Articles Posted in Industry Bars

After failing to cooperate in a probe into allegations of securities violations, George Merhoff, a former ex-Cetera Financial Group adviser, has been barred by the Financial Industry Regulatory Authority (FINRA). He was fired by the brokerage firm in April for allegedly issuing an undisclosed payment to a firm customer.

With over 21 years working in the brokerage industry, Merhoff was a registered Cetera broker for seven years. Before that, he was registered with Pacific West Securities, where he worked for 13 years, and at AAG Securities for less than a year.

Merhoff’s BrokerCheck record shows 27 customer disputes filed since December 2015 that have either been settled or are pending. Allegations include the following:

Former Cetera Broker Allegedly Engaged in Outside Business Activities

The Financial Industry Regulatory Authority (FINRA) announced that it is barring Nina Jessee, a former Cetera Advisors broker. The bar comes after Jessee failed to cooperate with the self-regulatory organization (SRO), which was investigating complaints about her related to alternative investments, including allegations that she had engaged in business activities that were not authorized outside of the brokerage firm.

With more than 30 years in the industry, Jessee has also been a registered broker at five other broker-dealers, including Investors Capital Corp., Financial Securities Network, NAP Financial Corporation, Marketing One Securities, and Mutual of Omaha Fund Management Company.

Jason Nelson, an ex-LPL Financial broker (LPLA), is now barred by the Financial Industry Regulatory Authority (FINRA). The bar comes after Nelson refused to participate in the self-regulatory organization’s (SRO) probe into his sales activities.

LPL fired Nelson early last year after finding that he misrepresented customer financial information related to annuity sales. Without denying or admitting to FINRA’s findings, Nelson consented to the entry of findings and the bar. He worked nearly 14 years as a formerly registered broker. Previous to working with LPL Financial, Nelson was an Edward Jones broker.

It was just last month that FINRA permanently barred ex-LPL Financial broker Philip John Nalesnik, whom the broker-dealer also fired last year.

James Anderson, an ex-Ameritas Investment Corp. adviser, is now barred by the Financial Industry Regulatory Authority (FINRA) after he failed to participate in a probe into allegations that he had taken part in selling away. Ameritas fired Anderson earlier this year after the brokerage firm’s own investigation found that he had engaged in selling promissory notes and indexed annuities that it had not approved.

Anderson was at Ameritas for 14 years. In April, a claimant filed a FINRA arbitration case accusing of making unsuitable recommendations by pushing promissory notes. The allegations are related to the selling away charges against him. The claimant is asking for $400K in damages.

Selling Away

Former Securities America Broker Is Accused of Unsuitable and Unauthorized Trades

Michael Bastardi, an ex-Securities America broker, is barred by the Financial Industry Regulatory Authority (FINRA) after he failed to give the regulator the information it requested for an investigation into his alleged conduct. Bastardi was a registered representative with Securities America from 2014 to 2016.

In 2018, the brokerage firm submitted a Form U5 that disclosed that Bastardi had been named in a customer complaint accusing him of unauthorized trading, unsuitable margin trading, forgery, and fraud while at Securities America and previous to that when he was a registered Dalton Strategic Investment Services broker. His alleged misconduct is said to have resulted in about $250K in damages. The investor fraud claim is still pending.

On May 17, 2019, the Financial Industry Regulatory Authority (“FINRA”) issued a permanent bar against former Pennsylvania LPL Financial representative Philip John Nalesnik.

According to FINRA’s BrokerCheck records, Nalesnik was in the securities industry for roughly 17 years, from 2002 until he was kicked out in 2019.  Nalesnik previously worked at IDS Life Insurance Company, American Express Financial Advisors, CCO Investment Advisors and, for almost a decade, LPL Financial, LLC.

Prior to receiving his FINRA bar, Nalesnik had a very questionable regulatory history.  Nalesnik’s CRD shows that he has had at least five customer complaints, one criminal complaint, at least two tax liens and a personal bankruptcy, much of which happened while Nalesnik was a registered representative of LPL Financial.

The Financial Industry Regulatory Authority (Finra) has permanently barred fired Merrill Lynch broker Bhenoy (Ben) Dembla. According to InvestmentNews, The former broker was let go from the financial firm in 2016 for “falsifying documents” related to mutual fund sales.

Dembla, who worked for Merrill the entire time he was a broker from 2001 to 2016, is accused of submitting fake sell orders to get around the firm ’s electronic order system protections. The protections should have stopped the submission of Class B share purchase orders once these had exceeded the accumulation limit.

According to FINRA, Dembla would submit the bogus sell orders, which the system would accept, and then he would cancel the orders. All of this made it possible for certain customers to go over Class B share thresholds with their purchases.

Investor Awarded $276K in Woodbridge Ponzi Fraud

A Financial Industry Regulatory Authority (FINRA) arbitration panel has awarded more than $276K to an investor that lost money in the $1.2B Woodbridge Ponzi scam. The panel found that Quest Capital Strategies did not properly supervise former broker Frank Dietrich, who sold $400K of Woodbridge-sponsored mortgage notes to the investor.

According to InvestmentNews, Dietrich sold $10.8M of Woodbridge mortgage funds to 58 investors, making nearly $261K in commissions. He retired in March. In November, FINRA barred him after finding that the former broker did not obtain Quest’s approval to sell the notes.

Daniel Todd Levine, a former Morgan Stanley (MS) broker, has been barred by the Financial Industry Regulatory Authority after he failed to cooperate in a probe into allegations that he may have taken part in outside business activities that he did not disclose to the broker-dealer while he worked for the firm. Levine was a Morgan Stanley broker based in Denver, Colorado between 2013 and July 2018 when he stepped down. His next employer was First Financial Equity Corp., but that brokerage firm fired him a few weeks later after he did not notify them about the FINRA investigation.

According to Levine’s BrokerCheck record, he previously worked with Prudential Securities, Merrill Lynch, and UBS (UBS). He was employed in the securities industry for over 20 years.

A number of other former Morgan Stanley brokers have recently made news headlines over allegations of broker fraud. Last month, FINRA announced that it had filed a lawsuit against Ami Forte, who is accused of making unauthorized trades in the account of now deceased Home Shopping Network co-founder Roy M. Speer. In November, former Morgan Stanley financial adviser James Polese was sentenced to five years behind bars after pleading guilty to defrauding customers of over $1M.

The Financial Industry Regulatory Authority (FINRA) has barred yet another ex-broker for selling promissory notes that have since been linked to the $1.2B Woodbridge Ponzi scam. The fraud is believed to have bilked around 8,400 investors.

According to the self-regulatory authority (SRO), broker Frank Dietrich sold 58 investors $10M of promissory notes that came from the Woodbridge Group of Companies. 30 of these investors were clients of Quest Capital Strategies, Inc., which was Dietrich’s brokerage firm at the time of the sales. FINRA said that the former Quest Capital broker earned $261K in commissions from selling the Woodbridge investments.

Quest Capital Strategies reportedly did not know that Dietrich was selling the Woodbridge notes to its customers. Earlier this year, the brokerage firm allowed him to step down after finding that he had sold a product it had not approved and for failing to disclose external business activities.

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