In a separate action, the U.S. Attorney’s Office for the Eastern District of New York filed criminal charges against Mr. Perera. He was arrested on Monday, March 27, 2023, and arraigned on a 16-count indictment charging him with securities fraud, investment advisor fraud, wire fraud, and money laundering, in connection with a scheme to induce an investor to purchase stock in companies that traded on the NASDAQ and New York Stock Exchange (NYSE).

Customers of Mr. Perera or Aegis Capital Corp. who have suffered financial losses as a result of Mr. Perera’s negligence or misconduct can contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential consultation and review of their legal rights.

Iorio Altamirano LLP represents investors that have disputes with their financial advisors or brokerage firms, such as Aegis Capital Corp.

Securities and Exchange Commission v. Surage Kamal Roshan Perera and Janues Capital Incorporated, 2:23-cv-02316

On March 27, 2023, the United States Securities and Exchange Commission (“SEC”) filed a lawsuit in federal court against Mr. Perera and his firm, Janues Capital Incorporated (“Janues”), alleging that from February 2022 until March 2023, Mr. Perera defrauded at least one investor (“Investor A”) out of millions of dollars by lying about investment opportunities and strategies; misappropriating the investor’s money by, in part, not purchasing the securities she subscribed to through Janues and using a substantial portion of her money to engage in high volume, highly leveraged trading in other securities; lying to her about non-existent investment profits; and concealing large trading losses.

According to the complaint, Mr. Perera falsely told Investor A that his firm had access to specific restricted securities at discounted prices through connections with large institutional investors. Investor A first met Mr. Perera through a mutual friend when Mr. Perera was a registered broker of Aegis Capital Corp.

Mr. Perera also allegedly claimed to exercise a trading strategy—which he called “options straddles”—that would not only prevent any trading losses but also, for some of the supposed investments, guarantee returns on the investment of at least 9% and up to as much as 50%. Perera’s false promises convinced the investor to give him approximately $4.3 million.

According to the lawsuit, Mr. Perera did not use Investor A’s funds to purchase the securities she had subscribed to and did not engage in the promised “options straddles” to prevent trading losses and generate the profits he had guaranteed. Instead, he transferred at least $3.5 million of Investor A’s funds to a brokerage account in the name of his wife, Nishani Alahakoon, and used those funds to engage in highly speculative, leveraged trading, which resulted in over $3 million in trading losses.

Mr. Perera allegedly concealed his misappropriation of Investor A’s funds and his trading losses by providing Investor A with phony trade confirmations and account statements that falsely showed the expected returns and by using funds received from other sources to partially repay the investor victim.

The SEC’s complaint alleges that Mr. Perera and Janues violated antifraud provisions of the federal securities laws. Mr. Perera also was charged with aiding and abetting Janues’ alleged violations. The SEC’s complaint names Nishani Alahakoon, whose brokerage account Perera and Janues traded, as a relief defendant.

Financial Advisor Surage Kamal Roshan Perera (CRD No. 4716321)

Roshan Perera had 18 years of experience in the securities industry and was associated with 11 different brokerage firms, including five different firms that have been expelled from the securities industry by the Financial Industry Regulatory Authority (“FINRA”). Mr. Perera was registered with Aegis Capital Corp from April 18, 2018, through September 12, 2018.

According to his public disclosure report with FINRA, Mr. Perera has been the subject of at least one customer dispute, which included allegations of unauthorized trading. The 2009 dispute was settled.

Investors who have disputes with their financial advisors and brokerage firms can file securities arbitration claims to resolve the disputes and seek recovery of investment losses.

FINRA’s BrokerCheck tool can be used to obtain Mr. Perera’s complete and updated disclosure report.

Aegis Capital Corp. – A Duty to Supervise

Selling away is when a financial advisor solicits a customer to participate in a private securities transaction that is “away” from the firm. In other words, when a broker recommends a transaction to buy or sell a security that is not offered or approved by the brokerage firm where the financial advisor is employed or registered.

A brokerage firm can be held responsible for its financial advisors’ conduct in “selling away” cases under certain circumstances.

Pursuant to FINRA Rule 3280, when a broker-dealer approves a private transaction away from the firm, the firm assumes legal responsibility for the trade. There are no exceptions to this rule. Broker-dealers can be held responsible for the conduct of their financial advisors in connection with these approved transactions.

Even if a transaction is not approved by a firm, a brokerage firm can also be held liable if the financial advisor acted with apparent authority or the investor reasonably believed that the advisor’s activities were approved or part of the broker’s services.

Brokerage firms like Aegis Capital Corp. must properly supervise financial advisors and customer accounts. Brokerage firms must also establish and maintain a reasonably designed system to oversee account activity, such as private securities transactions, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to supervise its financial advisors or the investment account activity sufficiently, it may be liable for investment losses sustained by customers.

See Also:

Law Firm Investigating the Sale of GWG L Bonds to Retail Investors by Aegis Capital Corp

Iorio Altamirano LLP Files GPB Automotive Claim Against Aegis Capital Corp

Aegis Capital Corp. Ordered to Pay Nearly $2.7 Million for Supervisory Failures Related to Rampant Excessive and Unsuitable Trading

How to Recover Financial Losses or Obtain a Free Consultation

If you have suffered investment losses with Mr. Perera or Aegis Capital Corp or suspect other inappropriate activity occurred in your investment or retirement account, contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (646) 330-4624 for a free and confidential review of your legal rights.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.

When a financial advisor participates in a private securities transaction that is not approved by a firm, it is referred to as “selling away.” The prohibitions on selling away are designed to protect investors by ensuring that all brokers’ activities are reasonably supervised by firms that employ them. Further, securities that are sold away from a firm have not been vetted by the firm.

Customers of Mr. Booth or Valic Financial Advisors, Inc. that have suffered financial losses can contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential consultation and review of their legal rights.

Iorio Altamirano LLP represents investors nationwide that have disputes with their financial advisors or brokerage firms, such as Valic Financial Advisors, Inc.

FINRA Letter of Acceptance, Waiver, and Consent No. 2021069207301

Enoch S. Booth and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) on July 20, 2021, after Mr. Booth refused to provide documents connected with FINRA’s investigation.

On June 29, 2021, in connection with FINRA’s investigation, FINRA sent a request to Mr. Booth for the production of documents pursuant to FINRA Rule 8210. The request south documents in connection with FINRA’s investigation into facts surrounding Mr. Booth’s termination from Valic Financial Advisors, Inc. On June 29, 2021, Mr. Booth stated in an email that he would not produce the requested documents.

By refusing to cooperate with FINRA’s investigation, Mr. Booth violated FINRA Rules 8210 and 2010.

Accordingly, he has been barred by FINRA from associating with any FINRA member brokerage firm in any capacity.

Valic Financial Advisors, Inc. – Supervisory Duties

Brokerage firms like Valic Financial Advisors, Inc. must properly supervise financial advisors and customer accounts. Brokerage firms must also establish and maintain a reasonably designed system to oversee account activity to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to sufficiently supervise its financial advisors or the investment account activity, it may be liable for investment losses sustained by customers.

How to Recover Financial Losses or Obtain a Free Consultation

If you have lost money with financial advisor Enoch Booth or Valic Financial Advisors, Inc., contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (646) 330-4624 for a free and confidential evaluation of your legal rights.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.

Iorio Altamirano LLP is a bilingual law firm, fluent in both English and Spanish.

The former stockbroker, Lawrence (Larry) Fawcett, was barred from the securities industry by FINRA in March 2018 for failing to cooperate with a FINRA investigation into his outside business activities. FINRA subsequently revoked Mr. Fawcett’s securities license for failing to pay a fine and suspended him for failing to comply with an arbitration award. Mr. Fawcett, who had only been in the securities industry for five years, had an extensive history of customer complaints, regulatory sanctions, associations with disreputable brokerage firms, and an employment termination after allegations of wrongdoing.

If you have lost money with Lawrence Fawcett or Westpark Capital, Inc., contact FINRA arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.

Iorio Altamirano LLP represents investors nationwide that have disputes with their financial advisors or brokerage firms, such as Westpark Capital, Inc.

Charles A. Hailey and Karen G. Hailey v. Westpark Capital, Inc., FINRA Case No. 20-00320

On May 25, 2021, a FINRA Dispute Resolution Services arbitration panel awarded customers Charles A. Hailey and Karen G. Hailey nearly $800,000.

In the Statement of Claim, filed in January 2020, Claimants asserted the following causes of action: breach of fiduciary obligations; breach of contract; negligence/professional negligence; violations of the Virginia Securities Act and blue sky statutes; violations of federal securities law; common law fraud/ misrepresentations and, omissions; unsuitability, including both quantitative and qualitative, specifically including overconcentration and use of significant margin; failure to supervise; violations of state and federal rules and regulations; agency, respondeat superior and control person liability; and general equitable principle that apply in arbitration.

The causes of action related to private placement investments in Monster Digital, Inc., Miramar Labs, Inc., Protagenic Therapeutics, Inc. stock, the volume of trading (i.e., excessive trading/churning) in other securities. In addition, the claim sought damages for the recommended purchase of gold, through GFS Associates, and precious metals, through Omega Knight 2 LLC. In 2018, Omega Knight 2, LLC was charged by the Commodity Futures Trading Commission for fraud. The investments in GFS Associates and Omega Knight 2 LLC were private securities transactions sold by Mr. Fawcett without the approval of his firm, Westpark Capital, Inc.

In a rare occurrence, the arbitration panel devoted uncompensated time to drafting and issuing an explained decision which the parties did not request. A summary of the panels’ findings are below:

Private Placements:

The arbitration panel found that Mr. Fawcett had no prior experience in recommending private placement investments to customers prior to joining Westpark Capital, Inc. in June 2015. The panel also found that the customer, Mr. Hailey, had invested in only one private fund prior to following Mr. Fawcett’s recommendations and investing in the subject private placements. The prior private fund related to real estate and was recommended by people whom Mr. and Mrs. Hailey had known well from their years of experience in the Richmond, Virginia scene. Accordingly, the arbitration panel concluded that the three private placement investments recommended by Mr. Fawcett were far outside of Mr. Hailey’s range of sophistication, and therefore unsuitable for him. The panel also concluded that the illiquid private placement investments were unsuitable given the Hailey’s advanced age and lack of liquidity in their assets. Ultimately, the panel determined that the recommendations to invest in the private placements were made for Mr. Fawcett’s best interests, not those of the customers.

