JAMES GLENN TALLANT NAMED IN FINRA COMPLAINT FOR CHURNING

James Glenn Tallant, a broker at Purchase, New York based Morgan Stanley Smith Barney, was named a respondent in a Financial Industry Regulatory Authority (FINRA) complaint. The complaint alleges that Mr. Tallant exercised control over the customer's accounts by engaging in discretionary trading without written authorization. Mr. Tallant also allegedly exercised de facto control because the customer routinely followed Mr. Tallant's advice and was unable to evaluate Mr. Tallant's recommendations and to exercise independent judgment. FINRA alleged the trading was unsuitable and excessive in size and frequency. The complaint also alleges that the number of transactions in the accounts was excessive in light of the customer's investment objectives and resulted in turnover and cost/commission-equity ratios exceeding those that create a presumption of churning. The complaint further alleges that Mr. Tallant executed or caused the execution of the securities transactions with intent to defraud, and that he knew, or was reckless in failing to recognize, that the trading in the accounts resulted in substantial commissions for him but could not reasonably be expected to benefit the customer. By allegedly executing the improper transactions in the customer's accounts, Mr. Tallant, of Abilene, Texas, allegedly placed his own interests above the customer's interests.

Broker-dealers must establish and implement a reasonable supervisory system to protect customers from stockbroker misconduct. If broker-dealers do not establish and implement a reasonable supervisory system, they may be liable to investors for damages flowing from the misconduct. Therefore, investors who have suffered damages due to prohibited activity such as unauthorized discretionary trades and/or churning can bring forth claims to recover investment losses against broker-dealers like Morgan Stanley Smith Barney, which should monitor their brokers' activities in order to prevent the above described misconduct.

Have you suffered losses in your Morgan Stanley Smith Barney account? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Morgan Stanley Smith Barney stockbrokers who may have engaged in misconduct and caused investors losses.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 33 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

JAMES HARMAN MCNEILL FINED AND SUSPENDED BY FINRA FOR UNAUTHORIZED TRADES

James Harman McNeill, a former broker with Purchase, New York based Morgan Stanley Smith Barney LLC, submitted a Letter of Acceptance, Waiver and Consent in which he consented to the entry of the Financial Industry Regulatory Authority's (FINRA) findings that he exercised discretionary power in the accounts of his firm's customers without the customers' written authorization to place discretionary trades and without his firm's written acceptance of the accounts as discretionary. FINRA stated that Mr. McNeill entered orders for purchase transactions and falsely indicated that the transactions were unsolicited when in fact the trades were solicited. The transactions for the customers' accounts were purchases of a non-traditional exchange traded fund, which caused the firm's books and records to be inaccurate. Mr. McNeill, of McKinney, Texas, was fined $15,000 and suspended from association with any FINRA member in any capacity for nine months. The fine must be paid either immediately upon Mr. McNeill's re-association with a FINRA member firm following his suspension, or prior to the filing of any application or request for relief from any statutory disqualification, whichever is earlier. Mr. McNeill's suspension is in effect from March 18, 2013 through December 17, 2013.

Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and implement a reasonable supervisory system, they may be liable to investors for damages flowing from the misconduct. As a result, investors who have suffered damages due to unauthorized trades can bring forth claims to recover losses against broker-dealers like Morgan Stanley Smith Barney, which should have prevented the above described illegal activity. Have you suffered losses in your Morgan Stanley Smith Barney LLC account due to broker misconduct? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

