KIMBERLY ANN SPRINGSTEEN-ABBOTT NAMED IN FINRA COMPLAINT FOR ALLEGEDLY MISUSING INVESTOR FUNDS

Kimberly Ann Springsteen-Abbott, a broker at Clearwater, FL based Commonwealth Capital Securities Corp., was named a respondent in a Financial Industry Regulatory Authority (FINRA) complaint alleging that she directed the misuse of investor funds to pay for various credit card charges that were not related to legitimate business purposes of the funds. The complaint alleges that the charges relating to the misused investor funds consisted of personal expenses for Ms. Springsteen-Abbott and another individual. The allegedly misused funds totaled at least $344,798.79, and some of the charges have been refunded. The complaint also alleges that in connection with a FINRA examination, Ms. Springsteen-Abbott and her firm provided a false and back-dated document in connection with the documentation provided regarding the credit card charges. By allegedly creating the false and back-dated documentation, Ms. Springsteen-Abbott, of Holiday, Florida, caused her firm to maintain inaccurate books and records.

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 stockbroker misconduct. Therefore, investors who have suffered damages due to prohibited activity such as misuse or misappropriation of funds can bring forth claims to recover losses against broker-dealers like Commonwealth Capital Securities Corp., which should monitor their brokers' activities in order to prevent the above described misconduct.

Have you suffered losses in your Commonwealth Capital Securities Corp.? 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 Commonwealth Capital Securities Corp. stockbrokers who may have engaged in misconduct and caused investment 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.

MARK TIMOTHY YOUNGS FINED AND SUSPENDED BY FINRA FOR GIVING A CLIENT A FICTITIOUS BOND REDEMPTION CONFIRMATION

Mark Timothy Youngs, a broker formerly with New York, New York based RBC Capital Markets, LLC, submitted a Letter of Acceptance, Waiver and Consent in which he was fined $5,000, suspended, and consented to the entry of the Financial Industry Regulatory Authority's (FINRA) findings that he recommended to a brokerage customer that he sell a municipal bond and purchase a unit investment trust (UIT) comprised of certain international bonds, which was subsequently contested by the customer. FINRA said that having understood the customer to have authorized the transactions, Mr. Youngs sold the bond and purchased the UIT in the customer's account. After having received transaction confirmations, the customer approached Mr. Youngs questioning the sell transaction in his account and claiming that it had not been authorized. After this confrontation, Mr. Youngs created and provided to the customer a document that made it appear that the municipal bond had been redeemed by the issuer rather than sold. FINRA also said that when Mr. Youngs' manager questioned him about the transactions in the customer's account, Mr. Youngs immediately admitted that he had created and provided to the customer a sham redemption notice. Mr. Young, of Annapolis, Maryland, was terminated by RBC Capital Markets, and he was suspended from association with any FINRA member in any capacity for four months.

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. Therefore, investors who have suffered damages due to the above described prohibited activity or other forms of similar misconduct can bring forth claims to recover losses against RBC Capital Markets, which should have prevented Mr. Youngs from committing the described illegal acts. Have you suffered losses in your RBC Capital Markets, 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.

RANDOLPH NG LEONG BANNED BY FINRA FOR FORGING CUSTOMER SIGNATURES ON CHECKS AND INSURANCE FORMS

Randolph Ng Leong, formerly with New York, New York based NYLIFE Securities LLC, submitted a letter of acceptance, waiver, and consent in which Mr. Leong consented to sanctions and to the entry of findings that he used a customer's checkbook to write himself a check for $900. Mr. Leong forged the customer's signature on the check, deposited the check into his account, and used the money to pay part of the amount due on his monthly mortgage loan, without the customer's authorization to write the check and sign it. FINRA's findings further stated that Mr. Leong also signed customers' names to life insurance applications without their consent. In addition, findings stated that Leong allowed an applicant for insurance to forge the signature of the applicant's mother on the back of the insurance application. Mr. Leong, of Troy, Michigan, was banned from association with any FINRA member in any capacity.
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. Therefore, investors who have suffered damages due to Mr. Leong's fraudulent activity can bring forth claims to recover losses against NYLIFE Securities, which should have prevented Mr. Leong from committing the described illegal activity.
Have you suffered losses in your NYLIFE Securities LLC brokerage 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 NYLIFE Securities LLC 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 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.