Private placements are private securities offerings exempt from registration with the Securities and Exchange Commission (SEC). There are significant risks associated with investments in private placements, particularly their lack of liquidity and speculative nature.

Churning:

The arbitration panel concluded that the level of activity in the customers’ accounts was unsuitable for any investor and that it was done in order to generate commissions. The panel held Westpark Capital, Inc. liable for permitting the churning and responsible for returning the commissions to the Haileys.

Excessive trading occurs when a financial advisor makes many trades in a customer’s account, not to benefit the customer but to generate commissions for the broker.

Churning is a more egregious variation of excessive trading. Churning refers to a situation where the broker executed an excessive number of trades and did so with the intent to defraud or reckless disregard for the customer’s interest.

Excessive trading and churning are unethical and illegal practices in the securities industry. They are all also violations of securities rules and regulations and can cause enormous harm to customers.

Failure to Supervise:

The customers argued that Westpark Capital, Inc. failed to adequately supervise Mr. Fawcett and their accounts. They argued that Westpark Capital, Inc. took a laissez-faire approach to supervision, ignoring warning signs of trouble. Their expert concluded that Westpark Capital, Inc.’s failure to follow up on these “red flags” was negligent. The incidents that the panel found the most troubling included the following:

• Westpark Capital, Inc. hired Mr. Fawcett without an in-person interview, despite his brief and checkered history as a broker. Mr. Fawcett twice failed his Series 7 (General Securities Representative Qualification Examination), then moved from firm to firm six times in four years. One of the firms terminated him for “failure to provide services to the firm for he was engaged.” Another was subsequently expelled by FINRA. Although members of the five-person hiring committee testified, they never made clear why they hired someone with such a weak track record in the first place.
• Westpark Capital, Inc. permitted Mr. Fawcett to work from his home in Queens, New York, even though Westpark Capital, Inc. maintained an office in Manhattan. The two members of Westpark Capital, Inc.’s office in Boca Raton, Florida, assigned to supervise Mr. Fawcett had FINRA infractions on their records that did not inspire confidence.
• Six months after Westpark Capital, Inc. hired Mr. Fawcett, FINRA required him to participate in an in-person interview. Two months later, Mr. Fawcett settled an arbitration claim filed by a client at Salomon Whitney by agreeing to pay $30,000.00 out of personal funds. Westpark Capital, Inc. evidently did not regard the claim, interview, or settlement as cause for concern.
• For its only in-home inspection of Mr. Fawcett, Westpark hired Bernard E. Young, who had been banned from the securities industry for participating in a Ponzi scheme. Not surprisingly, Mr. Young noted that Mr. Fawcett had a personal fax machine but did not inquire how it was being used. Nor did he follow up when Mr. Fawcett described Bullhammer, which he listed on his application as an account used for tax purposes, as a software program. No one from Westpark followed up either. Mr. Fawcett used the fax machine to send false information to Mr. Hailey. He used the back account to accept funds from Mr. Hailey for purchases of gold from other firms.

The arbitration panel held that Westpark Capital, Inc. accorded Mr. Fawcett far more freedom and trust than he had earned and that the consequences were predictable.

Brokerage firms must also establish and maintain a reasonably designed system to oversee account activity to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to sufficiently supervise its financial advisors or the investment account activity, it may be liable for investment losses sustained by customers.

Selling Away:

The arbitration panel concluded that Westpark Capital, Inc. was not liable for Mr. Fawcett selling the gold and precious metal securities that were not approved by the firm.

When a financial advisor participates in a private securities transaction that is not approved by a firm, it is referred to as “selling away.” The prohibitions on selling away are designed to protect investors by ensuring that all brokers’ activities are reasonably supervised by firms that employ them. Further, securities that are sold away from a firm have not been vetted by the firm.

Financial Advisor Lawrence John Fawcett Jr. CRD No. 5851474

Lawrence John Fawcett Jr., who also goes by Larry, was barred from the securities industry in December 2020. Mr. Fawcett’s license was revoked by FINRA for failing to comply with another arbitration award.

Mr. Fawcett, who had only been in the securities industry for five years, had an extensive history of customer complaints, regulatory sanctions, associations with disreputable brokerage firms, and an employment termination after allegations of wrongdoing.

Past Associations:

Mr. Fawcett entered the securities industry in 2012. During the course of his brief 5-year career as a broker, Mr. Fawcett was associated with five different brokerage firms, including two firms that have been expelled from the securities industry by FINRA:

• Westpark Capital, Inc., from June 2015 to March 2018.
• Salomon Whitney Financial, from September 2013 to June 2015.
• Rockwell Global Capital LLC, from June 2013 to September 2013.
• John Thomas Financial (expelled by FINRA), from April 2013 to June 2013.
• Rockwell Global Capital LLC, from August 2012 to April 2013.
• EKN Financial Services Inc. (expelled by FINRA), from April 2012 to August 2012.

One of the firms terminated him for “failure to provide services to the firm for he was engaged.”

Mr. Fawcett was fired from Westpark Capital, Inc. in March 2018 for conducting business from a non-disclosed location and making false representations to the firm.

Regulatory Sanctions:

In November 2017, Mr. Fawcett and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”), after FINRA alleged that Mr. Fawcett recommended unsuitable mutual fund transactions to a customer. Mr. Fawcett consented to a 15-business day suspension and a fine of $2,500.

In March 2018, FINRA barred Mr. Fawcett from the securities industry after he refused to cooperate with FINRA’s investigation regarding Mr. Fawcett’s outside business activities.

In June 2018, FINRA revoked Mr. Fawcett’s license pursuant to FINRA Rule 8320 for failing to pay the monetary fine that was issued in 2017.

In December 2020, FINRA suspended Mr. Fawcett for failing to comply with an arbitration award.

Customer Complaints:

In just five years, Mr. Fawcett racked up numerous customer complaints:

• Customer Dispute (October 2020): A customer filed a securities arbitration complaint alleging nearly $85,000 in damages as a result of unsuitable investment recommendations related to equity positions (common or preferred stock) and private securities. The claim alleged the following causes of action: suitability, churning, unauthorized trading, fraud, negligent misrepresentation, breach of fiduciary duty, breach of covenants of good faith, breach of fair dealing, negligent supervision, breach of contract, Section 20 violations, failure to supervise, unjust enrichment, and lost opportunity. The dispute is pending.
• Customer Dispute (March 2020): A customer filed a securities arbitration complaint alleging negligence, qualitative and quantitative unsuitability, failure to supervise, breach of fiduciary duty, breach of contract, negligent misrepresentation and omissions, and lost opportunity damages. The causes of action related to BlackBerry Ltd. stock and the customer sought $15,633 in damages. An arbitrator found Mr. Fawcett to be liable and ordered him to pay $5,663 in compensatory damages and $30,0000 in punitive damages. As of December 2020, Mr. Fawcett has not paid the arbitration award to the customer.
• Customer Dispute (February 2020): Westpark Capital, Inc. was found liable, and the Haileys were awarded nearly $800,000 in damages, including over $545,000 in compensatory damages, $33,500 in costs, and $215,000 in attorneys’ fees.
• Customer Dispute (May 2018): A customer filed a securities arbitration complaint seeking $33,271 in damages as a result of excessive trading, churning, and unsuitable transactions. The dispute is pending.
• Customer Dispute (April 2018): A customer filed a securities arbitration complaint seeking $260,038 in damages as a result of churning, negligence, unsuitability, unauthorized trading, and breach of contract. The causes of action related to equities (common or preferred stock). The alleged conduct occurred when Mr. Fawcett was employed by SW Financial. The dispute is pending.
• Customer Dispute (June 2017): A customer submitted a written complaint to Westpark Capital Inc. alleging that Mr. Fawcett purchased 1000 shares of Blackberry stock without his knowledge. According to Westpark Capital, Inc., Mr. Fawcett’s supervisor contacted the client, where the client “changed his tone” and stated that he was “sill” for writing the note and that it was “mainly due to buyer remorse.” The client supposedly apologized for the letter and misunderstanding. The dispute was marked closed and withdrawn.
• Customer Dispute (September 2015): A customer filed a FINRA arbitration claim against Salomon Whitney and Mr. Fawcett for unauthorized trading. The claim alleged $20,000 in damages. Salomon Whitney and Mr. Fawcett settled the matter for $13,500.
• Customer Dispute (November 2014): A customer filed a FINRA securities arbitration claim against Salomon Whitney and Mr. Fawcett for unauthorized trading, unsuitable investments, and an unsuitable investment strategy. The claim alleged $214,000 in damages. The parties entered into an agreement to present to the arbitration panel a Stipulated Award. The panel accepted the award and found Mr. Fawcett liable for $30,000.
• Customer Dispute (April 2013): A customer submitted a written complaint to Rockwell Global Capital, LLC alleging unauthorized trades. The customer did not file a securities arbitration complaint. The firm denied the customer any compensation.

How to Recover Losses or Obtain a Free Consultation

If you have lost money with financial advisor Lawrence (Larry) Fawcett Jr. or Westpark Capital, Inc., contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (646) 330-4624 for a free and confidential evaluation of your account.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.

Reportedly, Mr. Viyella recommended that his clients invest in the Conrad Hotel, a luxury hotel in Fort Lauderdale, Florida, in which he had a personal stake. Mr. Viyella reportedly knew the hotel was facing financial difficulties, yet recommended that his clients invest in the hotel, causing them to suffer financial losses.

Mr. Viyella was registered with Morgan Stanley in Miami, Florida, from June 2009 until December 2020. He has also been associated with the following entities: Terrena Enterprises, LLC, VSHC Management, LLC, VSHC Family Limited Partnership LP, and Earthview Capital, LLC.

Since October 2019, Mr. Viyella has been the subject of five customer complaints that appear to be related to soliciting Morgan Stanley clients to participate in promissory note investments.

If you have suffered financial losses investing with Candido Viyella or Morgan Stanley, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential review of your account.

Iorio Altamirano LLP represents investors nationwide that have disputes with their financial advisors or brokerage firms, such as Securities America, Inc.

