Unsuitable

Top 15 Types of Securities Leading to Customer Disputes in 2020

Published on: December 27, 2020 | by Iorio Altamirano

When an investor suffers harm, including investment losses, due to misconduct by a financial advisor or broker-dealer, the investor can file a securities arbitration claim against their financial advisor and/or broker-dealer in an effort to be compensated. The case will be presented and defended in an arbitration proceeding to a panel of arbitrators instead of a court of law in front of a judge and jury.

Arbitration is the primary forum for resolving disputes between investors and brokerage firms or financial advisors because the parties have contractually agreed to use arbitration as an alternative dispute resolution process. When an investor opens an account with a broker-dealer, the investor is required to sign an array of account opening documents. These account opening documents regularly include an arbitration clause, which requires that arbitration be used as an alternative to litigation. This requirement is often a contractually binding obligation for both parties. As a result, disputes between investors and financial advisors or brokerage firms are resolved in arbitration as an alternative to court.

The Financial Industry Regulatory Authority (FINRA) is authorized by Congress to regulate the financial services industry and operates the largest arbitration forum for securities disputes. Most securities arbitrations take place using FINRA’s Dispute Resolution Services’ arbitration forum because, as FINRA members, financial advisors and brokerage firms are required to arbitrate customer complaints upon the filing of a claim through FINRA.

UBS Ordered to Pay $90,000 to Yield Enhancement Strategy Customer

Published on: December 23, 2020 | by Iorio Altamirano

On December 22, 2020, a FINRA Dispute Resolution Services arbitration panel in Boca Raton, Florida, ordered UBS Financial Services, Inc. to pay a customer $89,675 in compensatory damages. After considering the pleadings, the testimony and evidence presented at the hearing, the arbitration panel concluded that the UBS Yield Enhancement Strategy (“YES”) was not suitable for the investor, Gerald S. Backman, a retired partner at corporate law firm Weil Gotshal & Manges.

Many UBS customers, including wealthy and sophisticated investors, who invested in UBS’s Yield Enhancement Strategy have filed lawsuits against UBS in the form of FINRA arbitrations to recover financial losses. The customers have claimed that the strategy was not suitable for them and that UBS materially misrepresented and omitted the product’s risks.

Investors who have suffered investment losses due to UBS’s Yield Enhancement Strategy should contact experienced securities arbitration attorneys at Iorio Altamirano LLP for a free and confidential case evaluation. Partner August Iorio, who has been investigating YES for nearly two years, can be reached at august@ia-law.com or toll-free at (855) 430-4010.

Transamerica Financial Advisors, Inc. Sanctioned by FINRA and Ordered to Pay $8.8 Million for Supervisory Violations Related to Variable Annuities, Mutual Funds, and 529 Plans

Published on: December 21, 2020 | by Iorio Altamirano

FINRA has sanctioned Transamerica Financial Advisors, Inc. (“Transamerica Financial”) for its failure to reasonably supervise its financial advisors’ recommendations of three different products – variable annuities, mutual funds, and 529 plans. These recommendations resulted in significant customer harm and financial loss. Transamerica Financial was ordered to pay $4.4 million in restitution to approximately 2,400 affected customers and also fined an additional $4.4 million.

Investors who have received partial restitution from Transamerica Financial through FINRA’s order may still be entitled to additional recovery. A FINRA partial restitution order does not preclude investors from pursuing their own claims to seek restitution or other available remedies.

If you have lost money with Transamerica Financial Advisors, Inc., contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. Iorio Altamirano LLP represents investors with disputes with their financial advisors or brokerage firms, such as Transamerica Financial Advisors, Inc.

Former LPL Financial LLC Financial Advisor, Michael Anthony Tavel, Suspended by FINRA for Selling Away, Making an Unsuitable Recommendation, and Misrepresentation – Indianapolis, IN

Published on: December 18, 2020 | by Iorio Altamirano

FINRA has suspended financial advisor Michael Anthony Tavel (CRD #4862463) from the securities industry for 18 months and fined him $20,000. Michael Tavel was a stockbroker at LPL Financial LLC, in Indianapolis, Indiana, from September 2004 until April 2019. He has also been affiliated with Charter Advisory Corporation and Tavel Insurance & Financial Services, LLC.

If you have lost money with Michael Tavel, contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.

Michael Tavel and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) on December 17, 2020, over allegations related to Mr. Tavel recommending private securities transactions to three investors. One of the transactions involved a senior customer. Mr. Tavel did not have a reasonable basis to believe that the recommendation that the senior invest in the private security was suitable. Mr. Tavel also provided misleading materials to the customers and, after the customer orally complained, improperly attempted to settle the complaint away from the firm.

David T. Phillips Suspended for Nine Months for Future Income Payments, LLC Solicitation – Gilbert, Arizona

Published on: November 18, 2020 | by Iorio Altamirano

FINRA has suspended stockbroker David T. Phillips (CRD #3094195) for nine months from the securities industry and ordered him to pay a $5,000 fine. These sanctions arose from Mr. Phillips’ solicitation of Future Income Payments, LLC. This blog has previously written about Future Income Payments, LLC.

