Fraud

The Frankowski Firm is investigating potential claims against LPL Financial, LLC and its former broker Charles Fackrell, of Yadkinville, North Carolina, following a Financial Industry Regulatory Authority (“FINRA”) arbitration award of $462,000 against the firm based on Mr. Fackrell’s fraudulent Ponzi scheme and unsuitable trading in LPL customers’ accounts. Mr. Fackrell accepted a permanent bar from the securities industry by FINRA in February 2015 based on his failure to cooperate FINRA’s investigation into allegations that Mr. Fackrell converted customer funds and sold private securities offerings away from LPL without the firm’s knowledge or approval. Mr. Fackrell also pled guilty to criminal charges brought against him for securities fraud and was sentenced to more than five years in prison for running a $1.4 million Ponzi scheme while employed at LPL. Mr. Fackrell was also ordered to serve three years under court supervision and pay nearly $820,000 in restitution to former clients. In October, the State of North Carolina fined LPL Financial [...]

The Securities and Exchange Commission (“SEC”) has censured and fined Ameriprise Financial for its continued use of F-Squared AlphaSector strategies in its marketing to clients, even after learning that the AlphaSector strategies were based on flawed calculations. The F-Squared AlphaSector strategies were a mathematical algorithm which purported to calculate an appropriate buy or sell “signal” for nine exchange traded funds (“ETFs”) for nine industries across the S&P 500 index. The formula, however, miscalculated the historical performance of AlphaSector by incorrectly implementing signals earlier than when the signals could have actually occurred. This miscalculation resulted in highly inflated back-tested historical performance data. In 2014, F-Squared admitted wrongdoing in falsifying performance numbers in its advertising materials and payed a $35 million fine to the SEC. Previously, however, by October 2013, F-Squared had informed Amerprise of the flaw in its system and instructed Ameriprise to remove references to its advertising materials to performance information from F-Squared for periods prior to 2008. Instead, Ameriprise [...]