Securities Lawyer Blog | Victim of Fraud?

Dec/14

12

What is a REIT?

A REIT, Real Estate Investment Trust, is a company that owns, finances, and in
the majority of cases, operates income-producing real estate. They can be publically traded, private, or public but not listed.

The two main types of REITs are 1) Mortgage REITs which deal in investment and ownership of property mortgages. The revenue is generated by the interest that they earn on the mortgage loans. 2) Equity REITs which invest in and own properties. The revenues come mainly from the rents generated from the properties.

Typically REITs must pay out at least 90 percent of their taxable income in dividends to shareholders and the shareholder then pays the income tax on the dividends.

There are many types of commercial real estate owned by REITS. Some examples are hospitals, shopping malls, apartments, office buildings, warehouses, etc. REITs are designed similar to mutual funds which can give the investor all types of regular income streams, diversification and long-term capital appreciation.

If you sustained a financial loss due to your stock broker/financial advisor’s recommendations regarding REITs, call Soreide Law Group for a free consultation with an attorney on how to potentially recover your losses at 888-760-6552.

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Dec/14

11

Two Financial Advisors from Buffalo Charged with Fraud by the SEC

On December 10, 2014, the SEC filed civil fraud charges against TIMOTHY S. DEMBSKI and WALTER F. GRENDA JR., from the Buffalo area and their company, Reliance Financial Advisors.

According to the SEC, financial advisor, Timothy S. Dembski, allegedly lost nearly $4 million of his client’s money through investing it in a hedge fund. His partner Walter F. Grenda Jr., allegedly borrowed $175,000 from clients, telling them that he would use the money for his business, when in fact the majority of the funds went for his own personal expenses.

According to the SEC, the two men allegedly made false statements to their clients. Many of these clients were elderly and had limited investment knowledge. A former debt collector who became the hedge-fund manager, Scott M. Stephan, was also charged. Stephan and Dembski co-owned the hedge fund, Prestige Wealth Management Fund.

Grenda pulled his clients out of the fund in October of 2012 after his clients lost around 4 percent of their investment. However, Stephan and Dembski continued on with the fund.

The Prestige Wealth Management Fund lost approximately 80 percent of its value in December of 2012. The SEC said it was because of Stephan manually investing and trading in stock options that Dembski’s clients lost the majority of their Prestige Fund investments.

The SEC settled its case against Scott Stephan, and he was permanently barred from working in the securities industry. He also faces penalties and possible additional disgorgement of funds at a later date.

TIMOTHY S. DEMBSKI was previously registered with the following securities firm(s):

09/2011 – 08/2013 MID ATLANTIC CAPITAL CORPORATION (CRD# 10674) – BUFFALO, NY

10/2006 – 03/2011 WALL STREET FINANCIAL GROUP, INC. (CRD# 35830) – HAMBURG, NY

06/1995 – 10/2006 SECURITIES AMERICA, INC. (CRD# 10205) – CHEEKTOWAGA, NY

WALTER F. GRENDA JR was previously registered with the following securities firm(s):

09/2011 – 07/2013 MID ATLANTIC CAPITAL CORPORATION (CRD# 10674) – BUFFALO, NY

10/2006 – 03/2011 WALL STREET FINANCIAL GROUP, INC. (CRD# 35830) – HAMBURG, NY

03/1990 – 09/2006 SECURITIES AMERICA, INC. (CRD# 10205) – CHEEKTOWAGA, NY

11/1989 – 03/1990 ROYAL ALLIANCE ASSOCIATES, INC. (CRD# 23131) – NEW YORK, NY

12/1986 – 11/1989 INTEGRATED RESOURCES EQUITY CORPORATION (CRD# 6403)
05/1985 – 12/1986 WESTMORELAND CAPITAL CORPORATION (CRD# 11469)
12/1983 – 05/1985 APPLE FINANCIAL CORPORATION (CRD# 10375)
03/1983 – 01/1984 DEAN WITTER REYNOLDS INC. (CRD# 7556)
01/1981 – 11/1982 FIRST JERSEY SECURITIES, INC. (CRD# 6621)

If your broker or financial advisor recommended risky hedge funds call Soreide Law Group for a free consultation with an attorney on how to potentially recover your investment losses at: 888-760-6552.

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Dec/14

10

Former San Francisco Wells Fargo Broker Barred by FINRA

MICHAEL J. FREW (CRD# 812805) San Francisco, has been permanently barred by FINRA for allegedly accepting loans from his clients and/or converting clients funds. Frew has not cooperated completely with FINRA in their investigation. Michael Frew was also permanently barred from the securities industry in the State of California.