FINRA Letter of Acceptance, Waiver, and Consent No. 2019064630801

Candido J. Viyella and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) on May 10, 2021, after Mr. Viyella refused to provide on-the-record testimony in connection with FINRA’s investigation. The investigation originated after Morgan Stanley discharged Mr. Viyella and disclosed concerns regarding his participation, involvement, and a beneficial ownership interest in an outside investment.

On April 30, 2021, in connection with FINRA’s investigation, FINRA sent a letter to Mr. Viyella requesting the production of documents and information pursuant to FINRA Rule 8210. On April 20, 2021, Mr. Viyella, through counsel, stated on a phone call that he would not appear for on-the-record testimony at any time.

By refusing to provide the information or documents, Mr. Viyella violated FINRA Rules 8210 and 2010.

Financial Advisor Candido Jose Viyella (CRD No. 1829255)

Candido Jose Viyella had 32 years of experience in the securities industry. According to his BrokerCheck report, he has been the subject of at least five recent customer complaints:

• Customer Dispute (October 2020): Customers filed a securities arbitration claim alleging that Mr. Viyella solicited an outside investment opportunity that was not authorized by Morgan Stanley. The dispute is pending.
• Customer Dispute (October 2020): A customer filed a securities arbitration claim alleging that Mr. Viyella solicited an outside investment opportunity in or about October 2015 that was not authorized by Morgan Stanley. The customer alleged $1 million in damages. Morgan Stanley settled the matter for $140,000.
• Customer Dispute (October 2020): A customer filed a securities arbitration claim alleging that Mr. Viyella solicited an outside investment opportunity in or about October 2013 that was not authorized by Morgan Stanley. The customer alleged $500,000 in damages. Morgan Stanley settled the matter for $60,000.
• Customer Dispute (March 2020): A customer filed a legal action in Miami alleging fraudulent misrepresentation with respect to an outside investment opportunity not authorized by Morgan Stanley that was solicited by Mr. Viyella between 2013 and 2015. The customer is seeking $2 million in damages. The dispute is pending.
• Customer Dispute (October 2019): A customer filed a securities arbitration claim alleging that Mr. Viyella solicited an outside investment opportunity in or about October 2015 that was not authorized by Morgan Stanley. The dispute is pending.

When a financial advisor participates in a private securities transaction that is not approved by a firm, it is referred to as “selling away.” The prohibitions on selling away are designed to protect investors by ensuring that all brokers’ activities are reasonably supervised by firms that employ them. Further, securities that are sold away from a firm have not been vetted by the firm.

Supervisory Duties

Brokerage firms like Morgan Stanley must properly supervise financial advisors and customer accounts. Brokerage firms must also establish and maintain a reasonably designed system to oversee account activity, such as “selling away,” to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to sufficiently supervise its financial advisors or the investment account activity, it may be liable for investment losses sustained by customers.

How to Recover Financial Losses or Obtain a Free Consultation

If you have lost money with financial advisor Candido Viyella or Morgan Stanley, contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (646) 330-4624 for a free and confidential evaluation of your account.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.

Iorio Altamirano LLP is a bilingual law firm, fluent in both English and Spanish.

Can I Sue My Financial Advisor Over Losses?

Yes, you can sue your financial advisor or broker to recover investment losses if the broker did not have your best interest in mind when they made an investment recommendation or offered investment advice. You can also sue your financial advisor or broker if the financial advisor misrepresented or omitted material facts that an investor should have known about the security or investment strategy.

However, the dispute likely will not be litigated in a court of law. Instead, it will be contested in arbitration.

What is Securities Arbitration?

When an investor suffers investment losses due to misconduct by a financial advisor or broker-dealer, the investor can file a securities arbitration claim against their financial advisor and/or broker-dealer in an effort to be compensated. Arbitration, an alternative dispute resolution process, is the primary forum for resolving disputes between investors and brokerage firms because the client agreement, which the customer signs at account opening, contains a mandatory arbitration clause. To read more about securities arbitration, click here.

Securities arbitration is a unique and complex practice area. Investors should seek out experienced counsel who understands the FINRA forum and can navigate the arbitration process to effectively advocate on their behalf.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue individual FINRA arbitration claims nationwide on behalf of investors to recover financial losses from brokerage firms’ wrongful conduct.

Can You Sue Someone for a Bad Investment?

The short answer is “yes” if your advisor did not act in your best interest connected with an investment-related recommendation.

When a broker-dealer makes an investment recommendation, or a registered investment adviser provides investment advice, the investor is entitled to a recommendation (from a broker-dealer) or advice (from an investment adviser) that is in the best interest of the investor, and that does not place the interest of the financial professional or financial institution ahead of the interests of the retail investors.

The “best interest” standard is not limited to “recommendations” to purchase a security. It also applies to recommendations to sell or hold a security. Additionally, it applies to recommendations to purchase, sell, or hold an investment strategy. Finally, the “best interest” standard also explicitly applies to recommendations of types of accounts, including brokerage accounts and investment advisory accounts.

What is Excessive Trading or Churning?

Excessive trading occurs when a financial advisor makes many trades in a customer’s account, not to benefit the customer, but to generate commissions for the broker.

Churning is a more egregious variation of excessive trading. Churning refers to a situation where the broker executed an excessive number of trades and did so with the intent to defraud or reckless disregard for the customer’s interest. Churning is an unethical and illegal practice. It is also a violation of securities rules and regulations and can cause enormous harm to customers.

Excessive trading and churning are unethical and illegal practices. They are also violations of securities rules and regulations and can cause enormous harm to customers.

How Do I Sue an Investment Firm?

Brokerage firms must properly supervise financial advisors and customer accounts. Brokerage firms must also establish and maintain a reasonably designed system to oversee account activity to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to sufficiently supervise its financial advisors or the investment account activity, it may be liable for investment losses sustained by customers.

If you believe you have a claim, you should contact experienced securities arbitration attorneys at Iorio Altamirano LLP for a free and confidential consultation and review of your legal rights.

How Much Do Securities Arbitration Attorneys Charge?

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue individual FINRA arbitration claims nationwide on behalf of investors to recover financial losses from brokerage firms’ wrongful conduct.

Iorio Altamirano LLP generally represents investors through a contingency fee arrangement, which means that if we do not obtain a recovery, we do not collect a fee*.

*We do not collect a fee unless we obtain a recovery via settlement or judgment. You may, however, be responsible for costs and expenses the firm has advanced according to the terms of your agreement with the firm. The firm may recover advanced costs and expenses by deducting the expense from the gross recovery of any settlement or judgment.

Mr. Martirosian, who had only 13 years of experience in the securities industry, had a history of associations disreputable broker-dealers, customer complaints, and tax liens.

Mr. Martirosian was employed by Joseph Stone Capital in New York from July 2016 until April 26, 2021

If you have suffered financial losses investing with David Martirosian or Joseph Stone Capital L.L.C., or suspect that Mr. Martirosian did not have your best interest in mind when recommending investments or making account transactions, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential review of your legal rights.

Iorio Altamirano LLP represents investors that have disputes with their financial advisors or brokerage firms, such as Joseph Stone Capital.

Joseph Stone Capital L.L.C.

According to a 2017 investigation by Reuters, out of all of the brokerage firms in the country, Joseph Stone Capital hired the second most brokers with a history of significant disclosures. In 2021, Iorio Altamirano LLP set out to update that analysis.

The investigation revealed that seventy-six percent (76%) of Joseph Stone Capital’s brokers and supervisors have significant red flag public disclosures. Significant red flag disclosures include:

• regulatory sanctions,
• terminations of employment after allegations of misconduct,
• customer disputes that result in an award or settlement, and
• prior association with a firm that FINRA has expelled.

You can read the full investigative report here: Investigative Report: Iorio Altamirano LLP Investigation into Joseph Stone Capital L.L.C. Reveals Troubling Pasts for Owners, Executives, and Brokers

Mr. Martirosian was one of the brokers who had serious incidents reported on his BrokerCheck report.

FINRA Letter of Acceptance, Waiver, and Consent No. 2019063251701

FINRA and Mr. Martirosian entered into a Letter of Acceptance, Waiver, and Consent No. 2019063251701 on April 26, 2021, after Mr. Martirosian refused to cooperate with a FINRA investigation into potentially unsuitable and excessive trading and his potential participation in private securities transactions while associated with Joseph Stone Capital.

On March 22, 2021, in connection with its investigation, FINRA sent a request to Mr. Martirosian for the production of information and documents pursuant to FINRA Rule 8210. On April 6, 2021, Mr. Martirosian, through counsel, stated in an email that he would not provide the requested information or documents at any time.

By refusing to provide the information or documents, Mr. Martirosian violated FINRA Rules 8210 and 2010. Accordingly, FINRA barred him from associating with any broker-dealer in all capacities.

Excessive trading occurs when a financial advisor makes many trades in a customer’s account, not to benefit the customer but to generate commissions for the broker.

Excessive trading is an unethical and illegal practice. It is also a violation of securities rules and regulations and can cause enormous harm to customers.

Financial Advisor David Martin Martirosian (CRD No. 5261144)

David Martin Martirosian had 13 years of experience in the securities industry but a history of associations disreputable broker-dealers, customer complaints, and tax liens.

In 13 years, Mr. Martirosian has been associated with nine different firms, including four firms that have been expelled by FINRA:

• Joseph Stone Capital, L.L.C. in Mineola, New York, from July 2016 to April 2021.
• Spartan Capital Securities, LLC in Garden City, New York, from January 2016 to August 2016.
• Caldwell International Securities from June 2015 to December 2015 (expelled by FINRA).
• Legend Securities Inc. in Oyster Bay, New York, from December 2013 to July 2015 (expelled by FINRA).
• SCF Securities, Inc., from August 2013 to December 2013.
• John Carris Investments LLC in Hoboken, New Jersey, from June 2013 to September 2013 (expelled by FINRA).
• Cape Securities Inc. in Bayside, New York, from June 2011 to May 2013.
• John Thomas Financial in New York, New York, from July 2009 to April 2011 (expelled by FINRA).
• National Securities Corporation in Huntington, New York, from January 2007 to July 2009.

