Monthly Archives: December 2021

FINRA’s Department of Enforcement entered a default decision September 22, 2021 against Elizabeth Ann Sollars, a former Allstate Financial Services, LLC broker, for failing to deliver information and documentation, as well as failing to present and provide testimony to FINRA in accordance with FINRA Rule 8210.

The material was requested as part of FINRA’s investigation into claims that Sollars misappropriated insurance customer premium money while she was registered with her firm.

Sollars has two years of experience in the securities sector, and between June 2017 and January 2020, was registered as a broker with Allstate Financial Services, LLC in Terre Haute, IN.

Financial advisers and customer accounts must be appropriately supervised by brokerage businesses like Allstate Financial Services, LLC. To ensure compliance with securities laws and industry rules, brokerage companies must also build and maintain an adequately structured system to oversee account activity. Brokerage firms may be held accountable for losses if a brokerage business fails to adequately supervise its financial advisors or investment account activities.

Maddox Hargett & Caruso, P.C. represents investors nationwide who are trying to recover their losses. You can call or email our senior partner Mark Maddox to have your potential case evaluated at no charge. Please call 317-598-2043 or email him at mmaddox@mhclaw.com.

From 2001 to 2021, Roland Terrence Molo (CRD: 4371241) was a registered broker with Edward Jones in Illinois.

On his BrokerCheck report, Molo has nine disclosures including allegations he stole $800,000 from senior citizens by convincing them to transfer money out of their financial institution accounts for the purported investment in tax-free bonds without their knowledge or authorization. The bonds did not exist and instead Molo is alleged to have misused the money for his own personal use.

Brokerage firms, such as Edward Jones, are responsible for properly supervising all representatives who are registered with them. Brokerage firms must also guarantee that its financial advisors adhere to all securities rules and regulations, as well as internal business standards. Customers may hold brokers and brokerage firms accountable for investment losses if brokerage firms fail to effectively oversee their licensed representatives.

Maddox Hargett & Caruso, P.C. represents investors nationwide who are trying to recover their losses. You can call or email our senior partner Mark Maddox to have your potential case evaluated at no charge. Please call 317-598-2043 or email him at mmaddox@mhclaw.com.

Maddox Hargett & Caruso, P.C., based in Indianapolis, is looking into financial advisors who transfer clients into more expensive investments, resulting in excessive costs. Commission-based financial advisors and brokers frequently make “exchanges” that convert clients from one investment to another that is remarkably similar. They frequently claim that these new investments would “earn you more money,” but the truth is that they will make more money in commissions and fees.

According to FINRA, the federal securities regulator, NY Life Securities has agreed to “pay a total of $263,347 to settle allegations that, as a result of supervisory failures, it failed to prevent several of its clients from being charged excessive, unnecessary fees after one of its brokers engaged in unsuitable mutual fund and cross-product switches.”

According to FINRA, a broker at the company, identified only as “Broker A,” recommended that 10 clients buy and sell Class A mutual funds after holding the shares for brief periods of time “on hundreds of times” between January 2015 and March 2019.

According to FINRA, the clients paid nearly $175,000 in unnecessary front-end sales charges for Class A mutual fund shares as a result of the short-term trades, with Broker A collecting around $116,000 in commissions.

A spokesman for parent business New York Life told ThinkAdvisor, “The firm has always behaved in good faith and remains completely dedicated to delivering the necessary tools and guidance to meet financial requirements.” He went on to say, “We were able to engage with FINRA to achieve a settlement that best serves our clients’ interests.” NYLife Securities signed a FINRA letter of acceptance, waiver, and consent on Sept. 30, 2021, without admitting or denying the industry self-findings, regulator’s agreeing to be censured and pay a $200,000 fine and $63,347 in restitution.

Broker-advisors don’t always inform clients that seemingly innocuous trades would result in a bonanza in commissions and fees for them and their firms. Frequently, shifting client money from one mutual fund share class to another is all that is required.

Who is responsible if a broker-advisor charges you excessive and needless fees, reducing your total returns? Brokerage firms are accountable for overseeing their brokers’ behavior under FINRA guidelines, which might lead to an arbitration dispute. Such transactions may be deemed “unsuitable” for a customer, particularly if they are uninformed of the financial consequences in terms of lowered retirement funds.

Maddox Hargett & Caruso, P.C. represents investors nationwide who are trying to recover their losses. You can call or email our senior partner Mark Maddox to have your potential case evaluated at no charge. Please call 317-598-2043 or email him at mmaddox@mhclaw.com.

In the last year, Frederick Mark Atiyeh of Crown Capital Securities, L.P. has received a customer complaint alleging broker misconduct.

