CMD Investigating Claims Against Brent Porges and Zachary Bader for Churning, Unsuitability, Unauthorized Trading and Fraud

Securities law firm Carmel, Milazzo & DiChiara LLP (CMD) is investigating claims against brokers Brent Porges and Zachary Bader for churning (excessive trading), making unsuitable recommendations, unauthorized trading and fraud, particularly related to ETFs (exchange traded funds) and ETNs (exchange traded notes).

According to Brent Porges’ FINRA BrokerCheck, he has been the subject of at least five (5) customer complaints, which include allegations of churning, fraud, unauthorized trading, and unsuitability.

Similarly, according to Zachary Bader’s FINRA BrokerCheck, he has been the subject of at least eight (8) customer complaints, which include allegations of churning, fraud, unauthorized trading, and unsuitability.

These acts may have occurred while Mr. Porges and Mr. Bader were registered with the following broker-dealers: Craig Scott Capital, LLC, National Securities Corporation, Newbridge Securities Corporation and Meyers Associates, L.P.  These broker-dealers have an independent duty to supervise Mr. Porges and Mr. Bader, as well as the customer accounts they service.  If the broker-dealers did not properly supervise Brent Porges and/or Zachary Bader, they can be held liable for their acts.

If you or someone you know lost money investing with Brent Porges and/or Zachary Bader you may be entitled to recover your investment losses through FINRA arbitration. CMD accepts cases on a contingency fee basis, which means we only get paid if you get paid.  Your time to file a claim may be limited, so contact us today at (212) 658-0458 or contact@cmdllp.com for a free and confidential case evaluation.

CMD Investigating Claims Over AlphaSector Strategy ETFs

Securities law firm Carmel, Milazzo & DiChiara LLP (“CMD”) is investigating 13 management firms over investments of client money into AlphaSector Exchange Traded Funds (“ETFs”).   The AlphaSector strategy was developed by F-Squared Investments which has since admitted in an enforcement case brought by the United States Securities and Exchange Commission (“SEC”) that its purportedly “real” past performance record was inflated and back-dated.

On August 25, 2016, the SEC announced it has penalized 13 investment management firms for violating the securities laws.  The SEC claimed that the firms marketed and recommended the AlphaSector strategy to their clients based on false and misleading advertising about the past track record.   The SEC claimed that the firms accepted F-Squared’s false statements and failed to conduct their own investigation of the past performance of the strategy.

The investment management firms penalized by the SEC are:

AssetMark

BB&T Securities

Banyan Partners

Congress Wealth Management

Constellation Wealth Advisors

Executive Monetary Management

HT Partners

Hilliard Lyons

Ladenburg Thalmann Asset Management

Prospera Financial Services

Risk Paradigm Group

Schneider Downs Wealth Management Advisors

Shamrock Asset Management

If you or someone you know lost money investing in AlphaSector Exchange Traded Funds (“ETFs”), you may be entitled to recover your investment losses through either litigation or arbitration. CMD accepts cases on a contingency fee basis, which means we only get paid if you get paid.  Your time to file a claim may be limited, so contact us today at (212) 658-0458 or contact@cmdllp.com for a free and confidential case evaluation.

CMD is Investigating Claims Against Richard Martin and G.F. Investment Services, LLC for Recommending Unsuitable ETFs and Failure to Supervise

Securities law firm Carmel, Milazzo & DiChiara LLP (CMD) is investigating claims against Richard Martin and G.F. Investment Services, LLC for unsuitable recommendations and failure to supervise.

