Securities Fraud Lawyer Blog

December 15, 2016

Five Star Financial Hit with Cease and Desist

Five Star Financial Hit with Cease and Desist Order by California’s Department of Business Oversight

On August 9, 2016 the State of California’s Department of Business Oversight issued a cease and desist order against Five Star Financial (dba JBAH Insurance Solutions) and its control persons and officers Anna Holt and John Biyikoglu over charges that they sold securities to the public in the form of “JPMorgan Structured Investments” without being registered as a broker dealer, and by way of material ommisions of fact.

The Commissioner’s cease and desist order alleges that in 2014, Five Star Financial, through its control persons Anna Holt and John Biyikoglu sold JPMorgan Structured Investments to California residents promising a return of between sixteen and twenty percent. Upon receiving the funds from the investors, the company deposited the funds into an account where they were commingled for non investment purposes such as paying for general operating expenses, paying sales commissions and personal expenses, and repaying investors from other transactions. The Commissioner further alleges that Biyikoglu told investors that their funds had increased in value, when in fact the money had been spent by Five Star Financial, rather than invested as described to the investors.

December 7, 2016

Robert Estevez Suspended Over Steepener Trades

by David Liebrader

Robert Estevez suspended by FINRA

In September, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Robert Estevez of Greenwich, CT, a registered representative with Joseph Gunnar and Company submitted an acceptance, waiver and consent letter whereby he was suspended from association with any FINRA member in any capacity for two months and ordered to pay a fine of $20,000. The FINRA complaint asserted that Robert Estevez recommended steepeners to his clients, which are highly complicated synthetic investment products that attempt to measure and profit from the difference between long term and short term interest rates.

The market for steepeners is illiquid, making their use unsuitable for most customers. FINRA found that Estevez recommended a short term trading strategy using steepeners, which, given their illiquid nature, resulted in losses when the clients were unable to recoup their original purchase price.

November 29, 2016

FINRA Bars Joey Broussard

by David Liebrader

Joey Broussard barred by FINRA

In November, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Joey Broussard of Princeton, Texas, a registered representative formerly with Source Capital Group and Red River Securities was barred from association with any FINRA member in any capacity. The FINRA findings stated that a customer to whom Broussard had sold a limited partnership interest submitted a letter attempting to cancel the transaction. Broussard, without the customer’s knowledge or permission, then submitted a letter cancelling the recission request, forging the customer’s signature in the process.

Registration and disciplinary history

November 29, 2016

Barbara Bottoms fined, suspended by FINRA

by David Liebrader

Barbara Bottoms fined and suspended by FINRA

In November, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Barbara Bottoms of North Pole Alaska, a registered representative formerly with Wells Fargo Advisors submitted an acceptance, waiver and consent letter whereby he was suspended from association with any FINRA member in any capacity for two years months and ordered to pay a fine of $17,500. The FINRA complaint asserted that Barbara Bottoms engaged in unauthorized mutual fund transactions in her clients’ accounts. FINRA also found that Bottoms improperly took client information home with her which resulted in confidential information being held in an unsecure location.

Registration and disciplinary history

November 29, 2016

Nikoh Securities fined by FINRA

by David Liebrader

FINRA fines Nikoh Securities

In November, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Nikoh Securities Corporation of Northbrook, IL submitted an acceptance, waiver and consent letter regarding its failure to supervise its registered representatives who participated in private securities transactions. The firm was fined $5,000 by FINRA.

FINRA’s allegations against Nikoh Securities concerned the firm’s failure to establish, implement and maintain an adequate supervisory system to oversee the outside business activities of its registered representatives. The AWC stated that the firm also failed to conduct an adequate level of due diligence into a hedge fund to which Nikoh referred its clients.

November 29, 2016

FINRA Bars Broker Jay Chitnis

by David Liebrader

Jay Chitnis barred by FINRA

In November, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Jay Chitnis of Atlanta, Georgia, a registered representative formerly with Yieldquest Securities and IFS Securities submitted an acceptance, waiver and consent letter whereby he was barred from association with any FINRA member in any capacity. The FINRA complaint asserted that Jay Chitnis participated in a series of fraudulent municipal bond transactions that resulted in him and his firm receiving nearly seven hundred thousand dollars. FINRA found that Chitnis oversaw a fictitious trading scheme that involved making numerous unauthorized transactions in his customer accounts, which resulted in the clearing firm improperly crediting the firm hundreds of thousands of dollars, which have never been returned.

Registration and disciplinary history

November 29, 2016

Hank Werner of Legend Securities Charged by FINRA

by David Liebrader

FINRA charges Hank Werner of Legend Securities.

In a complaint filed by the FINRA Department of Enforcement in October, 2016 Hank Werner of Northport, NY, a former registered representative with Legend Securities was named as a Respondent in a complaint charging him with churning an elderly widow’s account over three years, generating over two hundred thousand dollars in commissions.

The allegations include that Werner excessively traded an elderly, blind widow’s account without regard to her investment objectives or risk tolerances or her ability to bear the loss of the funds. As a result of the improper recommendations the customer sustained losses of over $180,000.

November 28, 2016

Lance Slater Suspended by FINRA

by David Liebrader

FINRA suspends former UBS, Morgan Stanley broker Lance Slater.

Lance Slater, a registered representative from Marlton, NJ formerly with UBS Financial Services and Morgan Stanley was suspended from FINRA membership for violations of Rule 9554. He has subsequently been barred by FINRA.

FINRA Rule 9554. Failure to Comply with an Arbitration Award or Related Settlement or an Order of Restitution or Settlement Providing for Restitution

November 28, 2016

Encinitas Broker Derek Miller Suspended by FINRA

by David Liebrader

FINRA suspends Encinitas, CA broker Derek Miller.

Derek Miller, a registered representative from Encinitas, CA formerly with Securities America and Cambridge Investment Research was suspended from FINRA membership for violations of Rule 9554. He has subsequently been barred by FINRA.

FINRA Rule 9554. Failure to Comply with an Arbitration Award or Related Settlement or an Order of Restitution or Settlement Providing for Restitution

November 28, 2016

Former UBS Broker David Lavine Barred by FINRA

by David Liebrader

Sugar Land UBS broker David Lavine barred by FINRA.

David Lavine, a registered representative from Sugar Land, TX, formerly with UBS Financial Services was suspended from FINRA membership for violations of Rule 9554. He has subsequently been barred by FINRA.

FINRA Rule 9554. Failure to Comply with an Arbitration Award or Related Settlement or an Order of Restitution or Settlement Providing for Restitution