Securities & Stock Broker Fraud Blog

Mutual Fund Breakpoint Discounts – FINRA Fines and Suspends Ex-Cetera Broker

May 15, 2023 | Dan Miller

The Financial Industry Regulatory Authority (FINRA) has fined and suspended a former Cetera Advisors broker in Tucson, Arizona for failing to invest his customers’ funds in a way that would have qualified for mutual fund breakpoint discounts, according to a settlement finalized on Thursday and as reported on Advisor Hub and broker check.

Allegedly, from April 2014 and September 2019, Todd R. Anderson recommended that an elderly customer purchase $1 million worth of mutual funds across 31 fund families without considering that the customer could have qualified for volume-based “breakpoint” discounts if he had invested in fewer, according to Finra. As a result, the customer incurred $20,867 in unnecessary sales charges, the regulator said in the settlement.

“Allegations

Miller Stern Lawyers – Investigation into Stricker Street Fire That Claimed The Lives Of Three Baltimore City Firefighters And Injured A Fourth – Departmental And City Wide Failures – Miller Stern Lawyers

December 3, 2022 | Dan Miller

WBFF Fox 45 in Baltimore Investigates Stricker Street Fire https://foxbaltimore.com/news/city-in-crisis/investigative-report-on-stricker-street-fire-reveals-departmental-problems#

According to Fox 45, “The report describes confusion over which firefighters were on scene that day and who was trapped inside the collapsed, burning structure. . . . ”

“One of the most glaring problems on that January day, the firefighters had no idea they were walking into an unsafe vacant home that had been on fire twice before.”

Merrill Settles Claim for $4.25 Million Regarding Suitability Allegations

March 2, 2022 | Dan Miller

Merrill terminated 38-year Birmingham, Alabama based Advisor after settling a customer claim for $4.25 million, according to Advisor Hub and FINRA Brokercheck.

Merrill fired the advisor for “conduct including making an unsuitable investment strategy recommendation and misrepresentation to a client” tied to an options investment and also for failing “to follow Firm standards related to business communications,” according to BrokerCheck.

The customer submitted a written complaint to Merrill for unspecified damages over unsuitable sales and misrepresentations between November 2019 and November 2020, according to the CRD report for the Advisor.

Brian Leggett and Bryson Holdings, LLC v. Wells Fargo Clearing Services, et al

March 1, 2022 | Dan Miller

Fulton County Superior Court ***EFILED***QW Date: 1/25/2022 1:53 PM Cathelene Robinson, Clerk

IN THE

SUPERIOR COURT OF FULTON COUNTY STATE OF GEORGIA

FINRA To Hire A Law Firm to Review Arbitrator Selection After Judge Rebukes FINRA in Vacating a Wells Fargo Award

March 1, 2022 | Dan Miller

Bull Bear
The Financial Industry Regulatory Authority hired an “independent” law firm to conduct a review of its arbitrator selection procedures after a Judge rebukes FIRNA in an order vacating a Wells Fargo award in a controversial case, according to FINRA.

Finra, whom denied any flaw in its process, hired the law firm of Lowenstein Sandler after a scathing order to vacate a Wells Fargo award. The Judge had said Finra and Wells Fargo’s lawyer appeared to have a secret agreement to strike potential arbitrators from a neutral list and questioned the fairness of the process.

The concerns were reiterated by the Public Investors Advocate Bar Association, which called for “an immediate investigation” by the Securities and Exchange Commission and hearings in Congress, and by Senator Elizabeth Warren (D-Mass.) and Rep. Katie Porter (D-Calif.) in a February 10 letter.

$950,000 Fine to Merrill – Flawed Supervision Allowed Two Advisors to Steal $6M

March 1, 2022 | Dan Miller

According to Advisor Hub, the Financial Industry Regulatory Authority has censured and imposed a $950,000 fine on Merrill Lynch Wealth Management for allegations that they engaged in ignoring flaws in its fraud detection systems allowed for two of their brokers to steal $6 million from clients.

“Merrill’s systems did not properly screen Automated Clearing House transfers from customers’ accounts to detect when one of its registered representatives was the beneficiary of those transfers,” FINRA said. Merrill’s internal fraud-detection system was only “designed to detect fraud by third parties” or “persons other than its own brokers,” it continued.

