In November, 2015, the Financial Industry Regulatory Authority (“FINRA”) announced that registered representative Todd Shanholtzer of Las Vegas, Nevada and formerly associated with Park Avenue Securities submitted a letter of Acceptance, Waiver and Consent in which he was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in any capacity for six months.
Without admitting or denying the findings, Todd Shanholtzer consented to the sanctions and to the entry of findings that he mishandled funds from a brokerage customer by mistakenly directing $58,622 of the customer’s funds into the wrong account, which caused the customer to incur a significant tax liability. The findings stated that Shanholtzer failed to deposit the funds into a qualified tax-deferred account, as the customer and the customer’s wife instructed him, and instead the funds were mistakenly deposited into the customer’s and his wife’s joint brokerage account. As a result, the $58,622 was deemed a taxable distribution and an early withdrawal subject to state and federal tax. When the customer complained to Shanholtzer about this error and other prior transactions, Shanholtzer settled the complaint away from his member firm by making a total of $50,000 in payments directly to the customer.
Todd Shanholtzer asked the customer and his wife not to mention their complaints to anyone, including the firm, and to not use the word “mistake” in any written communications to him. Shanholtzer did not inform his firm of the customer’s complaints or of the payments to the customer.
The findings also stated that Todd Shanholtzer provided a $40,000 personal cash loan to a corporate brokerage customer without notifying his firm or receiving its approval. The firm’s written policies prohibited Shanholtzer from engaging in this lending arrangement.
The suspension is in effect from October 5, 2015, through April 4, 2016.
Todd Shanholtzer ’s registration and disciplinary history
In order to lawfully sell investments to the public, one must either be registered or exempt from registration.
Todd Shanholtzer was registered with:
According to FINRA’s CRD disclosure report, Todd Shanholtzer has been the subject of four customer complaints and one regulatory investigation.
The Law Office of David Liebrader practices exclusively in the field of investment loss recovery. For the past 23 years, we have dedicated our law practice to assisting investors who have been victims of investment fraud via fraudulent and unsuitable investment transactions. During that time we have recovered money for over one thousand individuals, pension plans, trusts and companies. The recoveries we have obtained via judgments, awards and settlements on behalf of our clients exceed $40,000,000.
When investors contact our firm they can expect prompt attention, and a detailed analysis of their issues. Typical claims that we are asked to review involve “unsuitability (where a financial advisor makes investment recommendations that are inconsistent with a customer’s investment objectives), claims for “churning” (where a broker enters into an excessive number of trades for the purpose of generating commissions), claims involving illiquid investments such as private placements (I.e., real estate investment trusts, limited partnerships, equipment leasing and oil and gas drilling programs) as well as claims for violations of state securities laws, which often provide investors remedies like attorney’s fees and interest, if they are successful on the claim.
Since a Supreme Court ruling in the 1980s, most investment related disputes between brokerage firms and their customers have been filed in an arbitration forum hosted by FINRA Dispute Resolution. FINRA, along with the SEC, serves as a securities industry “watchdog” and regulator. Most brokerage firms require their clients to sign binding arbitration agreements, mandating that any disputes between them be arbitrated at FINRA.
Investors pursuing claims at FINRA typically advance claims related to suitability. FINRA rules require that all registered representatives make suitable investment recommendations to their clients. Other claims are based on negligence or breach of fiduciary duty, while another category includes claims based on misrepresentations and fraud. Most claims filed with FINRA are resolved within 15 months, and oftentimes, the cases are resolved via settlement or mediation in under a year.
FINRA’s rules require that all investment recommendations made by licensed financial advisors be suitable in light of a customer’s needs, objectives and risk tolerance. In addition, all registered representatives are required to be properly supervised, with periodic inspections and reviews by qualified supervisors, whose job it is to vigorously investigate suspicions of wrongdoing (red flags).
If you suspect that you have been the victim of investment fraud, or had a financial advisor recommend unsuitable investments to you, call us today for a free, confidential consultation at (702) 380-3131.