Securities Lawyer Blog | Victim of Fraud?

Nov/14

24

Idaho Broker Pleads Guilty in Misappropriation of Over $800,000

JOANN JACKSON (CRD# 2246952) a 63 year-old investment advisor from Coeur d’Alene, Idaho, pled guilty to wire fraud last week in federal court. Allegedly, Jackson misappropriated over $800,000 from her client’s account.

The alleged victim had placed all of her investment accounts with Jackson. Jackson has worked as a stockbroker since 1994, and had become close friends with the victim over the years. When Jackson became a broker with Moloney Securities in Idaho, the victim transferred her accounts to Moloney Securities with Jackson.

Jackson opened an account with Moloney Securities in 2007 in her daughter’s name without her daughter’s knowledge. Jackson had told her daughter in 2008 that because of problems she could not have an account in her own name. Jackson began depositing what her daughter thought were paychecks into the daughter’s local bank account, when in fact, this was money stolen from her client’s Moloney Security account.

Allegedly, the stolen money was first moved to Jackson’s daughter’s Moloney account, then it was transferred by wire to her daughter’s local bank account. Jackson used this stolen money to pay her bills or withdraw the cash for her own use. Jackson also forged checks on the victim’s Moloney Security account and deposited them directly into her daughter’s account.

Jackson pled guilty to two counts of wire fraud, which carries 20 years in prison and a maximum fine of $250,000. She has agreed to make restitution of $811,084.

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

07/2004 – 10/2013 MOLONEY SECURITIES CO., INC. (CRD# 38535) – COUER D’ ALENE, ID

11/1997 – 07/2004 A. G. EDWARDS & SONS, INC. (CRD# 4) – ST. LOUIS, MO

04/1994 – 11/1997 D.A. DAVIDSON & CO. (CRD# 199) – GREAT FALLS, MT

Soreide Law Group represents our clients nationwide in arbitrations before FINRA. For a free consultation on how to potentially recover your investment losses due to your broker/financial advisor’s misappropriation of your funds call: 888-760-6552.

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Nov/14

21

West Palm Beach NSM Expelled by FINRA and CEO Barred by FINRA

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

NSM Securities, Inc. (CRD #134357, West Palm Beach, Florida) and Niyukt Raghu Bhasin (CRD #2282048, Wellington, Florida)

NSM Securities was expelled from FINRA membership and Bhasin the founder, owner, President and Chief Executive Officer (CEO), was barred by FINRA.

Allegedly NSM aggressively traded stocks in the commission-based accounts of its customers. FINRA stated that Bhasin chose profits over his duties owed to NSM’s customers and chose not to establish, maintain and enforce a supervisory system for NSM’s business.

FINRA stated that Bhasin fostered a ‘culture of non-compliance’ which then resulted in sales practice violations, customer complaints, and cold-calling abuse.

FINRA also stated that Bhasin, failed to detect and prevent churning, excessive trading, and unsuitable investment recommendations. NSM, acting through its brokers, allowed customers to buy securities in cash accounts where the cost to buy the securities was met by the sale of the same securities, known as “free-riding.”

FINRA also found that the firm failed to institute procedures for cold-calling prospective customers resulting in telephone calls to numbers on the firm’s do-not-call list and/or the national do-not-call list.
(FINRA Case #2011027667402)

The Soreide Law Group recently won a case against NSM in which the client won 100% of their investment losses. See blog posting below at:

http://www.securitieslawyer.com/securitieslawyerblog/?p=4838

Call the Fort Lauderdale-based, Soreide Law Group for a free consultation on how to potentially recover your investment losses call: 888-760-6552.

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Nov/14

21

Former LPL Broker from Tampa Fined and Suspended for Sale of Private Securities

JODIE L. MILLER (CRD# 4772684)

was suspended by FINRA for 18 months and a fined $53,225, included in this figure was a disgorgement in the amount of $38,225 plus interest. This was due to Miller’s alleged “selling away” securities in Tri-Med Corporation.

According to the reports, in 2012 Miller allegedly participated in the private sales of Tri-Med Corporation in the amount of $764,500. Miller made approximately $38,225 in commissions. It was also reported that Miller did not notify or get the approval of her firms for her participation in the sale of private securities.

The Florida Office of Financial Regulation sued Tri-Med and five of it’s top officers alleging the sale of unregistered securities and operating what amounted to a “Ponzi scheme.”