Michael J. Frew was employed by Wells Fargo Advisors and allegedly sold promissory notes to his WFA clients and according to FINRA assured his clients that the notes would be secure and provide a stable income. Many of Frew’s former clients who have filed lawsuits, stopped receiving payments on their promissory notes this year.

There have been claims have been filed with FINRA against Wells Fargo and Michael Frew for the recovery of their investment losses.

According to FINRA’s BrokerCheck, Michael J. Frew was previously registered with the following securities firm(s):

07/2003 – 01/2014 WELLS FARGO ADVISORS, LLC (CRD# 19616) – SAN FRANCISCO, CA

03/1988 – 07/2003 PRUDENTIAL SECURITIES INCORPORATED (CRD# 7471) – NEW YORK, NY

04/1988 – 05/1988 SHEARSON LEHMAN HUTTON INC. (CRD# 7506)
09/1975 – 04/1988 E. F. HUTTON & COMPANY INC (CRD# 235)

If you sustained losses due to former Wells Fargo broker, Michael J. Frew, call for a free consultation with an attorney on how to potentially recover those losses: 888-760-6552. The Soreide Law Group represents clients nationwide before FINRA.

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Dec/14

8

Former New York LPL Financial Broker Fined and Suspended by FINRA

JEFFREY A. CASHMORE (CRD# 1928725) former LPL broker, was suspended and fined by FINRA for alleged misconduct for distributing misleading sales information to his clients and prospective clients.

According to a recent article in Reuters, in one case, six retirees of the former Niagara Mohawk Power Corp, now a part of National Grid USA, a subsidiary of National Grid, allege that Jeffery Cashmore, who was a broker for LPL Financial LLC at the time, advised them to cash in their pensions when they retired and roll the money over into investments that he would manage. The retirees lost millions of dollars when they could have locked in their monthly pension payments for life.

Jeffrey Cashmore, currently has an investment advisory firm in Williamsville, New York.

According to FINRA’s BrokerCheck, Jeff Cashmore was previously registered with the following securities firm(s):

Registered Dates Firm
11/1994 – 10/2012 LPL FINANCIAL LLC (CRD# 6413) – WILLIAMSVILLE, NY

10/1992 – 11/1994 KIDDER, PEABODY & CO. INCORPORATED (CRD# 7613) – NEW YORK, NY

06/1990 – 10/1992 LIBERTY SECURITIES CORPORATION (CRD# 14416) – PURCHASE, NY

03/1989 – 07/1990 SHEARSON LEHMAN HUTTON INC. (CRD# 7506) – NEW YORK, NY

Soreide Law Group can be reached (888) 760-6552. We represent our clients nationwide before FINRA. Call for a free consultation with an attorney on how to potentially recover your investment losses.

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Jason Mitchell Meyers (CRD #1842913, Huntington, New York)

was barred by FINRA for allegedly misappropriating at least $700,000 of investor funds raised for private offerings of securities.

FINRA’s findings stated that the investors never received returns on their investments. The private offerings were to raise money to purchase the broker-dealer where Jason Meyers was employed. Meyers raised around $3 million for an entity Meyers created and controlled. Meyers used some portion of the funds for his broker-dealer’s operations. He did meet the net capital obligations and purchased a small interest in the broker-dealer. However, Meyers used a significant portion of the money raised for his own personal use which was not authorized by investors.

(FINRA Case #2010024003801)

Jason Mitchell Meyers was previously registered with the following securities firm(s):

06/2012 – 09/2012 TRIDENT PARTNERS LTD. (CRD# 41258) – WOODBURY, NY

07/2004 – 05/2012 ICM CAPITAL MARKETS LTD. (CRD# 103725) – NEW YORK, NY

10/2002 – 04/2004 S.W. BACH & COMPANY (CRD# 43522) – PORT WASHINGTON, NY

08/2002 – 10/2002 MARKETREND SECURITIES, LTD. (CRD# 34423) – NEW YORK, NY

01/2002 – 08/2002 GILFORD SECURITIES INCORPORATED (CRD# 8076) – NEW YORK, NY

08/1997 – 02/2002 THE THORNWATER COMPANY, L.P. (CRD# 36195) – NEW YORK, NY

02/1997 – 07/1997 SUN COAST CAPITAL CORP. (CRD# 40133) – NEW YORK, NY

10/1996 – 11/1996 AMERICAN INVESTMENT SERVICES, INC. (CRD# 21111) – OKLAHOMA CITY, OK
FINRA expelled the firm in 02/2003
05/1996 – 11/1996 WOLF A. POPPER, INC. (CRD# 3059) – NEW YORK, NY

