CMD Investigating Claims Against Legend Securities, Inc., Hank (Henry) Werner and Michael Stanton for Excessive Trading, Churning and Failure to Supervise

Securities law firm Carmel, Milazzo & DiChiara LLP (CMD) is investigating claims against Legend Securities, Inc., Henry Werner and Michael Stanton for excessive trading, churning and failure to supervise.

FINRA has filed a complaint against Legend Securities, Inc., Michael Salvatore Stanton and Henry (Hank) Werner alleging that Mr. Werner churned and excessively traded each of a customer’s three accounts, charging more than $243,000 in commissions and fees, and causing the customer net losses of nearly $184,000, within just over three years. The complaint alleges that Mr. Werner willfully violated Section 10(b) and Rule 10b-5 of the Securities Exchange Act, and FINRA Rule 2020.  The complaint also alleges that Mr. Werner recommended an unsuitable variable annuity exchange to the customer, without having a reasonable basis to believe that the transaction was suitable.  The complaint further alleges that Legend failed to enforce its written supervisory procedures (WSPs), to prevent Mr. Werner from churning and excessively trading the customer’s brokerage accounts. Legend and Mr. Stanton failed to adequately investigate red flags demonstrating that Mr. Werner was churning the customer’s accounts. Legend and Mr. Stanton also failed to adequately investigate, or simply ignored, that Mr. Werner engaged in aggressive, “in-and-out” trading, repeatedly purchasing securities and then selling them after relatively short holding periods to purchase other securities, for no apparent reason.  Such in-and-out trading is a hallmark of excessive trading and churning.

If you or someone you know lost money investing with Henry (Hank) Werner and/or Legend Securities, 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 Broker John Kakonikos for Churning, Excessive Trading, Unsuitable Recommendations and Unauthorized Trading

Securities law firm Carmel, Milazzo & DiChiara LLP (CMD) is investigating claims against stock broker John Kakonikos for churning, excessive trading, unauthorized trading and unsuitable recommendations. According to Mr. Kakonikos’ FINRA BrokerCheck, he has been the subject of at least five (5) customer complaints while registered with Southeast Investments and Caldwell International Securities.

According to FINRA, Mr. Kakonikos engaged in excessive and unsuitable trading in a customer’s account, causing realized trading losses of $72,524.53, while generating $41,617.56 in fees and commissions. The findings stated that Mr. Kakonikos recommended and executed securities transactions in the customer’s account, over which he had de facto control.  Considering the customer’s financial situation, lack of investment experience and needs, and requiring a minimum return of nearly 50 percent just to break even, Mr. Kakonikos’ trading in the customer’s account was excessive and quantitatively unsuitable for the customer.  Overall, the account generated $53,168.22 in cumulative costs, including margin interest.  The findings also stated that Mr. Kakonikos effected purchase and sale securities transactions in the customer’s account without her authorization, knowledge or consent.

If you or someone you know lost money investing with John Kakonikos, 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 Richard Gomez for Unsuitable Recommendations and Failure to Supervise

Securities law firm Carmel, Milazzo & DiChiara LLP (CMD) is investigating claims against securities broker Richard Gomez and brokerage firms Woodstock Financial Group Inc. and Rockwell Global Capital, LLC for unsuitable recommendations and failure to supervise.  According to Mr. Gomez’s FINRA BrokerCheck, he has been the subject of at least three (3) customer complaints.

In September 2016, Gomez was barred from association with any FINRA member in any capacity.  The sanction was based on findings that Gomez recommended the securities of two companies without a reasonable basis to conclude that the investments were suitable for any customer.  The findings stated that Gomez did virtually no investigation beforehand and failed to follow up on numerous red flags presented to him.

Most significantly, while one company and its entities claimed to hold hundreds of millions of dollars in pre-initial public offering stock, Gomez never independently verified those claims. When he asked questions, nobody at the company, the issuers of the stock, or the private equity firms through which the company purportedly had acquired its stock, would talk to him. In the end, Gomez based his diligence on the company almost exclusively on what was told to him by the company’s founder and one of its employees, or on information gathered from a handful of websites affiliated with the company’s founder. Gomez admits that he did not even search the SEC’s website during his investigation of the company. Gomez’s investigation of the other company was similarly limited since he primarily relied on information provided to him by the company’s founder and other registered representatives associated with other FINRA-member firms.