According to FINRA’s BrokerCheck, JODIE L. MILLER was previously registered with the following securities firm(s):

09/2012 – 01/2013 LPL FINANCIAL LLC (CRD# 6413) – TAMPA, FL

05/2009 – 09/2012 VALIC FINANCIAL ADVISORS, INC. (CRD# 42803) – TAMPA, FL

03/2008 – 11/2008 QUESTAR CAPITAL CORPORATION (CRD# 43100) – ST. PETERSBURG, FL

06/2004 – 03/2008 NYLIFE SECURITIES LLC (CRD# 5167) – TAMPA, FL

The Florida-based Soreide Law Group represents clients nationwide in arbitrations before FINRA. For a free consultation on how to potentially recover your investment losses due to your broker/financial advisor call: 888-760-6552.

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Nov/14

20

Minnesota Broker Barred by FINRA for Selling Penny Stock From His Personal Accounts

Thomas Neil Charbonneau (CRD #44868, Arden Hills, Minnesota)

was barred by FINRA for allegedly selling nearly 1.7 million shares of a speculative penny stock from his own accounts which generated $400,000. According to FINRA, Charbonneau solicited the purchase of the speculative penny stock to his clients without disclosing that he was selling the stock from his personal accounts. In failing to disclose to his clients, Charbonneau prevented them from making informed decisions.

FINRA’s findings also stated that Charbonneau had a client sign blank firm documents relating to a possible investment in a REIT. This conduct is not allowed at his firm.
(FINRA Case #2010024882201)

Thomas Neil Charbonneau was previously registered with the following securities firm(s):

Registered Dates Firm
11/2010 – 12/2013 BERTHEL, FISHER & COMPANY FINANCIAL SERVICES, INC. (CRD# 13609) – LILYDALE, MN

03/2005 – 10/2010 FELTL & COMPANY (CRD# 6905) – INVER GROVE HEIGHTS, MN
01/2003 – 03/2005 STIFEL, NICOLAUS & COMPANY, INCORPORATED (CRD# 793) – ST. LOUIS, MO
05/2002 – 01/2003 DOUGHERTY & COMPANY LLC (CRD# 7477) – MINNEAPOLIS, MN
01/2001 – 05/2002 MILLER JOHNSON STEICHEN KINNARD, INC. (CRD# 694) – MINNEAPOLIS, MN
07/1994 – 01/2001 MILLER, JOHNSON & KUEHN, INCORPORATED (CRD# 8678) – MINNEAPOLIS, MN
07/1993 – 06/1994 HAMILTON INVESTMENTS, INC. (CRD# 821)
03/1972 – 07/1993 CRAIG-HALLUM, INC. (CRD# 1546)

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

Please call the Soreide Law Group for a free consultation on how to potentially recover your investment losses: 888-760-6552. We represent clients nationwide in arbitrations before FINRA.

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Nov/14

19

Naples Broker Suspended by FINRA in Private Securities Transactions

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

James Clifford Eastman (CRD #1385303, Naples, Florida)

was given a deferred fine of $20,000 and suspended by FINRA for nine months for allegedly participating in the sales of private securities without prior written notice to his firm or obtaining his firm’s approval of his participation in these transactions.

FINRA’s findings stated that Eastman allegedly referred his clients to invest in an offering, he then assisted the clients with obtaining the necessary funds from their brokerage accounts, and then assisted the clients with the paperwork. Eastman received approximately $65,000 in fees, but was instructed by his firm to return the funds.
This suspension is in effect from October 6, 2014, through July 5, 2015. (FINRA Case #2012034304001)

James Clifford Eastman was previously registered with the following securities firm(s):

01/2010 – 10/2012 WESTPORT RESOURCES INVESTMENT SERVICES, INC. (CRD# 24535) – NAPLES, FL

06/2009 – 01/2010 MORGAN STANLEY SMITH BARNEY (CRD# 149777) – NAPLES, FL

05/2001 – 06/2009 CITIGROUP GLOBAL MARKETS INC. (CRD# 7059) – NAPLES, FL

12/1991 – 06/2001 ROBERT W. BAIRD & CO. INCORPORATED (CRD# 8158) – MILWAUKEE, WI

07/1985 – 06/1988 FIRST AMERICAN NATIONAL SECURITIES, INC. (CRD# 10111)

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

Florida-based Soreide Law Group represents clients nationwide in arbitrations before FINRA. For a free consultation on how to potentially recover your investment losses call: 888-760-6552.

