Investor Lawyers Blog

Aegis Capital Broker Accused by Investors of Negligence, Unsuitable Investments and Unauthorized Trading

Published on: July 29, 2020 | by Shepherd Smith Edwards & Kantas, LLP

Former National Securities Stockbroker Named in Over 12 Customer Disputes

Thomas Edison Kelly, Jr., an Aegis Capital broker, has been the subject of a number of customer complaints between 2013 and 2020, three of which are still pending.

Prior to working for Aegis Capital in 2018, Kelly was a National Securities broker for 10 years. Before that, he was with First Republic Group from 1998 to 2008. First Republic was expelled by the Financial Industry Regulatory Authority (FINRA) in 2019. According to a 2017 Reuters report analyzing FINRA data, National Securities is one of 48 firms that hire brokers with red flags on their record.

GPB Capital Holdings Reports a Nearly $200M Drop In Assets Under Management

Published on: July 27, 2020 | by Shepherd Smith Edwards & Kantas, LLP

Delayed Filing with the SEC Shows 45.2% Drop in AUM Over 18 Months

Last month, GPB Capital Holdings finally filed its Form ADV with the US Securities Exchange Commission (SEC) after requesting an extension from the regulator in 2019.

In the form, the alternative asset firm, which is already under siege in the wake of numerous federal and state regulator investigations, an FBI probe, and lawsuits accusing it of operating a massive Ponzi scam, reported a $196.3M decline in assets under management (AUM) over 18 months from the end of 2017 to the end of June 2019. That’s a 45.2% drop from $434.3M in AUM to $238.6M.

First Western Capital Management Allegedly Placed Over $666M of Customers’ Money into Investments Reserved for Qualified Institutional Buyers

Published on: July 22, 2020 | by Shepherd Smith Edwards & Kantas, LLP

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.

Ex-NEXT Financial Broker Charles Kulch Accused of Overconcentrating Over 100 Massachusetts’ Investors in Risky REITs

Published on: July 20, 2020 | by Shepherd Smith Edwards & Kantas, LLP

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.

Northwestern Mutual Investment Services Fined $350K for Inadequate Supervision of Ex-Broker Sampson Pearson

Published on: July 16, 2020 | by Shepherd Smith Edwards & Kantas, LLP

Former Financial Representative Is Facing Criminal Trial for Annuity Fraud

The Financial Industry Regulatory Authority (FINRA) has fined Northwestern Mutual Investment Services $350K for failing to properly supervise former stockbroker, Sampson Pearson, which enabled him to defraud customers of $570K. Northwestern Mutual Investment Services is the brokerage arm of Northwestern Mutual Life Insurance Co.

Pearson, who was barred by the self-regulatory organization (SRO) in 2017, is charged in federal court with aggravated identity theft, mail fraud, and filing false tax returns. According to his BrokerCheck record, he is named in 13 disclosures, including 11 customer disputes.

Ex-Merrill Lynch Brokers Charles Kenahan & Dermod Cavanaugh Investigated for Alleged Churning After Over $200M in Losses

Published on: July 15, 2020 | by Shepherd Smith Edwards & Kantas, LLP

Ex-New Hampshire Governor is Suing For Damages

The New Hampshire Bureau of Securities Regulation is looking into allegations brought by the state’s former governor, Craig Benson, who is accusing ex-Merrill Lynch brokers Dermod Cavanaugh and Charles Kenahan of churning his account and causing over $50M in damages that with market adjustments, he claims, is now over $100M. Benson filed a Financial Industry Regulatory Authority (FINRA) arbitration claim against the broker-dealer and the two men.

Merrill Lynch is a Bank of America (BAC) subsidiary. Churning is when a broker makes excessive trades in a customer’s account in order to earn commissions.

Despite $1.8B Ponzi Scam Allegations, GPB Capital Received Up to $7M in PPP Loans

Published on: July 13, 2020 | by Shepherd Smith Edwards & Kantas, LLP

Alternative Asset Firm Gets Federal Aid While Its Investors Fight To Recover Their Losses

Even as the US Securities Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), the FBI, state regulators and others have continued to investigate GPB Capital Holdings over allegations that it ran an up to $1.8B Ponzi scam, the alternative asset firm and its affiliated companies were able to secure between $3M and $7M in Paycheck Protection Program (PPP) loans following the outbreak of COVID-19.

News of the loans was disclosed by the Small Business Administration. GPB is one of over 660,000 small businesses that received loans under the PPP program, which is part of the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Customers Blame Newbridge Securities Broker Kerri Jamison For Investment Losses

Published on: July 10, 2020 | by Shepherd Smith Edwards & Kantas, LLP

Dually Registered Rep. Faces Multiple FINRA Arbitration Claims by Investors

Kerri Suzanne Jamison, a Newbridge Securities Corp. and Newbridge Financial Services Group stockbroker, is currently the subject of pending complaints by customers who claim they lost money because of investment recommendations she made.

Jamison, who has worked under the names Kerri Lasegue and Kerri Romero, is one of several of the firm’s registered representatives to become the subject of stockbroker fraud claims in recent years. According to her BrokerCheck record, Jamison has been named in four customer disputes. One was settled, and three, which were filed this year, are still pending:

Once Again, GPB Capital Holdings Reneges On Giving Key Tax Documents to Investors

Published on: July 9, 2020 | by Shepherd Smith Edwards & Kantas, LLP

K-1 Tax Documents Delayed Past Tax Deadline

In the latest GPB Capital news, the firm has notified investors of its GP Holdings II, LP fund that they won’t be getting their 2019 Schedule K-1 tax documents ahead of or by July 15, 2020, which is when US tax filings are due this year. The filing deadline was extended by the Internal Revenue Service (IRS) from its usual April 15 date as part of the US government’s COVID-19 relief.

This is the latest delay by the alternative asset firm, which has yet to provide key financial statements to investors and regulators for the past few years and is accused of operating a more than $1.5 B Ponzi scam.

Why Should Many San Francisco Investors Avoid Non-Traded REITs?

Published on: July 8, 2020 | by Shepherd Smith Edwards & Kantas, LLP

Non-Traded Real Estate Investment Trusts Are Risky, Illiquid

If you are a retail investor in San Francisco whose broker is recommending that you invest in non-traded real estate investment trusts (non-traded REITs), you should strongly reconsider.

While often touted as a security that allows investors to make money without having to worry about market volatility – this type of investment is actually still high risk, illiquid, and not suitable for many customers including retail investors, retirees, and other conservative investors with low-risk tolerance levels.