Securities Lawyer Blog | Victim of Fraud?

The Financial Industry Regulatory Authority (FINRA) announced that it has fined Berthel Fisher & Company Financial Services, Inc. and its affiliate, Securities Management & Research, Inc., of Marion, Iowa, a combined total of $775,000. This fine was for supervisory deficiencies, which included Berthel Fisher’s failure to supervise the sale of non-traded real estate investment trusts (REITs), and leveraged and inverse exchange-traded funds (ETFs). FINRA has ordered, as a part of the settlement, Berthel Fisher to retain an independent consultant to improve its supervisory procedures regarding its sale of alternative investments.

FINRA’s findings stated that from January 2008 to December 2012, Berthel Fisher had inadequate supervisory systems and written procedures for sales of alternative investments. These alternative investments included non-traded REITs, managed futures, oil and gas programs, equipment leasing programs and business development companies. FINRA stated that occasionally, the firm failed to accurately calculate concentration levels for alternative investments, causing the firm to not correctly enforce suitability standards for a number of the sales of these investments. Additionally, Berthel Fisher failed to train its staff on individual state suitability standards, which is part of necessary for certain alternative investment sales.

Also, FINRA found that from April 2009 to April 2012, Berthel Fisher did not have a reasonable basis for certain sales of leveraged and inverse ETFs. They did not adequately research or review non-traditional ETFs before allowing registered representatives to recommend them to customers, and failed to provide training to its sales force regarding these products. Berthel Fisher also failed to monitor the holding periods of these investments by customers, resulting in some instances in customer losses.

If you suffered investment losses due to your stock broker/financial advisor’s recommendations regarding non-traded REITs, leveraged and inverse ETFs, or other illiquid, and complex products, call Soreide Law Group for a consultation at no cost with a lawyer on how to potentially recover those losses: 888-760-6552.

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Sergey Pustelnik (CRD #4439199, Jersey City, New Jersey)

was barred by FINRA for refusing to produce FINRA requested emails in his possession, custody and control, as part of an investigation into, among other things, certain suspicious trading activities occurring through a member firm.

FINRA’s findings stated that Pustelnik refused to produce a copy of a .pst file containing emails in a gmail account he used for business and personal purposes.

(FINRA Case #2011029713003)

Sergey Pustelnik was previously registered with the following securities firms:

03/2011 – 01/2015 LEK SECURITIES CORPORATION (CRD# 33135) – NEW YORK, NY
01/2002 – 09/2010 GENESIS SECURITIES, LLC (CRD# 46992) – NEW YORK, NY (FINRA expelled the firm in 05/2012)

The information from FINRA’s Disciplinary Report March 2015 ends here.

If you’ve suffered investment losses due to your broker or financial advisor’s recommendations, please call Soreide Law Group for a consultation at no cost with an attorney for possible recovery of those losses: 888-760-6552.

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Barclays Capital Inc. (CRD #19714, New York, New York)

was censured, fined $155,000 and required to revise its Written Supervisory Procedures (WSPs) for allegedly submitting inaccurate short interest position reports to FINRA, and failed to report to FINRA its short interest positions.

FINRA’s findings stated that Barclays Capital’s supervisory system did not provide for compliance with respect to the applicable securities laws and regulations, and FINRA rules, to ensure an adequate review of the firm’s short interest positions.

(FINRA Case #2011030505401)

This summation of information obtained from FINRA’s Website “Disciplinary and Other Actions March 2015, ends here.”

Soreide Law Group represents clients nationwide. If you or a loved one experienced investment losses due to your broker/dealer or financial advisor, call a Securities Arbitration Lawyer at no cost for a consultation on how to potentially recover your losses at 888-760-6552.

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Fidelity Brokerage Services LLC (CRD #7784, Smithfield, Rhode Island

was censured and fined $350,000 by FINRA for allegedly overcharging 20,663 client accounts approximately $2.4 million.