JANICE LOUISE HALLETT FINED AND SUSPENDED FOR MISREPRESENTING OIL AND GAS INVESTMENTS

Janice Louise Hallett, a broker with Schertz, Texas based The Tidal Group, submitted a letter of acceptance, waiver, and consent in which Ms. Hallett consented to sanctions and to the entry of Financial Industry Regulatory Authority (FINRA) findings that she offered and sold oil and gas interests to her firm's customers that were securities offerings issued by the firm's affiliate. While discussing the offerings, Ms. Hallett negligently made inaccurate statements to several investors relating to the returns they could expect from the investment and the affiliate's track record. FINRA's findings also stated that Hallett negligently advised some investors considering purchasing interests in an offering that they could expect a return of their principal investment in one to three years. Since oil and gas investments are considered speculative in nature, such returns are not probable. Ms. Hallett, of Cibolo, Texas, was fined $10,000 and suspended from association with any FINRA member in any capacity for 20 business days - the suspension was in effect from January 7, 2013 through February 4, 2013.
Oil and gas investments vary in form, which can include limited partnerships, ownership of fractional undivided interests in leases, and general partnerships. Tax consequences and investor liability, depending on the type investment program, can vary as well. In a general partnership, investors actively participate in the operations of the venture, and they are personally liable for partnership debts. In a drilling limited partnership, an oil or gas company sells partnership units to investors and uses the money it raises to lease property and drill wells. In return for managing the project, the sponsor company usually takes an upfront fee that averages about 15% of one's investment (commonly referred to as tangible and intangible drilling costs) and also shares in a percentage of any revenue generated. In return, the promoter offers the investor the prospect of a substantial first year tax write-off and quarterly cash distributions from the sale of any oil and gas the partnership finds until the wells run dry. Drilling partnerships have always been a gamble, but recently, they have proven somewhat riskier than usual. This type of investment is very speculative, is a highly illiquid investment, and can have a long holding period.
In addition, FINRA found that while selling interests in an oil and gas venture, Ms. Hallett negligently advised a customer that the firm's affiliate had drilled "24 straight successful wells" in a particular area. In fact, the affiliate had drilled at least one dry hole in the area and drilled other wells in the area that yielded very limited gas or oil production.
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. Therefore, investors who have suffered damages due to Ms. Hallett's misrepresentations can bring forth claims to recover losses against The Tidal Group, which should have prevented Ms. Hallett from committing the described negligent activity.
Have you suffered losses in your The Tidal Group brokerage 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 The Tidal Group 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 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.

JAMES DOUGLAS GRIMES BANNED BY FINRA FOR FORGERY AND MISAPPROPRIATING FUNDS

James Douglas Grimes, formerly with Washington, Pennsylvania based Financial Network Investment Corporation, submitted an offer of settlement after the Financial Industry Regulatory Authority (FINRA) entered findings that he transferred $306,000 from customers' accounts to a business account in the name of another customer without any of the customers' consent or knowledge. Mr. Grimes consented to sanctions and to FINRA's findings that he affected the unauthorized transfers by submitting written journal request forms to his firm that contained forged client signatures. Mr. Grimes wrote numerous checks payable to cash totaling $250,446, withdrew funds from the business account, and converted the proceeds for his own use. Mr. Grimes forged the signature of the holder of the business account on the checks. Mr. Grimes, of Lawrence, Pennsylvania, was banned from association with any FINRA member in any capacity.
FINRA's findings also stated that the firm kept the journal request forms and the numerous checks as part of its books and records. Those documents appeared to contain genuine customer signatures. However, the signatures were forged so the records were therefore inaccurate. By falsifying journal requests and checks, Grimes caused his firm's books and records to be inaccurate.
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. Therefore, investors who have suffered damages due to Mr. Grimes's fraudulent activity can bring forth claims to recover losses against Financial Network Investment Corporation, which should have prevented Mr. Grimes from committing the described illegal activity.
Have you suffered losses in your Financial Network Investment Corporation brokerage 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 Financial Network Investment Corporation 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 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.

