Securities Lawyer Blog | Victim of Fraud?

Aug/14

20

Boca Raton-Based VFinance Fined Twice Again by FINRA

VFinance Investments Inc. of Boca Raton, FL, was 1.) fined $27,500 by FINRA for alleged failure to immediately publish a bid for several OTC securities that were higher than earlier bids, and 2.) fined $17,500 and ordered to pay $2,617 to customers for failure to use the most favorable prices for customers in the sale of securities. They were also cited for failure to supervise in the first case.

VFinance was fined $12,500 and paid $468 in restitution to customers earlier this year for alleged failure to quickly execute orders to buy and sell stock, resulting in their customers not obtaining favorable prices.

In 2013, VFinance was fined $65,000 for allegedly conducting a $5.95 million private placement for a company that was on a restricted list of firms which were not to be dealt with.

Many of these cases were listed previously on our website.

VFinance Investments, Inc., is listed on FINRA’s BrokerCheck as now having total of 25 “Disclosure Events:” 20 are Regulatory Events, and 5 are Arbitrations.

A disclosure events is described by FINRA as “certain criminal matters, regulatory actions, civil judicial proceedings, and financial matters in which the brokerage firm or one of its control affiliates has been involved.”

VFinance Investments, Inc., has been in business since 1998.

VFINANCE INVESTMENTS, INC
CRD# 44962
SEC# 8-50898

Main Office Location
1200 N. FEDERAL HIGHWAY
SUITE 400
BOCA RATON, FL 33432

If you’ve had financial losses due to your broker/dealer’s recommendations at VFinance Investments, Inc., of Boca Raton, FL, call Ft. Lauderdale-based Soreide Law Group for a free consultation with an attorney: 888-760-6552. Soreide Law Group represents our clients nationwide.

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Susan M. Diamond, Lake Worth, FL was fined $10,000 by the Financial Industry Regulatory Authority (FINRA) and received a four month suspension. Felix Investment, the New Jersey based firm she worked with, was additionally fined $300,000 and Frank G. Mazzola who is part owner of Felix, was barred from the industry by FINRA.

According to the FINRA report, allegedly Felix Investment sent misleading emails to their potential clients promising, among other claims, that a stock would gain ten times its value in the next twelve to twenty-four months. At the time, Diamond was the principal broker of Felix but allegedly Mazolla wrote the emails. According to FINRA, given Diamond’s position, she failed to supervise Mazolla’s activity, and establish the correct supervisory systems, and an anti-money laundering policy.

Previously, the Securities and Exchange Commission (SEC) had filed a civil lawsuit against Felix Investment and Mazzola that resulted in civil penalties of $160,000 and $100,000 respectively.

According to FINRA’s BrokerCheck, Susan M. Diamond (CRD# 336264) was previously registered with the following securities firm(s):
FELIX INVESTMENTS LLC (CRD# 148441) – UPPER SADDLE RIVER, NJ
06/2009 – 06/2014
CRESTA CAPITAL STRATEGIES, LLC (CRD# 134488) – MELVILLE, NY
11/2006 – 01/2010
JOSEPH CAPITAL, LLC (CRD# 120414) – NEW YORK, NY
02/2007 – 02/2009
VC ARJENT LTD. (CRD# 35909) – NEW YORK, NY
FINRA expelled the firm in 10/2008 03/2004 – 10/2006
VERTICAL CAPITAL PARTNERS, INC. (CRD# 35909) – NEW YORK, NY
FINRA expelled the firm in 10/2008 02/2003 – 05/2003
INTERNATIONAL SECURITIES CORPORATION (CRD# 36023) – NEW YORK, NY
10/2002 – 02/2003
S.G. MARTIN SECURITIES LLC (CRD# 46908) – JERICHO, NY
12/1999 – 05/2002
FIN-ATLANTIC SECURITIES, INC. (CRD# 25523) – JUPITER, FL
06/1998 – 12/1999
MADISON CAPITAL MARKETS CORP. (CRD# 3059) – NEW YORK, NY
10/1998 – 11/1998
ALDEN CAPITAL MARKETS, INC. (CRD# 25314) – NEW YORK, NY
08/1998 – 09/1998
MEYERS POLLOCK ROBBINS, INC. (CRD# 13436) – NEW YORK, NY
FINRA expelled the firm in 08/2001 11/1996 – 12/1997
R.T.G. RICHARDS AND COMPANY, INC. (CRD# 30991) – GARDEN CITY, NY
06/1995 – 11/1996
RICKEL & ASSOCIATES, INC. (CRD# 7839) – NEW YORK, NY
11/1994 – 06/1995
HORNBLOWER & WEEKS, INC. (CRD# 4683) – NEW YORK, NY
FINRA expelled the firm in 05/2003 08/1993 – 11/1994
WELLSHIRE SECURITIES, INC. (CRD# 17939) 05/1989 – 12/1989
MCKINLEY ALLSOPP, INC. (CRD# 13098) 08/1986 – 04/1989
CONARB PARTNERS, L.P. (CRD# 21768) 08/1988 – 10/1988
ROONEY, PACE INC. (CRD# 6218) 04/1985 – 07/1986
ISFA CORPORATION (CRD# 12984) 09/1983 – 12/1983
OVEST SECURITIES, INC. (CRD# 7429) 02/1983 – 08/1983