Mr. Martirosian has also been the subject of at least three customer disputes:

• Customer Dispute (November 2017): A customer indicated that he thought he was getting an additional 15,000 shares of Fat Brands Inc. added to his 10,000-share order of the same, at the IPO price of $12.00 in the primary market. Instead, the shares were purchased on the secondary market at a higher price, and the customer was not happy. The customer, firm, and Mr. Martirosian agreed to honor the $12 IPO price. The matter was deemed a settlement of $39,077.15, in which Mr. Martirosian personally contributed $20,000.
• Customer Dispute (June 2015): A customer filed a written complaint to Legend Securities, the firm that employed Mr. Martirosian at the time of the alleged conduct. The complaint related to an equity position. The customer did not file a securities arbitration complaint, instead choosing to complain directly to the brokerage firm. The firm denied the customer any compensation.
• Customer Dispute (October 2010): A customer filed a written complaint to John Thomas Financial, the firm that employed Mr. Martirosian at the time of the alleged conduct. The complaint related to excessive commissions and fees. The customer did not file a securities arbitration complaint, instead choosing to complain directly to the brokerage firm. The firm denied the customer any compensation.

According to Mr. Martirosian’s BrokerCheck report, he has also been the subject of the following IRS tax liens:

• October 29, 2019: $10,628.90.
• November 16, 2016: $14,705.73.
• December 15, 2014: $23,890.
• February 10, 2014: $25,050.

Joseph Stone Capital – A Duty to Supervise

Financial institutions like Joseph Stone Capital must properly supervise financial advisors and customer accounts. Brokerage firms must establish and maintain a reasonably designed system to oversee account activity, such as excessive trading, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to supervise its financial advisors or the investment account activity sufficiently, it may be liable for investment losses sustained by customers.

How to Recover Financial Losses or Obtain a Free Consultation

If you have suffered investment losses with David Martirosian or Joseph Stone Capital or suspect other inappropriate activity occurred in your investment or retirement account, contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (646) 330-4624 for a free and confidential review of your legal rights.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.

**Corrections and Clarifications: June 30, 2021**

• An earlier version of this blog post incorrectly stated that according to a 2017 investigation by Reuters, out of all of the brokerage firms in the country, Joseph Stone Capital hired the most brokers with a history of significant disclosures. According to a 2017 investigation by Reuters, out of all of the brokerage firms in the country, Joseph Stone Capital hired the second most brokers with a history of significant disclosures, not the most.

Mr. Rock was a financial advisor with Pruco Securities LLC (“Pruco Securities”) in Tampa, Florida, from July 2014 until August 2019.

Iorio Altamirano LLP is interested in speaking with past customers of Mr. Rock or Pruco Securities LLC. Contact securities arbitration law firm Iorio Altamirano LLP for a free and confidential evaluation of your investment or retirement account.

FINRA Letter of Acceptance, Waiver, and Consent No. 2019063574801

On April 23, 2021, Mr. Rock and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”). Specifically, FINRA alleged:

• Between March and June 2019, Rock solicited private-placement investments in a start-up company developing waste-to-energy technology totaling $409,200 from 17 investors.
• Four of the investors were customers of Pruco Securities.
• Rock participated in these purchases by recommending the investments, helping the investors complete Stock Purchase Agreements (SPAs), and collecting their SPAs and investment checks to provide to the company.
• Rock did not receive any compensation for the sales.
• Rock did not provide Pruco Securities with prior written notice of these activities, which were outside the regular course of his employment with the firm.
• Therefore, Rock violated FINRA Rules 3280 and 2010.

When a financial advisor participates in a private securities transaction that is not approved by a firm, it is referred to as “selling away.” The prohibitions on selling away are designed to protect investors by ensuring that all brokers’ activities are reasonably supervised by firms that employ them. Further, securities that are sold away from a firm have not been vetted by the firm.

Financial Advisor Frederick Joseph Rock (CRD No. 2548242)

Mr. Rock, who is not currently registered as a broker with any brokerage firm, had 23 years of experience in the securities industry and has been associated with six broker-dealers:

• Pruco Securities, LLC in Tampa, Florida, from July 2014 – August 2019.
• Fifth Third Securities, Inc. in Tampa, Florida, from May 2006 – November 2013.
• Uvest Financial Services Group, Inc. in Charlotte, North Carolina, from June 2003 – May 2006.
• MML Investors Services, Inc. in Springfield, MA, from March 1996 – June 2003.
• R. Phelps & Co., Inc., from February 1996 – March 1996.
• Cantella & Co., Inc. in Malden, Massachusetts, from May 1995 – June 1995.

According to Mr. Rock’s public BrokerCheck report, he has been the subject of at least two customer complaints:

• Customer Dispute (2011): A customer filed a securities arbitration complaint that alleged $600,000 in damages. The customer alleged misappropriation of funds and unauthorized trading of mutual funds and an exchange-traded fund. The causes of action included negligence, gross negligence, negligent-specific FINRA/NASD conduct rules violations, breach of fiduciary duty, breach of contract, and common law fraud. The dispute was settled by Fifth Third Securities, Inc. for $115,000.
• Customer Dispute (2016): A customer complained that Mr. Rock did not disclose all facts regarding recommended annuities and those annuities were not suitable. The customer did not file a securities arbitration complaint and instead complained directly to the firm, Pruco Securities, LLC. Pruco Securities LLC declined to give any compensation to the customer and closed the matter.

Mr. Rock’s BrokerCheck report also discloses that he has been the subject of three tax liens totaling over $30,000.

Pruco Securities LLC: A Duty to Supervise

Financial institutions, like Pruco Securities LLC, must properly supervise financial advisors and customer accounts. Brokerage firms are required to establish and maintain a reasonably designed system to oversee account activity, such as private securities transactions, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to supervise its financial advisors or the investment account activity sufficiently, it may be liable for investment losses sustained by customers.

How to Recover Losses or Obtain a Free Consultation

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.

If you have lost money with broker Fred Rock or Pruco Securities LLC, contact New York securities arbitration lawyers August Iorio and Jorge Altamirano of Iorio Altamirano LLP at august@ia-law.com, jorge@ia-law.com or toll-free at (646) 330-4624 for a free and confidential evaluation of your account.

Iorio Altamirano LLP is a bilingual law firm, fluent in both English and Spanish.

• made an unsuitable recommendation to two elderly, married customers;
• participated, without the approval of his firm, in a private securities transaction with those customers;
• willfully failed to timely amend his Uniform Application for Securities Industry Registration or Transfer (Form U4) to disclose a civil complaint and arbitration filed by one of the elderly customers, as well as other reportable events;
• entered into a settlement agreement with the customer that contained a prohibited condition — namely, that she would support his request for expungement;
• lied under oath at the expungement hearing;
• lied during on-the-record testimony to FINRA’s Department of Enforcement;
• engaged in a long pattern of unethical business conduct towards another retired customer from whom Mr. Schisler solicited a personal loan that he failed to repay for over six and a half years after maturity;
• made a false statement on a firm compliance questionnaire; and
• caused his firm to fail to preserve books and records by using outside, unmonitored email accounts to conduct securities business.

If you or a loved one were a customer of broker Steven Schisler or IFS Securities, contact securities arbitration law firm Iorio Altamirano LLP for a free and confidential review of your legal rights.

FINRA Disciplinary Proceeding No. 2018058718601

On April 13, 2021, the FINRA Department of Enforcement filed a complaint against broker Steven Schisler. The complaint includes the following allegations:

• In September 2014, Schisler persuaded an elderly, retired, married couple to invest $300,000 in a promissory note to finance a commercial property. That recommendation was not suitable for the customers. The $300,000 was a substantial portion of their retirement savings, and they depended upon those funds to pay down considerable debt. They also had few alternative sources of income in retirement. The recommended investment was a security and, by its own terms, was limited to accredited investors, which the married couple were not. Moreover, Mr. Schisler did not perform the diligence necessary to provide him with a reasonable basis to recommend the investment to his customers. Had he conducted even a cursory internet search, he would have learned that one of the two partners issuing the note had been barred from the securities industry for defrauding investors. By recommending an unsuitable investment, Mr. Schisler violated FINRA Rules 2111 and 2010.
• Schisler facilitated the elderly couple’s investment in the note by, among other things, recommending the investment to them, arranging and participating in a meeting in his own office between them and the issuer, and receiving a $9,500 finder’s fee from the issuer in connection with the transaction. Mr. Schisler participated despite repeated and explicit instruction from his firm that he could not do so. By participating in a private securities transaction without approval from his member firm, Schisler violated NASD Rule 3040 and FINRA Rule 2010.
• When the $300,000 note became due in September of 2016, the issuer defaulted. One of the customers died a few months earlier, and the remaining widow brought a civil lawsuit against Mr. Schisler and others involved in the investment and, subsequently, a FINRA arbitration against Mr. Schisler. Mr. Schisler willfully failed to timely amend his Form U4 to report either the civil lawsuit or the arbitration, despite repeated instructions from his member firm to do so. Schisler also willfully failed to timely amend his Form U4 to disclose the subsequent resolutions of the civil lawsuit and arbitration, as well as his receipt of a Wells Notice advising him that he was the subject of a FINRA investigation. By these willful disclosure failures, Schisler violated Article V, Section 2(c) of FINRA’s By-Laws and FINRA Rules 1122 and 2010.
• In January 2019, Mr. Schisler executed a settlement agreement with the elderly widow to resolve both her civil lawsuit and FINRA arbitration. Under the terms of the settlement, Mr. Schisler improperly required her to execute a declaration to support his request for expungement. By entering into a settlement with this prohibited condition, Schisler violated FINRA Rules 2081 and 2010.
• During the FINRA arbitration panel’s April 29, 2019 hearing on Mr. Schisler’s request for expungement, Mr. Schisler lied to the panel about his involvement in the promissory note, falsely testifying that he did “not personally” introduce the customers to the issuer and otherwise mischaracterizing the nature of his involvement with the note. In so doing, Schisler violated FINRA Rule 2010.
• On February 19, 2020, Mr. Schisler similarly provided false testimony to FINRA’s Department of Enforcement. During on-the-record testimony taken pursuant to FINRA Rule 8210, Mr. Schisler repeatedly and falsely testified that the $9,500 finder’s fee he received in connection with the promissory note investment was a “personal loan” and that he was unaware at the time that Customers H and E had made the investment. By lying during his testimony taken pursuant to FINRA Rule 8210, Schisler violated FINRA Rules 8210 and 2010.
• Schisler’s unethical misconduct extended to another elderly, retired customer. On April 9, 2009, Mr. Schisler solicited the elderly customer to lend him $50,000 in the form of a promissory note that was secured by mortgaged property on the verge of default. Mr. Schisler defaulted on the mortgage a few days after he issued the note to the elderly customer, and he subsequently lost the property through foreclosure. Mr. Schisler failed to disclose both the default and subsequent foreclosure to his elderly customer and then failed to repay her the $50,000 principal and the accrued interest for more than six years after the note matured. Mr. Schisler unilaterally extended the maturity date and repeatedly assured the elderly customer that payment would be forthcoming, only to renege on his promises without justification. After years of unjustified delays and still owing most of the original principal, Mr. Schisler finally repaid Customer P in October 2020. By engaging in this unethical business conduct towards a customer, Schisler violated FINRA 2010.
• When Mr. Schisler joined a new firm in May 2012, he brought the elderly customer with him. At that time, Mr. Schisler falsely responded “no” to a question on the firm’s questionnaire asking whether he had borrowed money from any current or former customers. In fact, Mr. Schisler had borrowed money from two customers, including the elderly customer. In so doing, Schisler violated FINRA Rule 2010.
• Finally, on 44 occasions, Mr. Schisler used non-firm email accounts not copied, captured, or supervised by his firm to communicate with customers regarding securities-related business. By causing his firm to fail to preserve required books and records, Schisler violated FINRA Rules 4511 and 2010.

