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FINRA Cases: Allegis Investment Adviser and Ex-Broker Ordered to Pay Nearly $405K, Former Madison Avenues Securities Broker Accused in $1.67M Unauthorized Trading Case is Barred by FINRA, and US Senator Elizabeth Warren Introduces Bill To Address Unpaid Arbitration Awards

FINRA Arbitration Panel Awards Allegis Investment Advisors Client $404,482

A Financial Industry Regulatory Authority arbitration panel has awarded Mark Watson $404,482 in his unauthorized trading case against Allegis Investment Services, Allegis Investment Advisors, and ex-broker Brandon Curt Stimpson. Watson is accusing Stimpson of placing his life savings in investments that were too risky and complex and of making unauthorized trades involving index put options connected to the Russell 2000 Index even though he had told the broker that he only wanted up to 25% of his portfolio involved in these. Instead, Watson alleges, Stimpson invested way more of his money in the index put options.

In his securities arbitration case, Watson also alleged breach of fiduciary duty. Now, a FINRA panel has awarded him nearly $275K in compensatory damages, nearly $54K in interest, and other costs.

Stimpson was fired by Allegis last year for not abiding by the firm’s ethics code and policies. According to his BrokerCheck records, he has been named in eight other customer disputes.

Madison Avenue Broker is Barred by FINRA

FINRA has barred ex-broker David L. Barber after he did not appear at a hearing regarding whether he violated the self-regulatory organizations’ rules by engaging in certain activities in customer accounts without written consent, including making unauthorized trades in their accounts. He was fired by Madison Avenue Securities earlier this year after a client was awarded $1.67M in an arbitration case.

In 2013, Barber admitted that he borrowed $867K from three customers, whom he later paid back. Still, he was fined $25K and suspended for four months. Last year, FINRA began probing allegations of unauthorized trading involving Barber.

PIABA Reports on Unpaid FINRA Arbitration Claims

According to a recent FINRA report, from 2012 to 2016 up to 30% of awards issued to investors were not paid. Now, a Public Investors Arbitration Bar Association report is saying that almost 36% of investors who won their arbitration cases were paid nothing. Last year, reports PIABA, 28 cents of every dollar awarded to an investor in a FINRA case was not paid.

Now, US Senator Elizabeth Warren (D-Mass) has introduced a bill mandating that the self-regulatory organization set up a pool to pay these unpaid awards. It would be funded by fines imposed on member firms. reports that FINRA data shows that in 2016, $14M of arbitration awards were not paid. This means that out of 158 arbitration cases that rendered damage awards, nearly three out of every 10 judgments went unpaid. $174M in fines, however, were collected.

Senator Warren wants FINRA to keep track of which arbitration awards are paid and those that are not. FINRA states in its report that it has barred brokers and firms that failed to pay FINRA arbitration awards.

At Shepherd Smith Edwards and Kantas, LTD LLP, we represent investors with broker fraud and investment adviser fraud claims in FINRA arbitration, as well as clients pursuing litigation in federal and state courts. Having an investor fraud law firm representing you can increase your chances of full recovery. Over the years, our securities fraud attorneys have helped thousands of investors in getting their money back. Contact us today to request your free case consultation.

Finra bars Madison Avenue rep fired after arbitration, InvestmentNews, March 7, 2018

Statistics on Unpaid Customer Awards in FINRA Arbitration, FINRA

Unpaid Arbitration Claims Persisted in 2017, PIABA Says, Wealth Management, March 7, 2018

The PIABA Report (PDF)

Senator Warren’s Bill (PDF)

Finra bars Madison Avenue rep fired after arbitration, InvestmentNews, March 7, 2018

Finra panel awards $404,482 to client after broker overdoes put options, InvestmentNews, March 7, 2018

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As LJM Preservation and Growth Fund Declines in Value and Announces Shut Down, Investors Suffer Losses, Stockbroker Fraud Blog, March 1, 2018

Three Companies and Their Principals Accused of $11.7M Texas Oil and Gas Offering Fraud, Stockbroker Fraud Blog, February 28, 2018

Ex-Wells Fargo Broker Barred for Alleged $180K Elder Financial Fraud, Stockbroker Fraud Blog, February 26, 2018

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