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Nov/14

19

Former Broker Charged in $1 Million Misappropriation of Clients Funds

The SEC has filed an action against ERIC W. JOHNSON, 51, (CRD# 2142522) for allegedly misappropriating at least $1 million from his clients. The SEC claims that Johnson transferred small sums to his personal account over 100 times. Eric William Johnson has not been located. Johnson has been with RedRidge Securities, based in Chicago, since 1999. FINRA has permanently barred Johnson from the industry.

Allegedly between 2004 – 2014 Johnson made 115 wire transfers worth $1 million from client accounts to an account in his name. The SEC alleges that Johnson targeted clients with large accounts and concealed his actions by submitting smaller transfers from computers not connected with his account. Johnson’s assets have been frozen.

ERIC W. JOHNSON was previously registered with the following securities firm(s):

03/1999 – 09/2014 REDRIDGE SECURITIES, INC. (CRD# 45976) – CHICAGO, IL
04/1996 – 06/1999 PROGRAM TRADING CORP. (CRD# 36740) – BOCA RATON, FL
FINRA expelled the firm in 01/2005
11/1993 – 05/1996 STEIN, SHORE SECURITIES, INC. (CRD# 31294) – ORLANDO, FL
01/1992 – 11/1993 EMANUEL AND COMPANY (CRD# 7309) – NEW YORK, NY
FINRA expelled the firm in 10/1994
05/1991 – 01/1992 BARING & BROWN, INC. (CRD# 24929) FINRA expelled the firm in 09/1992

Soreide Law Group represents clients nationwide in arbitrations before FINRA. Call for a free consultation on how to potentially recover your investment losses: 888-760-6552.

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Nov/14

18

Former Commonwealth Financial Network Client Awarded $580,000 by FINRA

A Financial Industry Regulatory Authority (FINRA) arbitration panel recently awarded a former client of Commonwealth Financial Network of Waltham, Massachusetts, $580,000.

According to the FINRA report, the client had claimed his Commonwealth advisor, who was not named in the filing, breached his fiduciary duty. The advisor allegedly recommended to his client to retire early and place the subsequent roll-over of shares of his employee stock ownership plan into a 72(t) IRA account and a non-72 (t) IRA account.

The client filed a $1 million claim last October against Commonwealth. The FINRA arbitration panel sided with the client, awarded him damages, and ordered Commonwealth to also pay $7,200 in court fees.

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

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In a recent Wall Street Journal investigation, they analyzed records of approximately 550,000 stockbrokers, and identified 16 hot spots in the United States where troubled brokers tend to concentrate.

The areas identified were clustered in these seven states: New York, New Jersey. Florida, Michigan, Arizona, Nevada, and California.

The article sites in particular, Delray Beach, Florida. Within a 10 mile radius there were approximately 3,000 brokers, and one in 17 had three or more disciplinary problems. These troubled brokers are three times the national average in disciplinary troubles.

Many of these brokers hold luncheons or dinners for prospective clients which can involve high pressured sales techniques.

The Delray Beach area, located in Palm Beach County, has one of the highest rates of brokers with disciplinary issues in the country. It is also one of the country’s largest retirement havens which makes it even more attractive for unscrupulous brokers because of the high concentration of potential elderly clients.

In the noted hot spots, the rate of households 65 and older with incomes over $100,000 was 50% higher than the national average. The majority of the hot spots were even better off than the national norm, having 13 of the 16 with incomes of $200,000 or more.

The Financial Industry Regulatory Authority (FINRA), has offices in the hot spots according to the WSJ. A representative from FINRA told the WSJ that they have dedicated resources to these geographical locations.

A South Florida broker was quoted in the article regarding the dinners given by brokers for prospective clients, “It’s called prospecting, just like you do for gold.”

If you feel you have become the victim of an unscrupulous broker or financial advisor, call the Fort Lauderdale-based Soreide Law Group for a free consultation on how to potentially recover your investment losses at 888-760-6552. We represent clients nationwide before FINRA.