When Gomez questioned one of the representatives about the resignation of the company’s CEO, he took at face value the explanation that the CEO had resigned because he believed the company might be bought before it went public, and that there was nothing more for the CEO to do. Gomez was also unable to confirm what he had been told about a FINRA member firm being the second-largest shareholder in the company, and failed to press one of the registered representatives for answers to his questions regarding the firm’s shareholder status.

If you or someone you know lost money investing with Richard Gomez, Woodstock Financial Group Inc. and/or Rockwell Global Capital, 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.

CMD Investigating Claims Against David Charles Cannata and Craig Scott Capital, LLC for Churning and Unsuitable Recommendations

Securities law firm Carmel, Milazzo & DiChiara LLP (CMD) is investigating claims against securities broker David Charles Cannata and brokerage firm Craig Scott Capital, LLC for unsuitable recommendations, excessive trading (a/k/a churning) and failure to supervise.  According to Mr. Cannata’s FINRA BrokerCheck he has been the subject of at least eight (8) customer complaints.

In September 2016, David Charles Cannata was barred from association with any FINRA member in any capacity and ordered to pay $1,566,298.14, plus interest, in restitution to customers.  The sanctions were based on findings that Cannata made unsuitable recommendation and excessively traded in customer accounts at his member firm.  The findings stated that Cannata had de facto control over the customer accounts and made all investment decisions.  Cannata’s trading strategy in each client’s account generated extraordinary levels of activity inconsistent with the clients’ objectives and financial circumstances.  The clients sustained losses ranging from $114,171 to $1,263,527 as a result of Cannata’s trading strategy.

The findings also stated that Cannata churned his customers’ accounts.  Cannata knowingly or recklessly disregarded his customers’ interests by seeking to maximize his own compensation. Both the high turnover rate and cost-to-equity ratio establish that Cannata recommended and executed trades in the customers’ accounts for his own benefit, without regard for his customers’ resources or best interests. As a result of his conduct, Cannata violated Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 and FINRA Rule 2020.

If you or someone you know lost money investing with David Charles Cannata and/or Craig Scott Capital, 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.

CMD Investigating Claims Against Ridgeway & Conger, Inc., And Securities Brokers Kenley Brisard, Philip Brisard and Leigh McCobb Garber

Carmel, Milazzo & DiChiara LLP (CMD) is investigating potential claims against Ridgeway & Conger, Inc., and securities brokers Kenley Brisard, Philip Brisard and Leigh McCobb Garber.

FINRA’s Department of Enforcement filed a complaint alleging that Ridgeway & Conger, Inc., Kenley Brisard and Philip Brisard sold an unregistered security that consisted of interest-only strips from loans issued by the United States Small Business Association (SBA) meant only for Qualified Institutional Buyers (QIBs) to individual retail investors at undisclosed markups using general solicitation emails that fraudulently misrepresented the product and their role in its development.

The complaint alleges that Kenley Brisard and Philip Brisard willfully violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder when they engaged in fraudulent misrepresentations and omissions of material fact in connection with customer purchases of securities with respect to the emails they sent to customers.  The misrepresentations and omissions in Kenley Brisards’ statements to customers were material because a reasonable investor would consider them important in making investment decisions, because they significantly altered the total mix of information made available to the solicited customers, and because they denied the investors the opportunity to make an informed decision about whether to invest in the SBA interest-only security. The complaint also alleges that Kenley Brisard and Philip Brisard, in connection with offers of the SBA interest-only security, sent false and fraudulent emails containing similar misrepresentations and omissions to additional customers and prospects, and failed to comply with Section 17(a)(1) of the Securities Act of 1933.   FINRA alleges that Kenley Brisard and Philip Brisard knowingly, willfully and/or recklessly ignored and/or contradicted the PPM for the SBA interest-only security to which they had ready access, and they made statements that had no underlying factual basis.  Kenley Brisard and Philip Brisard failed to reasonably and/or independently investigate and understand the SBA interest-only security before they recommended the investment to customers and failed to reasonably consider the information contained in the PPM.