FINRA warned Merrill in 2013 about problems with its monitoring of customer fund transfers, according to the settlement letter, as quoted in Advisor Hub and FINRA rulings.

In An Order To Vacate Award By Wells Fargo, Judge Scolds FINRA Arbitration

February 8, 2022 | Dan Miller

cropped-High-Res-TA-2018-2019-284x300 According to Advisor Hub and FINRA Website, in a decision overturning an arbitration award, a Georgia state court judge vacated an Arbitration decision in which Wells Fargo successfully beat an investor’s $1.7 million damage claims over investment losses.

According to the Order, Judge Belinda E. Edwards based her ruling in part on grounds that the Financial Industry Regulatory Authority administrators had allowed Wells Fargo and an outside lawyer to “manipulate” the arbitrator selection process. The article in Advisor Hub notes that “A Finra dispute resolution director improperly granted Wells Fargo’s request to strike two arbitrators, including one from a computer-generated “neutral” list, as part of an unwritten side agreement between the regulator and Wells’ lawyer.”

“Permitting one lawyer to secretly red line the neutral list makes the list anything but neutral, and calls into question the entire fairness of the arbitral forum,” Judge Edwards wrote in the January 25 ruling.

J.P. Morgan to Pay $4 Million to Client

January 26, 2022 | Dan Miller

Miller Stern Lawyers is currently investigating claims against J.P. Morgan. According to Advisor Hub and industry records, J.P. Morgan Advisors was ordered to pay $4 million in damages to a former client in their San Francisco office.

Industry records confirms that Lacey Winston Keath alleged unsuitability in filings against J.P. Morgan’s traditional brokerage unit in high-risk equities and junk bonds–without authorization, according to the Financial Industry Regulatory Authority award.

A J.P. Morgan spokeswoman declined to comment on the arbitration outcome or underlying dispute.

FINRA Sanctions Two Brokers over UIT Sales at Merrill

November 3, 2021 | Dan Miller

cropped-High-Res-TA-2018-2019-284x300 According to Advisor Hub and other industry news sources the Financial Industry Regulatory Authority levied sanctions against Merrill Lynch and two of its brokers over allegedly early rollovers of Unit Investment Trusts.

Miller Stern Lawyers is currently investigating matters pertaining to early rollovers of Unit Investment Trusts and other such practices. According to the reports from Finra, it finalized its sanctions against Merrill, and accepted a settlement letter from a 30-year Merrill veteran in Chattanooga, Tennessee, and another from a 35-year industry veteran in Charlotte, North Carolina.

According to the regulators information, including CRD information, both the brokers, Kelly Wayne Feehrer in Tennessee and Scott R. Mathews, who joined Merrill in 2009, agreed to three-month suspensions and $5,000 in fines for allegedly unsuitable UIT switch recommendations.

Finra Sanctions A Stock Broker Who Traded in A Dead Customer’s Account

April 2, 2021 | Dan Miller

Bull Bear Miller Stern Lawyers – 410-Law-Firm is currently investigating for individuals who may be victims of, and suffered damages and losses, due to stock market and financial abuses such fraud, mutual fund abuses, unsuitable mutual fund investments, failure to supervise, breach of fiduciary duty, overcharging , and unauthorized trading and elder abuse, and past clients of Ignacio Erhart Del Campo CRD#6084596, for, among other things, unauthorized trading and discretionary trading without written authority.

FINRA has recently fined and suspended a broker for trading in one of his customer’s non-discretionary accounts for five-and-a-half years without the customers written permission, however the worst of errors was his failure to realize that the client had been dead for two of those years, according to Advisor Hub.

Ignacio Erhart Del Campo CRD#6084596, who worked at Miami-based independent broker Insigneo Securities and predecessor firm Northeast Securities in Montevideo, Uruguay, agreed to a conditional $7,500 fine and reimbursement to the client’s estate of $19,189 for losses and commissions, along with a two-month suspension from the brokerage industry, according to a letter of acceptance, waiver and consent Finra’s enforcement department accepted on Wednesday, according to FINRA.