FINRA’s findings stated that Fidelity Brokerage Services did not have reasonable supervisory systems or procedures to ensure that clients were charged accurate fees for accounts managed by third-party investment advisors. This resulted in erroneous and duplicate fees charged in certain clients accounts utilizing asset-based pricing, duplicate fees in certain customer accounts managed by third-party wrap providers, and erroneous markups on certain fixed income investments. Fidelity Brokerage Services voluntarily reimbursed the disadvantaged customer accounts, with interest.

Also, FINRA stated that Fidelity Brokerage Services failed to establish an adequate supervisory system and written procedures reasonably designed to ensure that customers received accurate disclosures relating to its Asset-Based Pricing Program for accounts managed by third-party investment advisors and to monitor billing in these fee-based brokerage accounts to ensure that clients were charged in accordance with Fidelity Brokerage Services’ disclosures.
(FINRA Case #2012034916901)

The above summation of information was obtained on FINRA’s website “Disciplinary and Other FINRA Actions March 2015,” and ends here.

If feel your broker/brokerage inappropriately overcharged your account, Soreide Law Group offers investors a free consultation and portfolio analysis to decide if you have legal grounds to pursue a FINRA arbitration. To speak with a lawyer at no cost call: (888) 760-6552.

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The Florida-based Soreide Law Group, (888) 760-6552, obtained the following information on FINRA’s website “Disciplinary and Other FINRA Actions March 2015.”

Kerrie Milligan Grimstad (CRD #4276095, Lighthouse Point, Florida)

was censured and fined $5,000 for allegedly effecting trades in a client’s account, on the instructions of the client’s husband. Grimstad did not receive the client’s prior written authorization nor her member firm’s prior approval to exercise discretion in the account.

(FINRA Case #2012034061401)

Kerrie Grimstad is currently registered since 10/2012 with:

RAYMOND JAMES & ASSOCIATES, INC. (CRD# 705)
2255 GLADES ROAD, SUITE 120-A. 122-A, 125-A, BOCA RATON, FL 33431

She was previously registered with the following securities firms:

06/2009 – 10/2012 MORGAN STANLEY (CRD# 149777) – CHICAGO, IL
04/2007 – 06/2009 MORGAN STANLEY & CO. INCORPORATED (CRD# 8209) – CHICAGO, IL
05/2001 – 04/2007 MORGAN STANLEY DW INC. (CRD# 7556) – CHICAGO, IL
11/2000 – 03/2001 PFPC DISTRIBUTORS, INC. (CRD# 31334) – BERWYN, PA

This summation of information which was obtained from FINRA’s website ends here.

Call Florida-based Soreide Law Group for a free consultation with an attorney at 888-760-6552, if you’ve suffered investment losses because of your broker or financial advisor’s recommendations,.

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Florida-based Soreide Law Group, (888) 760-6552, has obtained the following summation from FINRA’s website under “Disciplinary and Other FINRA Actions March 2015.”

Jennifer Joice Trowbridge (CRD #4310649, Boca Raton, Florida)

was assessed a deferred fine of $10,000 and suspended by FINRA for two months for allegedly recommending a series of mutual fund switches in clients accounts without having reasonable grounds for believing that such transactions were suitable for those clients in view of the nature of the recommended transactions, the frequency of the transactions and the transaction costs incurred.

FINRA’s findings stated that Trowbridge recommended that the clients purchase Class A mutual funds, for which they paid commissions and front-end sales charges. Trowbridge then recommended that the customers sell those Class A mutual funds within only one month to 13 months after purchasing them. On average, these clients held the Class A mutual funds at issue for less than six months.

Trowbridge used the proceeds of the sales to purchase mutual funds offered by other fund families, causing the customers to pay additional commissions and fees. In total, the customers paid approximately $60,000 in unnecessary commissions on these switch transactions.

FINRA’s findings also stated that at various times, Trowbridge effected discretionary trades in a client’s account, with the client’s verbal consent, but without obtaining written authorization and without seeking or gaining her member firm’s acceptance of the account as discretionary.