In August 2016, FINRA filed a complaint against Richard Martin alleging that he solicited, purchased and recommended that his customers hold non-traditional Exchange Traded Funds (ETFs) in their accounts for lengthy periods of time, despite the enormous risks associated with holding non-traditional ETFs for more than one trading session. The FINRA complaint alleges that as a result, Richard Martin did not have a reasonable basis to believe that the non-traditional ETF products he recommended were suitable for any customer. As part of his investment strategy, Richard Martin focused on one potential risk— namely, his prediction of the impending collapse of the monetary and financial system. In failing to account for any other risks, including the risk that his predictions regarding the collapse of the economy may not come to pass, Richard Martin recommended to virtually all of his customers non-traditional ETFs.  As a consequence of Richard Martin’s unsuitable investment strategy, Richard Martin’s customers sustained significant losses in the approximate amount of $8 million, and he benefited from commissions received in the approximate amount of $55,912. The complaint also alleges that Richard Martin distributed communications to the public about the non-traditional ETFs that failed to provide a sound basis for evaluating the facts, were misleading, and contained exaggerated and unwarranted language, promissory statements and projections of future provisions.

If you or someone you know lost money investing with Richard Martin and/or G.F. Investment Services, LLC, you may be entitled to recover your investment losses through FINRA arbitration.  CMD accepts cases on a contingency fee basis, which means we only get paid if you get paid.  Your time to file a claim may be limited, so contact us today at (212) 658-0458 or contact@cmdllp.com for a free and confidential case evaluation.

 

 

FINRA Fines Oppenheimer Nearly $3,000,000 on Leveraged ETF Violations

 

The Financial Industry Regulatory Authority (FINRA) said Wednesday that it has fined Oppenheimer & Co. Inc. $2.25 million and ordered the firm to pay restitution of more than $716,000 to affected customers for selling leveraged, inverse and inverse-leveraged exchange traded funds (ETFs) to retail customers without reasonable supervision, and for recommending these non-traditional ETFs that were not suitable.

Oppenheimer failed to enforce the policies, its reps continued to solicit retail customers to purchase non-traditional ETFs and continued to execute unsolicited non-traditional ETF transactions even though the customers did not meet Oppenheimer’s stated criteria, FINRA states.

From August 2009 through September 2013, more than 760 Oppenheimer representatives executed more than 30,000 non-traditional ETF transactions totaling approximately $1.7 billion for customers.

FINRA found that Oppenheimer did not establish an adequate supervisory system to monitor the holding periods for non-traditional ETFs. And that the firm “failed to employ any surveillance or exception reports to effectively monitor the holding periods for non-traditional ETFs, so certain retail customers held non-traditional ETFs in their accounts for weeks, months and sometimes years, resulting in substantial losses.”

FINRA also found that Oppenheimer failed to conduct adequate due diligence regarding the risks and features of non-traditional ETFs and, as a result, did not have a reasonable basis to recommend these ETFs to retail customers. Similarly, Oppenheimer reps solicited and effected non-traditional ETF purchases that were unsuitable for specific customers. For example:

  • An 89-year conservative customer with annual income of $50,000 held 96 solicited non-traditional ETF positions for an average of 32 days (and for up to 470 days), resulting in a net loss of $51,847.
  • A 91-year conservative customer with an annual income of $30,000 held 56 solicited non-traditional ETF positions for an average of 48 days (and for up to 706 days), resulting in a net loss of $11,161.
  • A 67-year conservative customer with an annual income of $40,000 held two solicited non-traditional ETF positions in her account for 729 days, resulting in a net loss of $2,746.

If you or someone you know lost money investing in leveraged exchange traded funds, ETFs, or with Oppenheimer, you may be entitled to recover your investment losses through FINRA arbitration. CMD accepts cases on a contingency fee basis, which means we only get paid if you get paid.  Your time to file a claim may be limited, so contact us today at (212) 658-0458 or contact@cmdllp.com for a free and confidential case evaluation.

CMD Investigating Claims Against Caldwell International Securities Corporation For Excessive Commissions, Fees and Unauthorized Trading

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Carmel, Milazzo & DiChiara LLP (CMD) is investigating potential claims against Caldwell International Securities Corporation, and securities brokers Greg Allen Caldwell, Alex Evan Etter, Alain J. Florestan, Lennie Simmons Freiman, Paul Joseph Jacobs, Richard Andrew Lee, Lucas Dylan Lichtman and Richard Lim.