06/1995 – 04/1996 JOSEPHTHAL LYON & ROSS INCORPORATED (CRD# 3227) – NEW YORK, NY

06/1994 – 04/1995 GRUNTAL & CO. INCORPORATED (CRD# 372) – NEW YORK, NY

02/1991 – 05/1994 JOSEPHTHAL LYON & ROSS INCORPORATED (CRD# 3227) – NEW YORK, NY

08/1990 – 01/1991 ADVEST, INC. (CRD# 10) – HARTFORD, CT

02/1990 – 08/1990 SMITH BARNEY, HARRIS UPHAM & CO., INCORPORATED (CRD# 7059) – NEW YORK, NY

06/1989 – 03/1990 FIRST FIDELITY CAPITAL CORP. (CRD# 17967) FINRA expelled the firm in 10/1990

The previous summation of information was obtained from FINRA’s website under “Disciplinary and Other FINRA Actions, November 2014,” ends here.

If you have sustained financial losses due to your broker or financial advisor’s recommendations, call Soreide Law Group for a free consultation with an attorney at: 888-760-6552. We represent our clients nationwide before FINRA.

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The Fort Lauderdale-based Soreide Law Group has obtained the following summation of information from FINRA’s Website under “Disciplinary and Other Actions, November 2014.”

Herbert Leonard Kaye (CRD #265572, Delray Beach, Florida)

was assessed a deferred fine of $25,000, which includes disgorgement of $11,000 of commissions and was suspended by FINRA for four months for allegedly making discretionary trades in equities and ETFs in a client’s account without the client’s prior written authorization.

FINRA’s findings stated that Kaye was given verbal authority by his client to use his discretion to enter trades in her account without contacting her. However, Kaye’s firm’s policies and procedures prohibited reps from exercising discretion in client accounts except in certain circumstances, but not in this particular client’s account. These trades generated approximately $173,000 in gross commissions and fees for Kaye.

Also FINRA’s findings stated that Kaye made unsuitable recommendations that his client invest $1.1 million in gold and precious minerals fund. This was determined not to be a suitable investment due to her low risk tolerance objective and her age. Kaye also received $11,000 in commission for that investment.
Kaye’s suspension is in effect from September 15, 2014, through January 14, 2015.
(FINRA Case #2013037287401)

Herbert Leonard Kaye is not currently registered with any securities firm.

Herbert Leonard Kaye was previously registered with the following securities firm(s):

05/2008 – 06/2013 FIRST ALLIED SECURITIES, INC. (CRD# 32444) – BOCA RATON, FL

03/1991 – 05/2008 FFP SECURITIES, INC. (CRD# 16337) – DELRAY BEACH, FL

05/1989 – 02/1991 CORPORATE SECURITIES GROUP, INC. (CRD# 11025) – ST. LOUIS, MO

09/1986 – 07/1988 RAYMOND JAMES & ASSOCIATES, INC. (CRD# 705)
08/1986 – 09/1986 BISCAYNE SECURITIES CORPORATION (CRD# 17764)
03/1985 – 08/1986 MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (CRD# 7691)
02/1981 – 03/1985 PRUDENTIAL-BACHE SECURITIES INC. (CRD# 7471)
10/1978 – 03/1981 E. F. HUTTON & COMPANY INC (CRD# 235)
11/1977 – 11/1978 SHEARSON LOEB RHOADES INC. (CRD# 7506)
11/1977 – 11/1977 SHEARSON HAYDEN STONE INC. (CRD# 7295)
01/1977 – 10/1977 LOEB RHOADES & CO. INC. (CRD# 7502)
03/1974 – 01/1977 LOEB, RHOADES & CO. INC. (CRD# 525)
05/1972 – 07/1973 ECONOMIC RESEARCH ANALYSIS INC (CRD# 1000003)
02/1970 – 05/1972 THOMSON MCKINNON SECURITIES INC. (CRD# 829)

FINRA’s information ends here.

The Soreide Law Group can be reached (888) 760-6552. Soreide Law Group is located in Fort Lauderdale, Florida and represents our clients nationwide before FINRA. Call for a free consultation with an attorney on how to potentially recover your investment losses.

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Clark Smith Gardner (CRD #2930356, Orem, Utah)

was barred by FINRA member for allegedly converting client funds for his own use and benefit.

FINRA’s findings stated that Gardner’s client gave him a check for $243,000 to invest, however Gardner deposited that check into his own personal bank account and did not invest any of the money on the client’s behalf. Gardner used the clent’s money for his own personal use, which included the repayment of funds Gardner owed to other individuals.

