Articles Posted in Broker Fraud

SSEK Investigates Richard Cagle

If you are an investor who suffered losses while working with former Hilltop Securities Independent Network broker Richard Earl Cagle, please contact our broker fraud lawyers at Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) today. With 28 years in the industry, Cagle, who was a Texas broker, was barred by the Financial Industry Regulatory Authority (FINRA) a few months ago after he refused to appear and testify in the self-regulatory authority’s probe into allegations that he made unsuitable investment recommendations and mismarked customer order tickets.

It was just earlier this year that Hilltop Securities fired Cagle. His BrokerCheck record shows two settled customer disputes, both alleging unsuitable recommendations. One case was settled for $20K. The other broker fraud case was settled for $230K.

Our investor fraud lawyers at SSEK Law Firm are looking into claims involving former Wells Fargo (WFC) broker Leonard Kinsman (Kinsman). Kinsman currently still faces at least two customer complaints that were brought before the Financial Industry Regulatory Authority (FINRA), one claim involves a New Jersey widow and mother of three who is accusing him of defrauding her family of their life savings.

Until July 2019, Kinsman belonged to the Wells Fargo Financial Network of brokers that operate independently, even as they use the bank’s compliance software and investment systems. No details have been provided into how or why he is no longer affiliated with the firm’s broker network.

According to the New York Post, the widow began working with Kinsman in 2012 when he was still a Merrill Lynch broker and after her husband had passed away. She requested that Kinsman place her money, a $2.27M life insurance settlement, in conservative, diversified investments that promoted long-term growth so she could support her family off the interest.

Oppenheimer Broker Involved In Customer Dispute Cases  

Cesar Hurtado, who has been with Oppenheimer since 2003, is currently under scrutiny in the wake of recent customer disputes and is being investigated by Shepherd Smith Edwards and Kantas.

One of the claims alleging fraud, negligence, breach of fiduciary duty, and negligent misrepresentation was settled for $285K.  Another customer dispute case, which is still pending, makes similar claims and is seeking $100K in damages. 

Cleveland, Ohio

Shepherd, Smith, Edwards & Kantas (“SSEK”), a law firm specializing in representing wronged investors, is looking at allegations by FINRA into former Linsco Private Ledger (LPL) financial advisor, Jeffery Vasiloff (“Vasiloff”).  Vasiloff worked at LPL in 2018 and was not employed very long.  Vasiloff was fired, according to FINRA,  due to allegations of utilizing discretion without obtaining the proper written authority.  As a result, he was also suspended from acting as a financial advisor by FINRA.  He previously worked at Invest Financial Corporation and appears to be based out of Vermilion, Ohio.  After serving his suspension, Vasiloff became employed by JW Cole Financial.

Vasiloff never admitted nor denied FINRA’s finding.  However, he consented to the sanctions imposed and accepted the findings that he acted improperly by refusing to obtain prior consent, in writing, from the client before acting on that client’s behalf.  LPL simply reported to FINRA that Vasiloff was discharged for “use of discretion without prior written authorization.”

JP Morgan Securities (JPM) agreed to pay $14M to a claimant who accused its former broker Antoine Souma of misconduct that allegedly led to $20M in net losses. According to Advisor Hub, Souma, who is based in Los Angeles, was named in Barron’s 2016 Top 100 Financial Adviser list. He is currently a Morgan Stanley (MS) broker. He “vehemently denies” the allegations made in this investor fraud claim.

The claimant, Ziad Gandour, is the founder of industrial construction management company TI Capital. He accused Souma of the following:

  • Fraud

A Tennessee investor is pursuing a Financial Industry Regulatory Authority (FINRA) arbitration claim against Kalos Capital, Inc. and its broker Martin Hunter McFarlin for the more than $100K in losses that he sustained from investing in non-traded real estate investment trusts (non-traded REITs) and the GPB Capital Automotive Portfolio. Now, the claimant is alleging omissions, misrepresentations, gross lack of supervision, unsuitable recommendations, and due diligence failures. Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) is representing this individual in his case against Kalos and McFarlin.

Our client is a divorced dad, a small business owner, and an unsophisticated investor, which is why he turned to McFarlin and Kalos several years ago to help him invest his retirement money for him and his family. During seminars and company Christmas parties, the claimant was told that private placements were safe alternative investments.