Financial Advisor Steven Douglas Schisler (CRD No. 2367961)

Mr. Schisler, who is no longer registered with any brokerage firm, had 25 years of experience in the securities industry and has been associated with the following firms:

• IFS Securities in Grass Valley, California, from June 2012 to September 2019.
• Sterne Agee Financial Services, Inc. in Birmingham, Alabama, from March 2012 to May 2012.
• Synergy Investment Group, LLC in Grass Valley, California, from August 2004 to March 2012.
• Pension Planners Securities, Inc. in Sacramento, California, from October 2003 to August 2004.
• Washington Square Securities, Inc. in Des Moines, Iowa, from March 1999 to August 2003.
• Sunset Financial Services, Inc. in Kansas City, Missouri, from January 1998 to March 1999.
• SunAmerica Securities, Inc. in Phoenix, Arizona, from August 1995 to January 1998.
• Chubb Securities Corporation in Fort Wayne, Indiana, from August 1993 to December 1995.

Mr. Schisler has also been affiliated with a business named Synergy Wealth Management LLC.

In 2017, a customer filed a litigation complaint in Nevada state court, alleging the failure to return trust assets, conversion (theft), and breach of fiduciary duty. The dispute is still pending.

According to public records, in 1981, Mr. Schisler was convicted of Unlawful Possession of a Weapon, a felony. He was sentenced to three years’ probation, 80 hours of community services, and fined.

IFS Securities – Supervisory Duties

Brokerage firms like IFS Securities must properly supervise financial advisors and customer accounts. Brokerage firms must also establish and maintain a reasonably designed system to oversee account activity, such as unsuitable trades, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to sufficiently supervise their financial advisors or the investment account activity, it may be liable for investment losses sustained by customers.

How to Recover Financial Losses or Obtain a Free Consultation

If you or a loved one were a customer of Steven Schisler or IFS Securities and either sustained financial losses or suspect that Mr. Schisler did not have your best interest in mind when recommending investments or making account transactions, contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (646) 330-4624 for a free and confidential evaluation of your account.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.

Mr. Francis was a broker at MML Investors Services, LLC, Inc. in Ft. Lauderdale, Florida, from July 2008 to May 2017. At that time, MML terminated his employment connected with an investigation into an undisclosed outside business activity, selling away, and an unauthorized non-securities life insurance transaction. In August 2018, Mr. Francis pleaded guilty to wire fraud after admitting that between June 25, 2012, and May 31, 2017, he devised a scheme to defraud at least eleven investors out of approximately $665,000. Mr. Francis was subsequently sentenced to 41 months in prison and ordered to pay over $420,000 in restitution to clients. In May 2019, he was also barred by the SEC from association from associating with any broker, dealer, or investment advisor.

Iorio Altamirano LLP is also investigating the sales practices and due diligence of MML Investors Services, LLC related to its sale of GPB Capital funds. It is believed, according to reports, that MML has been subjected to numerous lawsuits from customers in the form of FINRA securities arbitration claims to recover investment losses.

Securities arbitration is a unique and complex practice area. Investors should seek out experienced counsel who can navigate the arbitration process and effectively advocate on their behalf.

Iorio Altamirano LLP is a securities arbitration law firm located in the heart of New York City. Iorio Altamirano LLP represents investors nationwide who have suffered investment losses due to securities fraud.

If you have suffered financial losses as a result of any of the following GPB private placement offerings, contact Iorio Altamirano LLP for a free and confidential review of your legal rights:

• GPB Automotive Portfolio, LP
• GPB Cold Storage LP
• GPB Holdings, LP
• GPB Holdings II, LP
• GPB Holdings III, LP
• GPB Holdings Qualified, LP
• GPB NYC Development, LP
• GPB Waste Management Fund, LP

Financial Advisor Oscar Francis (CRD No. 5094722)

Mr. Francis had 11 years of experience and has been associated with three different brokerage firms:

• MML Investors Services, LLC in Ft. Lauderdale, FL, from July 2008 to May 2017.
• AXA Advisors, LLC in Ft. Lauderdale, FL, from March 2007 to July 2018.
• Raymond James & Associates, Inc. in Boca Raton, FL, from April 2006 to February 2007.

MML Investors Services fired Mr. Francis on May 31, 2017, connected with a U.S. Department of Justice investigation into an undisclosed outside business activity and selling away. In August 2018, Mr. Francis pleaded guilty to wire fraud after admitting that between June 25, 2012, and May 31, 2017, he devised a scheme to defraud at least eleven investors out of approximately $665,000. Mr. Francis solicited his MML Investor Services clients, with whom he attended church, to invest in Mahum, Inc., which he incorporated and controlled. Mr. Francis falsely represented that Mahum, Inc. was affiliated with MML, and the investments in Mahum, Inc. would generate high rates of return. Mr. Francis also stole the funds he received, spending them on cocaine, alcohol, strip clubs, and luxury items. When investors inquired or complained about their investments’ status, Mr. Franciss would obtain loans and use other investment funds to repay the investors to prevent them from reporting Mr. Francis’s activity to MML or law enforcement.

Mr. Francis was subsequently sentenced to 41 months in prison and ordered to pay over $420,000 in restitution to clients. In May 2019, he was also barred by the SEC from association from associating with any broker, dealer, or investment advisor.

According to Mr. Francis’s public disclosure report with FIRNA, MML Investor Services, LLC has paid nearly $400,000 to five complaining customers:

• Customer Dispute (December 2018): In December 2018, a customer filed a complaint alleging $24,000 in damages. The customer alleged that in 2016, he believed that he was investing in a MassMutual product, which was later discovered to be a fraudulent investment, in which Mr. Francis misappropriated client funds. MML Investor Services, LLC settled the matter for $31,828.
• Customer Dispute (November 2018): In November 2018, a customer filed a complaint alleging $59,360 in damages. The customer alleged that in 2016, he believed that he was investing in a MassMutual product, which was later discovered to be a fraudulent investment, in which Mr. Francis misappropriated client funds. MML Investor Services, LLC settled the matter for $59,540.95.
• Customer Dispute (August 2017): In August 2017, a customer filed a complaint alleging $20,000 in damages. The customer alleged that in 2016, he believed that he was investing in a MassMutual product, which was later discovered to be an unapproved investment. MML Investor Services, LLC settled the matter for $20,370.
• Customer Dispute (August 2017): In August 2017, a customer filed a complaint alleging that in 2016 he believed that he was investing in a MassMutual product, which was later discovered to be an unapproved investment. MML Investor Services, LLC settled the matter for $44,321.
• Customer Dispute (May 2017): In May 2017, a customer filed a complaint alleging that in 2016 he believed that he was investing in a MassMutual product, which was later discovered to be an unapproved investment. MML Investor Services, LLC settled the matter for $243,652.

How to Recover Losses or Obtain a Free Consultation

If you have suffered financial losses investing with Mr. Francis or MML Investor Services, LLC, or suspect that Mr. Francis did not have your best interest in mind when recommending an investment, such as one of the GPB Capital notes, contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (646) 330-4624 for a free and confidential evaluation of your account.

Mr. Olave was a financial advisor with Questar Capital Corporation at the time of the alleged conduct. He has since moved to Lincoln Investment.

Iorio Altamirano LLP is interested in speaking with customers of Mr. Olave or Questar Capital Corporation. Contact securities arbitration law firm Iorio Altamirano LLP for a free and confidential review of your legal rights.

FINRA Letter of Acceptance, Waiver, and Consent No. 2020065678101

On April 7, 2021, Mr. Olave and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”). The FINRA AWC alleged:

• Between October 26, 2017, February 27, 2018, Respondent solicited seven investors to purchase $217,477 in securities of Future Income Payments, LLC (FIP).
• Future Income Payments, LLC represented itself as a structured cash flow investment that purchased pensions at a discount from pensioners and then sold a portion of those pensions as a “pension stream to investors.”
• Future Income Payments, LLC reportedly promised investors a 7% to 8% rate of return.
• Olave received a total of $3,795 in commissions associated with the Future Income Payments, LLC transaction.
• Quester Capital Corporation prohibited its financial advisors from participating in private securities transactions without prior written approval from the firm.
• Olave did not provide notice to Questar Capital Corporation before soliciting his elderly customers to purchase securities of Future Income Payments, LLC.

In April 2018, Future Income Payments, LLC ceased business, owing nearly $300 million in unpaid investor payments to over 2,600 individuals. In March 2019, Future Income Payments, LLC and its owner, Scott A. Kohn, were indicted by a Federal Grand Jury alleging a conspiracy to engage in mail and wire fraud. According to the indictment, Future Income Payments, LLC operated a Ponzi scheme.

When a financial advisor participates in a private securities transaction that is not approved by a firm, it is referred to as “selling away.” The prohibitions on selling away are designed to protect investors by ensuring that all brokers’ activities are reasonably supervised by firms that employ them. Further, securities that are sold away from a firm have not been vetted by the firm.