According to FINRA’s BrokerCheck, Frank G. Mazzola (CRD# 2371623) was previously registered with the following securities firm(s):
FELIX INVESTMENTS LLC (CRD# 148441) – UPPER SADDLE RIVER, NJ
09/2009 – 05/2014
ALEXANDER CAPITAL, L.P. (CRD# 40077) – NEW YORK, NY
03/2013 – 05/2013
ADVANCED EQUITIES, INC. (CRD# 35545) – NEW YORK, NY
05/2006 – 10/2009
LAIDLAW & COMPANY (UK) LTD. (CRD# 119037) – NEW YORK, NY
01/2004 – 05/2006
OPPENHEIMER & CO. INC. (CRD# 249) – NEW YORK, NY
01/2002 – 01/2004
PRIME CHARTER LTD. (CRD# 25668) – NEW YORK, NY
11/2001 – 01/2002
SANDS BROTHERS & CO., LTD. (CRD# 26816) – NEW YORK, NY
03/1997 – 11/2001
BFM ADVISORY, INC. (CRD# 38642) – NEW YORK, NY
12/1995 – 11/1996
CS FIRST BOSTON CORPORATION (CRD# 816) – NEW YORK, NY
09/1994 – 04/1995

If you experienced financial losses because of the recommendations of your broker/financial advisor, call Fort Lauderdale-based Soreide Law Group for youe free consultation with an attorney at: (888) 760-6552. Soreide Law Group represents clients nationwide.

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Aug/14

15

Federal Jury Returns Verdict in Financial Advisor Fraud Case

BENJAMIN L. GRANT, financial advisor, and his firm Sage Advisory Group based in Boston, were found liable for fraud by a federal jury in Massachusetts. This case was originally filed in 2010 by the Securities and Exchange Commission (SEC).

According to the SEC’s complaint, allegedly Benjamin Lee Grant of Boston persuaded his former brokerage customers from Wedbush Morgan Securities to transfer their assets to his new advisory firm, Sage Advisory Group. Apparently, Grant had accounts totaling over $100 million with Wedbush Morgan. Nearly all of these assets were managed by First Wilshire Securities Management, of California.

In September, 2005, the SEC said that Grant left Wedbush Morgan and opened Sage Advisory. Allegedly he told his clients in a letter that First Wilshire Securities Management suggested moving their accounts from Wedbush Morgan to a discount broker and Grant said that Sage Advisory Group was formed to handle the investments. He then told his clients, according to the SEC, to sign the documents to avoid disruption of their assets. The SEC felt Grant’s statements to his clients were false and misleading.

The jury deliberated for two hours and returned a verdict siding with the SEC.