The suspension is in effect from February 17, 2015, through April 16, 2015.
(FINRA Case #2011025433902)

Jennifer Joice Trowbridge was previously registered with the following securities firms

09/2012 – 11/2014 QUESTAR CAPITAL CORPORATION (CRD# 43100) – BOYNTON BEACH, FL
01/2010 – 09/2012 ESSEX SECURITIES LLC (CRD# 46605) – BOYNTON BEACH, FL
08/2005 – 12/2009 INVESTORS CAPITAL CORP. (CRD# 30613) – BOYNTON BEACH, FL
10/2003 – 08/2004 SIG SECURITIES, L.L.C. (CRD# 45915) – DALLAS, TX
02/2002 – 10/2003 NFP SECURITIES, INC. (CRD# 42046) – AUSTIN, TX

The summation obtained from FINRA’s website ends here.

If you suffered investment losses because of your broker or financial advisor’s recommendations, please call Soreide Law Group for a consultation at no cost with an attorney on possible recovery of those losses: 888-760-6552.

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Kevin Luby (CRD #4568246, Port Orange, Florida)

was assessed a deferred fine of $25,000 and suspended by FINRA for 10 months for allegedly failing to disclose to his member firms that he was engaged in outside business activities on an elderly firm client’s behalf.

FINRA’s findings stated that the client had named Luby as a co-successor trustee of her trust and co-personal representative of her estate.

Also, Luby assisted the client with the purchase, renovation and eventual ongoing management of certain investment properties. Luby failed to disclose the fiduciary appointments and involvement with the rental properties to one of his firms, and failed to disclose his involvement with the rental properties to the other firm.

FINRA’s findings stated that Luby provided false answers on one of the firm’s compliance questionnaires and annual certifications regarding being named the beneficiary of any client’s estate or holding any fiduciary positions for clients.

Kevin Luby’s suspension is in effect from January 20, 2015, through November 19, 2015. (FINRA Case #2013038108802)

Kevin Luby was previously registered with the following firms:

03/2012 – 08/2013 LPL FINANCIAL LLC (CRD# 6413) – SOUTH DAYTONA, FL
08/2009 – 03/2012 STIFEL, NICOLAUS & COMPANY, INCORPORATED (CRD# 793) – DAYTONA BEACH, FL
02/2007 – 08/2009 UBS FINANCIAL SERVICES INC. (CRD# 8174) – DAYTONA BEACH, FL
09/2002 – 02/2007 EDWARD JONES (CRD# 250) – ORMOND BEACH, FL

This ends the summary of information located on FINRA’s website from March 2015’s Disciplinary Report.

Florida-based Soreide Law Group represents our clients nationwide. If you have sustained investment losses due to your broker or financial advisor’s recommendations, call a Securities Arbitration Lawyer for a free consultation on how to potentially recover your losses at 888-760-6552.

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The Soreide Law Group, based in Florida (888) 760-6552, obtained the following summary from FINRA’s website, under “Disciplinary and Other FINRA Actions March 2015.”

Michael Vincent Borja (CRD #5451360, Miami, Florida)

was assessed a deferred fine of $5,000 and suspended by FINRA for 45 days for allegedly proceeding with wire transfer requests, from an imposter posing as a client, without first obtaining verbal confirmation from the client, which was his member firm’s policy.

FINRA’s findings stated that Borja falsely represented in his firm’s records that he verbally confirmed wire requests with the client and also provided fictitious reasons for the client’s transfer instructions.

Also, FINRA’s findings stated that Borja caused his firm to maintain false books and records concerning these wire transfer requests.

The suspension is in effect from February 2, 2015, through March 18, 2015.
(FINRA Case #2013037029901)

Michael V. Borja was registered with the following firms:

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

This summary of information from FINRA’s website ends here.

Call Florida-based Soreide Law Group for a free consultation on how to potentially recover your financial losses at 888-760-6552.

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Florida-based Soreide Law Group, (888) 760-6552, recently obtained the following summation of information found on FINRA’s website under “Disciplinary and Other FINRA Actions March 2015.”

