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Securities Fraud

17 August
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Two Chattanooga brokers investigated for securities fraud

Posted by Starr Austen
in Securities Fraud

A release from the TDCI says James Hugh Brennan III and Douglas Albert Dyer, co-owners operating Chattanooga-based Broad Street Ventures, LLC., allegedly raised more than $5 million from investors without using the money as promised. By WTVC – newschannel9.com Two former brokers with disciplinary histories from Chattanooga are under investigation for securities fraud by the Securities & Exchange Commission (SEC), the Tennessee Department of Commerce & Insurance (TDCI) and the FBI. The investigation, started by the TDCI, ultimately led to a recent court-ordered asset freeze in order to stop the fraud. A release from the TDCI says James Hugh Brennan III and Douglas Albert...

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08 August
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JPMorgan Settlement With Indiana Draws Interest of Other States

Posted by Starr Austen
in Securities Fraud

by Neil Weinberg, Bloomberg.com JPMorgan Chase & Co. has reached a settlement with Indiana regulators related to its asset management business, and now other states are expressing interest in how Indiana built its case. JPMorgan agreed on July 28 to pay $950,000 to settle claims by the Indiana secretary of state that the bank failed to disclose conflicts of interest to wealthy clients. Andrew Lang, a spokesman for Secretary of State Connie Lawson, said the settlement prompted officials from other states to ask how Indiana had pursued its claim. He wouldn’t identify the states. “Investors have the right to know all the facts...

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08 August
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$21 Million Dollar Ponzi Scheme Exposed

Posted by Starr Austen
in Securities Fraud

Patrick E. Churchville, a Rhode Island investment adviser has pleaded guilty to running a massive $21 million ponzi scheme. Churchville used approximately $2.5 million of investor funds to purchase a home in Barrington, Rhode Island. Since the purchase of the home, he has failed to pay almost $1 million in personal federal income taxes, according to a statement from the U.S. Attorney’s Office. Churchville will plead guilty to one count of tax fraud and five counts of wire fraud, according to the statement. He is also a defendant in a civil case brought forth by the SEC in May 2015. Ponzi Scheme...

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08 August
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Finra Bans Turner for Misrepresentation

Posted by Starr Austen
in Securities Fraud

Winston Wade Turner was banned by Finra for making unsuitable variable annuity recommendations while working for MetLife and Prudential Financial. It was revealed that Turner deceived his clients by neglecting specific material facts about their current variable annuities. In some cases, Turner suggested to his clients they sell their other investments in order to fund the purchase of variable annuities he recommended. It is a known fact that exchanging any annuity should be highly monitored, due to their relatively high commissions. In August of 2015, Turner was terminated by Prudential for his deceptive sales practices. In the July 8 Finra document...

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08 August
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Bill Passed to Help Protect Elder’s Against Financial Abuse

Posted by Starr Austen
in Securities Fraud

Legislation was finally approved by the House of Representatives to help protect advisers from liability when attempting to stop the exploit of senior citizens. The document ensures advisers who report the abuse to the appropriate regulators or law enforcement, will not held liable for violation of privacy laws. In addition, the bill addresses specified training for advisers to undergo which will help them identify elder financial abuse. The vote on the house floor came shortly after the unanimous approval last month in the House Financial Services Committee. Sen. Susan Collins, R-Maine, wrote the legislation and urged state securities regulators to support...

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08 August
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Banned Broker Ordered to Pay $4 Million Penalty

Posted by Starr Austen
in Securities Fraud

The SEC has banned Dawn J. Bennett, founder of Bennett Financial Group in Washington, DC, for using false performance documents to obtain wealthy clients. She is ordered to pay more than $4 million in fines and disgorgement. A civil penalty of $600,000 and a $2.9 million fine were handed down by Administrative Law Judge James Grimes. Morvillo LLP, the attorneys who represent Ms. Bennett stated she has no comment at this time regarding the ruling. Morvillo LLP has 21 days to appeal Grimes’s 48 page ruling. Bennett refused to attend this function as part of “unorthodox legal strategy.” The ruling focused...

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22 July
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Beware of Ponzi Schemes!

Posted by Starr Austen
in Securities Fraud

There presently is a trial going on in California involving a woman who was among hundreds of investors who claimed that a Metropolitan Life Insurance agent tricked them into buying unregistered securities as part of 200 million dollar Ponzi scheme. The victim in that case is a 75 year old widow. A couple of years ago our office handled a very similar case here in Indiana involving a life insurance agent. In that case the agent convinced his clients to give him large sums of money to invest in a “retirement savings plan”. The fraudster then took the money and lived...

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12 July
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Department of Labor Rolls Out New Rules for Financial Advisers: What They Mean for Reporters

Posted by Starr Austen
in Securities Fraud

by Jennifer Backer The Donald W. Reynolds National Center of Business Journalism Despite a shift towards more transparency in the financial planning industry, many investors still aren’t sure what they are paying their financial advisers, USA Today reported. But new rules the Department of Labor rolled out earlier this month are designed to clear things up for investors. The long-awaited and debated fiduciary rule requires that investment advisers put their clients’ interests before their own when it comes to fees and investment choices. The new rules are designed to clarify how much advisers are paid, who they work for, and how they get...

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06 July
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The SEC and Finra Tighten Their Grip on Money Laundering Violations

Posted by Starr Austen
in Securities Fraud

Regulators are clamping down on money laundering violations among brokerdealers in firms of all sizes, regardless if they have the proper compliance resources or not. Brokerdealers of small and medium sized firms should brace themselves for increasing regulations involving their compliance practices. No more are Finra and the SEC targeting just the larger companies. Nick Fera, chief executive officer of Firm58 stated, “They’re getting more aggressive about things and it’s harder to operate a business in this environment.” Recent Money Laundering Violations and Why E.S. Financial Services based in Miami, agreed to a $1 million fine for charges of violating antimoney laundering rules. The SEC fined New...

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06 July
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Massachusetts Looks to Hammer Shady Brokers

Posted by Starr Austen
in Securities Fraud

The top 241 firms in Massachusetts with an above average number of reps with misconduct reports on their records are being audited. Secretary of the Commonwealth, William Galvin has requested the firms hand over their hiring information. The letter being sent out, commonly referred to as a “sweep”, is to help the governing body understand brokerdealer hiring policies and procedures. According to Galvin, the goal is to rid the commonwealth of the bad apples. He stated, “We need and expect the brokerdealer community to assist us by aggressively policing and monitoring their own workforce. This sweep is intended to establish how the industry is meeting this critical investor protection responsibility...

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