Financial Advisor Louis Mauric Olave (CRD No. 5904834)

Mr. Olave has nine years of experience in the securities industry and has been associated with the following firms:

• Lincoln Investment in Burlington, VT, from February 2019 to the present.
• Questar Capital Corporation in Burlington, VT, from November 2015 to February 2019.
• Proequities, Inc. in Rutland, VT, from May 2011 to November 2015.

In his nine-year career, Mr. Olave has been the subject of at least four customer disputes:

• Customer Dispute (April 2020): A customer filed a securities arbitration complaint against Mr. Olave alleging $24,000 in damages as a result of Mr. Olave and Questar Capital Corporation’s unsuitable investment advice to purchase $25,000 in securities of Future Income Payments, LLC. The investment represented half of her net worth. An arbitration panel found in favor of the customer and awarded the customer nearly $24,000 in damages.
• Customer Dispute (April 2019): A customer made a written complaint directly to Questar Capital Corporation. The complaint alleged that in April 2018, the client made a $50,0000 purchase, with the proceeds from a surrender annuity, into a structured cash flow offering that was supposed to provide her a monthly income. The client did not receive any income or her principal back. The firm denied the customer any compensation. The customer did not file a securities arbitration complaint and still presumably has legal rights to seek a recovery.
• Customer Dispute (November 2014): A customer made a written complaint directly to Proequities Inc. alleging that the recommendation and sale of annuities were unsuitable given her retirement and liquidity needs. The firm denied her any compensation. The customer did not file a securities arbitration complaint.
• Customer Dispute (November 2014): A customer made a written complaint directly to Proequities Inc. alleging that the recommendation and sale of annuities were unsuitable given her retirement and liquidity needs. The firm denied her any compensation. The customer did not file a securities arbitration complaint.

Questar Capital Corporation: A Duty to Supervise

Financial institutions, like Questar Capital Corporation, must properly supervise financial advisors and customer accounts. Brokerage firms are required to establish and maintain a reasonably designed system to oversee account activity, such as private securities transactions, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to supervise its financial advisors or the investment account activity sufficiently, it may be liable for investment losses sustained by customers.

How to Recover Losses or Obtain a Free Consultation

When an investor suffers investment losses due to misconduct by a financial advisor or broker-dealer, the investor can file a securities arbitration claim against their financial advisor and/or broker-dealer in an effort to be compensated.

Securities arbitration is a unique and complex practice area. Investors should seek out experienced counsel who can navigate the arbitration process and effectively advocate on their behalf.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.

If you have lost money with broker Louis Olave, Lincoln Investment, or Questar Capital Corporation, contact New York securities arbitration lawyers August Iorio and Jorge Altamirano of Iorio Altamirano LLP at august@ia-law.com, jorge@ia-law.com or toll-free at (646) 330-4624 for a free and confidential evaluation of your account.

FINRA alleged that Mr. Rahn engaged in a pattern of breaking up customer orders for execution in violation of FINRA Rules. Specifically, from January 2014 to September 2018, Mr. Rahn recommended an “average pricing” investment strategy to his customers in which he executed orders by breaking them into multiple small trades, each generating a separate commission. Mr. Rahn lacked a reasonable basis to believe this strategy was suitable for his customers. Connected with this strategy, Mr. Rahn exercised time and price discretion on over 7,500 trades without the required authorization.

FINRA also alleged that Mr. Rhan executed 577 unauthorized trades in a customer’s account and that he mismarked 4,714 solicited trades in three customer accounts as “unsolicited” in violation of FINRA Rules.

The alleged conduct occurred while Mr. Rahn was employed by J.P. Morgan Securities LLC in Los Angles, California. J.P. Morgan terminated his employment in September 2018. According to the New York Times, Mr. Rahn was fired after he was accused of unauthorized trading, excessive trading, and excessive fees in an elderly customer’s account. A forensic analysis on the account at issue, which was worth approximately $1.3 million, revealed that the customer was charged $128,000 in commissions, which is ten times the typical amount for an account that size.

If you have suffered financial losses investing with Trevor Rahn, or suspect that Mr. Rahn did not have your best interest in mind when recommending investments or investment strategies, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential review of your account or annuity contract.

Iorio Altamirano LLP represents investors that have disputes with their financial advisors or brokerage firms, such as J.P. Morgan Securities.

FINRA Letter of Acceptance, Waiver, and Consent No. 2018059251701

FINRA and Mr. Rahn entered into a Letter of Acceptance, Waiver, and Consent No. 2018059251701 on March 19, 2021, after FINRA alleged that Mr. Rahn made a series of unsuitable investment strategy recommendations, unauthorized trades, and mismarked orders.

Mr. Rahn’s Unsuitable “Average Pricing” Investment Strategy

Between January 2014 and September 2018, Mr. Rahn made recommended an “average pricing” investment strategy to his customers in which he executed orders by breaking them into multiple small trades, each generating a separate commission. Specifically, FINRA alleged:

• Rahn recommended an “average pricing” investment strategy to customers in which he executed orders in 32 accounts by breaking them into multiple smaller trades that he entered at different times on the same day.
• When entering the smaller trades, Mr. Rahn often entered a separate commission on each trade that was greater than the amount that would be charged under the firm’s standard commission schedule.
• Rahn relied on the firm’s system to automatically assign commissions in accordance with the firm’s commission schedule without taking steps to confirm it actually did so.
• Because Mr. Rahn failed to conduct the necessary reasonable diligence to understand the cost implications of his recommended strategy, he lacked a reasonable basis to recommend his “average pricing” strategy to his customers.
• Therefore, Rahn violated FINRA Rules 2111(a) and 2010.
• Also, to implement his “average pricing” strategy, Mr. Rahn exercised time and price discretion by breaking up 1.106 customer orders into over 7.500 smaller trades.
• NASD Rule 2510(b) generally prohibits a registered representative from exercising discretionary power in a customer’s account without prior written authorization from the customer and written acceptance from the member firm. While NASD Rule 2510(d)(1) provides an exception for same-day time and price discretion, “[a]lny exercise of time and price discretion must be reflected on the order ticket.”
• Rahn did not have written authority from any of his customers, or written acceptance from his firm, to exercise discretion in any customer accounts. None of the tickets for the over 7,500 trades reflected an exercise of time and price discretion. Instead, Mr. Rahn entered all of these trades as “held” orders, meaning that each order was intended to be promptly placed. Therefore, Rahn violated NASD Rule 2510(b) and FINRA Rule 2010.

Mr. Rahn’s Unauthorized Trades

FINRA alleged that Mr. Rahn executed 577 unauthorized trades in a customer’s account.

Unauthorized trading often occurs in non-discretionary accounts, where a customer retains discretion. In non-discretionary accounts, brokers must obtain a customer’s permission every time before placing a trade.

Unauthorized trading is an unethical and illegal practice. It is also a violation of securities rules and regulations and can cause enormous harm to customers.

Mr. Rahn’s Mismarked Orders

FINRA alleged that Mr. Rahn mismarked 4,714 solicited trades in three customer accounts as “unsolicited.”

A “solicited” trade is a trade that was the broker’s idea. It is a trade where the financial advisor initiated and recommended the buy or sell transaction to the client.

An “unsolicited” trade is a trade that the customer initiated. It is a trade made by the client on their own initiative, without recommendations, suggestions, or prompting from the broker.

A financial advisor who marks order tickets as “unsolicited” even though the trades were the financial advisor’s idea violates FINRA Rule 2010. To read more about solicited and unsolicited trades, click here.

Financial Advisor Trevor Bradner Rahn (CRD No. 2196155)

Trevor Rahn had 26 years of experience in the securities industry and has been associated with the following firms:

• P. Morgan Securities LLC in Los Angeles, CA, from July 2010 to September 2018.
• Deutsche Bank Securities Inc. in Los Angeles, CA, from March 2008 to September 2010.
• Morgan Stanley & Co., Incorporated in Beverly Hills, CA, from April 2007 to March 2008.
• Morgan Stanley DW Inc. in Beverly Hills, CA, from October 1999 to April 2007.
• Merrill Lynch, Pierce, Fenner & Smith Incorporated in New York, NY, from January 1992 to October 1999.

J.P. Morgan terminated Mr. Rahn’s employment in September 2018. In connection with the discharge, J.P. Morgan alleged that Mr. Rahn engaged in unacceptable practices relating to the timing and size of orders entered, resulting in transaction charges and marking of certain orders for an account as unsolicited.

According to his public disclosure report with FINRA, Mr. Rahn is the subject of an unsatisfied lien in the amount of $763,425 by DB Bank Securities.

Also, according to his BrokerCheck Report, Mr. Rahn has been the subject of five customer disputes:

• Customer Dispute (April 2020): A customer alleged $125,000 in damages arising out of a private placement investment that was sold away from J.P. Morgan Securities LLC. The customer filed a complaint directly with the firm, and the firm denied the customer any compensation. The customer did not file a securities arbitration complaint.
• Customer Dispute (June 2019): A customer filed a complaint with J.P. Morgan Securities LLC, alleging $854,410 in damages. The customer alleged excessive trading and unauthorized trading and margin use. The firm settled the matter in October 2019 for nearly $550,000.
• Customer Dispute (November 2018): A customer filed a written complaint with J.P. Morgan Securities LLC in November 2018, alleging over $1.1 million in damages. The customer alleged that a number of transactions in the account were unauthorized. The firm settled the matter for $114,000.
• Customer Dispute (November 2017): A customer filed a written complaint, alleging that Mr. Rhan made unauthorized trades of closed-end funds. The matter was settled by J.P. Morgan Securities LLC for $64,590.
• Customer Dispute (October 2016): A written complaint was filed with J.P. Morgan Securities LLC in October 2016, alleging $57,847 in damages. The complaint alleged that in October 2015, the administrators of a client’s estate were not made aware of fees in connection with the liquidation of securities, which were excessive. The firm settled the matter for $57,847.

J.P. Morgan Securities LLC – A Duty to Supervise

Financial institutions like J.P. Morgan Securities LLC must properly supervise financial advisors and customer accounts. Brokerage firms must establish and maintain a reasonably designed system to oversee account activity, such as annuity switches, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to supervise its financial advisors or the investment account activity sufficiently, it may be liable for investment losses sustained by customers.

How to Recover Financial Losses or Obtain a Free Consultation

If you were an investor of Trevor B. Rahn and have suffered investment losses, or suspect that Mr. Rahn did not have your best interest in mind when recommending investments or investment strategies, contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (646) 330-4624 for a free and confidential evaluation of your account or annuity contract.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.