BENJAMIN L. GRANT (CRD# 2671941), according to FINRA’s BrokerCheck, was previously registered with the following securities firm(s):

WEDBUSH MORGAN SECURITIES INC. (CRD# 877) – LOS ANGELES, CA
12/2001 – 10/2005

FIRST WILSHIRE SECURITIES MANAGEMENT, INC. (CRD# 6609) – PASADENA, CA
03/1998 – 12/2001

INTERSECURITIES, INC. (CRD# 16164) – ST. PETERSBURG, FL
09/1996 – 02/1998

CITICORP SECURITIES, INC. (CRD# 7474) – NEW YORK, NY
11/1995 – 08/1996

Soreide Law Group will represent clients nationwide before FINRA. If you have experienced losses through your broker/financial advisor, call a Securities Arbitration Lawyer for a free consultation on how to potentially recover those losses: 888-760-6552.

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MICHAEL V. BORJA (CRD# 5451360) has been barred from working in the financial industry in the State of Florida for seven years after he was cited by regulators for alleged ‘violations of trust.’

In an August 8th. order, the Florida Office of Financial Regulation said that Michael Vincent Borja, a former wealth advisor with Wells Fargo Advisors, was terminated by Wells Fargo in Miami in May of 2013. Borja was allegedly accused by Wells Fargo of falsifying the records of a wire transfer. This violated Wells Fargo’s company procedures.

According to the Office of Financial Regulation, Michael Borja admitted to entering information into Wells Fargo Advisors’ systems that was incorrect and Borja agreed to cease and desist from such conduct and not to reapply for a license for at least seven years.

MICHAEL V. BORJA (CRD# 5451360) was previously registered with the following securities firm(s):

WELLS FARGO ADVISORS, LLC (CRD# 19616) – MIAMI, FL
01/2012 – 05/2013
OPPENHEIMER & CO. INC. (CRD# 249) – MIAMI, FL
02/2009 – 01/2012
UBS INTERNATIONAL INC. (CRD# 107726) – CORAL GABLES, FL
02/2008 – 02/2009

Call Soreide Law Group, (888) 760-6552, based in Fort Lauderdale, Florida, for a free consultation with an attorney if you feel your losses are due to your stock broker or financial advisor’s recommendations. We represent clients nationwide before FINRA.

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GEORGE BUSSANICH 55, of Park Ridge, New Jersey, and his son, GEORGE BUSSANICH Jr., 34, of Upper Saddle River, New Jersey, have agreed to pay $5.5 million, which includes $4 million restitution to their approximately 30 victims. The pair allegedly scammed their investors through the sale of unregistered security notes, and then used investors’ money to buy two Maseratis, a Ferrari, and other luxury items for themselves. FINRA barred George Bussanich (CRD# 4552414) permanently in December of 2013.

New Jersey authorities asked a judge to freeze the assets of everyone named in the suit, appoint a receiver to take title to and possession of their property, and to review all financial records.

Under the terms of the settlement, the father and son, along with their two companies will pay to the investors $4,074,097.06 in full restitution, $1 million in civil penalties ($250,000 of which will be suspended if they comply with the terms of the settlement), and other costs.

The Bussanichs’ are permanently prohibited from acting as agents, broker-dealers, or investment advisors in New Jersey’s securities industry. Also they are prohibited from controlling or acting as officers or directors of any entity that sells securities, and from selling or offering securities in the State of New Jersey.

GEORGE BUSSANICH, CRD# 4552414, according to FINRA’s BrokerCheck, was previously registered with the following securities firm(s):

KOVACK SECURITIES INC. (CRD# 44848) – CLIFFSIDE PARK, NJ
10/2006 – 12/2011

NEWBRIDGE SECURITIES CORPORATION (CRD# 104065) – CLIFFSIDE PARK, NJ
08/2004 – 09/2006

GRANITE SECURITIES, LLC (CRD# 104255) – WOODBURY, NY
FINRA expelled the firm in 10/2013 06/2004 – 07/2004

FIRST MONTAUK SECURITIES CORP. (CRD# 13755) – RED BANK, NJ
04/2004 – 05/2004

If you have sustained investment losses due to your stockbroker or financial advisor’s recommendations in unregistered security notes, or other complex products, call Soreide Law Group for a free consultation on how to potentially recover your losses at 888-760-6552.

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In an August 8, 2014, SAN ANTONIO EXPRESS NEWS article, Patrick Danner writes about the stock broker Matthew A. Bell, and others, charged with securities fraud. Bell was arrested last month after he, along with six others, were indicted in a $300 million stock manipulation scheme. The Securities and Exchange Commission (SEC) also filed civil charges against Bell and others for the return of profits from the alleged scheme and penalties.

