rfrankowski

The SEC charged Broidy Wealth Advisors and its owner with overbilling clients and stealing assets from their trusts to pay for personal expenses, including leases on two luxury cars. The firm and owner Marc D. Broidy of Beverly Hills, California received over $1.4 million in illicit gains since February 2011, according to the commission. Allegedly, he used the money to fund his mortgage, overseas trips, and leases on two Mercedes-Benz automobiles. Broidy took about $865,000 in funds from clients’ trusts for which he was trustee, the SEC said. Further, he billed customers an excess of $643,000, allegedly trying to conceal it by changing management fees charged by broker-dealers that worked with Broidy Wealth Advisors. “Broidy fell well short of his fiduciary obligations as an investment adviser by misappropriating money and failing to disclose important conflicts of interest to his clients,” said Andrew Calamari, director of the SEC’s New York regional office. The SEC says Broidy misled advisory clients about investments [...]

Following on the heels of the recent Wells Fargo scandal, FINRA is performing a sweep of broker-dealer firms to determine what kinds of cross-selling programs they have been offering. The regulator is seeking an extensive list of data from broker-dealers about the incentives they offer employees to promote bank products of an affiliate or parent company to broker-dealer retail customers through referrals or direct sales. It is also looking for incentives to sell additional features, including credit cards, securities-based loans or checking accounts. “In light of recent issues related to cross-selling, FINRA is focused on the nature and scope of broker-dealers’ cross-selling activities and whether they are adequately supervising these activities by their registered employees to protect investors,” Nancy Condon, FINRA’s vice president of media relations and web services, wrote. FINRA wants data from broker-dealers from between January 1, 2011 through September 30, 2016 with a deadline of November 30. The fifteen categories FINRA requested include, but are not limited [...]

Jamie Aguilar was terminated by Morgan Stanley for alleged conduct regarding private securities transaction. According the FINRA’s BrokerCheck, three customers have filed complaints against him. Morgan Stanley terminated Aguilar in May, alleging that an outside financial transaction between the financial advisor and a client of the firm that was not disclosed to the firm. Giving loans or selling notes and other investments outside of one’s brokerage firm are impermissible private securities transactions and constitutes a practice called “selling away.” The full extent and nature of Aguilar’s private securities transactions is currently unknown. Yet, according to BrokerCheck, Jamie Aguilar has disclosed outside business activities listed as including Events Magnificent, Inc.  Many times, brokers sell promissory notes and other investments through side businesses as accountants, lawyers, real estate brokers, or insurance agents to clients of those side practices. In the securities industry, selling away occurs when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by [...]

Stuart Dickinson, a former WFG Investments broker, was banned from the securities industry by FINRA after recommending that his clients invest in a Ponzi scheme. The regulatory body also ordered Dickinson to pay $924,000 in restitution to seven customers, according to a default decision notice FINRA released. The notice states that Dickinson failed to conduct reasonable due diligence on ATM Financial Services (ATMF) and “missed key red flags that signaled fraud,” causing his investors to lose $1.02 million. In 2007, Dickinson sold over $1 million in limited partnership interests in ATM Alliance (ATMA). Through ATMA, he contracted with ATMF to manage and service ATMs at several locations. In 2008, Stuart Dickinson discovered ATMF did not use ATMA funds to purchase ATM machines, but in fact, used the funds to pay fictitious returns to earlier investors, according to FINRA. Dickinson should have recognized there was something amiss when he was shown partly handwritten ATM retail space lease agreements and incomplete and inconsistent performance [...]