schedule an appointment or consultation to review your rights and options.

Avoiding Stockbroker Fraud is the best way to protect your money.

Part 2: Identifying and Avoiding Stockbroker Fraud

dkradmin

Protect Your Money by Avoiding Stockbroker Fraud

In the first blog post in our blog series, we discussed the basics of what a stockbroker does and some examples of ways in which one can be victimized by an unscrupulous stockbroker. As we mentioned before, the types of stockbroker fraud we mentioned are not comprehensive. Rather, our blog is meant to demonstrate that there are numerous forms of stockbroker fraud. When in doubt, consult a qualified professional.

Now that you know to be on the lookout for potential stockbroker fraud, spotting it is not always as it easy as it may seem. A stockbroker intent on committing fraud often can disguise their misconduct through artful and convincing sales pitches. A Ponzi schemer, for example, has a goal of luring you away from your money by promising something otherwise unattainable, like extremely high rates of return. Many Ponzi schemers have defrauded even savvy investors out of millions – and even billions – of dollars.

4 Steps to Avoiding Stockbroker Fraud

There is no sure-fire way to detect stockbroker fraud, but the following tips can help you make sure that you and your money are being treated both fairly and legally:

  • Ask questions. Gather as much information as you can – if you don’t like or understand the answers, ask for clarification or seek another opinion. Stockbrokers are obligated to disclose not only the upside of investments but also the risks.
  • Get a second opinion. While brokers earn a living based on sales of stocks and other securities, any broker worth their reputation should not be afraid to let you perform your due diligence before investing. If you feel pressured to make an immediate decision, it may be because the person selling to you might not want you to uncover whatever it is he or she is trying to hide.
  • Do your homework. There are many ways to gather information, and you should use every means at your disposal. The Financial Industry Regulatory Authority (FINRA) has an excellent BrokerCheck tool where you can see if your broker or the firm has ever been accused of any wrongdoing.
  • When in doubt, consult a lawyer. If you are worried that something just doesn’t add up, or even if you just have questions, consult a qualified securities attorney who can help make sure that your account is accurate, and your investments are legitimate – and legal.

Even a savvy, experienced investor who has done their homework is not 100% safe from investment fraud; however, by following the steps outlined above, you can give yourself a chance to avoid being victimized.

Stay tuned for our final installment in our stockbroker fraud series in which we discuss what to do in the unfortunate event that you become the victim of stockbroker fraud.

Call a Stockbroker Fraud Attorney Today

If you have suffered a loss due to stockbroker fraud, you may have legal rights that require your immediate attention.
Contact an attorney today to schedule an appointment or consultation to review your rights and options.

Understanding Stockbroker Fraud

Part 1: Explaining & Understanding Stockbroker Fraud

dkradmin

Protect Your Money by Understanding Stockbroker Fraud

In this multi-part series of blog posts, we are going to talk about how to protect your money from stockbroker fraud. Investing is a wonderful way to grow your money, but it also can expose you to abuse by people in positions of trust. One of the most important things you can do to protect yourself is to know as much as possible about where your money is going and making sure it is entrusted to the right person or brokerage firm.

In this first installment, we discuss understanding stockbroker fraud. Subsequent posts will discuss identifying stockbroker fraud and what to do if you become the unfortunate victim of stockbroker fraud.

What is Stockbroker Fraud?

First, it is important to understand what a stockbroker does and how you can become the victim of stockbroker fraud. A stockbroker (or “broker”) is a regulated professional who works with a brokerage firm, provides investment advice, and sells stocks or other securities in exchange for a commission or fee.

Stockbrokers are in a position of trust because the average investor relies on the broker’s knowledge to recommend suitable investments based on the investors’ stated investment objectives, risk tolerance, and investment needs.

Stockbroker fraud can come in many forms, ranging from churning, to misrepresentation or omission. Fraud can be difficult to spot, even to the trained eye. Churning, for example, is the buying and selling of securities for the primary purpose of generating commissions, regardless of whether the trades makes sense for the investor.

Types of Stockbroker Fraud

Other forms of stockbroker fraud can include but are not limited to:

  • Misrepresenting the nature or risks of an investment
  • Social Media Fraud
  • Microcap Fraud
  • Advance Fee Fraud
  • Foreign Currency Trading Fraud
  • High Yield Investment Programs

Stay tuned for Part 2 of our blog series, in which we will discuss what to do to help avoid becoming the victim of stockbroker fraud.

Call a Stockbroker Fraud Attorney Today

If you have suffered a loss because your broker or brokerage firm misrepresented or omitted crucial information about an investment, you may have legal rights that require your immediate attention. Such misrepresentations could be as basic at representing that a risky investment was safe and secure.

Contact an attorney today to schedule an appointment or consultation to review your rights and options.

Steps to Preventing Stockbroker Fraud

4 Steps to Preventing Stockbroker Fraud

dkradmin

When you put money into an investment account, you want to make sure that it is safeguarded. These four steps to preventing stockbroker fraud can be taken in an effort to avoid stockbroker fraud and to make sure that you do not become the victim of an unscrupulous broker.

Investigate Your Broker’s Background

The Financial Industry Regulatory Authority (FINRA) has a handy BrokerCheck tool that allows you to check out your broker. You can find out if any complaints have been lodged, what the status or results are, and whether the broker has ever been fined or suspended. If your broker isn’t listed, this likely indicates that he or she is not properly licensed to sell securities and you should be avoid investing with that broker.

Review Account Information Very Carefully

When you open a brokerage account, forms are completed to document your risk tolerance, your investment objectives, and your net worth. Make sure that these forms are completed accurately, as your broker’s supervisor can use these documents as a benchmark against which to compare the investments and investment strategies that your sells to you. Even if your broker completes these forms for you, make sure that you review them for accuracy.

Review Your Statements and Address Suspicious Activity Immediately

Take the time to review your monthly account statements and any trade confirmations that you receive. If you notice something awry or if you do not understand any of the transactions, you should immediately contact your broker or brokerage firm. Any delay in doing so can lower your ability to bring a viable claim for investment fraud or stockbroker misconduct. If something looks wrong, address it immediately and make sure that you document your concerns in writing. Importantly, don’t simply rely on your broker if you have serious questions about your account. A broker who is committing wrongdoing likely would not admit that to you. Seek an independent review of your account from another broker or by an investment fraud lawyer.  

Close Your Account

If you believe you have been the victim of stockbroker misconduct or securities fraud, you should close your account immediately before anything else can happen. Find a new broker – and a securities fraud lawyer – and gather evidence of the potential misconduct.

More Information on Stockbroker Misconduct

For more information on unauthorized trading and common investor problems, you can also consult the FINRA website.

Call a Los Angeles Securities Fraud Attorney Today

While stockbroker misconduct cannot always be prevented, there are certain remedies for victims of securities fraud and misconduct, including filing a FINRA arbitration claim to recover your investment losses.

Contact an experienced Los Angeles securities fraud attorney today for a consultation to discuss your rights and options.