Articles Posted in Disciplinary Actions

In November, 2014, the Financial Industry Regulatory Authority (“FINRA”) announced that Bart Ellis of Chicago, IL and formerly associated with Ameriprise Financial had been barred from FINRA membership for making unauthorized trades in his customer’s account.

Ellis had been named in a FINRA complaint alleging that he made unauthorized trades in a  client’s account without first discussing the trades with her.

The complaint alleged that Ellis created a false telephone log of entries in an effort to create the appearance that he had discussed the transactions with his client, and that she had authorized the trades. In fact, the hearing panel found that these entries were false, and that the customer did not have any telephone conversations with Ellis on any of the posted dates.

In February, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that David Escarcega of Phoenix, AZ, and associated with Center Street Securities had been barred for his role in selling GWG secured debentures.

On February 29, 2016, a panel of FINRA’s Office of Hearing Officers issued a decision ordering that David Escarcega be barred from association with any FINRA member firm.

The hearing panel found that the GWG Debentures were illiquid, speculative investments involving a high degree of risk, and not suitable for investors that had any need for liquidity before the maturity date.

Unregistered financial advisor Reza Baharimehr (aka Mohamed Baharimehr) of Los Angeles, CA and Las Vegas, NV was hit with three judgments in Clark County NV District court for his role in a scam targeting elderly people. The Law office of David Liebrader represented the Plaintiffs in all three cases.

Reza Baharimehr who holds no securities licenses, sold shares in a company called Velcor LLC, a company that purportedly invested in a cocoa planation in Ecuador, as well as life settlement contracts.

Baharimehr targeted an elderly, terminally ill man who was in hospice, for an investment into the Velcor program. After the man died, his heirs sued to recover the losses. Baharimehr agreed to pay the heirs the full amount of the loss beginning in March 2015, but defaulted on his obligations, forcing the heirs back into court to obtain a judgment. In July, 2015 the court entered judgment against Baharimehr and his business partner John Schemetti for $238,000.

The securities attorneys at The Law Office of David Liebrader have opened an investigation into the securities related conduct of IBN Financial Services, a FINRA registered broker dealer that was sanctioned by the Pennsylvania Department of Banking and Securities in July 2014.

In July, 2014 IBN Financial Services entered into a consent agreement and order with the state of Pennsylvania pertaining to allegations that the firm operated in violation of the Pennsylvania Securities Act in regards to the way in which they supervised a registered representative employed with their firm.

The investigation arose from an examination conducted by the state in July 2013, which disclosed that a broker who was supposed to be on “heightened supervision” was not being supervised according to the requirements of the written guidelines.

The securities attorneys at The Law Office of David Liebrader have opened an investigation into the securities related conduct of Steven Wyatt, a FINRA registered representative formerly associated with Morgan Stanley in Ridgeland, Mississippi.

In October 2015 Steven Wyatt disclosed that he was the subject of an investigation by the Mississippi Secretary of State into whether or not he had violated the Mississippi Securities Laws pertaining to conduct that occurred between 2007 and 2012. This investigation follows on the heels of a FINRA investigation into Steven Wyatt’s sales of securities of a company known as Morris Innovative. Wyatt entered into an acceptance waiver and consent (“AWC”) decree with FINRA whereby for purposes of the proceeding he consented to the entry of findings that he engaged in conduct that was a violation of FINRA rules pertaining to his recommendations and purchases of Morris Innovative securities. As a result of the AWC, Wyatt was fined $12,500 and suspended from FINRA membership association for a period of four months.

FINRA maintains a database that the public can access to check the credentials of their financial advisors. The website, also known as broker check contains a listing for Steven Wyatt, who, in addition to the FINRA and MS Secretary of State investigations, has been the subject of eight customer complaints, including those for churning, and making unsuitable investments.

Richard Isgrig, a registered representative formerly with Northwestern Mutual of Cincinnati, OH was suspended from FINRA membership for violations of Rule 9552

FINRA Rule 9552. Failure to Provide Information or Keep Information Current

provides if a member, person associated with a member or person subject to FINRA’s jurisdiction fails to provide any information, report, material, data, or testimony requested or required to be filed pursuant to the FINRA By-Laws or FINRA rules, or fails to keep its membership application or supporting documents current, FINRA staff may provide written notice to such member or person specifying the nature of the failure and stating that the failure to take corrective action within 21 days after service of the notice will result in suspension of membership or of association of the person with any member. In January, 2016 Richard Isgrig was suspended from FINRA membership for violating Rule 9552.

Sam Collaku, a registered representative formerly with National Securities in Edison, NJ was suspended from FINRA membership for violations of Rule 9552

FINRA Rule 9552. Failure to Provide Information or Keep Information Current

provides if a member, person associated with a member or person subject to FINRA’s jurisdiction fails to provide any information, report, material, data, or testimony requested or required to be filed pursuant to the FINRA By-Laws or FINRA rules, or fails to keep its membership application or supporting documents current, FINRA staff may provide written notice to such member or person specifying the nature of the failure and stating that the failure to take corrective action within 21 days after service of the notice will result in suspension of membership or of association of the person with any member. In January, 2016 Sam Collaku was suspended from FINRA membership for violating Rule 9552.

Ray Aleksey, a registered representative formerly with Wells Fargo in Brooklyn, NY was suspended from FINRA membership for violations of Rule 9552

FINRA Rule 9552. Failure to Provide Information or Keep Information Current

provides if a member, person associated with a member or person subject to FINRA’s jurisdiction fails to provide any information, report, material, data, or testimony requested or required to be filed pursuant to the FINRA By-Laws or FINRA rules, or fails to keep its membership application or supporting documents current, FINRA staff may provide written notice to such member or person specifying the nature of the failure and stating that the failure to take corrective action within 21 days after service of the notice will result in suspension of membership or of association of the person with any member. In January, 2016 Ray Aleksey was suspended from FINRA membership for violating Rule 9552.

On August 25, 2015 the Securities and Exchange announced that James R. Glover, a former registered representative with Signator Investors, Inc. submitted an Offer of Settlement which the SEC accepted. Solely for the purpose of the SEC’s proceedings and without admitting or denying the findings herein, James R. Glover agreed to the findings that he engaged in a fraudulent offering scheme and investment advisory fraud.

The complaint alleged that from approximately January 1999 through May 2012, Glover raised over $13,000,000 from over 100 customers by soliciting them to invest in Colonial Tidewater. The complaint alleged that Glover solicited investments in Colonial Tidewater through materially false and misleading statements regarding the financial health of Colonial Tidewater, the expected returns and risk of investing, and his personal financial stake in the unregistered offerings.

The complaint further alleged that Glover misappropriated substantial sums from investors.

On  September 8, 2015 the SEC barred Marc Mandel of Boulder, CO who called himself  the “Wizard of Wall Street” from selling stocks, and ordered him to pay fines to the Commission.

Mandel, CEO of Wall Street Radio Inc. and host of the radio show “Winning on Wall Street” accepted the cease-and-desist order without admitting or denying the findings.

According to the SEC’s AWC, Mandel partnered with Ditto Holdings Inc. the owner of FINRA broker dealer Ditto Trade, in order to introduce his newsletter subscribers to Ditto Trades’ securities offerings.