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Nov/14

12

Former Investment Advisor Defrauded Football Plalyers

There was a recent report in the Wall Street Journal that former Nebraska football players, Steve Octavien and Marlon Lucky, accepted gifts from financial advisor, MARY R. WONG (CRD# 1745747), while they were at Nebraska. This was in an article about financial advisors who take advantage of athletes. Steve Octavien and brothers Daniel and Josh Bullocks, claim they lost hundreds of thousands of dollars which they earned during their professional football careers.

Wong was banned by the New York Stock Exchange panel in 2007 for defrauding two widowed clients out of $150,000. In 2010, Wong pled guilty to securities fraud. Mary Wong is now serving a 63-month sentence in a federal prison.

Wong was registered with First Investors Corp. and Wells Fargo until 2004. She solicited several of the Nebraska football players during their careers. Octavien reported that his scholarship was not enough to cover all of his living expenses, so he went to Wong for help.

Daniel Bullocks said there were many financial advisors offering players gifts and cash, and many players felt they were being groomed as future clients after leaving Nebraska and possibly signing on as a professional player. Marlon Lucky did not invest with Wong after his playing career was over, however, Octavien and the Bullocks brothers did invest with Wong only to lose their investment.

Mary R. Wong was previously registered with the following securities firm(s):
12/2000 – 08/2004 WELLS FARGO INVESTMENTS, LLC (CRD# 10582) – SAN FRANCISCO, CA
12/2000 – 08/2002 WELLS FARGO BROKERAGE SERVICES, L.L.C. (CRD# 16100) – MINNEAPOLIS, MN
06/2000 – 05/2001 WELLS FARGO SECURITIES INC. (CRD# 17438) – SAN FRANCISCO, CA
05/2000 – 12/2000 WELLS FARGO BROKERAGE SERVICES, L.L.C. (CRD# 16100) – MINNEAPOLIS, MN
10/1987 – 05/2000 FIRST INVESTORS CORPORATION (CRD# 305) – NEW YORK, NY

If you have experienced a financial loss due to Mary R. Wong, call Soreide Law Group for a free consultation with an attorney on how to potentially recovery your investment losses at: 888-760-6552.

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Nov/14

12

Former Stifel Nicolaus Broker Barred by FINRA

ROBERT J. HEAD (CRD# 240935) has been permanently barred by the Financial Industry Regulatory Authority (FINRA) from acting as a broker or otherwise associating with firms that sell securities to the public.

FINRA reports that allegedly from August 2008 until October 2013, Head who was managing a Stifel Nicolaus trust account for a client, exercised his own discretion in this client’s account. This client who is 78 and retired, never gave her authorization to Head to trade in her account at his discretion. Allegedly, Head traded in the retiree’s account routinely without obtaining her permission or discussing the details of the trades.

According to the FINRA report, Head allegedly chose high-risk investments for this particular client who was retired and allegedly originally wished to stay in low-risk investments. For example, in 2011 there were 310 transactions, many of which were high-risk investments which generated over $41,000 in commissions for Head, and approximately $13,500 in losses for the client.

ROBERT J. HEAD was previously registered with the following securities firm(s):

08/2008 – 01/2014 STIFEL, NICOLAUS & COMPANY, INCORPORATED (CRD# 793) – OMAHA, NE

05/2004 – 08/2008 WELLS FARGO INVESTMENTS, LLC (CRD# 10582) – OMAHA, NE

10/1997 – 06/2004 ROBERT W. BAIRD & CO. INCORPORATED (CRD# 8158) – MILWAUKEE, WI

09/1992 – 10/1997 SMITH BARNEY INC. (CRD# 7059) – NEW YORK, NY

08/1992 – 09/1992 THE PRINCIPAL/EPPLER, GUERIN & TURNER, INC. (CRD# 260) – DALLAS, TX

01/1992 – 08/1992 PRUDENTIAL SECURITIES INCORPORATED (CRD# 7471) – NEW YORK, NY

02/1978 – 01/1992 DEAN WITTER REYNOLDS INC. (CRD# 7556) – PURCHASE, NY

05/1973 – 02/1978 DEAN WITTER & CO. INCORPORATED (CRD# 6466)
11/1968 – 05/1973 DEAN WITTER & CO. INCORPORATED (CRD# 209)

If you or an elderly family member have investment losses due to your stock broker/financial advisor, call Soreide Law Group for a free consultation on how to potentially recover your investment losses at 888-760-6552. We represent our clients nationwide before FINRA.

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