Securities Arbitration Lawyer Blog

INVESTIGATION: Former Morgan Stanley and Westpark Capital, Inc. Financial Advisor Stephen Sloane (CRD# 1257601) Investigated by FINRA for Unsuitable Trades in 14 Customer Accounts– New York, NY

Published on: October 22, 2020 | by Iorio Altamirano

FINRA has filed an enforcement complaint against Stephen Sloane, alleging that from January 2014 to January 2018, he recommended an unsuitable investment strategy to at least 14 customers. The complaint alleges that Sloane did not have a reasonable basis for recommending that his customers engage in active, short-term trading of U.S. Treasuries with 10- and 30-year maturities. FINRA alleged that Sloane did not conduct reasonable diligence to understand the effect of the strategy’s costs on the customers’ potential returns. FINRA has also alleged that Sloane charged five customers excessive markups in violation of FINRA Rule 2121 and 2010.

Stephen Sloane was a financial advisor and registered representative at the following firms:

Westpark Capital, Inc., New York, NY (March 2016 – August 2020); and

Morgan Stanley Fined, Censured, And Ordered to Pay Nearly $775,000 in Restitution to Customers Over Former Broker Kevin Gunnip (CRD# 2701801)

Published on: October 21, 2020 | by Iorio Altamirano

On August 12, 2020, Morgan Stanley and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) over allegations that it failed to reasonably supervise its former broker Kevin Gunnip. As part of the AWC, Morgan Stanley agreed to pay a $175,000 fine and was censured by FINRA. It also agreed to pay eight clients $774,574 in restitution. Two other customers have already settled separately with Morgan Stanley.

The Morgan Stanley AWC allegations involve Kevin Gunnip’s and its own conduct between 2012 and 2017:

Gunnip recommended short-term trades in ten customer accounts;

UBS Profits Double as Investors in UBS’s Yield Enhancement Strategy Suffer Losses

Published on: October 20, 2020 | by Iorio Altamirano

Today, UBS Group AG announced that its net profit almost doubled in the third quarter to nearly $2.1 billion from $1.05 billion from a year earlier.

Meanwhile, as UBS and other large investment banking firms continue to rake in huge profits, UBS’s Yield Enhancement Strategy investors continue to suffer avoidable losses.

UBS’s Yield Enhancement Strategy, or YES, is a complex managed options strategy that UBS marketed as a safe, market-neutral overlay that would provide incremental returns to an investor’s portfolio.

Financial Advisor Frank Venturelli (CRD# 6403468) SUSPENDED by FINRA – New Jersey

Published on: October 19, 2020 | by Iorio Altamirano

FINRA has suspended Frank Venturelli from the securities industry for 11 months. Frank Venturelli was a financial advisor and registered representative at the following firms:

Arive Capital Markets, Bay Ridge, NY (September 2019 to December 2019); and
First Standard Financial Company LLC, Red Bank, NJ (November 2014 to September 2019).

Financial Advisor Jeffrey Broten (CRD# 1006678) BARRED by FINRA – New Jersey

Published on: October 16, 2020 | by Iorio Altamirano

FINRA has permanently barred Jeffrey A. Broten from the securities industry. Jeffrey Broten was a financial advisor and registered representative at the following firms:

Newbridge Securities Corporation (affiliated with Black River Wealth Management LTD), Morristown, NJ (August 2019 to December 2019);
First Standard Financial Company LLC, Red Bank, NJ (February 2018 to August 2019); and

Why FINRA Should Convert In-Person Hearings Canceled Due To COVID-19 To Virtual Hearings

Published on: October 15, 2020 | by Iorio Altamirano

The Financial Industry Regulatory Authority (FINRA) has postponed in-person arbitration hearings and mediations through January 1, 2021. The latest FINRA administrative postponement follows the health crisis’ evolving nature and affects all active cases scheduled for a hearing before a FINRA arbitration panel through that date. In response, customers have sought to hold virtual securities arbitration hearings via Zoom. The goal of these customer requests is to avoid unnecessary delays and resolve their claims in a timely manner by keeping their original hearing dates on the calendar. Virtual hearings are particularly critical for elderly investors or investors in poor health. Yet, arbitration panels have denied investors’ requests for a virtual arbitration hearing in 27% of cases. That means that almost 3 in 10 investors who wished to proceed with a virtual hearing were prevented from doing so. FINRA should take bolder action, and as an equitable forum, it should act to address this uneven disposition by arbitration panels, which unfairly prejudices nearly a third of investors. FINRA should amend its rules and automatically convert in-person hearings canceled due to COVID-19 to virtual hearings.

Seventh Circuit Court of Appeals Precedent and the Potential for Indefinite Delays

There is already precedent out of the Seventh Circuit Court of Appeals in favor of virtual hearings. Clunkier than an in-person hearing? Sure. But both sides will deal with logistical challenges, ruled a Federal Judge. There is no unfair prejudice to either party in holding a hearing on Zoom. The way the system is currently set up, motion practice is required. Both the Claimant and the Respondent present their arguments for or against holding a virtual hearing, and the arbitration panel then issues its order. A uniform solution by the regulator, albeit a temporary one, seems better than arbitration panels granting some motions for virtual arbitration hearings while denying others. It makes little sense, particularly at a time of uncertainty and health risks for everyone involved in the process.

Can World Investor Week Effect Real Change for Main Street Investors?

Published on: October 6, 2020 | by Iorio Altamirano

The global campaign promoting investor education and protection kicked off this week. Securities regulators in the U.S. issued a joint investor bulleting highlighting key themes for investors. Among them, the benefits of holding long-term investments, the rise of COVID-19 scams, the need for investors to use resources available to confirm that they are dealing with a reputable firm, and the importance of asking questions to financial professionals.

All sensible topics, to be sure. However, given the campaign’s scope and the multitude of stakeholders involved, the campaign misses an opportunity to have a meaningful impact where it matters most: enhancing investor protections for Main Street.

FINRA’s 2019 statistics show that it imposed $39.5 million in fines to member firms and ordered $27.9 million in restitution to investors. FINRA imposes monetary fines to member firms when it identifies misconduct. These fines also have the added goal of discouraging further misconduct. Restitution is used to address the issue of an investor unjustly suffering a monetary loss. Luckily for those investors, FINRA was able to make them whole. But what about cases that did not involve action by the regulator or went unreported?

Seasoned Securities Arbitration Lawyers August M. Iorio and Jorge Altamirano Announce Their New Law Firm Iorio Altamirano LLP

Published on: September 28, 2020 | by Iorio Altamirano

We are proud to announce the launch of our securities arbitration boutique, Iorio Altamirano LLP.

We intend to build a client-focused national practice that offers a bold approach and aggressively pursues the recovery of investment losses on behalf of clients. Our new firm will represent individual investors, groups of individuals, business entities, family offices, credit unions, and institutional investors.

“We have a strong commitment to transparency. It is rooted in who we are as attorneys and as a law firm. Our core values of integrity, excellence, and grit will help us deliver results for our clients,” said partner August Iorio.

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