FINRA’s Department of Enforcement filed a complaint alleging that  alleging that Caldwell International Securities Corporation, by and through one or more of its registered representatives and principals, put profits before customers, growth before compliance and subterfuge before transparency. The complaint alleges that the Caldwell International Securities Corporation’s culture of non-compliance led to serious sales practice, supervisory and reporting violations at its home office and multiple branches. Alex Evan Etter, Alain J. Florestan, Richard Andrew Lee, Lucas Dylan Lichtman and Richard Lim made unsuitable recommendations of an active trading investment strategy to their customers despite the fact these representatives failed to understand the risks of the investment strategy being recommended, or the impact the staggering commissions and fees generated by this active trading investment strategy would have on their customers’ accounts. These representatives had no reasonable basis to recommend such a strategy to their customers. As a result of the recommendation of an unsuitable active investment trading strategy, customer accounts suffered more than $1.1 million in realized trading losses while paying over $1 million in commissions and fees.

The complaint alleged that Caldwell International Securities Corporation and its brokers are liable for the unsuitable recommendations of an active trading investment strategy made by Etter, Florestan, Lee, Lichtman and Lim under the doctrine of respondeat superior because each representative was an agent of the firm acting within the scope of his duties when he engaged in this misconduct. Caldwell International Securities Corporation, acting by and through its registered representatives, made unsuitable recommendations involving inverse and/or leveraged Exchange Traded Funds (ETFs) without a reasonable basis for believing these investments were suitable for their customers.

The complaint also alleges that the Caldwell International Securities Corporation, Caldwell, Freiman and Jacobs failed to establish and maintain a system to supervise the activities alleged that was reasonably designed to achieve compliance with applicable securities laws and regulations and NASD/FINRA rules. Caldwell International Securities Corporation, Caldwell, Freiman and Jacobs failed to monitor for, detect and, when detected, investigate multiple instances of potential misconduct by the firm’s brokers involving unsuitable active trading investment strategies, unsuitable ETFs, discretionary trading without written authorization and excessive trading/churning in multiple customer accounts across multiple branches of the firm. In addition, the firm, Caldwell, Freiman and Jacobs failed to implement a reasonable supervisory system to adequately review trades for unsuitable recommendations, such as ETFs, and to adequately monitor whether the firm’s representatives understood the risks and benefits of the active trading investment strategy they were recommending, nor did the firm monitor whether the representatives had done any due diligence on the recommended active trading investment strategy. This grossly inadequate supervisory system resulted in many firm customers suffering significant losses and paying staggering commissions and fees. Caldwell International Securities Corporation, Caldwell, and Freiman failed to establish and maintain a system to supervise the firm’s activities that was reasonably designed to achieve compliance with applicable securities laws and regulations and NASD/FINRA rules and/or the firm’s written supervisory procedures in multiple other ways. Caldwell International Securities Corporation, Caldwell, and Freiman failed to place representatives on heightened supervision, review all electronic correspondence to and from customers, identify and report customer complaints received, and apply right of reinvestment/right of reinstatement fee waivers, resulting in overcharges of $107,367.08 to customers’ accounts.  Moreover, the complaint alleges that the firm willfully violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-10 by charging customers misleading and/or discriminatory miscellaneous fees in several transactions.

If you or someone you know has a complaint or lost money investing with Caldwell International Securities Corporation, and/or securities brokers Greg Allen Caldwell, Alex Evan Etter, Alain J. Florestan, Lennie Simmons Freiman, Paul Joseph Jacobs, Richard Andrew Lee, Lucas Dylan Lichtman and Richard Lim, you may be able to recover your losses through securities arbitration. The attorneys at CMD are experienced in representing investors in fraud, suitability, unauthorized trading, excessive commissions, excessive fees, ETFs and failure to supervise actions against brokers and brokerage firms. CMD accepts cases on a contingency fee basis, which means we only get paid if you get paid. Your time to file a claim may be limited, so contact us today at (212) 658-0458 or contact@cmdllp.com for a free and confidential case evaluation.