TAG | broker misrepresenting funds
Comments off · Posted by Securities Lawyer in FINRA
FINRA, the Financial Industry Regulatory Authority, alleges Roman Sledziejowski, the Polish president and owner of TWS Financial, LLC, in Brooklyn, N.Y., used customer funds for his own use and gave false statements to clients from June, 2009, through August, 2012.
FINRA alleges Sledziejowski defrauded three Polish customers of more than $4 million by taking money out of their accounts, and in other cases, having them transfer funds that he said would be invested in a Polish vodka company. Mr. Sledziejowski refused to testify and cooperate with FINRA.
Sledziejowski told one client that his funds were being put into a Polish bank and the stock of a Polish vodka maker, but no such investments were ever made. Two other customers said they didn’t authorize the wire transfers that he made from their accounts to Innovest Holdings, LLC, which Sledziejowski controlled.
“In order to mask his misconduct, Sledziejowski provided customers with falsified account statements or ‘account snapshots,’ which were fictional accounts of their holdings in their TWS brokerage accounts or the values of those accounts,” FINRA said.
Sledziejowski was previously registered with Wachovia Securities LLC, Prudential Securities Inc. and Salomon Smith Barney Inc., according to FINRA’s BrokerCheck. TWS Financial filed to withdraw its broker-dealer registration on Nov. 9th.
If you have invested with Roman Sledziejowki, TWS Financial, LLC, or Innovest Holdings, LLC, and experienced financial losses, call and speak at no charge to a securities attorney who may potentially help you recover those losses. Call: 888-760-6552, or visit our website at: http://www.securitieslawyer.com.
Soreide Law Group, PLLC, representing investors nationwide before FINRA the Financial Industry Regulatory Authority.
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Comments off · Posted by Securities Lawyer in FINRA
William Thomas Johnson Jr. (CRD #1189117, Registered Representative,
North Palm Beach, Florida)
was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Johnson consented to the described sanction and to the entry of findings that he received approximately $47,000 from a customer after Johnson made the representation, which was false when made, that he was going to use the funds to purchase corporate bonds for the customer.
FINRA found that Johnson accepted these funds, deposited them into a bank account under his control and made improper use of the funds, which included payment of personal expenses, and never purchased the corporate bonds.
FINRA’s findings also stated that Johnson received approximately $53,000 from another customer after he made the representation, which was false when made, that he would use the funds to purchase a certificate of deposit (CD) for the customer. Johnson then accepted the funds, deposited them into a bank account under his control and made improper use of the funds, which included payment of personal expenses, and never purchased the CD.
FINRA found that Johnson’s misrepresentation to his customers and improper use and conversion of his customers’ funds constituted a failure in the conduct of his business to observe high standards of commercial honor and just and equitable principles of trade.
(FINRA Case #2011029514101)
This information was found on FINRA’s website under “Disciplinary and Other FINRA Actions, August, 2012.”
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, represents clients nationwide. Please call for a free consultation on how you could potentially recover your financial losses. To speak with an attorney call 888-760-6552, or visit our website at: http://www.securitieslawyer.com.
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Daniel Edward Becerril II (CRD #4489715, Registered Representative, Huntington Beach, California)
has been barred from association with any FINRA member in any capacity and this sanction was based on FINRA’s findings that Becerril made willful misrepresentations and omissions to his customer by telling her that he would invest an $11,500 inheritance in a mutual fund, when in fact he deposited the funds in an account that he controlled, and converted the funds to his own use.
FINRA’s findings stated that Becerril misused his customer’s funds and engaged in an extended course of misconduct to avoid and postpone the return of the customer’s funds.
These findings also stated that Becerril failed to produce documents FINRA requested during an on-the-record interview.
(FINRA Case #2009018944001)
This information was obtained on FINRA’s website under “Disciplinary and Other Actions, June, 2012.”
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The following information is from FINRA’s website under, “Disciplinary and Other FINRA Actions, May, 2012.”
This ends the information from FINRA’s website.
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Comments off · Posted by Securities Lawyer in FINRA
WASHINGTON — In a February article in The Bond Buyer, Jonathan Hemmerdinger writes that a Financial Industry Regulatory Authority (FINRA) arbitration panel ordered Memphis-based Morgan Keegan & Co. to pay a Birmingham investor $1.95 million for misrepresenting that the Jefferson County, Ala., sewer bonds he purchased were safe, liquid and tax-free investments.
These bonds were actually auction-rate securities and the ARS market collapsed and froze during the financial crisis, leaving investors holding the securities they had purchased.
In an order from FINRA issued Feb. 17, the panel awarded the payment to William W. Featheringill, a Birmingham investor and venture capitalist. The amount of damages equals the amount of ARS Featheringill was left holding.
Mr. Featheringill complained to FINRA in 2010 that staff at AmSouth Investment Services Inc., which became a part of Morgan Keegan in 2007, misrepresented the risks associated with investing in auction-rate securities. Featheringill purchased $3.5 million worth of the sewer bonds in 2005 from AmSouth. That company was acquired by Morgan Keegan’s parent, Regions Financial Corp.
Morgan Keegan said that it is considering an appeal of the decision.
Hemmerdiner writes that Mr. Featheringill said he was unfamiliar with investing in bonds and purchased the securities on the advice of AmSouth staff, who assured him the bonds were safe and that he could get his money every 35 days if he wanted to. Featheringill later sold $1.5 million of the bonds. His holdings totaled $1.95 million in 2010 when he filed the complaint against Morgan Keegan.
The Bond Buyer article goes on to say that auction-rate securities are long-term bonds with interest rates that reset regularly at auctions. ARS are similar to short-term paper because investors can hold them for short periods. But if the auctions fail, as they did when the financial crisis was unfolding in 2008 and dealers stopped supporting the auctions, investors may be stuck holding them indefinitely.
“Unfortunately, the sewer bonds were, in risk and suitability terms, the exact opposite of what they were represented to be,” said Featheringill’s complaint. “This type of investment — auction rate securities — had and still has huge risk of illiquidity and price depreciation.”
Rediker said staffers at Morgan Keegan were aware of problems with ARS in 2007, but failed to notify investors.
“They knew in the fall of 2007 that there was severe risk of failure,” he said.
“The principal amount at issue in this case may seem relatively small, but the securities principles involved were large. They go to governing the fundamental relationship between broker-dealers and their clients,” said Joseph S. Fichera, chief executive officer of Saber Partners LLC, who served as an expert witness for Featheringill. “While each case is fact-specific, the sheer number and variety of ARS cases, even four years after the market dislocation, suggests there were fundamental problems in this market.”
Although the FINRA panel gave Featheringill all of the damages that he asked for, it took no action on the his demand for $5.85 million in punitive damages.
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