RICHARD GRANT CODY FINED AND SUSPENDED FOR UNSUITABLE AND EXCESSIVE TRADING

Former Leerink Swann & Co. broker, Richard Grant Cody of Boston, Massachusetts, was fined and suspended from association with any Financial Industry Regulatory Authority FINRA member in any capacity for one year. The United States Court of Appeals for the First Circuit affirmed a Securities and Exchange Commission (SEC) decision, which had sustained a National Adjudicatory Council (NAC) decision. The sanction was based on findings that Mr. Cody engaged in unsuitable and excessive trading in customers' accounts at Boston, Massachusetts based Leerink Swank & Co., gave his customers account summaries that contained materially misleading account values, and failed to timely update his Form U4 to disclose settlements with customers. The fine imposed totaled $27,500, and the suspension is in effect from January 7, 2013 through January 6, 2014.
Excessive trading or "churning" involves excessive trading by a broker in a client's account mainly to generate commissions. Churning is considered an illegal and unethical practice that violates SEC rules and securities laws. Although there is no quantitative measure for churning, frequent buying and selling of securities that does little to meet a client's investment objectives may be construed as evidence of churning. Churning may result in substantial losses in a client's account, and even if profitable, may generate a tax liability for a client.
Broker-dealers must establish and implement a reasonable supervisory system to protect customers from churning and similar abuses. If broker-dealers do not establish a reasonable supervisory system, they may be liable to investors for damages. Therefore, investors who have suffered damages can bring forth claims to recover losses against Leerink Swann & Co. due to Mr. Cody's churning.
Have you suffered losses in your Leerink Swann & Co. brokerage 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 Leerink Swann & Co. 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 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.

CHRISTOPHER MICHAEL BONES FINED AND SUSPENDED FOR UN-AUTHORIZED TRADES IN CLIENT ACCOUNTS

Christopher Michael Bones, a broker at Summit Brokerage Services, Inc. in Eugene, Oregon, submitted a Letter of acceptance, waiver, and consent in which he was fined $5,000 and suspended from association with any Financial Industry Regulatory Authority (FINRA) member in any capacity for 15 business days. Mr. Bones, who is currently with Ameriprise Financial Services, Inc. in Eugene, Oregon, consented to the sanction and to the entry of findings that he exercised trading discretion in customers' accounts following an agreed-upon investment strategy, but he did not consistently notify the customers prior to placing a trade in their accounts.
A discretionary account is an account that allows a broker to buy and sell securities without the client's consent. The client must sign a discretionary disclosure with the broker in order to document the client's consent. A discretionary account sometimes referred to as a "managed account." Sometimes certain guidelines are set by the client regarding trading in the account - a client might only permit investments in blue chip stocks.
In this case, none of the customers provided Mr. Bones with written authorization to exercise any discretionary power, and his member firm did not authorize these accounts as discretionary. FINRA's findings stated that in fact, as was known to Mr. Bones, his member firm's policies prohibited the exercise of discretionary power in any client's account.
Have you suffered losses in your Summit Brokerage Services brokerage 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 Summit Brokerage Services 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 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.

