securities arbitration

Investigation: Former MML Investor Services, LLC Broker, Oscar Francis, Reportedly Recommended GPB Capital Holdings to Customers – Fort Lauderdale, Florida

Published on: April 12, 2021 | by Iorio Altamirano

Iorio Altamirano LLP is currently investigating former MML Investor Services, LLC broker Oscar Francis, who reportedly recommended that his customers invest in private placement securities issued by GPB Capital. The GPB notes, which are private securities offerings exempt from registration with the Securities and Exchange Commission (SEC), are inherently risky investments. These investments are suitable only for highly sophisticated investors who understand the risks and can afford a significant monetary loss. Unfortunately, many brokerage firms and brokers sold the GPB Capital securities to retirees and unsophisticated investors because they paid a high up-front commission.

Mr. Francis was a broker at MML Investors Services, LLC, Inc. in Ft. Lauderdale, Florida, from July 2008 to May 2017. At that time, MML terminated his employment connected with an investigation into an undisclosed outside business activity, selling away, and an unauthorized non-securities life insurance transaction. In August 2018, Mr. Francis pleaded guilty to wire fraud after admitting that between June 25, 2012, and May 31, 2017, he devised a scheme to defraud at least eleven investors out of approximately $665,000. Mr. Francis was subsequently sentenced to 41 months in prison and ordered to pay over $420,000 in restitution to clients. In May 2019, he was also barred by the SEC from association from associating with any broker, dealer, or investment advisor.

Iorio Altamirano LLP is also investigating the sales practices and due diligence of MML Investors Services, LLC related to its sale of GPB Capital funds. It is believed, according to reports, that MML has been subjected to numerous lawsuits from customers in the form of FINRA securities arbitration claims to recover investment losses.

Scottsdale, Arizona Broker Kevin Canterbury Facing Three Pending Customer Disputes

Published on: April 10, 2021 | by Iorio Altamirano

Iorio Altamirano LLP is currently investigating former Coastal Equities, Inc. broker Kevin Canterbury who is facing three securities arbitration claims related to recommendations to invest in Direct Participation Program and Limited Partnership interests, believed to be private placement securities issued by GPB Capital. Kevin Canterbury operated his own independent advisory firm, Redstone Capital.

The GPB notes, which are private securities offerings exempt from registration with the Securities and Exchange Commission (SEC), are inherently risky investments. These investments are suitable only for highly sophisticated investors who understand the risks and can afford a significant monetary loss. Unfortunately, many brokerage firms and brokers sold the GPB Capital securities to retirees and unsophisticated investors because they paid a high up-front commission.

Mr. Canterbury was a broker at Coastal Equities, Inc. from 2012 until 2020. Iorio Altamirano LLP is also investigating the sales practices and due diligence of Coastal Equities, Inc. related to its sale of GPB Capital funds. Earlier this year, the SEC charged three people and their affiliated entities with running a “Ponzi-like scheme” that raised more than $1.7 billion by selling private placements issued by alternative asset management firm GPB Capital Holdings.

Broker Hebert Frey Suspended by FINRA After Excessively Trading and Placing Unauthorized Trades in The Account of a Disabled Client – Mount Vernon, Ohio

Published on: April 9, 2021 | by Iorio Altamirano

The Financial Industry Regulatory Authority (“FINRA”) has suspended financial advisor Hebert Frey from the securities industry for sixteen months. Mr. Frey consented to the suspension after FINRA alleged that he excessively traded a customer’s account and placed unauthorized trades. The customer was a 54-year-old disabled homemaker. FINRA also fined Mr. Frey $15,000 and ordered him to disgorge $76,137 in commissions.

The alleged conduct occurred while Mr. Frey was employed by Lincoln Douglas Investments, LLC in Mt. Vernon, Ohio, and Union Capital Company in Tucson, Arizona.

As discussed more fully below, Mr. Frey has a long history of customer complaints, run-ins with regulators, and employment terminations. Throughout his career, Mr. Frey has been suspended six times by regulators, ordered to pay nearly $50,000 in fines, and been the subject of at least six customer complaints.

Broker Matthew Crafa Facing Three Pending Customer Disputes Related to GPB Capital Funds

Published on: April 8, 2021 | by Iorio Altamirano

Iorio Altamirano LLP is currently investigating Royal Alliance Associates, Inc. broker Matthew Crafa who is reportedly facing three securities arbitration claims related to recommendations to invest in private placement securities issued by GPB Capital. The GPB notes, which are private securities offerings exempt from registration with the Securities and Exchange Commission (SEC), are inherently risky investments. These investments are suitable only for highly sophisticated investors who understand the risks and can afford a significant monetary loss. Unfortunately, many brokerage firms and brokers sold the GPB Capital securities to retirees and unsophisticated investors because they paid a high up-front commission.

Mr. Crafa has been a broker at Royal Alliance Associates, Inc. since 2011. Iorio Altamirano LLP is also investigating the sales practices and due diligence of Royal Alliance Associates related to its sale of GPB Capital funds. Earlier this year, the SEC charged three people and their affiliated entities with running a “Ponzi-like scheme” that raised more than $1.7 billion by selling private placements issued by alternative asset management firm GPB Capital Holdings. Royal Alliance Associates has faced numerous lawsuits from customers in the form of FINRA securities arbitration claims to recover investment losses.

