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Articles Posted in Financial Firms

Lax Oversight Purportedly Allowed An LPL Broker to Continue Defrauding Customers in Ponzi Scam

The Financial Industry Regulatory Authority (FINRA) has fined LPL Financial Holdings (LPLA) $6.5M due to purported supervisory inadequacies related to recordkeeping, fingerprinting employees that were non-registered representatives, and its financial advisers’ consolidated reports. The self-regulatory organization (SRO) found that due to weak oversight of these consolidated reports, an ex-broker was enabled to continue committing a $5M Ponzi scheme. 

The former registered investment advisor, identified by Advisors Hub as ex-Norwalk, Connecticut broker James Thomas Booth,  pleaded guilty to securities fraud in November. He was sentenced to 42 months behind bars. Booth has been named in 36 customer disputes.  

FINRA Settlement Includes Restitution to More than 2,400 Customers

In an agreement reached with the Financial Industry Regulatory Authority (FINRA), Transamerica Financial Advisors consented to pay $8.8M over the unsuitable sales of mutual funds, variable annuities (VAs) and 529 savings plans to customers. 

$4.4M of this is a fine and $4.4M is restitution to about 2,400 customers who were financially harmed. The firm settled with FINRA but without denying or admitting to its findings. 

New FINRA Arbitration Claim Seeks $260K in Damages 

Former Wells Fargo Clearing Services (WRET) broker Herbert Lee Weith IV is named in yet another customer dispute in which the claimant is seeking damages for losses involving variable annuities. Weith, who was a Wells Fargo broker from 2012 to 2019 in Naples, Florida, became a registered investment advisor for Equitable Advisors, LLC, in Columbia, Maryland from January to October of 2020.

Our Florida broker fraud attorneys have been looking into complaints by ex-Wells Fargo customers of Weith who suffered serious investment losses that may have been caused by unsuitable investment recommendations. Contact our attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) today. 

Connecticut Investment Advisor is Also Part of RBC Team Chu, Philipps, and Associates  

Joseph Ijong Chu, an RBC Capital Markets stockbroker, has been named in a number of customer disputes this year. Chu is also a registered investment advisor with the broker-dealer. He is part of the RBC  team known as Chu, Phillips, and Associates, which offers products and services through City National Bank in Stamford, Connecticut. 

Chu’s customers are blaming him for the investment losses they suffered when he allegedly overconcentrated their accounts in risky oil and gas investments that were unsuitable for them. 

Ex-LPL Broker Marketed Non-Traded Investments To Mississippi Retiree 

A retired investor has filed a Financial Industry Regulatory Authority (FINRA) arbitration claim against LPL Financial and its former broker, Tamber King Proctor, seeking up to $100K in damages. 

The claimant contends that LPL Financial and Proctor should have never recommended that he invest in the business development company (BDC), FS Energy & Power Fund (FSEP), and the Northstar Healthcare Real Estate Investment Trust (REIT). 

Proprietary, Non-Traded Oil, Gas and Energy Investments Plunged  In Value

If your David Lerner Associates broker recommended and sold you any of the firm’s proprietary non-traded oil and gas investments and you sustained significant losses, you may have grounds for an investor fraud claim for damages. 

The privately-held broker-dealer exclusively sold investments and mutual funds to customers in its Spirit of America Energy Fund (NASDAQ: SOAEX), as well as its Energy 11 LP and Energy Resources 12 LP. 

FINRA Suspends Texas Broker For Three Months

Kurt Jason Gunter, a Wells Fargo Clearing Services (WRET) registered representative in Bee Cave, Texas, was recently sanctioned by the Financial Industry Regulatory Authority (FINRA). 

The self-regulatory organization (SRO) contends that he allegedly made unsuitable unit investment trust (UIT) sales to customers. In addition to having to pay a $10K civil fine, Gunter is suspended for three months beginning December 20, 2020. The broker, who is also a registered Wells Fargo investment adviser, consented to the sanctions but is not denying or admitting to the findings. 

Office of the Comptroller of the Currency Accuses Bank of Inadequate Internal Controls  

JPMorgan Chase Bank has been ordered to pay a $250M penalty. The Office of the Comptroller of the Currency (OCC) contends that the bank engaged in “unsafe and unsound practices” related to its internal controls and an internal audit of fiduciary duties. 

With fiduciary assets of $29.1 trillion, JPMorgan has one of the biggest and complex fiduciary businesses. It offers many types of investment strategies via different investment vehicles to its clients. The Bank is not denying or admitting to the agency’s findings.

Morgan Stanley Fires Financial Advisors After Inherited Account Credits Investigation

Morgan Stanley (MS) announced recently that it has terminated a number of financial advisors after a months-long investigation into payments being made to retired Morgan Stanley financial advisors under Morgan Stanley’s own Legacy Account Payments Program. 

Morgan Stanley’s “sunset plan” allows brokers who are retiring from the firm to split fees and commissions with brokers who inherit the retiring broker’s accounts.  

Banned Woodbury Financial Broker Allegedly Sold Fake Investments, Converted Client Monies

Ronald Walter Hannes, a Spokane, Washington-based investment advisor and former Woodbury Financial Services broker, is accused by the Washington State Department of Financial Institutions of defrauding 19 clients of over $2.9M. 

Hannes had operated out of Hannes Financial Services and he was also a registered Woodbury Financial Services broker for 25 years until 2019. He has 33 years of experience working in the industry. Hannes was fired by Woodbury Financial Services last December. Financial Industry Regulatory Authority (FINRA) barred him in February.

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