FINRA alleged that between May 2017 and April 2018, David Phillips participated in private securities transactions totaling $876,636, without prior disclosure and approval from his employer at the time, ProEquities, Inc. Specifically, FINRA alleged:

Between May 2017 and April 2018, Mr. Phillips solicited eight investors to purchase $876,363 in securities of Future Income Payments, LLC.

Troy R. Baily Suspended for Recommending Future Income Payments, LLC – Omaha, Nebraska

Published on: November 17, 2020 | by Iorio Altamirano

FINRA has suspended stockbroker Troy R. Baily (CRD #4458930) for six months from the securities industry and ordered him to pay a $5,000 fine. These sanctions arose from Mr. Baily’s solicitation of Future Income Payments, LLC. This blog has previously written about Future Income Payments, LLC.

FINRA alleged that between February and May 2017, Troy Baily participated in private securities transactions totaling $210,000, without prior disclosure and approval from his employer at the time, Sagepoint Financial, Inc. Specifically, FINRA alleged:

Between February and May 2017, Mr. Baily solicited investors to purchase $210,000 in securities of Future Income Payments, LLC.

Lonna R. Dehn Ristvedt Suspended for Soliciting Customers to Buy Future Income Payments, LLC – Fargo, North Dakota

Published on: November 17, 2020 | by Iorio Altamirano

FINRA has suspended stockbroker Lonna Rae Dehn Ristvedt (CRD #2277778) for four months from the securities industry and ordered her to pay a $5,000 fine. These sanctions arose from Ms. Dehn Ristvedt’s solicitation of Future Income Payments, LLC. This blog has previously written about Future Income Payments, LLC.

FINRA alleged that in June 2015, Lonna Rae Dehn Ristvedt participated in private securities transactions totaling $163,320 without prior disclosure and approval from her employer at the time, National Planning Corporation. Specifically, FINRA alleged:

In June 2015, Ms. Dehn Ristvedt solicited two investors to purchase $163,320 in securities of Future Income Payments, LLC.

John Westbrook Suspended for Future Income Payments, LLC Solicitation – Montgomery, Alabama

Published on: November 17, 2020 | by Iorio Altamirano

FINRA has suspended stockbroker John A. Westbrook (CRD #1846059) for five months from the securities industry and ordered him to pay a $5,000 fine. These sanctions arose from Mr. Wesbrook’s solicitation of Future Income Payments, LLC. This blog has previously written about Future Income Payments, LLC.

FINRA alleged that between October 1, 2016, and May 9, 2017, John Westbrook participated in private securities transactions totaling $350,335, without prior disclosure and approval from his employer at the time, Center Street Securities, Inc. Specifically, FINRA alleged:

Between October 1, 2016, and May 9, 2017, Mr. Westbrook solicited three investors to purchase $350,335 in securities of Future Income Payments, LLC.

Coastal Equities, Inc. Censured by FINRA and Ordered to Pay Over $280,000 in Restitution and Interest to Customers – Dublin, Ohio

Published on: November 13, 2020 | by Iorio Altamirano

FINRA has sanctioned Coastal Equities, Inc. for its failure to reasonably supervise a stockbroker who recommended excessive and unsuitable trades in the accounts of customers. Coastal Equities, Inc. was censured and ordered to pay $270,320 in restitution to clients, plus $9,589 in interest.

FINRA alleged that between October 2016 and July 2018, Coastal Equities, Inc. failed to reasonably supervise a financial advisor that recommended excessive and unsuitable trading in accounts of four customers. FINRA also alleged that the financial advisor was making unsuitable recommendations to purchase securities using margin in two of those accounts. According to the allegations, the financial advisor’s supervisor became aware of multiple instances of unsuitable trading but failed to respond reasonably.

Based on public records, it is believed that the financial advisor at issue is Sam Aziz. Mr. Aziz worked at Coastal Equities in the Dublin, Ohio branch from September 2015 through July 2018. In 2019, Mr. Aziz was barred by FINRA from the securities industry. He has also been the subject of numerous customer complaints.

Financial Advisor Lawrence Goldstein BARRED by FINRA – Nevada

Published on: November 11, 2020 | by Iorio Altamirano

FINRA has barred stockbroker Lawrence Goldstein from the securities industry. Lawrence Goldstein was a registered financial advisor with McNally Financial Services Corporation in Sparks, Nevada, from April 2010 until February 28, 2020.

According to public records, Mr. Goldstein refused to cooperate with a FINRA investigation in whether he engaged in unsuitable excessive trading in a customer’s account.

Excessive trading occurs when a financial advisor makes many trades in a customer’s account, not to benefit the customer but to generate commissions for the broker. Excessive trading is unethical and illegal.