Legal Matters

The Financial Industry Regulatory Authority ("FINRA") has barred Dennis Ayre from the securities industry based on his refusal to cooperate with FINRA's investigation into the unsuitability of investment recommendations he made to his customers. Dennis Ayre Background Repeated complaints from Ayre’s customers triggered FINRA to investigate Ayre's investment recommendations to his clients. Most of the complaints against Ayre were for unsuitable investment recommendations. Unsuitable investments are investments that do not fulfill the needs or objectives of the investor. Brokers have a duty to recommend only investments that are suitable based on a client's risk tolerance, age, investment experience, financial needs, among other factors. Negligence includes misconduct and/or oversight by a broker that may not have been intentional. These claims can involve a broker recommending a certain security investment to a client without researching all the information needed to make a suitable recommendation. Dennis Ayre Violation of FINRA Rules According to FINRA Rule 8210(a)(1), FINRA may require a person “to testify [...]

Wells Fargo Advisors Financial Network, LLC and Wells Fargo Clearing Services, LLC (collectively, "Wells Fargo") have submitted a letter of Acceptance Waiver and Consent, resulting in a censure and a $2,250,000 fine. A FINRA investigation found that Wells Fargo failed to properly store records related to their customer identification program (CIP) in the non-erasable and non-writable format (WORM) required by FINRA. Wells Fargo CIP Record Storage According to FINRA, in November 2016, Wells Fargo’s personnel discovered that the CIP record storage was not WORM-compliant, and they advised an internal working group of the issue. The working group decided that the record issue should be escalated to determine if it needed to be reported to FINRA. However, the issue was not escalated to the proper group that considered FINRA reporting obligations. Thus, the record issue was not reported to FINRA or remediated. From 2003 to August 2020, Wells Fargo allegedly stored thirteen million CIP records of approximately eight million customers improperly. [...]

An investment suitability analysis is required - by industry rules and by law - before a stockbroker makes a recommendation to his or her client. Stockbrokers are obligated to recommend an investment only if they have first determined the recommendation to be suitable for the client based upon that client’s individual needs. As attorneys who represent investors in arbitration claims against broker-dealers, we have too often seen instances of unscrupulous brokers who generated huge commissions for themselves by selling high-risk and/or illiquid investments (like REITs and variable annuities) to a large percentage of their client base, even if some of those clients could not afford the risks, needed quick access to their investment principle, or did not need to be locked into a long term investment with a contingent deferred sales charge (early withdrawal penalty). Investment Suitability Is Required When A Stockbroker Solicits An Investment The financial industry and state securities regulators impose legal obligations on brokers to know the [...]

The SEC has filed a complaint against Safeguard Metals LLC and its owner, Jeffrey Santulan, for allegedly misleading hundreds of elderly investors and engaging in a multimillion-dollar scheme. Safeguard Metals LLC is a Wyoming Limited Liability Company located in Woodland Hills, California. Jeffrey Santulan is the only Safeguard member, and he owns 100% of the company. According to the SEC’s complaint, from December 2017 to July 2021, Safeguard and Santulan acted as investment advisers, persuaded investors to sell their existing securities, transfer the proceeds into self-directed Individual Retirement Accounts, and invest the proceeds into gold and silver coins by making false and misleading statements about the safety and liquidity of the investors’ securities investments, Safeguard’s business, and its compensation. Safeguard and Santulan allegedly targeted investors at or near retirement age using the Safeguard website, online advertisements, and direct calls. According to the SEC, Safeguard marketed itself as a full-service investment firm with offices in London, New York City, and Beverly [...]