EX-MORGAN STANLEY SMITH BARNEY EXECUTIVE CLIFFORD JAGODZINSKI FIRED FOR BLOWING THE WHISTLE ON BIG PRODUCER

Former risk officer Clifford Jagodzinski was fired for blowing the whistle on a variety of violations by Morgan Stanley Smith Barney (MSSB) representatives. The most notable of Mr. Jagodzinski's discoveries was the churning of preferred securities by a star broker MSSB recruited from Bank of America Merrill Lynch. Mr. Jagodzinski claimed that Harvey Kadden "was flipping preferred securities in a manner that was generating tens of thousands of dollars in commissions but causing losses or minimal gains for his clients exposing (them) to unnecessary risks." A superstar producer, Mr. Kadden was a 30-year veteran of Merrill Lynch before joining MSSB. Mr. Kadden received a $25 million guarantee just for signing on. Mr. Jagodzinski alleged in his complaint that his firing by MSSB was "an action for unlawful retaliation under the Dodd-Frank Act," as well as state law claims.
A whistleblower is a person who tells the public or someone in authority about alleged dishonest or illegal activities occurring in a government department or private organization. The alleged misconduct may be classified as a violation of a law, rule, regulation and/or a direct threat to public interest, such as fraud, health/safety, and corruption. Whistleblowers may make their allegations internally (to other people within the accused organization) or externally (to regulators, law enforcement agencies, to the media or to groups concerned with the issues). The Dodd-Frank Act provides protection for whistleblowers against retaliation for exposing illegal activities. In recent years, the whistleblower has gained notoriety on Wall Street due to the discovery and exposure of numerous schemes by investment banks and investment advisers.
The Law Offices of Robert Wayne Pearce regularly represents whistleblowers through all stages of the action. Potential rewards to whistleblowers generally range between 10 - 30% of the amount recovered by the government. Actions can be filed anonymously, and the law prohibits employers from retaliating against whistleblowers - employers may not fire, demote, suspend, threaten, harass, or discriminate against a whistleblower. Whistleblowers who suffer from employment retaliation may sue for reinstatement, back pay, and any other damages incurred.
Have you considered blowing the whistle to protect public and/or private interests? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

TEXAS PONZI SCHEMES: INVESTORS SUE MORGAN STANLEY SMITH BARNEY AND PROVIDENT ROYALTIES

11 investors in Dallas, Texas are suing Morgan Stanley Smith Barney and one of its financial advisers, Delsa Thomas, for running a Ponzi scheme. A Ponzi scheme is an unsustainable fraud pyramid that inevitably ends in ruin. Schemers use money raised from latter investors or investors higher up the pyramid to pay an earlier investor's returns. Ponzi schemes invariably fall apart when markets deteriorate or when the schemer is unable to raise more cash. The investors alleged that Ms. Thomas took advantage of their trust by suggesting that they invest in Tejas Eagle Financial LLC; Ms. Thomas established an investment range of $125,000.00 to $250,000.00, which was made up of her investors' retirement and savings money. Investors also contended that Ms. Thomas' recommendation was unsuitable and was bound to destroy whatever amount they had invested and that Morgan Stanley Smith Barney breached its duty of care by allowing her to give investment advice that was unsuitable. Damages are being sought under vicarious liability, fraud, negligent misrepresentation, and negligent supervision.

On another note, a federal court in Texas has sentenced Joseph Blimine to 20 years for running two oil and gas Ponzi schemes that began in Michigan in 2003. Mr. Blimine and other fraudsters made over $28 million before starting Provident Royalties in 2006 for the purpose of carrying on with their Ponzi scheme in Texas; close to 7,700 investors were defrauded out of over $400 million. Mr. Blimine pled guilty to the criminal charges brought against him by the Securities and Exchange Commission following a lawsuit against Provident Royalties, Provident Asset Management, and 21 other entities that offered and sold the investment.

Due diligence requires a reasonable investigation of all material facts before entering into an agreement or transaction with another person or entity. It is a measure taken to prevent unnecessary harm to an innocent party. The measure would require an entity offering and selling a security to analyze the legitimacy, nature, and risks associated with the product. An investor in Provident Royalties can claim damages against the entity that sold the investment for not performing its due diligence prior to the offer and sale.

Have you suffered investment losses in the Delsa Thomas or Provident Royalties Ponzi scheme? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.