FORMER OBSIDIAN FINANCIAL GROUP STOCKBROKER MARK CHRISTOPHER HOTTON NAMED IN FINRA COMPLAINT FOR MISCONDUCT

Former Obsidian Financial Group registered representative Mark Christopher Hotton was named in a Financial Industry Regulatory Industry (FINRA) complaint alleging that while he was employed by Oppenheimer, he improperly used and converted $5,932,000 of customer funds, without his customers knowledge or consent, for his own use and benefit, and caused at least an additional $2,584,078 to be wired from the customers' Oppenheimer accounts to his outside business activities and individual affiliates. Mr. Hotton was allegedly employed by or accepted compensation from outside business entities, which was outside the scope of his relationship with Oppenheimer. Unfortunately, this is not the first set of complaints filed against Mr. Hotton for stock broker misconduct. Numerous customer complaints alleging similar misconduct that go as far back as 1997 were filed against Mr. Hutton while he was employed by American Capital Partners, Oppenheimer, Ladenburg Thalmann, and M.S. Farrell.
In its complaint, FINRA alleges that Mr. Hotton forged and falsified numerous documents and made numerous misrepresentations, verbal and written, to his customers, his firm, and others to further his fraudulent scheme. In addition, the complaint alleges that Hotton provided customers with fabricated statements for a non-existent account at an entity and false written statements about the value of their investments with him. Moreover, the complaint alleges that Hotton exercised control over customers' accounts; recommended and executed transactions that were excessive and unsuitable in light of customers' investment objectives, risk tolerance, and financial situation; loaned $250,000 to firm customers with notifying and receiving written authorization from the firm; he falsely testified during an on-the-record testimony about numerous topics in response to FINRA's questions; he provided FINRA with false statements and claims after authorities made a request for information and documents; and acted with intent to defraud or with reckless disregard for the customers' interests and for the purpose of generating commissions.
Regarding Hotton's U4, FINRA's complaint alleges that he submitted various U4 Forms but failed to disclose his engagement in a number of entities while employed by Oppenheimer; he willfully failed to make any disclosure on his U4 of several legal actions against him, or the settlement of those actions - Hotton failed to disclose that information even after the NASD instructed him to do so; he failed to timely amend his U4 to disclose the commencement of a federal action against him, or the temporary restraining order granted in that action; and when he finally amended his Form U4 to disclose the federal action, he falsely described the action as a business dispute between business partners.
Mr. Hotton also allegedly committed numerous acts of misconduct in clients' accounts and violated his customer-specific suitability obligations. FINRA's complaint states that Hotton executed hundreds of unauthorized trades in customers' accounts without his customers' knowledge, consent, or authorization. FINRA claims that Hotton's customers neither gave Hotton prior written authorization to exercise discretionary powers in their accounts, nor did they give Hotton verbal discretionary power. One of Hotton's customers specifically stated that he was not interested in risky or speculative trading, but Hutton still recommended investments that were contrary to the customer's investment objectives and financial situation. Some of the risky investments recommended were leveraged on inverse exchange traded funds or ETFs, which Hotton did not completely understand. In particular, Hotton did not understand or explain to his clients that the long-term return of a leveraged or inverse ETF can substantially deviate from the underlying index. Therefore, Hotton failed to satisfy the reasonable basis suitability requirement in connection with his investment recommendations.
Have you suffered losses in your Obsidian Financial Group brokerage 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 Obsidian Financial Group 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 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.