The complaint further alleges that Ridgeway & Conger, Inc. charged excessive markups on customers’ unregistered securities transactions. In each of the transactions, the firm purchased the SBA interest-only security for its own account from a placement agent, and shortly thereafter sold it to individual retail customers. In each of these transactions, the firm already had the order from the customer in hand before it purchased the security from the placement agent. In each instance Leigh McCobb Garber, on the firm’s behalf, signed the trade tickets approving the markup. In total, the firm charged approximately $112,408 in markups for a security which the firm purchased for a total of about $548,722 and sold to customers for a total of about $661,131. Nothing in the nature of the Ridgeway & Conger, Inc.’s or Kenly Brisard or Philip Brisard’s business or the identified purchases of the SBA interest-only security justified the size of the markups on the purchases by the firm’s customers.  In addition, the complaint alleges that the firm fraudulently failed to disclose the excessive markups on trade confirmations or otherwise to purchasers of the SBA interest-only security, thereby willfully violated Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 thereunder, and violated FINRA Rule 2020. Ridgeway & Conger, Inc.’s misrepresentations and omissions were material because a reasonable investor would consider them important in making investment decisions.

Furthermore, the complaint alleges that Ridgeway & Conger, Inc. and Leigh McCobb Garber failed to establish and maintain proper supervisory systems and procedures for the firm’s sales of Securities Act of 1933 Rule 144A securities, markup and Section 5 activities related to the sales of the interest-only unregistered security.

If you or someone you know has a complaint or lost money investing with Ridgeway & Conger, Inc., and/or securities brokers Kenley Brisard, Philip Brisard and Leigh McCobb Garber, you may be able to recover your losses through securities arbitration. The attorneys at CMD are experienced in representing investors in fraud, suitability, private placements, 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.

CMD Investigating Claims Against Securities Broker Edward Beyn

Carmel, Milazzo & DiChiara LLP (CMD) is investigating potential claims against securities broker Edward Beyn, formerly registered with Craig Scott Capital and now with Rothschild Lieberman.

On March 16, 2016, FINRA’s Department of Enforcement filed a complaint alleging that Mr. Beyn churned nine accounts of six customers, all over the age of 60, from March 2012 through May 2015, profiting as he violated securities laws.  According to the complaint, Mr. Beyn’s short-term trading strategy involved quickly turning over the accounts to generate “outsize commissions for himself” and Craig Scott Capital.

If you or someone you know has a complaint or lost money investing with Edward Beyn, you may be able to recover your losses through securities arbitration. The attorneys at CMD are experienced in representing investors in churning, suitability, fraud 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 for a free and confidential case evaluation.

Timothy S. Dembski and Walter F. Grenda Barred For Fraud

Carmel, Milazzo & DiChiara LLP (CMD) is investigating potential claims against securities brokers Timothy S. Dembski and Walter F. Grenda.  FINRA has announced that Messrs. Dembski and Grenda received a lifetime ban from the securities industry for lying about a hedge fund they were selling.

According to FINRA, Timothy S. Dembski and Walter F. Grenda told potential investors that the hedge fund in question, the Prestige Wealth Management Fund LP, was a growth fund that in reality lost 80 percent of its value in the last month it traded.

At the time of the fraud, Dembski and Grenda were employed with Mid Atlantic Capital Corporation in Buffalo, New York. FINRA’s investigation found that Dembski and Grenda made material misrepresentations and omissions to lead investors to believe the hedge fund was based on a computer algorithm that automatically included risk protections and stop-losses to limit losses in the fund.  According to FINRA,  the fund was a highly speculative investment, the fund’s chief investment officer had complete control over the investments made, and it was not obligated to follow the computer algorithm.

Dembski and Grenda distributed marketing information saying the chief investment officer worked in the financial services industry for more than 14 years, co-managed a portfolio of more than $500 million and was a vice president of investments for a New York based investment company, all of which were false.

If you or someone you know has a complaint or been defrauded by Timothy S. Dembski, Walter F. Grenda and/or Mid Atlantic Capital Corporation, you may be able to recover your losses through securities arbitration. The attorneys at CMD are experienced in representing investors in fraud 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 for a free and confidential case evaluation.