Securities Lawyer Blog | Victim of Fraud?

TAG | misrepresentation by broker

Nov/12

29

Roman Sledziejowki Defrauded Fellow Poles $4 mill

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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Oct/12

15

Guggenheim Securities Fined $800,000 by FINRA

Comments off · Posted by Securities Lawyer in FINRA

The Financial Industry Regulatory Authority (FINRA) has fined Guggenheim Securities, LLC, of New York, $800,000 for failing to supervise two collateralized debt obligation (CDO) traders who engaged in activities to hide a trading loss writes the editor of the Corporate Crime Reporter in a recent article.

Also, Alexander Rekeda, the former head of Guggenheim’s CDO Desk, was suspended for one year and fined $50,000.
Timothy Day, a trader on Guggenheim’s CDO Desk, was suspended for four months and fined $20,000.

“Guggenheim’s inadequate supervision allowed their traders to engage in extensive and repeated inappropriate actions to try to conceal a trading loss,” said Brad Bennett, FINRA’s enforcement chief. “The traders deceived their customer and supported their scheme through the use of inaccurate books and records, all of which went undetected by the firm.”

In October 2008, as the result of a failed trade, Guggenheim’s CDO Desk acquired a junk-rated tranche of a collateralized loan obligation (CLO). After many unsuccessful attempts by Guggenheim’s CDO Desk to sell the position, Rekeda and Day persuaded a hedge fund customer to purchase the CLO for $950,000 more than it had previously agreed to pay by falsely presenting the CLO as part of a package of securities a third party offered for sale.

According to FINRA, they found that in an attempt to hide the trading loss on the CLO position, the traders provided the customer with order tickets that increased the price for the CLO position and decreased the price of the other positions that were part of the transaction. When the customer inquired about the pricing adjustments, Day, at Rekeda’s direction, lied and said a third-party seller of the CLO position had already settled the trade at a higher price and requested the customer pay this higher price.

When customer agreed to overpay for the CLO and in return, Day and Rekeda agreed to compensate the customer through other transactions, including pricing adjustments on six other CLO trades, a waiver of fees the customer owed in connection with resecuritization transactions, and a cash payment to the customer.

It was noted that the records created to document the transactions did not indicate any connection to the overpayment for the CLO.

FINRA found Guggenheim had failed to conduct adequate review of the CDO Desk’s trades, documentation concerning transactions by traders on the desk, and the traders’ email communications. Guggenheim, Rekeda, and Day neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.

Guggenheim must retain an independent consultant to review and make recommendations concerning the adequacy of its supervisory procedures.

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, represents clients nationwide in arbitrations before FINRA. Call to speak to an attorney regarding your investment losses. For a free consultation on how to potentially recover those losses call: 888-760-6552, or you may visit our website at: http://www.securitieslawyer.com.

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Jun/12

6

FINRA Fines Brookstone Securities Inc Over Sale of CMOs

Comments off · Posted by Securities Lawyer in FINRA

In May, a FINRA arbitration panel fined Brookstone Securities Inc., $1 million over the sale of risky CMOs (collateralized mortgage obligations) and said they made “fraudulent misrepresentation and omissions of material fact in selling complex, esoteric and risky tranches of [CMOs] to unsophisticated, elderly and retired investors.”  The FINRA panel also ordered its chief executive, Antony Lee Turbeville, along with a broker, Christopher Dean Kline barred from FINRA registered broker-dealers.

Brookstone and Antony Turbeville were jointly ordered to pay clients restitution of $440,600, while Brookstone and Christopher Kline were jointly ordered to pay $1,179,500 in restitution.

It was said in FINRA’s decision, that Turbeville and Kline “preyed on their elderly customers’ greatest fears,” such as losing their all of their savings to nursing homes and becoming penniless, thus enticing them into risky CMOs.

“Brookstone, Mr. Turbeville and Mr. Kline intentionally or recklessly misrepresented the CMO investments to their customers as a safe way, through government-backed bonds, to obtain a high rate of return on their investments,” according to the FINRA decision. “In reality, the CMOs the brokers purchased for the customers were high-risk investments whose returns were not assured, but instead, because of interest rate changes, were subject to dramatic changes in maturity, cash flow and value.”

According to FINRA, between July 2005 and July 2007,  Brookstone earned $492,500 in commissions over that time on CMOs, and investors lost $1.62 million.

Seven clients,  between 61 and 91, claimed they did not understand how CMOs worked and were not sophisticated investors, according to the FINRA decision.  FINRA has a long-standing warning to firms and advisers about selling CMOs, since 1993, when the CMO market collapsed. Finra, formerly NASD, warned that “in light of the complexity and the varying risk characteristics of CMOs, member must be conversant in all of the characteristics of CMOs to assess adequately the suitability of CMOs for their customers. Moreover, members must ensure that their customers understand the characteristics and risks associated with CMOs.”

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide.  If you or a loved one experienced a loss through Brookstone Securities, Inc., or another broker/dealer on the sale of CMOs, for a free consultation with an attorney on how to potentially recover your losses, please call 888-760-6552, or visit our website at: http://www.securitieslawyer.com.

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May/12

23

FINRA Arbitration Filed Against Douglas A. Leone and Newport Coast Securities

Comments off · Posted by Securities Lawyer in FINRA

Soreide Law Group, PLLC, is currently investigating claims against Douglas A. Leone of Newport Coast Securities, Irvine, California.  Leone was previously, according to FINRA’s Brokercheck,  located in New York. Currently, according to FINRA’s Brokercheck, Leone has 3 pending customer disputes against him and has other cases that have been settled in arbitration.  The alleged charges against him that were settled in arbitration included: misrepresentations, fraud, deceit, breach of contract, unauthorized trades, and excessive commissions, to name a few.
 
Soreide Law Group recently filed a FINRA arbitration against Newport Coast Securities and their registered representative Douglas Leone. The allegations relate to excessive trading or account churning.
 
If you were a client of Doug Leone and you feel that your account was excessively traded call for a free consultation on how to potentially recover your losses. To speak with an attorney 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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Apr/12

16

Melbourne, FL, Rep Fined and Suspended by FINRA

Comments off · Posted by Securities Lawyer in FINRA

The following information is from FINRA’s website under “Disciplinary Actions, March, 2012:”
 
Allan Anthony Scheer (CRD #2775825, Registered Principal, Melbourne, Florida)
 
submitted an Offer of Settlement in which he was fined $5,000 and suspended from association with any FINRA member in any capacity for four months. The fine is to be paid upon reentry to the securities industry. Without admitting or denying the allegations, Scheer consented to the described sanctions and to the entry of findings that he misrepresented material information to potential customers regarding the returns associated with the index-linked certificates of deposit (CDs) that they each purchased from his member firm.
 
The findings stated that the misrepresentations to the customers were material, as a reasonable investor considering whether to purchase the product would consider the rate of return to be considered significant.
 
The findings also stated that Scheer’s member firm terminated his employment for misrepresentation of product returns. The suspension is in effect from February 6, 2012, through June 5, 2012.
(FINRA Case #2009019330601)
 
The information from FINRA’s website has ended.
 
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide.
For a free consultation with an attorney, please call 888-760-6552, or visit our website at: www.securitieslawyer.com.

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