Securities Fraud Lawyer Blog
On September 30, 2015 the Securities and Exchange announced that Securus Wealth Management LLC submitted an Offer of Settlement. Solely for the purpose of the SEC’s proceedings and without admitting or denying the findings herein, Securus Wealth Management and James Goodland consented to the findings that from January 2010 through July 2013, Securus and James Goodland, its President and Chief Compliance Officer, failed reasonably to supervise Howard Richards, an investment advisory representative associated with Securus Wealth Management. The findings also stated that Securus and Goodland failed to adopt and implement an adequate system of internal controls with a view toward preventing and detecting violations of the Advisers Act.
During this period, Richards engaged in a manipulative scheme to support the market price of Gatekeeper USA, Inc. (“Gatekeeper”) to help Gatekeeper obtain financing. Gatekeeper was a start-up company whose stock was thinly-traded on the over-the counter grey market under the symbol GTKP. Howard Richards caused his clients to invest over $1 million in shares of Gatekeeper stock during this period. This trading was unusual for Securus Wealth Management, whose primary business involved investing in mutual funds on behalf of its clients. In furtherance of his scheme, Howard Richards sent numerous emails from his Securus Wealth Management email account to an insider at Gatekeeper in which he discussed his scheme. In addition, Howard Richards failed to disclose significant conflicts of interest to his advisory clients arising from his personal ownership of Gatekeeper shares and his close involvement with the company
Howard Richards registration and disciplinary history
In order to lawfully sell investments to the public, one must either be registered or exempt from registration.
Howard Richards was registered with:
March 2001- December 2013 Cambridge Investment Research
According to FINRA’s CRD disclosure report, Howard Richards has been the subject of 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.