rfrankowski

The Ninth Circuit ruled an fake attorney who chaired a FINRA arbitration panel prevented Move Inc. from having a fair hearing regarding accusations Citigroup Global Markets Inc. mismanaged $131 million of the real estate company’s funds, saying the deceitful arbitrator wrongfully influenced the proceedings. A three-judge panel found that a lower court erred in not vacating an arbitration panel’s 2009 denial of Move’s claims against Citigroup, reversing the district court’s judgment and ordering the arbitrators’ award vacated. Move commenced arbitration proceedings in September 2008 claiming Citigroup mismanaged $131 million of Move’s funds by investing in speculative auction rate securities and alleging claims such as breach of fiduciary duty and breach of contract. Because the dispute involved a complex securities issue, Move sought to have the panel led by an experienced attorney and selected as its top choice a man named James H. Frank, who according to FINRA received a law degree from Southwestern University in 1975 and was licensed to practice law [...]

FINRA fined eight firms a sum of $6.2 million and ordered five of them to pay an additional $6.3 million in restitution for failures in supervision that led to the sales of unsuitable variable annuity products. As part of the settlement, FINRA imposed sanctions against Voya Financial Advisors, five broker-dealer subsidiaries of Cetera Financial Group, Kestra Investment Services and FTB Advisors Inc., according to its action notice. Voya was ordered to pay its customers at least $1.8 million, while Cetera Financial Group’s subsidiaries, Cetera Advisors, First Allied, Summit Brokerage and VSR will collectively pay customers at least $4.5 million. The unsuitable variable annuity products at issue were L-share annuities that are considered “potentially incompatible, complex and expensive long-term minimum-income and withdrawal riders.” The regulator said that L-share annuities could “pay greater compensation to the firms and registered representatives than more traditional share classes.” The L-share annuities were often found hidden in a complex product that combines expensive guaranteed income and withdrawal riders that [...]

The Certified Financial Planner Board of Standards has temporarily suspended Ash Narayan, an investment adviser in Irvine, California, for allegedly bilking professional athletes out of millions of dollars. The CFP Board says it reached its decision after Narayan was named in a SEC complaint alleging he misappropriated client funds and misrepresented his professional qualifications. The interim suspension took effect October 25. In June, the SEC announced charges against Narayan for taking money from accounts he managed for professional athletes, investing them in a struggling online sports and entertainment ticket business called Ticket Reserve. He transferred over $33 million to the company, failing to disclose he was a member of its board, owned its stock and received $2 million in finder’s fees for the investments, according to the SEC’s complaint. “These investments were unsuitable, contrary to the clients’ stated and agreed objectives and sometimes without the clients’ knowledge and consent,” the CFP Board said. “Mr. Narayan also misrepresented to clients that he was a Certified [...]

FINRA barred former FSC Securities Corporation broker Leonard Fox from acting as a broker or otherwise associating with firms that sell securities to the public. His BrokerCheck report shows that Fox has been the subject of four customer complaints and two regulatory actions. FINRA brought a regulatory action against Fox in August 2016, alleging that Fox borrowed and misappropriated funds from a firm customer. The regulator also accused Fox of borrowing customer funds in May 2012 when it alleged that he borrowed $10,000 from a client and suspended him for ten days. According to BrokerCheck records, Leonard Fox has disclosed outside business activities listed as including Fox Wealth Management Group, LLC.  Sometimes, brokers sell promissory notes and other investments through outside businesses as accountants, attorneys, real estate brokers, or insurance agents to clients of those side businesses. Fox entered the securities industry in 1982.  Throughout his career, he spent stints registered with First Jersey Securities, Inc.; Merrill Lynch, Pierce, Fenner & [...]