Securities arbitration is a unique and complex practice area. Investors should seek out experienced counsel who can navigate the arbitration process and effectively advocate on their behalf.

Joseph Ambrosole, a Joseph Stone Capital L.L.C. Broker, Suspended by FINRA

Published on: April 8, 2021 | by Iorio Altamirano

The Financial Industry Regulatory Authority (“FINRA”) has suspended financial advisor Joseph Ambrosole from the securities industry for six months. Mr. Ambrosole consented to the suspension after FINRA alleged that he excessively and unsuitably traded the accounts of two customers. FINRA also fined Mr. Ambrosole, who was also suspended by FINRA in 2017 for unethical sales practices, $5,000 and ordered him to pay $147,031.50 in restitution.

Mr. Ambrosole, who has only eight years of experience in the securities industry, has a history of associations disreputable broker-dealers, customer complaints, and regulatory sanctions.

The alleged conduct occurred while Mr. Ambrosole was employed by Joseph Stone Capital L.L.C. in New York, New York.

Dawson James Securities, Inc. Sanctioned by FINRA for Charging Customers Excessive Commissions

Published on: April 6, 2021 | by Iorio Altamirano

The Financial Industry Regulatory Authority (“FINRA”) has sanctioned Dawson James Securities, Inc. (“Dawson James”) for charging customers excessive commissions. On April 6, 2021, FINRA and Dawson James entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) whereby Dawson James accepted the following sanctions:

a censure;
a $20,000 fine; and

Hutchinson Island, Florida Broker, Gregory Mancuso, Formerly of Crowdvest Securities LLC, BARRED by FINRA

Published on: April 2, 2021 | by Iorio Altamirano

The Financial Industry Regulatory Authority (“FINRA”) has barred broker Gregory Mancuso from the securities industry for providing false testimony during an on-the-record interview connected with an investigation into Mr. Mancuso’s handling of the brokerage accounts of two senior sisters with disabilities. The alleged conduct occurred while Mr. Mancuso was registered with BMA Securities, LLC, from August 2, 2016, to November 13, 2017.

On December 21, 2020, FINRA’s Department of Enforcement filed a complaint against Mr. Mancuso, alleging that Mr. Mancuso had his two elderly customers transfer a large part of their life savings to a company with which he was affiliated. One of the sisters was 73 years old and had dementia. The other sister was 68 years old and had multiple sclerosis. The complaint alleges that in 2017, Mancuso recommended that the elder sister use funds from her 401(k) account to purchase a variable annuity offered by a purported Swiss asset management firm, which Mr. Mancuso was affiliated. The complaint also alleges that Mr. Mancuso testified falsely during an on-the-record interview to conceal both his involvement in the transfer and actions he took to potentially change one of the sister’s power of attorney.

Mr. Mancuso failed to respond to the FINRA complaint. FINRA’s Department of Enforcement then requested a default decision, which the hearing officer granted.

Another Win for UBS Yield Enhancement Strategy (YES) Customers, Second Award in March 2021

Published on: April 1, 2021 | by Iorio Altamirano

On March 31, 2021, a FINRA Dispute Resolution Services arbitration panel in Columbus, Ohio, ordered UBS Financial Services, Inc. (“UBS”) to pay customers over $372,000 in compensatory damages and fees. The claimants, Matthew and Lisa Fisher alleged that UBS and brokers Ortal Shachar and Richard Mark Held presented the Yield Enhancement Strategy (“YES”), an options strategy, as low risk. In actuality, the complexity and nature of YES exposed the Claimants to a significant risk of loss.

This order is the second arbitration award against UBS in March 2021 concerning YES and the third since December 2020. On March 5, 2021, another FINRA arbitration panel in Denver, Colorado, ordered UBS to pay customers over $1 million in compensatory damages. In December 2020, a FINRA arbitration panel in Boca Raton, Florida, awarded a customer nearly $90,000.

UBS has faced numerous lawsuits from customers in the form of FINRA securities arbitrations related to YES, a complex managed options strategy that UBS marketed as safe and market-neutral. The customers have claimed that the strategy was not suitable for them and that UBS materially misrepresented and omitted the risks of the strategy.

FINRA Sanctions Securities America, Inc. For Failing to Supervise the Sale of the LJM Preservation and Growth Fund

Published on: March 30, 2021 | by Iorio Altamirano

The Financial Industry Regulatory Authority (“FINRA”) has sanctioned Securities America, Inc. (“Securities America”) for failing to reasonably supervise brokers’ recommendations of the LJM Preservation & Growth Fund. On March 29, 2021, FINRA and Securities America entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) whereby Securities America accepted the following sanctions:

a censure;
a $100,000 fine;

FINRA Sanctions J.W. Cole Financial, Inc. For Failing to Supervise the Sale of the LJM Preservation and Growth Fund

Published on: March 30, 2021 | by Iorio Altamirano

The Financial Industry Regulatory Authority (“FINRA”) has sanctioned J.W. Cole Financial, Inc. (“J.W. Cole”) for failing to reasonably supervise brokers’ recommendations of the LJM Preservation & Growth Fund. On March 18, 2021, FINRA and J.W. Cole entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) whereby J.W. Cole accepted the following sanctions:

a censure;
a $50,000 fine;