LPL Supervisor Michael S. Lincoln’s Head in Ground while San Diego Financial Advisor Solicited Investments in Speculative Hawaii Real Estate from LPL Customers

Posted on Nov 18th, 2016

Mr. Michael Lincoln is probably regretting his decision to avoid reporting the outside business activity (OBA) of a financial advisor he was supposed to be supervising, according to settlement documents he signed with the Financial Industry Regulatory Authority (FINRA).

While at LPL Financial, Mr. Lincoln supervised a financial advisor who developed a real estate property in Hawaii. Mr. Lincoln even invested $850,000 of his own money in his subordinate’s business venture.

Merrill Lynch Financial Advisor Matthew J. Gorelik Lied About Having a College Degree?

Posted on Nov 18th, 2016

According to settlement papers signed with the Financial Industry Regulatory Authority (FINRA), Mr. Gorelik, a financial advisor with a long career, has been misrepresenting his educational background.

Mr. Matthew J. Gorelik told his brokerage firm, Merrill Lynch, and others that he graduated from a university in Massachusetts. While the settlement papers do not state which university, we all know that the most prestigious university in Massachusetts is Harvard.

The truth is that Mr. Gorelik has never graduated from any university, much less Harvard.

Sigma Financial Busted for Overcharging Customers on Unit Investment Trusts (UITs)

Posted on Nov 13th, 2016

Sigma Financial joined a long line of brokerage firms that have gotten in trouble for overcharging customers recently, settling allegations brought by the Financial Industry Regulatory Authority (FINRA) for approximately $200,000 in fines and restitution.

According to Sigma’s settlement agreement with FINRA, Sigma failed to apply sales charge discounts to customers who purchased Unit Investment Trusts (UITs). There are a variety of investments, like UITs, which offer volume discounts to investors. Failure to pass these discounts on to investors is an increasingly common problem in the brokerage industry.

ProEquities Financial Advisors Sold ETFs Without Proper Supervision

Posted on Nov 13th, 2016

If you are having second thoughts about an alternative ETF sold to you by a ProEquities financial advisor, there may be good reasons! ProEquities recently paid an eye-popping $200,000 fine to the Financial Industry Regulatory Authority (FINRA) for supervisory failures in selling non-traditional exchange-traded funds (ETFS).

To understand the magnitude of ProEquities supervisory failure requires a brief explanation of what ETFs are.

Simply put, an ETF is an investment that is designed to rise and fall in a way that mimics a financial index or benchmark.

Investors Capital Corp. in Trouble. Again.

Posted on Nov 10th, 2016

The bad news for Investors Capital Corp., an independent brokerage firm, just keeps coming. Recently one of its financial advisors, Cyrus Lamont Hancock of Marietta, Georgia, agreed to be permanently barred from the securities industry.

What did Mr. Hancock do? According to a settlement agreement Mr. Hancock signed with the Financial Industry Regulatory Authority (FINRA), Mr. Hancock took $11,000 worth of customer funds and deposited it in his own bank account. The customers did not approve!

Perhaps Mr. Hancock’s actions should not have been such a big surprise to Investors Capital. He pled guilty to felony theft in 1998. He disclosed a $62,000 tax lien a few years ago. Perhaps the better question is, why did Investors Capital ever hire Mr. Hancock in the first place?

J. Randall Gladden of Securities Equity Group, Affiliate of Select Portfolio Management, Suspended for Involvement in Church Fund

Posted on Nov 9th, 2016

In La Mesa, California, financial advisor J. Randall Gladden has been suspended from the brokerage business for a full year due to his involvement in the Church Fund.

Mr. Gladden used to work for Securities Equity Group, an affiliate of Select Portfolio Management, an investment advisory firm.

So what did Mr. Gladden do to get suspended? According to settlement documents he signed with the Financial Industry Regulatory Authority (FINRA), Mr. Gladden conducted a private securities offering in Church Development Fund, LLC (a Washington LLC) and Church Fund, LLC, raising over $2 million from investors. These funds were supposed to provide refinance lending to churches for building projects and other capital campaigns.

Three Reasons You Might Regret Buying a Variable Annuity from an HD Vest Financial Advisor

Posted on Nov 7th, 2016

HD Vest recently signed a settlement agreement with one of its regulators settling disputes about issues at HD Vest that could significantly affect whether HD Vest customers who bought annuities are regretting that decision now.

According to the Financial Industry Regulatory Authority (FINRA), HD Vest had inadequate compliance procedures in three critical areas. HD Vest failed to adequately identify liens and judgments against its own financial advisors, failed to adequately disclose complaints against its advisors, and failed to properly monitor variable annuity sales.

SEC Sides with NBA Star Tim Duncan of San Antonio Spurs Against Financial Advisor Charles A. Banks, IV

Posted on Oct 11th, 2016

The SEC has accused a long time financial advisor to pro athletes, Charles A. Banks, IV, with securities fraud. While the SEC’s complaint doesn’t name the investor it alleges Mr. Banks defrauded, it does mention that the investment was in Gameday Entertainment, LLC, a private sports merchandise retailer, and a Wall Street Journal affiliate has mentioned that Tim Duncan of the San Antonio Spurs has filed a civil lawsuit against Charles Bank related to this investment.

What does a Receivership Do? An Investor’s Guide to How Receivers Recover Investment Losses While (Hopefully) Avoiding Bankruptcy

Posted on Oct 4th, 2016

If you’re reading this article, there is a good chance you invested in or through an entity that is now in receivership, and you probably have a lot of questions! The purpose of this article is to give you a general overview of how receiverships work so you know what to expect. Every receivership is different, but every receivership goes through four overlapping stages: 1) stabilization; 2) investigation; 3) litigation; and 4) distribution.

These four stages all support the overarching goal of every receivership—the orderly winding down of a business in a manner that maximizes value for investors.

We will come back to these four stages in a minute, but first it is important to understand the background context that gives rise to a receivership.

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