According to FINRA, Gardner also engaged in an outside business as an agent for a real estate investment company and did not notify his firm nor did he obtain their consent.
(FINRA Case #2014041351601)

Clark Gardner was previously registered with the following securities firm(s):

12/2013 – 05/2014 CETERA ADVISORS LLC (CRD# 10299) – OREM, UT

02/2002 – 12/2013 SAMMONS SECURITIES COMPANY, LLC (CRD# 115368) – OREM, UT

08/1997 – 02/2002 WALNUT STREET SECURITIES, INC. (CRD# 15840) – EL SEGUNDO, CA

This summation of information which was obtained from FINRA’s website under “Disciplinary and Other FINRA Actions, November 2014,” ends here.

Soreide Law Group represents clients nationwide before FINRA. If you sustained financial losses due to your broker or financial advisor’s recommendations, call Soreide Law Group for a free consultation with an attorney at: 888-760-6552.

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The following summation of information was obtained by Soreide Law Group on FINRA’s Website under “Disciplinary and Other Actions, November 2014.”

Mark Foster (CRD #719105, Pasadena, California)

was barred by FINRA for failure to respond to FINRA’s requests for information and documents and failure to appear before FINRA and provide on-the-record testimony.

The requests from FINRA stemmed from allegations that Mark Foster may have misappropriated more than $2 million in client funds.
(FINRA Case #2014039867601)

FINRA has permanently barred Mark Foster from acting as a broker or otherwise associating with firms that sell securities to the public.

Mark Foster was previously registered with the following securities firm(s):

12/2006 – 05/2012 STERN FISHER EDWARDS INC (CRD# 7548) – LOS ANGELES, CA

11/1984 – 12/2006 THE SEIDLER COMPANIES INCORPORATED (CRD# 3911) – LOS ANGELES, CA

11/1980 – 12/1984 BATEMAN EICHLER, HILL RICHARDS, INCORPORATED (CRD# 76)

This ends the summation of information from FINRA’s website.

Call Soreide Law Group for a free consultation with an attorney on how to potentially recover your investment losses at 888-760-6552. We represent our clients nationwide before FINRA.

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Dec/14

2

Huntsville Broker Barred by FINRA

Keith Michael Rogers (CRD #4987615, Huntsville, Alabama)

was barred by FINRA for his failure to cooperate with FINRA in an investigation. Rogers did not appear for testimony with FINRA.

FINRA’s findings stated that the FINRA investigation was into whether Rogers had misappropriated funds by, among other things, improperly diverting funds from the bank accounts of brokerage clients of G.L.S. & ASSOCIATES, INC., to an account he controlled.
(FINRA Case #2014041532601)

Keith Michael Rogers was previously registered with the following securities firm:

01/2006 – 01/2013 G.L.S. & ASSOCIATES, INC. (CRD# 47502) – HUNTSVILLE, AL

This ends the summation of information obtained from FINRA’s website under “Disciplinary and Other FINRA Actions, November 2014.”

Soreide Law Group represents our clients nationwide before FINRA. If you have sustained losses due to the recommendations of your broker/financial advisor, call us for a free consultation with an attorney at: 888-760-6552.

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Kenneth William Schulz (CRD #4605235, Tomahawk, Wisconsin)

was barred by FINRA for allegedly directing a registered assistant to impersonate Schulz’s former clients. The assistant was told to make phone calls to Schulz’s former firm and request that the client’s accounts be liquidated, then they could invest with Schulz at his new firm.

FINRA’s findings stated that the registered assistant impersonated the clients in phone calls to his former firm. This resulted in Schulz’s former firm liquidating all of the securities positions the clients were holding. The clients had not authorized Schulz or his assistant to request that Schulz’s former firm liquidate their accounts. These clients were not aware that their accounts were liquidated until after the transactions had occurred.

Also, FINRA’s findings stated that Ken Schulz refused to appear for FINRA on-the-record testimony.
(FINRA Case #2013037650601)

Ken Schulz was previously registered with the following securities firm(s):

05/2013 – 07/2013 COMMONWEALTH FINANCIAL NETWORK (CRD# 8032) – TOMAHAWK, WI

01/2003 – 05/2013 LPL FINANCIAL LLC (CRD# 6413) – TOMAHAWK, WI

The summation of information obtained from FINRA’s website under “Disciplinary and Other FINRA Actions, November 2014,” ends here.

If you have sustained losses due to the your broker or financial advisor, call Soreide Law Group for a free consultation with an attorney on how to potentially recover your investment losses: 888-760-6552. We represent clients nationwide before FINRA.

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