Naveen K. Bhagwani (CRD #5423037, West Palm Beach, Florida)

was barred by FINRA for alleged unauthorized trades in client’s non-discretionary accounts without the knowledge, authorization, or consent of the clients or any persons with trading authority over the accounts.

FINRA’s findings stated that Bhagwani excessively traded, made unsuitable investments and churned client accounts with the intention and purpose of generating commissions for himself and his member firm.

FINRA’s findings also stated that Bhagwani misrepresented material facts to clients, and in part to cover up his fraudulent practices, created and forged his client’s signatures on a letter that authorized the transfer of their funds, without their knowledge or consent.
(FINRA Case #2011027667402)

Naveen K. Bhagwani was previously registered with the following securities firm:

10/2007 – 10/2011 NSM SECURITIES, INC. (CRD# 134357) – WEST PALM BEACH, FL
FINRA expelled the firm in 09/2014

This ends the summation obtained from FINRA’s website.

If you had investment losses because of your broker or financial advisor’s recommendations, please call the Florida-based Soreide Law Group for a free consultation with an attorney: 888-760-6552.

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The following is a portion of the article quoting Securities Lawyer, Lars K. Soreide of Soreide Law Group. The article was written by Andrew Welsch and appeared in onwallstreet on March 11,2015:

“Ex-Advisor Racks Up $16M in Client Complaints

One barred advisor. Fourteen client complaints. $16 million in alleged damages.

Troubles are mounting for Enver Rahman Alijaj, a former advisor who has been hit with 14 customer complaints that allege a total of $16 million in damages, according to FINRA records. In the most recent case against him, an arbitration panel ordered him to pay two former clients $275,000.

“I’ve never seen a broker that has as many complaints,” says Lars K. Soreide, an attorney representing the clients, who sought damages for alleged churning, excessive use of margin and overly concentrating their portfolio.
Alijaj was working at Legend Securities, a brokerage and investment banking firm based in New York, at the time of this alleged wrongdoing, which led to a complaint filed with FINRA in January 2013.

During the ensuing case, Alijaj failed to show at arbitration hearings and did not have an attorney representing him, according to FINRA records. The firm did not return calls or emails seeking comment.

Alijaj faces similar allegations of misconduct in over a dozen client complaints that span his time at multiple firms since he entered the industry in 2005, records show. Alijaj, who was barred from the industry by FINRA in October 2014, denied several of the allegations in statements in his BrokerCheck file. It is unclear if Alijaj is currently employed.

In one case that was settled for nearly $1.7 million in 2012, Alijaj said he “denies all allegations and findings by the panel,” adding that he was not required to participate in the award.

Soreide, the attorney representing the two clients from the most recent arbitration decision against Alijaj, says they will attempt to seek recourse in civil court.

$1.6M SETTLEMENT

A 2009 client complaint alleging unsuitable recommendations, churning and breach of fiduciary duties was settled for $1.6 million, according to Alijaj’s BrokerCheck file. The alleged misconduct occurred during 2008 and 2009. The records show that he was ordered to pay $500,000 in the settlement, and that the client had sought damages of about $2.9 million.

At the time Alijaj was employed at Point Capital — which was later acquired by Tampa, Fla.-based broker-dealer JHS Capital Advisors — and subsequently by John Thomas Financial, which closed in 2013 after its founder was sued by the SEC for deceiving investors. JHS did not return calls or emails seeking comment.

For the remaining client complaints involving Alijaj, which have yet to be settled or resolved in arbitration, clients are seeking more than $8 million in alleged damages. –With additional reporting by Suleman Din.”

The following blog posting also appeared in our blog on February 18, 2013:

http://www.securitieslawyer.com/securitieslawyerblog/?s=Enver+Rahman+Alijaj&submit=Go

If you or a family member have suffered financial losses due to broker Enver Rahman Alijaj, call the Soreide Law Group for a free consultation on how to potentially recover those losses at 888-760-6552. We represent our clients nationwide before FINRA.

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