Legal Matters

SEC Charges Woodbridge Group The Securities and Exchange Commission (“SEC”) announced charges today against five individuals and four companies for unlawful sales of Woodbridge Group of Companies, LLC to main street investors. The five Florida-based defendants: Barry M. Kornfeld, Ferne Kornfeld, Lynette M. Robbins, Andrew G. Costa, and Albert D. Klagler, allegedly sold more than $243 million of unregistered Woodbridge securities to more than 1,600 retail investors. According to the allegations, the defendants reaped millions of dollars in commissions on Woodbridge securities sales even though they were not registered as broker-dealers and were not permitted to sell securities. One of the defendants, Barry M. Kornfeld, was acting in violation of a previous SEC order which barred him from acting as a broker. The SEC alleges that the defendants pitched Woodbridge as a “safe and secure” investment. The Kornfelds allegedly solicited investors at seminars and a “conservative retirement and income planning class” they taught at a Florida university.  The SEC [...]

SEC charges Ameriprise Ameriprise Financial Services, Inc. was charged by the Securities and Exchange Commission (“SEC”) with failing to safeguard retail investors from theft by its representatives, according to a press release from the SEC. Ameriprise has agreed to pay $4.5 million to settle the charges. The SEC alleged that five Ameriprise representatives committed “numerous fraudulent acts” over a four-year period, including forging client documents and stealing more than $1 million in client funds. The SEC further alleged that Ameriprise failed to adopt and implement adequate policies and procedures to safeguard investor assets and failed to supervise its representatives’ conduct. The five representatives were based in Minnesota, Ohio, and Virginia. Three of the representatives had already pled guilty to criminal charges and all five were fired by Ameriprise for misappropriation of client funds. The SEC’s order found that Ameriprise has since implemented a system to safeguard clients’ money had has reimbursed the affected clients for the losses they [...]

Ethan De Naray Broker Investigation The Frankowski Firm is investigating potential claims against Ethan De Naray, of the Minneapolis, Minnesota area, and his former employer,  Merrill Lynch, following FINRA’s fine and suspension of De Naray on August 3, 2018. FINRA’s Acceptance, Waiver and Consent letter against De Naray included FINRA findings that De Naray conducted unauthorized trades and mislabeled trades in customer accounts. Specifically, FINRA found that De Naray engaged in more than 100 discretionary (broker conducted) trades in a customer’s account without obtaining prior written authorization from the customer and without out Merrill Lynch having accepted the accounts as discretionary. This conduct was in violation of FINRA Rule 2510(b). Moreover, De Naray also was found to have mismarked customer order tickets as “unsolicited” trades (i.e., customer originated) rather than accurately listing the transactions as solicited (by the broker). This conduct was in violation of FINRA Rules 4511 and 2010. As punishment for these violations, FINRA fined De [...]

David Chadwick Carrick and Stifel Nicolaus The Frankowski Firm is investigating potential claims against David Chadwick Carrick and Stifel, Nicolaus & Company, Inc., following a lawsuit filed in Greene County, Mississippi earlier this year on behalf of an elderly client of Mr. Carrick’s surrounding allegations of wrongdoing alleged to have occurred while he was an employee of Morgan Stanley Smith Barney and Sterne, Agee &Leach, Inc. (which was bought out by Stifel Nicolaus). The Complaint alleges that the client, who was approximately 76 years old and in declining mental health at the time of the events at issue, was not informed that Mr. Carrick had been terminated by Morgan Stanley for violations of firm policies. The client alleges tremendous losses to her account dating back to 2009 and alleges that the losses were caused by Carrick’s negligence, overconcentration in risky positions, and lack of loss-limiting implementations. The Complaint further alleges that Stifel, Nicolaus was negligent in its failure [...]