FORMER ALEXANDER CAPITAL STOCKBROKER MARK CHRISTOPHER HOTTON NAMED IN FINRA COMPLAINT FOR MISCONDUCT

Former Alexander Capital registered principal Mark Christopher Hotton was named in a Financial Industry Regulatory Industry (FINRA) complaint alleging that while he was employed by Oppenheimer, he improperly used and converted $5,932,000 of customer funds, without his customers knowledge or consent, for his own use and benefit, and caused at least an additional $2,584,078 to be wired from the customers' Oppenheimer accounts to his outside business activities and individual affiliates. Mr. Hotton was allegedly employed by or accepted compensation from outside business entities, which was outside the scope of his relationship with Oppenheimer. Unfortunately, this is not the first set of complaints filed against Mr. Hotton for stock broker misconduct. Numerous customer complaints alleging similar misconduct that go as far back as 1997 were filed against Mr. Hutton while he was employed by American Capital Partners, Oppenheimer, Ladenburg Thalmann, and M.S. Farrell.
In its complaint, FINRA alleges that Mr. Hotton forged and falsified numerous documents and made numerous misrepresentations, verbal and written, to his customers, his firm, and others to further his fraudulent scheme. In addition, the complaint alleges that Hotton provided customers with fabricated statements for a non-existent account at an entity and false written statements about the value of their investments with him. Moreover, the complaint alleges that Hotton exercised control over customers' accounts; recommended and executed transactions that were excessive and unsuitable in light of customers' investment objectives, risk tolerance, and financial situation; loaned $250,000 to firm customers with notifying and receiving written authorization from the firm; he falsely testified during an on-the-record testimony about numerous topics in response to FINRA's questions; he provided FINRA with false statements and claims after authorities made a request for information and documents; and acted with intent to defraud or with reckless disregard for the customers' interests and for the purpose of generating commissions.
Regarding Hotton's U4, FINRA's complaint alleges that he submitted various U4 Forms but failed to disclose his engagement in a number of entities while employed by Oppenheimer; he willfully failed to make any disclosure on his U4 of several legal actions against him, or the settlement of those actions - Hotton failed to disclose that information even after the NASD instructed him to do so; he failed to timely amend his U4 to disclose the commencement of a federal action against him, or the temporary restraining order granted in that action; and when he finally amended his Form U4 to disclose the federal action, he falsely described the action as a business dispute between business partners.
Mr. Hotton also allegedly committed numerous acts of misconduct in clients' accounts and violated his customer-specific suitability obligations. FINRA's complaint states that Hotton executed hundreds of unauthorized trades in customers' accounts without his customers' knowledge, consent, or authorization. FINRA claims that Hotton's customers neither gave Hotton prior written authorization to exercise discretionary powers in their accounts, nor did they give Hotton verbal discretionary power. One of Hotton's customers specifically stated that he was not interested in risky or speculative trading, but Hutton still recommended investments that were contrary to the customer's investment objectives and financial situation. Some of the risky investments recommended were leveraged on inverse exchange traded funds or ETFs, which Hotton did not completely understand. In particular, Hotton did not understand or explain to his clients that the long-term return of a leveraged or inverse ETF can substantially deviate from the underlying index. Therefore, Hotton failed to satisfy the reasonable basis suitability requirement in connection with his investment recommendations.
Have you suffered losses in your Alexander Capital brokerage 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 Alexander Capital 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 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.

CLYDE THORNBURG OF NEXT FINANCIAL PERMANENTLY BARRED FROM BROKERAGE INDUSTRY FOR CHURNING AND FORGERY AND NEXT FINANCIAL RECEIVES A PASS AGAIN!

According to an Order recently issued by the Financial Industry Regulatory Authority (FINRA), Clyde Thornburg, formerly employed by NEXT Financial, has been permanently barred from working as a stockbroker in the securities industry. Mr. Thornburg was charged earlier this year with violations of NASD Rules 2110, 2310, 2510(b) and 3110 and FINRA Rule 2010 for engaging in a pattern of unsuitable short-term trading in switching of unit investment trusts ("UITs"), corporate debt, and mutual funds in accounts owned by five customers, four of whom were elderly and unsophisticated investors, including a mentally incapacitated 91-year-old widow under the care of a guardian and an 82-year-old widow who was beginning to experience the effects of the Alzheimer's disease.
In the five customers' accounts, Mr. Thornburg repeatedly purchased or switched UITs, corporate debt, and mutual funds less than one year after purchasing them. On average, Mr. Thornburg switched the products almost every two months. He often used a strategy where he caused a customer to sell one UIT, mutual fund, or corporate bond and invest all or part of the sales proceeds in another UIT, corporate bond, or mutual fund. The switching strategy was contrary to the design of the UITs, corporate debt and mutual funds. These investments are generally intended to be held long-term and carry substantial transaction fees which can become excessive in an actively traded account. During the time period that Mr. Thornburg churned the customer's accounts there were approximately 200 short-term UIT, corporate debt, and mutual fund transactions.
As a result of the approximately 200 short-term transactions, none of which were held for more than ten months, Mr. Thornburg's customers incurred unnecessary sales charges amounting to over $332,000. By looking the other way the supervisors at NEXT Financial allowed Mr. Thornburg to improperly generate over $301,000 in gross commissions for the firm. During the same time period the five customers collectively lost over $983,000.
Mr. Thornburg was found to have made these recommendations to buy and sell UIT's, corporate debt, and mutual funds without having reasonable grounds for believing that such recommendations were suitable in view of the size and frequency of the transactions, and based upon the facts known to him regarding the five customers' financial situations, objectives, and needs. As a result, the pattern of short-term trading in switching of these investments was undoubtedly unsuitable for all five customers and a violation of NASD Rules 2110 and 2310 and FINRA Rule 2010.
It was further found by FINRA that Mr. Thornburg misrepresented and omitted information concerning the costs of the products, leading these elderly investors to believe that they would not be charged sales charges or commissions. In fact, they were charged duly for the transactions and Mr. Thornburg violated NASD 2110 and FINRA Rule 2010 for his misrepresentations and omissions. Additionally, and in furtherance of his short-term strategy, Mr. Thornburg engaged in discretionary trading in all of the five accounts without prior written authorization, in violation of NASD Rules 2110 and 2510 (b) and FINRA Rule 2010.
To top it off, this unscrupulous stockbroker also forged or caused to be forged the names of at least three customers or their representatives on 19 mutual fund disclosure forms. Mr. Thornburg's forgery and falsification of documents further violated NASD Rule 2110 and FINRA Rule 2010. These forged documents caused NEXT Financial to maintain inaccurate books and records in violation of NASD rules 3110 and 2110 and FINRA Rule 2010.
All of the foregoing begs the question: Does NEXT Financial have a reasonable supervisory system in place and if it does why didn't the brokerage firm detect Mr. Thornburg's egregious violations of industry rules and regulations at an earlier stage and prevent the fraud? Further, why hasn't the firm been sanctioned for its negligent supervision of Mr. Thornburg? Could it be that FINRA is unwilling to take on a fight with a brokerage firm? Too often, brokerage firms receive a pass when their employees engage in an egregious fraud. It's wrong and the FINRA practice of free passes must be stopped by investors and their attorneys!
Have you suffered losses resulting from stockbroker misconduct at NEXT Financial? 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.