One of the firms that Bell allegedly recommended to clients was Palmaz Scientific Inc. This biotech was part of a private offering, and often a private placement is considered highly speculative and risky to the clients purchasing the investment.

The group is also accused of ‘pump-and-dump’ which is basically pumping up the price of penny stocks before dumping their own personal shares which then causes the price to crash and leaves investors with worthless paper, while they walk away with their profits. Some of the alleged ‘pump-and-dump’ schemes involved shares of Cubed, Inc., The Staffing Group Ltd., CodeSmart, and StarStream Entertainment Inc. Matthew Bell was with Securities America, Inc. and WFG Investments, Inc. in San Antonio, Texas.

Lars Soreide of Soreide Law Group is representing some of Bell’s clients who have filed claims with the Federal Industry Regulatory Authority (FINRA) against Bell. Soreide said in the article that his clients were accredited investors. However, he said the private placement was still unsuitable for them because it’s an illiquid investment and it represented a substantial portion of their net worth.

“Truthfully, I don’t think they know what the hell they even bought,” Soreide said. “They just did whatever he told them to buy.”

Bell apparently found many of his clients through Oak Hills Church, the North Side mega-church.

“He actually prayed with some of my clients before they bought investments,” Soreide said. “Talk about insanity.”

Soreide Law Group represents their clients nationwide before FINRA. If you were a client of Matthew A. Bell, or other brokers/financial advisors involved in this alleged scheme, call an attorney for a free consultation on how to potentially recover your losses: 888-760-6552.

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Aug/14

7

SEC Charges Virginia Brokers With Fraud Against Elderly

Virginia broker, Donna Jessee Tucker, (CRD# 4696985) was charged by the SEC in Roanoke, Virginia, with defrauding her elderly clients. Tucker allegedly stole her clients’ money for her own personal use and falsified the account statements to cover up her fraud. Allegedly, Tucker stole $730,289 from her elderly clients and then used the money to pay her personal expenses such as, vacations, vehicles, clothing, and her country club membership.

The SEC alleged that by sending her customers’ statements electronically, Tucker knew that the customers would be unable or unwilling to access their statements. Some of her elderly clients were legally blind. Tucker also performed
unauthorized trades and other financial transactions. Tucker agreed to disgorge the $730,289 in the criminal or civil cases and settle the SEC’s charges.

In another Virginia case, the SEC has obtained a final judgment in the Richmond financial holding company, AIC Inc., a brokerage firm, Community Bankers Securities LLC. and their CEO, Nicholas D. Skaltsounis . They must pay $70 million as a result of an October, 2013 trial for fraud. Allegedly, they conducted an offering fraud while selling AIC promissory notes and stocks to several investors across numerous states, many of whom were elderly. They allegedly misrepresented the risks involved with their product and omitted information about the investments when discussing them with their clients. They used money from new investors to pay back existing investors, and were never profitable.

According to FINRA’s BrokerCheck, Donna Jessee Tucker was previously registered with the following securities firm(s):
UBS FINANCIAL SERVICES INC. (CRD# 8174) – ROANOKE, VA
11/2007 – 04/2013
A. G. EDWARDS & SONS, INC. (CRD# 4) – ROANOKE, VA
12/2003 – 11/2007

Nicholas D. Skaltsounis (CRD# 825000) was previously registered with the following securities firm(s):
ADVENT SECURITIES, INC. (CRD# 128281) – RICHMOND, VA
07/2006 – 09/2010
WATERFORD INVESTOR SERVICES, INC. (CRD# 46227) – RICHMOND, VA
FINRA expelled the firm in 12/2013 07/2005 – 09/2010
COMMUNITY BANKERS SECURITIES, LLC (CRD# 42794) – RICHMOND, VA
02/2003 – 12/2009
ADVENT SECURITIES, INC. (CRD# 128281) – RICHMOND, VA
07/2005 – 05/2006
UVEST FINANCIAL SERVICES GROUP, INC. (CRD# 13787) – RICHMOND, VA
06/1997 – 02/2006
COMPULIFE INVESTOR SERVICES, INC. (CRD# 21543) – ST. CLOUD, MN
04/1988 – 06/1997
DOMINICK & DOMINICK, INCORPORATED (CRD# 223) 03/1986 – 08/1988
RICHMOND FINANCIAL CORPORATION (CRD# 14742) 12/1986 – 08/1988
ANDERSON & STRUDWICK, INCORPORATED (CRD# 48) 11/1980 – 03/1986
DEAN WITTER REYNOLDS INC. (CRD# 7556) 05/1980 – 12/1980
WHEAT, FIRST SECURITIES, INC. (CRD# 6124) 08/1977 – 05/1980
ANDERSON & STRUDWICK, INCORPORATED (CRD# 48) 07/1976 – 08/1977

