Legal Matters

The Financial Industry Regulatory Authority (“FINRA”) has entered an Acceptance Waiver and Consent letter against Cheryl Ann Stallings, formerly of LPL Financial, LLC. According to FINRA’s factual findings, Ms. Stallings inappropriately became power of attorney for and LPL customer, took control of two customers’ bank accounts, became a successor trustee and beneficiary a of customer’s trust, and withheld that information from her employer, in violation of firm policy and FINRA rules. FINRA found that between May 2014 and December 2016, Ms. Stallings failed to disclose these interests to her firm, which prohibited its registered representatives from acting as trustees without prior firm approval and even then only if there was a family relationship. Likewise, FINRA found that Ms. Stallings had made false statements and misrepresentations to LPL on annual compliance questionnaires. Upon the customers’ deaths, Ms. Stallings received more than $60,000 from customer bank accounts and $248,000 as a beneficiary of a customer’s estate. She also improperly used approximately $5,300 [...]

The Financial Industry Regulatory Authority (“FINRA”) entered an Acceptance, Waiver, and Consent (“AWC”) letter today against former Waddell & Reed broker Robert Lee Basile, who worked in Waddell and Reed’s Riverside, California branch office. Basile was arrested earlier this year for “theft by caretaker” related to an elder abuse investigation into charges that he stole money from his own elderly mother. According to FINRA’s findings, Basile converted over $130,000 from his elderly mother’s brokerage account at Waddell and Reed without her knowledge or consent. Basile’s conduct violated FINRA Rules 2150 and 2010, FINRA Rule 2150 which prohibit FINRA members from making improper use of a customer’s securities or funds and require associated persons like Mr. Basile to “observe high standards of commercial honor and just and equitable principles of trade.”  Basile entered the securities industry in 2009 and became associated with Waddell and Reed in 2014. As a result of FINRA’s findings against him, Mr. Basile has received a lifetime [...]

An arbitration panel of the Financial Industry Regulatory Authority (“FINRA”), has entered an Award of over $360,000, plus interest, against Wells Fargo Advisors, LLC following a customer arbitration against the firm.  The customer’s claims included allegations of violations of federal and state securities and business practices acts, breach of contract, fraud, breach of fiduciary duty, and negligence involving Wells Fargo’s sale of investments including: Oasis Petroleum, Inc.; Ritchie Bros Auctioneers, Inc.; TCF Financial Corp.; Arts-Way MFG Co., Inc.; Monsanto Co. New; James River Coal, Inc.; Intrepid Potash, Inc.; CNH Global NV; BP PLC SPONS ADR; and Pengrowth Energy Corp. The claimant requested $172,000 in compensatory damages to recoup their investment losses. The FINRA panel of arbitrators awarded the claimant their requested $172,000, plus $68,800 in attorneys’ fees, $100,000 in punitive damages, $20,000 in costs, and post-judgment interest. The panel found that Wells Fargo had violated numerous sections of the federal Securities Act, the Securities Exchange Act, and committed common law [...]

A Financial Industry Regulatory Authority (FINRA) arbitration panel has entered a $300,000 award against Moloney Securities, Inc. and Moloney Securities Asset Management, LLC, of St. Louis, Missouri. The claimants in the arbitration claimed that the Moloney firms breached fiduciary duty, committed fraud, made unsuitable investment recommendations, misrepresentations, were neglectful, failed to supervise their broker(s), breached their contracts with the claimants, and violated various securities regulatory statutes. The claimants’ allegations stemmed from investments in energy and limited partnerships, speculative and aggressive growth securities, and alleged over-concentration in these unsuitable investments. After a week-long hearing, the FINRA arbitration panel ordered Moloney to pay the claimants $300,000 to compensate them for their investment losses, and pay $15,475.00 to cover the FINRA hearing session fees. Moloney’s FINRA BrokerCheck Report indicates that Moloney has had five other customer complaints and six regulatory events since its formation in 1995. If you lost money as a result of an investment which was unsuitable or was misrepresented to [...]