Frederick Atiyeh (CRD #872352) is a subject of a securities industry sales practice abuse investigation. He is now registered with Crown Capital Securities, L.P. in Whitmore Lake, Michigan.

Frederick Atiyeh is the subject of two pending client complaints alleging a lack of proper due diligence, lack of suitability and over-concentration in regards to investments in alternative and variable annuity products as well as misrepresentations of risk factors in regards to the purchase of alternative investments.

Maddox Hargett & Caruso, P.C. represents investors nationwide who are trying to recover their losses. You can call or email our senior partner Mark Maddox to have your potential case evaluated at no charge. Please call 317-598-2043 or email him at mmaddox@mhclaw.com.

Maddox Hargett & Caruso, P.C., based in Indianapolis, is looking into financial advisors and brokers that trade excessively in client accounts. One of the most common securities industry abuses is “churning,” or trading excessively to generate broker commissions. Due to these methods, investors have lost millions of dollars.

The Securities and Exchange Commission of the United States has ordered Aegis Capital Corp. of New York City to pay “approximately $2.8 million, including $1.7 million in restitution to 68 customers whose accounts were potentially excessively and unsuitably traded by the firm’s representatives,” according to FINRA. According to fa-mag.com, FINRA also fined Aegis $1.1 million for supervisory violations.

“Aegis supervisors failed to detect or act on information that eight Aegis reps traded customer accounts excessively and unsuitably over a four-year period, generating $2.9 million in trading costs that would have required investments to generate more than 71 percent returns to offset costs,” according to FINRA. “Aegis failed to create a supervisory system reasonably tailored to comply with FINRA’s suitability rule from July 2014 to December 2018,” according to FINRA. As a result, Aegis failed to detect and resolve possibly excessive and unsuitable trading in customer accounts by its representatives, including trading by eight Aegis representatives who unduly traded 31 customers’ accounts, according to the regulator.

According to FINRA, Aegis had information of broker churning reports. “The firm failed to act on more than 900 ‘exception reports’ provided by its clearing firm that highlighted possibly unsuitable trading, as well as more than 50 client complaints alleging excessive, unsuitable, or unlawful trading in their accounts,” according to FINRA. According to fa-mag, Aegis, which was founded in 1984, has 37 compliance and enforcement declarations for sales and best execution violations in the BrokerCheck database.

“The hallmark of appropriate supervision is recognizing and responding to red signals, and it’s a vital component in preventing excessive and improper trading in customer accounts,” said Jessica Hopper, executive vice president and head of FINRA’s Department of Enforcement. According to the regulator, Aegis and two of its supervisors agreed to “accept and consent to the entry of FINRA’s findings without acknowledging or disputing them.”

Excessive trading in one’s account should be avoided by all investors. Churning is traditionally measured using two metrics. The “2-4-6” rule is the first of these. This statistic has been utilized by courts and regulators for many years. There is a “inference” of churning if your account is turned-over (meaning total trades equal total equity in the account being traded or turned-over one time) two times every year. There is a “presumption” of churning if the account is turned over four times each year; and if the account is turned over six times or more per year, it is “conclusive” of churning. The cost-to-equity ratio is also taken into account by courts and regulators. Simply put, the S&P 500 has historically returned around 13% every year. You’re being ripped off if your account has to earn 13% just to pay the cost of trading.

Maddox Hargett & Caruso, P.C. represents investors nationwide who are trying to recover their losses. You can call or email our senior partner Mark Maddox to have your potential case evaluated at no charge. Please call 317-598-2043 or email him at mmaddox@mhclaw.com.

Maddox Hargett & Caruso is looking into allegations that William LeBoeuf, an Ohio-based financial adviser, acted inappropriately in the sale of private placements to clients of his previous employers, Merrill (formerly Merrill Lynch) and Cetera Advisor Networks.

LeBoeuf was suspended for a year by FINRA last week after it was discovered that he inappropriately participated in the sale of private shares in a real estate investment fund and a software company. LeBoeuf allegedly failed to fully communicate the illiquidity and hazards of some transactions to potential investors, according to FINRA. LeBoeuf has been fired by Cetera.

Securities offered in a non-public sale are known as private placements. These investments are often illiquid, meaning they can’t be purchased and sold quickly, and they’re also very risky. We’d like to hear from you if you sustained losses as a result of LeBoeuf’s investing advice.

Contact us immediately for a free consultation to discuss your legal options if you believe LeBoeuf offered unsuitable private placements to you. Maddox Hargett & Caruso, P.C. represents investors nationwide who are trying to recover their investment losses. If your financial advisor was William LeBoeuf, we may be able to help you recover some or most of your losses. You can call or email our senior partner Mark Maddox to have your potential case evaluated at no charge. Please call 317-598-2043 or email him at mmaddox@mhclaw.com