Private Placements Are Risky Investments

An investor who filed an arbitration claim against Arkadios Capital for selling her GPB Capital Holdings private placements now has a hearing date set before a Financial Industry Regulatory Authority (FINRA) panel: April 20, 2020. This is one of the first GPB investor fraud case brought against a brokerage firm to get a hearing scheduled before one of the self-regulatory authority’s (SRO) arbitrators. Our broker fraud lawyers at Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) are representing this claimant.

The investor, who is a woman from the greater Atlanta, Georgia area, is claiming hundreds of thousands of dollars in retirement fund losses after her financial adviser, an Arkadios broker, recommended the GPB securities to her. While with the broker-dealer, her portfolio became especially concentrated in private placements, including the GPB Holdings II Limited Partnership. Now, the claimant is contending that this GPB investment, in particular, was an extremely unsuitable recommendation for her, especially since it involved her IRA from which no losses can be offset.

Our client maintains that she was not aware of the risks involved in the investment strategy used by her Arkadios broker. She is alleging unsuitable recommendations, omissions, misrepresentations, gross negligence, due diligence failures, breach of fiduciary duty, negligence, and inadequate supervision. The investor is seeking damages, interest, and costs.

If former Cetera Advisers broker James Christopher Hayne has handled your investments  and you suffered investment losses that you suspect were due to fraud or negligence, you should speak with an experienced stockbroker fraud law firm right away. Over the years, Hayne, a Texas broker, has been named in numerous customer arbitration claims brought  before the Financial Industry Regulatory Authority (FINRA).

With 17 years in the industry, Hayne, previously was a registered broker with Questar Capital, First Allied Securities, Edward Jones, and Morgan Stanley. His BrokerCheck record shows nine customer disputes, five of which were settled.

Most recently, there was the Financial Industry Regulatory Authority claim brought against Hayne by a customer that was resolved for $325K. The former client had requested $100K in damages. In that investor fraud case, Hayne  was accused of violating both the Texas Securities Act and California Corporate Securities Law, breaching contractual duties to the claimant, negligence in the way he handled the latter’s account, and causing the customer to suffer investment losses.

A Former Morgan Stanley (MS) broker who was barred by the Financial Industry Regulatory Authority (FINRA) last year has pleaded guilty to defrauding his clients of hundreds of thousands of dollars. Elias Herbert Hafen was a registered Morgan Stanley rep. from 2009 until 2018 and then briefly went to work for Wells Fargo Clearing Services. According to his BrokerCheck record, Wells Fargo (WFC) fired him after just several months because he had financial agreements with clients that the firm never approved.

A news release of Hafen’s guilty plea on Justice.gov states that between 2013 and 2018, Hafen defrauded at least 11 financial advisory clients by fooling them into thinking he was able to access a high yield investment fund that came with guaranteed investment returns. This fund, however, was not affiliated with the investment bank where Hafen was a registered broker. In fact, it did not exist.

Because of Hafen’s investment advice, a number of his clients moved hundreds of thousands of dollars to his own bank account, from where he was supposed to invest in the fund. Instead, he generated fake bank statements using the name of an investment company that didn’t exist and, rather than use investors’ funds as intended, Hafen spent their money to fund his luxury lifestyle.

Clients of UBS Group AG (UBS) who employed the firm’s Yield Enhancement Strategy (YES) are now filing investor fraud complaints after suffering at least $60M in losses to date. YES involves options trades and borrowing that was supposed to be “safe” and low risk while earning investors positive returns.

The complex investment strategy did just that while the market was stable but the volatility that ensued last year–the worst to hit the market in 30 years– caught investors by surprise. The Wall Street Journal reports investor losses of over 13% in one month alone. However, Seeking Alpha reports that losses have been as high as 20% for some investors.

For example, according to the WSJ, Sherrie Pellini, a 60-year-old UBS customer who financially supports her mom and three kids, invested $3M in the UBS YES Strategy and was charged 1.75%. She now claims her losses were $750K. Pellini is accusing UBS broker Robert Perlman of telling her that YES had not resulted in any losses for 17 years.

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