Mr. Warner has recently been associated with the following financial institutions: Chelsea Financial Services (2017 – 2019), Dominion Investor Services, Inc (2017), IFS Securities (2014 – 2017), NFP Advisor Services, LLC (2013 – 2014), and LPL Financial, LLC (2003 – 2013).

If you have lost money with broker George Warner, Chelsea Financial Services, Dominion Investor Services, Inc, or IFS Securities, contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.

FINRA Letter of Acceptance, Waiver, and Consent No. 2020067463101

George Marshall Warner, Jr. and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) on March 9, 2021, after Mr. Warner refused to provide information and documents in connection with FINRA’s investigation into whether Mr. Warner participated in an undisclosed private securities transaction.

On December 28, 2020, in connection with FINRA’s investigation, FINRA sent a letter to Mr. Warner to produce information and documents pursuant to FINRA Rule 8210. On February 15, 2021, Mr. Warner, through counsel, stated in an email that he would not provide the requested information or documents at any time.

By refusing to provide the information or documents, Mr. Warner violated FINRA Rules 8210 and 2010. Accordingly, FINRA barred him from associating with any broker-dealer in all capacities.

Financial Advisor George Marshall Warner (CRD No. 2300570)

George Warner had 24 years of experience in the securities industry and has a history of customer complaints and disciplinary actions.

In 2017, Mr. Warner was suspended for thirty days by FINRA for allegedly alternating various customer documents on at least five occasions after the customers had already signed the documents. The findings stated that Mr. Warner corrected or included the customer’s anticipated liquidity needs, net worth, liquid net worth, and/or annual income on new account forms, alternative investment disclosure forms, and an IRA Application. FINRA also fined Mr. Warner $5,000 for his conduct.

According to his public disclosure report, Mr. Warner has been discharged or permitted to resign three times in his career after allegations of wrongdoing. First, in 2013, LPL Financial LLC in Rockwall, Texas, terminated Mr. Warner’s employment, alleging that he obtained client signatures on blank account transfer forms. Then, in 2014, he was “permitted to resign” from NFP Advisor Services, LLC in Rockwall, Texas, after allegedly making alterations to a client’s new account form after the client had signed the document. Finally, in October 2019, Chelsea Financial in Staten Island, New York, “permitted him to resign” after Mr. Warner allegedly participated in a private securities transaction.

Finally, Mr. Warner has been the subject of two customer complaints:

• Customer Dispute (2020): A customer alleged $100,000 in damages arising out of a private securities transaction (aka “selling away”). Chelsea Financial Services employed Mr. Warner at the time of the alleged conduct. The dispute is still pending.
• Customer Complaint (2009): A customer alleged that Mr. Warner, while associated with LPL Financial, made an error in connection with the purchase of CIT bonds versus Citi Corp. bonds. The customer alleged $329,426 in damages. The matter was settled for $225,000, including a $30,000 contribution from Mr. Warner.

Chelsea Financial Services, Dominion Investor Services, Inc, and IFS Securities: A Duty to Supervise

Financial institutions, like Chelsea Financial Services, Dominion Investor Services, Inc, and IFS Securities, must properly supervise financial advisors and customer accounts. Brokerage firms are required to establish and maintain a reasonably designed system to oversee account activity, such as private securities transactions, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to supervise its financial advisors or the investment account activity sufficiently, it may be liable for investment losses sustained by customers.

How to Recover Losses or Obtain a Free Consultation

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.

If you have lost money with George Warner, Chelsea Financial Services, Dominion Investor Services, Inc, or IFS Securities, contact New York securities arbitration lawyers August Iorio and Jorge Altamirano of Iorio Altamirano LLP at august@ia-law.com, jorge@ia-law.com or toll-free at (646) 330-4624 for a free and confidential evaluation of your account.

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Update: Broker Scott Reed, Formerly of Wells Fargo in Scottsdale, Arizona, Appears to Have a History of Recommending High Risk and High Commission Investments to Customers

Last month, this blog reported that broker Scott Wayne Reed (CRD No. 3007033) had been barred from the securities industry by the Financial Industry Regulatory Authority (“FINRA”) for participating in private securities transactions totaling at least $3.5 million without providing prior written notice to his firm. Beginning in early 2019 and continuing until his termination from Wells Fargo in April 2020, Mr. Reed solicited at least six individuals, including at least two Wells Fargo customers, to invest in securities issued by Pebblekick, a software and web development company based in Pasadena, California.

Iorio Altamirano LLP has since learned that Mr. Reed has also solicited clients to invest in the following high risk and speculative investments:

• GWG “L Bonds”: Speculative, high risk, and illiquid “bonds” that are classified as an alternative investment. An L bond is an unrated life insurance bond that finances the purchase and premium payments of life insurance contracts bought in the secondary market. Brokers get a commission of 1 to 5% of the market price of the bond.
• Staffing 360 Solutions, Inc. (STAF): A penny stock that once traded at over $100 / share.
• Kadmon (KDMN): A publicly traded biotech company founded in 2010 by Sam Waksal, who has previously pled guilty and served jail time for insider trading. Kadmon has not performed before or after its IPO in 2016.
• Aequitas: Investments related to or sponsored by Aequitas Management. Aequtias Management was charged by the SEC in 2016 for defrauding investors. The SEC’s complaint alleged that the investment group defrauded more than 1,500 investors nationwide into believing they were making health care, education, and transportation-related investments. Instead, Aequitas Management primarily used the money to cover its operating expenses and pay earlier investors in a Ponzi-like scheme.

Iorio Altamirano LLP, a securities arbitration law firm, is interested in speaking with customers of Mr. Reed or Wells Fargo. Contact us today for a free and confidential consultation.

Arizona Corporation Commission Docket No. S-21132A-20-0370

On December 15, 2020, the Securities Division of the Arizona Corporation Commission filed a “Notice of Opportunity for Hearing Regarding Proposed Order to Cease and Desist, Order for Restitution, Order for Administrative Penalties, Order for Revocation and Order for Other Affirmative Action” (the “Notice”) against Scott Reed, his wife, Pebblekick, Inc., and Don K. Shiroishi, the Chief Executive Officer and President of Pebblelike. The Notice alleged violations of the Securities Act of Arizona, A.R.S. § 44-1801 et seq. (the “Securities Act”) and Arizona Investment Management Act, A.R.S. § 44-3101 et seq. (“IM Act”). Specifically, the Notice included the following allegations against Mr. Reed:

• Reed failed to timely disclose four (4) liens the Internal Service recorded against him for unpaid income taxes for the years 2008 ($46,767), 2009 ($57,075), 2013 and 2014 ($120,971), and 2015 ($17,605).
• Beginning in early 2019, Mr. Reed solicited at least six individuals, including at least two Wells Fargo customers, to invest in securities issued by Pebblekick, Inc., a software and web development company based in Pasadena, California.
• The six investors collectively invested at least $3.5 million in exchange for notes from Pebblekick promising to pay the investors interest at annualized rates of sixty percent (60%) or more.
• Reed received selling compensation of $191,340 from Pebblekick, Inc. for his role in soliciting and facilitating the investments.
• Reed lied to his employers and securities regulators about his selling away and termination from Wells Fargo.

Allegations related to Wells Fargo Investor One:

• In January 2020, Mr. Reed proposed to an investor (“Investor One”) that he invest by making a three-month loan to a company in California, Pebblekick, for which the investor would receive a fifteen percent (15%) return.
• Prior to Mr. Reed approaching Investor One with the Pebblekick investment, Investor One never spoke to Mr. Reed about finding short-term lending opportunities.
• Reed told Investor One that the investment would be safe and that he and another investor (“Investor Two”) had made a similar investment with Pebblekick. Mr. Reed even went as far as showing Investor One, Investor Two’s account on his phone.
• Based on Mr. Reed’s recommendation and assurances that the investment was one hundred percent (100%) safe, Investor One decided to invest $100,000.
• Reed then requested that Investor One invest $200,000. Mr. Reed told Investor One that Pebblekick would pay him $30,000 interest on the $200,000 investments for three months, which is fifteen percent (15%) for that period or an annualized interest rate of sixty percent (60%).
• Reed offered to personally guarantee $100,000 of the investment through an email. The guarantee persuaded the customer to invest $200,000.
• Reed failed to disclose to Investor One that he already owed substantial debts in the amount of $1,452,793, which would impair his ability to repay the debts.
• In mid-March 2020, Investor One had become nervous about this Pebblekick investment due to COVID-19 and the impact the virus appeared to be having on the economy.
• During a conversation in late-March 2020, Mr. Reed stated that Pebblekick’s CEO was “in his back pocket” because Mr. Reed had raised $4 million to $5 million for Pebblekick. Reed also represented that Investor Two had invested $1.1 million and had been repaid $600,000.
• Investor One questioned why Pebblekick would borrow money from him and other individuals and agree to pay an annualized interest rate of sixty percent (60%). He also expressed his concerns that the investment seemed too good to be true.
• Reed responded that Pebblekick just needed bridge financing until it could access a line of credit coming from a bank in Shanghai, China.
• Reed said that he would bet that Pebblekick could repay Investor One the following week and suggested that he only ask for half his money back and leave the other half with Pebblekick.
• When Investor One asked if Wells Fargo backed the Pebblekick investment, Mr. Reed responded, “Hell no. Not at all. This has nothing to do with Wells.”
• Investor One would not have invested in Pebblekick if Mr. Reed had informed him the investment had nothing to do with Wells Fargo.
• Investor One eventually received his $200,000 investment back from Pebblekic, but Pebblekick did not pay him any interest.

Allegations related to Wells Fargo Investor Two:

• Investor Two provided Wells Fargo with copies of text messages in which Mr. Reed solicited and sold Investor Two the following investments: (i) $200,000 in something Mr. Reed called “Precision Surgical,” which Mr. Reed stated that Pebblekick owned; (ii) $200,000 in what Mr. Reed called “Mako Studios (Pebblekick)“; (iii) $200,000 in something Mr. Reed called Ascensive Creator, and (iv) $500,000 in Ascensivc Creator.