WAS FLORIDA BROKER DONALD HORRAS RUN OUT OF MORGAN STANLEY?

On November 8, 2012, stockbroker Donald Horras of Morgan Stanley Smith Barney transferred employment to Raymond James and Associates. Our law office is conducting an investigation and wants to know whether he was run out of Morgan Stanley or truly terminated his employment voluntarily? During the course of Mr. Horras career he was the subject of at least 7 customer complaints and one regulatory investigation. The customer complaints were generally made by elderly customers who claimed he made unsuitable recommendations of variable annuities that cause them significant losses to their retirement funds.
An annuity is a form of insurance that offers a series of payments for a period of time. Variable annuities are typically higher in risk when compared other types of annuities and depend on how the stock market is performing. Buyers have the option to allocate the cash invested into different types of assets such as mutual funds, indices, fixed income investments or bonds, and cash. Most variable annuities do not have principal protection, so investors can lose money if markets deteriorate.
The Law Offices of Robert Wayne Pearce P.A. is currently investigating Donald Horras' acts and omissions at Morgan Stanley Smith Barney and would be interested in speaking with anyone with the truth about Mr. Horras' sudden departure from that brokerage firm.
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.

FLORIDA SUNTRUST INVESTMENT SERVICES BRANCH MANAGER BRENNAN R. LOLLAR BARRED FOR MISAPPROPRIATING FUNDS

The Financial Industry Regulatory Authority (FINRA) has barred Brennan R. Lollar from association with any FINRA member for misappropriating funds while working as a branch manager for SunTrust Investment Services. FINRA's finding stated that Mr. Lollar transferred funds into customers' accounts without SunTrust's permission and labeled them as refunds of banks fees. However, bank fees were never incurred by the customers, and Mr. Lollar knew that the customers were not entitled to any refunds. Mr. Lollar misappropriated a total of $3,242.90 into customer accounts through a series of small transactions - Mr. Lollar admitted to the bank that he issued the false refunds for purposes of gaining favor with certain customers. SunTrust Investments obtained reimbursement through the liquidation of Mr. Lollar's retirement fund. In addition, Mr. Lollar did not respond to FINRA requests for information and failed to appear for an on-the-record FINRA interview.
Broker-dealers must establish and implement a reasonable supervisory system to protect clients from fraudulent practices by their investment professionals. If broker-dealers do not establish and/or implement a reasonable supervisory system, they may be liable to investors for damages. Therefore, investors who have suffered damages resulting from the misappropriation of their funds by an investment professional can bring forth claims to recover losses against their broker-dealer for failure to prevent such illegal activity.
Have you suffered damages resulting from a misappropriation of your funds? 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.

