David Gott suspended for outside business activities.

David Gott, a registered representative from Tipton, Iowa, formerly with Ausdal Financial Partners, Inc., was suspended from FINRA membership as a result of an investigation into his selling of private investment equities to customers without obtaining his firm’s approval, which is a violation of FINRA rules. Gott entered into an acceptance waiver and consent agreement with FINRA in which he neither admitted nor denied the findings. He was suspended for six months and fined $5,000.

In July 2017, Gott agreed to the suspension and FINRA published its findings. The report said Gott sold more than $546,000 of private capital to clients and did not notify his firm. FINRA found that Gott’s firm also profited from selling these investments. However, Ausdal Financial Partners, Inc. does not allow their brokers to take part in these types of transactions without their written approval. Gott did not follow the correct guidelines in this process,and compromised his position with the firm.

Craig Langweiler accused of excessive trading.

Craig Langweiler, a registered representative from Philadelphia, Pennsylvania, formerly with Windsor Street Capital, is facing a FINRA complaint as a result of an investigation into a complaint regarding his excessive trading in a customer’s account. FINRA is currently looking into this complaint and has begun a formal investigation.

In July 2017, Craig Langweiler was the focus of a complaint that claimed that he had traded a customer’s account unreasonably.   He allegedly traded 257 times, and lost as much as 25 percent of the customer’s account value. The complaint alleges that Langweiler made over $27,000 from this excessive trading, disregarding the obviously extreme cost cost-to-equity ratio in the account.

Hilliard Lyons ordered to pay $560,000 FINRA arbitration award

In September, 2017, a FINRA arbitrator panel sitting in St. Louis, Missouri issued a $550,000 binding arbitration award against brokerage firm Hilliard Lyons, a FINRA registered broker dealer.  The award included $100,000 in punitive damages pursuant to State Farm v. Campbell, a 2003 United States Supreme Court case.  The panel also added nearly $20,000 in recoverable costs.

The underlying matter involved an investment in Breitburn Energy, an oil and gas operator that filed for bankruptcy in 2016.  The customers brought claims for suitability, alleging that the account was over concentrated in Breitburn shares, which resulted in substantial losses.  FINRA member firms are obligated to properly diversify customer accounts, and to make recommendations which are consistent with a client’s risk tolerances and investment objectives.

Trident Partners hit with fine over complex steepeners trading.

In July, 2017, the Financial Industry Regulatory Authority (“FINRA”) announced that Trident Partners Ltd. of Woodbury, NY, submitted an acceptance, waiver and consent letter regarding its failure to supervise its reps in their selling of steepeners. The firm was censured and fined $50,000.

Steepeners are complex products that entail significant risk.  FINRA has issues several notices to members on steepeners, which are frequently used to “juice” returns on mundane, low risk products like certificates of deposit.

Conestoga Life Settlements Services, Conestoga International, Conestoga Trust and Conestoga Member Services were all named as related entities in a Wisconsin Department of Financial Institutions Division of Securities Cease and Desist Order involving insurance agents Jace  McDonald, Peter Viater and Derek Anderson.

The Order dated May 15, 2015 made findings of fact that  Conestoga Life Settlments had IC agreements with Jace  McDonald, Peter Viater and Derek Anderson whereby they were authorized to sell fractional interests in life insurance policies to Wisconsin residents.

Among the findings were that Jace McDonald put on seminars where he made misrepresentations and misleading statements concerning the Conestoga Life Settlements by comparing them to bank CDs and other statements implying the investors were guaranteed a return on their investments.  These statements were contrary to the risk disclosures in the PPM, which stated that the investments were speculative in nature and did not provide any guarantee.

Mercury Securities hit with censure and fine

In July 2017, the Financial Industry Regulatory Authority (“FINRA”) announced that Mercury Securities of San Rafael, CA submitted an acceptance, waiver and consent letter regarding its failure to effectively approve and document private securities transactions made by their representatives. The firm was censured and fined $5,000.

FINRA’s allegations against Mercury Securities concerned the firm’s authorization of private securities transactions made by three of its brokers. They were compensated by outside businesses through these private transactions despite their Written Supervisory Procedures clearly stating that the representatives would need proper approval and written documentation of their outside business dealings. The AWC stated that the firm did not follow the correct protocol and failed to record adequate information about the private deals. It was also discovered that the firm did not record the transactions in their files and allowed the business dealings with their representatives to go unsupervised.

Sean Sladek pleads guilty in Las Vegas USDC

The securities attorneys at The Law Office of David Liebrader have opened an investigation into the investment related conduct of Sean Sladek, who plead guilty on October 4, 2017 to defrauding investors as part of a scheme to support his gambling lifestyle in Las Vegas.  Despite not having any securities licenses, Sladek held himself out as a successful securities trader, and told prospective investors that he could generate substantial returns.

FINRA hosts a database that the public can access to check the credentials of their financial advisors.  The website, also known as broker check does not contains a listing for Sean Sladek, which implies that he was never licensed either as a broker dealer, a sales representative or as a registered investment advisor.

Terry Bahgat who was barred by FINRA in March, 2017, has now been sued by the SEC.

In March, 2017 FINRA barred former Cambridge Investment Research and Gradient Securities broker Terry Bahgat, aka Tarek Bahgat for refusing to cooperate with a FINRA investigation.  On September 29, 2017 the SEC filed fraud charges against Terry Bahgat alleging that he siphoned money out of seven elderly client accounts and directed the money to a company he controlled before fleeing to Egypt in 2016.

Bahgat’s FINRA ban was for avoiding his obligations to provide information and respond to FINRA regulators when conducting investigations.

Virtual Communications Corporation- Private Note Offering Investigation

The securities attorneys at The Law Office of David Liebrader have opened an investigation into a private note offering by Virtual Communications Corporation, a Las Vegas business run by Ronald J Robinson.

Beginning in 2012 Virtual Communications Corporation commenced a private offering of securities via a $1,000,000 promissory note offering.  According to a power point presentation created by Virtual Communications Corporation the notes were to be guaranteed by Ronald J Robinson, and the notes bore Mr. Robinson’s signature as guarantor.

Sonya Camarco charged with Fraud by SEC

SEC alleges over $400,000 in client funds used to pay credit card bills

The securities attorneys at The Law Office of David Liebrader have opened an investigation into the securities related conduct of Sonya Camarco (aka Sonya Fatchett), a licensed FINRA registered representative from Colorado Springs, Colorado, formerly affiliated with LPL Financial Services.