Wells Fargo: A Duty to Supervise

Financial institutions, like Wells Fargo, must properly supervise financial advisors and customer accounts. Brokerage firms are required to establish and maintain a reasonably designed system to oversee account activity, such as private securities transactions, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to supervise its financial advisors or the investment account activity sufficiently, it may be liable for investment losses sustained by customers.

How to Recover Losses or Obtain a Free Consultation

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.

If you have lost money with broker Scott Reed or Wells Fargo, contact New York securities arbitration lawyers August Iorio and Jorge Altamirano of Iorio Altamirano LLP at august@ia-law.com, jorge@ia-law.com or toll-free at (646) 330-4624 for a free and confidential evaluation of your account.

Iorio Altamirano LLP is a bilingual law firm, fluent in both English and Spanish.

Mr. Reed was a financial advisor with Packerland Brokerage Services, Inc. (“Packerland”) in Palm City, Florida, from December 2002 until December 2020.

Iorio Altamirano LLP is interested in speaking with customers of Mr. Shelley or Packerland Brokerage Services, Inc. Contact securities arbitration law firm Iorio Altamirano LLP for a free and confidential evaluation of your account.

FINRA Letter of Acceptance, Waiver, and Consent No. 2020065315901

On March 3, 2021, Mr. Shelley and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”). Specifically, FINRA alleged:

• In July 2016, Mr. Shelley sold an investor $29,500 in Future Income Payments, LLC security.
• Future Income Payments, LLC represented itself as a structured cash flow investment that purchased pensions at a discount from pensioners and then sold a portion of those pensions as a “pension stream to investors.”
• Future Income Payments, LLC reportedly promised investors a 7% to 8% rate of return.
• Shelley received a total of $1,475 in commissions associated with the Future Income Payments, LLC transaction.
• Packerland prohibited its financial advisors from participating in private securities transactions without prior written approval from the firm.
• Shelley did not provide notice to Packerland before soliciting the investor to purchase securities of Future Income Payments, LLC.

In April 2018, Future Income Payments, LLC ceased business, owing nearly $300 million in unpaid investor payments to over 2,600 individuals. In March 2019, Future Income Payments, LLC and its owner, Scott A. Kohn, were indicted by a Federal Grand Jury alleging a conspiracy to engage in mail and wire fraud. According to the indictment, Future Income Payments, LLC operated a Ponzi scheme.

Financial Advisor Richard Scott Shelley (CRD No. 2671545)

Mr. Shelley has 23 years of experience in the securities industry and has been associated with at least one firm that FINRA has expelled. Mr. Reed has been associated with the following firms:

• Packerland Brokerage Services, Inc. in Palm City, FL, from December 2002 – December 2020.
• High Mark Securities in Lakeland, FL, from April 2002 – December 2002.
• Packerland Brokerage Services, Inc in Green Bay, WI, from March 2000 – April 2002.
• Signator Investors, Inc. in Boston, MA, from November 1998 – March 2000.
• Gruntal & Co., L.L.C. in New York, NY, from May 1997 – February 1998.
• Capital International Securities Group, Inc. in Miami, FL, from November 1996 – April 1997.
• Joseph Roberts & Co., Inc. in Pompano Beach, FL, from March 1996 – October 1996 (Expelled by FINRA).

Packerland Brokerage Services, Inc: A Duty to Supervise

Financial institutions, like Packerland Brokerage Services, Inc, must properly supervise financial advisors and customer accounts. Brokerage firms are required to establish and maintain a reasonably designed system to oversee account activity, such as private securities transactions, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to supervise its financial advisors or the investment account activity sufficiently, it may be liable for investment losses sustained by customers.

How to Recover Losses or Obtain a Free Consultation

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.

If you have lost money with broker Richard Shelley or Packerland Brokerage Services, Inc, contact New York securities arbitration lawyers August Iorio and Jorge Altamirano of Iorio Altamirano LLP at august@ia-law.com, jorge@ia-law.com or toll-free at (646) 330-4624 for a free and confidential evaluation of your account.

Iorio Altamirano LLP is a bilingual law firm, fluent in both English and Spanish.

Mr. Reed was a financial advisor with Wells Fargo Clearing Services (“Wells Fargo”) in Scottsdale, Arizona, from April 2016 until April 2020. Mr. Reed was permitted to resign after a customer alleged that Mr. Reed recommended and facilitated investment opportunities in investments sold away from and not offered by Wells Fargo.

Wells Fargo appears to have denied any compensation to the complaining customer.

Iorio Altamirano LLP is interested in speaking with customers of Mr. Reed or Wells Fargo. Even if Wells Fargo has previously denied your complaint, contact securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.

**Read Iorio Altamirano LLP’s latest blog post about Scott Reed: Update: Broker Scott Reed, Formerly of Wells Fargo in Scottsdale, Arizona, Appears to Have a History of Recommending High Risk and High Commission Investments to Customers**

FINRA Letter of Acceptance, Waiver, and Consent No. 2020066246901

On February 19, 2021, Mr. Reed and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”). The AWC includes the following factual findings:

• Beginning in early 2019 and continuing until his termination from Wells Fargo in April 2020, Mr. Reed solicited at least six individuals, including at least two Wells Fargo customers, to invest in securities issued by a software and web development company based in Pasadena, California.
• The securities were notes issued by the company to raise capital for its ongoing operations and for investors to profit from the repayments, which included a 15% rate of interest.
• Reed participated in at least $3.5 million in these investments away from the firm by providing written materials about the company to investors and by communicating with them orally, by email and text message about the company and encouraging them to invest.
• Reed also facilitated the transactions by, among other things, helping investors send or receive transfers of funds.
• In one case, Mr. Reed offered to personally guarantee half of an individual’s investment.
• Reed received selling compensation of $191,340 from the company for his role in soliciting and facilitating the investments.
• Reed also personally invested over $200,000 in the company.
• Reed failed to provide Wells Fargo with prior notice or obtain the firm’s advance approval for his participation in these private securities transactions.
• By participating in private securities transactions away from the firm, Mr. Reed violated FINRA Rules 3280 and 2010.

The Arizona Corporation Commission is also investigating Mr. Reed over the same allegations.

Financial Advisor Scott Wayne Reed (CRD No. 3007033)

Mr. Reed has 21 years of experience in the securities industry and has been associated with at least one firm that has been expelled by FINRA. Mr. Reed has been associated with the following firms:

• First Financial Equity Corporation from April 2020 – December 2020.
• Wells Fargo Clearing Services, LLC from April 2016 – April 2020.
• Coastal Equities, Inc. from November 2015 – April 2016.
• Accelerated Capital Group from February 2012 – November 2015 (Expelled by FINRA).
• Meridian United Capital, LLC from November 2010 – February 2012.
• Fidelity Brokerage Services LLC from February 2001 – July 2010.
• Ameritrade from July 1999 – January 2001.

Mr. Reed has been the subject of at least three customer complaints:

• In March 2020, a customer complained that Mr. Reed recommended an investment opportunity in a company not offered by the firm. Upon information and belief, this complaint is what caused Mr. Reed to be terminated by Wells Fargo and barred by FINRA. The customer did not file an arbitration complaint. Instead, the customer complained directly to Wells Fargo, and Wells Fargo inexplicitly denied the complaint.
• In 2017, a customer alleged that Mr. Reed recommended unsuitable oil and gas investments and did not diversify their investment profile. The complaint is still pending.
• In 2010, a customer alleged that Mr. Reed made an unsuitable recommendation related to a mutual fund. The customer did not file an arbitration complaint. Instead, the customer complained directly to the firm that employed Mr. Reed, and the firm denied the complaint.

Wells Fargo: A Duty to Supervise

Financial institutions, like Wells Fargo, must properly supervise financial advisors and customer accounts. Brokerage firms are required to establish and maintain a reasonably designed system to oversee account activity, such as private securities transactions, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to supervise its financial advisors or the investment account activity sufficiently, it may be liable for investment losses sustained by customers.

How to Recover Losses or Obtain a Free Consultation

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.

If you have lost money with broker Scott Reed or Wells Fargo, contact New York securities arbitration lawyers August Iorio and Jorge Altamirano of Iorio Altamirano LLP at august@ia-law.com, jorge@ia-law.com or toll-free at (646) 330-4624 for a free and confidential evaluation of your account.

Iorio Altamirano LLP is a bilingual law firm, fluent in both English and Spanish.

Mr. Francoeur was a financial advisor at Cambridge Investment Research, Inc. in Somersworth, New Hampshire, from January 2012 until his employment was terminated in March 2020. Cambridge Investment Research fired Mr. Francoeur, alleging that he assisted a client with an investment that was not approved by the firm and that he used an unapproved email account, both against the firm’s policies.

If you have suffered financial losses investing with Michael Francoeur or suspect that Mr. Francoeur did not have your best interest in mind when recommending investments or account transactions, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential review of your account.

Iorio Altamirano LLP represents investors that have disputes with their financial advisors or brokerage firms, such as Cambridge Investment Research.

FINRA Letter of Acceptance, Waiver, and Consent No. 2019064967501

Michael Francoeur and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) on February 3, 2021, after Mr. Francoeur refused to provide information and documents in connection with a FINRA investigation into his conduct. FINRA initiated the investigation after it received a customer complaint.

On March 2, 2020, in connection with FINRA’s investigation, FINRA sent a request to Mr. Francoeur to produce information and documents pursuant to FINRA Rule 8210. FINRA followed-up with Mr. Francoeur on July 28, 2020, and then again on November 19, 2020. Mr. Francoeur did not produce the requested documents to FINRA.

By refusing to provide the information or documents, Mr. Francoeur violated FINRA Rules 8210 and 2010.

Accordingly, FINRA barred him from associating with any broker-dealer in any capacity.

Cambridge Investment Research – Supervisory Duties

Brokerage firms like Cambridge Investment Research must properly supervise financial advisors and customer accounts. Brokerage firms must also establish and maintain a reasonably designed system to oversee account activity to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to sufficiently supervise their financial advisors or the investment account activity, it may be liable for investment losses sustained by customers.

How to Recover Financial Losses or Obtain a Free Consultation

Securities arbitration is a unique and complex practice area. Investors should seek out experienced counsel who understands the FINRA forum and can navigate the arbitration process to effectively advocate on their behalf.

If you or a loved one were a customer of Michael Francoeur and either sustained financial losses or suspect inappropriate activity in your investment or retirement accounts, contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (646) 330-4624 for a free and confidential evaluation of your account.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.