If you suspect an elderly family member could be the victim of financial abuse or exploitation, call Soreide Law Group for a free consultation on how to potentially recover those losses at 888-760-6552. We represent clients nationwide before FINRA.

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On July 31, 2014, former Ameriprise Financial Services financial advisor, Michelle Lee Kern, 36, of Sacramento, CA, was sentenced to 46 months in prison and ordered to pay $642,625 in restitution for financial advisor fraud.

Michele Kern was a licensed financial advisor with Ameriprise Financial Services Inc. in Roseville, CA, from 2009 through December 2012, and allegedly stole $642,625 from approx. 20 clients. Michelle Kern forged clients’ signatures on checks, and made wire transfers out of client accounts which she then transferred to her own bank accounts and credit cards. According to victim statements read in court, the victims said how difficult it was for many of them to retire, support disabled children, and pay for college.

While Kern awaits her sentencing in this fraud case, she has also been charged with embezzling money from her church.

Kern will begin serving her sentence on September 11, 2014.

Soreide Law Group represents clients nationwide. Call a Securities Arbitration Lawyer for a free consultation on how to potentially recover your investment losses at: 888-760-6552.

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INTL FCStone Securities Inc. (CRD #45993, Winter Park, Florida)

was censured, fined $70,000, ordered to pay $62,297.13 plus interest in restitution to customers, and required to revise its WSPs (Written Supervisory Procedures).

According to the FINRA report, allegedly INTL FCStone Securities Inc., partially executed customer limit orders in OTC (over-the-counter) securities after it traded each subject security for its own market-making account at a price that would have satisfied each client’s limit order.

FINRA’s findings also stated that INTL FCStone Securities’ supervisory system did not provide reasonable supervision regarding customer limit order protection.

(FINRA Case #2010021400901)

Soreide Law Group, (888) 760-6552, based in Fort Lauderdale, Florida, obtained this summary of information from FINRA’s website, listed under “Disciplinary and Other FINRA Actions, July, 2014.” Call for a free consultation with an attorney if you feel your losses are due to your stock broker or financial advisor’s recommendations. We represent clients nationwide before FINRA.

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Aug/14

6

Ohio Firm Censured and Fined $100,000 Over Variable Annuity Sales

Great American Advisors, Inc. (CRD #36451, Cincinnati, Ohio)

was censured and fined $100,000 by FINRA for failure to have adequate supervisory systems in place for the sale of variable annuities.

FINRA’s findings stated that because of this, two of Great American Advisors’ independent contractor representatives recommended unsuitable variable annuity transactions for Great American Advisors clients. The independent contractors and Great American Advisors earned improper commissions and the clients paid $363,173 in unnecessary surrender fees and incurred longer surrender periods.

FINRA’s findings also stated that Great American Advisors did not have an adequate supervisory system in place that ensured procedures were properly implemented. Great American Advisors failed to ensure that the sales of variable annuities by the representatives adhered to their written procedures.

FINRA also noted that Great American Advisors not have a system or Web-based access to a database that allowed it to adequately compare the annuity to be replaced with the other variable annuities.

(FINRA Case #2009019513903)

This summarization of information from FINRA’s website under “Disciplinary and Other Actions, July, 2014,” ends here.

If you or a loved one have experienced investment losses due to your stock broker or financial advisor’s recommendations of annuities, call Soreide Law Group for a free consultation with an attorney on how to potentially recover your annuity losses: 888-760-6552.

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