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Articles Posted in Failure to Supervise

Senior Investor’s Loses Retirement Funds Because of Unsuitable Investment

An Arkansas retiree has filed a Financial Industry Regulatory Authority  (FINRA) arbitration claim against LPL Financial for losses he suffered because of the unsuitable recommendation of Rhett Douglas Bedwell, one of the broker-dealer’s former registered representatives. Bedwell, who is no longer a  stockbroker or investment advisor, is accused of defrauding a number of customers. 

Now, this retiree is seeking up to $500K in investment loss damages after Bedwell invested a significant portion of his retirement funds in what appears to have been a Ponzi scam involving Small World Capital and the now defunct, Graysail Capital. 

Morgan Stanley Settlement Includes FINRA Fine and Investor Restitution 

According to the Financial Industry Regulatory Authority (FINRA), Morgan Stanley Wealth Management has consented to pay a $175K fine and more than $774K in restitution for allegedly failing to supervise its former broker Kevin Gunnip. 

The Texas-based financial representative is accused of excessively trading in preferred securities and corporate bonds over five years, causing 10 customers to lose more than $900K. 

Colorado Investment Firm Fined $200K For Investing Unqualified Buyers Into Unsuitable Investments 

The US Securities and Exchange Commission (SEC) has ordered First Western Capital Management Co. to pay a $200K fine over allegations that, over a 7-year period, it invested over $666M of clients’ funds into securities that they didn’t qualify for. As a result, 81 clients were placed in securities that were reserved for qualified institutional buyers (QIBs), which are investors that have at least $100M in assets.

The firm is a Denver-based investment adviser. Our Colorado investment fraud lawyers at Shepherd Smith Edwards and Kantas are offering free case consultations to customers that were harmed by these unsuitable investment recommendations and sales that the SEC says were initiated by at least nine of First Western’s investment adviser representatives. Contact us today at (720) 439-2827

Galvin’s Office Files Civil Lawsuit Alleging Overconcentration, Unsuitable Investments 

William Galvin, the Secretary of the Commonwealth of Massachusetts, has filed civil charges against former NEXT Financial Group broker, Charles Chester Kulch. 

The state is accusing him of selling real estate investment trusts (REITs) and variable annuities (VA) to customers for whom they were unsuitable and overconcentrating their portfolios in these high risk, illiquid investments.

Investor Sues Kalos Capital Over GPB Capital Losses

A widower retiree in his eighties is suing Kalos Capital for losses he suffered in GPB Capital Holdings’ private placements and other risky investments that were recommended to him by Kalos broker, Jason Mosher.  

The claimant contends that Mosher, who operates his business under the name Sheppard Mosher but is an employee of Kalos, overconcentrated his IRA in GPB investments and other risky securities including private Real Estate Investment Trusts (REITs) and privately traded securities. Now, this elderly investor is seeking up to $500K in damages.

FINRA Accuses SunTrust Investment Services of Failing to Properly Supervise Brokers

The Financial Industry Regulatory Authority (FINRA) has ordered SunTrust to pay $634K to settle charges accusing the broker-dealer of not properly supervising 17 of its brokers when they recommended that customers hold non-traditional exchange-traded funds (ETFs) for long periods–a practice that can lead to losses especially when there is market volatility. 

Of this settlement, $50K is a fine and $584,466 is restitution. SunTrust Investment Services, which is owned by Trust Bank, agreed to the sanctions but without denying or admitting to the self-regulatory organization’s (SRO’s) findings. 

Alabama Retiree Lost Retirement Savings To Broker Fraud and Negligence

An investor in Alabama has filed a Financial Industry Regulatory Authority (FINRA) arbitration complaint against Kestra Investment Services, Inc. for retirement losses that she suffered while working with the now-former broker, James Daughtry. 

The firm fired Daughtry earlier this year around the same time that FINRA barred him indefinitely after he refused to testify in the self-regulatory (SRO)’s probe into allegations that he engaged in potentially fraudulent and unauthorized transactions in customers’ accounts. 

Broker-Dealers Accused of Not Properly Supervising Custodial Accounts

The Financial Industry Regulatory Authority (FINRA) announced that it has fined five major firms $1.4M in total for not reasonably supervising custodial accounts. The broker-dealers are:

  • Citigroup (C), which will pay $300K.

Collateral Yield Enhancement Strategy (CYES) Damages: SSEK Investigating Merrill Lynch Financial Advisor 

Shepherd Smith Edwards & Kantas (SSEK), a law firm specializing in representing wronged investors is looking into allegations against Gordon Harper, a financial advisor with Merrill Lynch out of Upper Montclair, New Jersey. Prior to that, he worked at Banc of America and Edward Jones. 

According to allegations in a recent Financial Industry Regulatory Authority Inc. (FINRA) claim, Gordon Harper recommended something called Harvest Volatility Management CYES (also known as collateral yield enhancement strategy). Harvest is a money manager which, as the name implies, attempts to manage volatility. 

26-Year Old Mayor is Arrested and Accused of Investor Fraud

Jasiel Correira, who is the mayor of Fall River, Massachusetts, has pleaded not guilty to multiple criminal counts of wire fraud and tax fraud. The 26-year-old was arrested this week following allegations that he defrauded investors of over $230K.

Correira maintains that the investor fraud allegations are false. He refuses to step down as city mayor.

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