FLORIDA STERLING ENTERPRISES GROUP BROKER ROBERT JOSEPH EANELL FINED AND SUSPENDED FOR MISREPRESENTING HIS EDUCATIONAL BACKGROUND TO PROSPECTIVE CLIENTS

The Financial Industry Regulatory Authority (FINRA) has fined Robert Joseph Eanell $7,500.00 and suspended him from association with any FINRA member in any capacity for 30 business days for misrepresenting his educational background to prospective clients. FINRA found that Mr. Eanell's firm, Sterling Enterprises Group, asked him to identify all of the degrees, titles, and certifications that he used on his letterhead, business cards, or in communications with clients. However, Mr. Eanell failed to disclose the fact that he held himself out as a holder of a doctoral degree.
The following are examples of some credentials brokers might be falsely alleging they have earned to convince investors to give them business:
-Certified Financial Planner: the Certified Financial Planner (CFP) designation is a professional certification for financial planners conferred by the Certified Financial Planner Board of Standards (CFP Board). To receive authorization to use the designation, the candidate must meet education (minimum bachelor's degree), examination (10-hour multiple choice exam divided into 3 days), work experience (extensive experience in the financial planning field), ethics requirements, and pay an ongoing certification fee. CFPs must also complete continuing education requirements.
-Chartered Financial Analyst: the CFA charter is a qualification for finance and investment professionals, particularly in the fields of investment management and financial analysis of stocks, bonds and their derivative assets. The program focuses on portfolio management and financial analysis, and provides knowledge of other areas of finance. CFA candidates must past three exams and complete 48 months of qualified work experience to earn the CFA charter.
-University Honors: graduates attaining a grade point average (GPA) of 3.5 to 3.8 from an accredited college or university earn "cum laude" honors. Graduates attaining a GPA above 3.8 to 3.89 earn "magna cum laude" honors. The highest honors, or "summa cum laude" honors, are earned by graduates attaining a GPA of 3.9 to 4.0.
In order to protect prospective clients from false credentials touted by their brokers, broker-dealers must establish and implement a reasonable supervisory system. If broker-dealers do not establish and/or implement a reasonable supervisory system, they may be liable to investors for damages. Therefore, investors who have suffered damages resulting from misrepresentations by their broker about his or her expertise and/or credentials can bring forth claims to recover losses against their broker-dealer for failure to prevent such illegal activity.
Have you suffered losses resulting from reliance on you adviser's false expertise? 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.

FLORIDA MERRILL LYNCH BROKER CHARLES EUGENE BISHOP JR. FINED AND SUSPENDED FOR ATTEMPTING TO MISAPPROPRIATE $3 MILLION FROM ELDERLY CLIENT

Charles Eugene Bishop Jr. has been fined $7,500 and suspended for two years by the Financial Industry Regulatory Authority (FINRA) for attempting to misappropriate approximately $3 million from an elderly client while he was at Merrill Lynch. FINRA's findings stated that Mr. Bishop generated paperwork by which the deceased client's assets would be transferred to a purported entity that was never formed, but whose name was identical to a company the client owned, with a tax identification number assigned by the IRS to a different entity that was never formed, but whose sole member was Mr. Bishop.
In order to carry out his scheme, Mr. Bishop had the client sign a firm form that designated Mr. Bishop's entity. Even though the client's signature was notarized, the client was not present when the form was notarized by the notary. In addition, the tax identification number on another firm form the client signed was changed to the tax identification number associated with Mr. Bishop's entity. Furthermore, the findings stated that after the client passed away, Mr. Bishop filed a notice, through his attorney, with his state's probate division asserting that he had an interest in the deceased client's estate as beneficiary. The court eventually issued an order invalidating the beneficiary designations after Mr. Bishop was terminated from Merrill Lynch.
Broker-dealers must establish and implement a reasonable supervisory system to protect clients from fraudulent practices by their brokers. If broker-dealers do not establish and/or implement a reasonable supervisory system, they may be liable to investors for damages. Therefore, investors who have suffered damages resulting from the misappropriation of their funds by their broker can bring forth claims to recover losses against their broker-dealer for failure to prevent such illegal activity.
Have you suffered damages resulting from a misappropriation of your funds by your broker? 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.