Legal Matters

Oppenheimer & Co., Inc. has been hit with a $36.7 million award against it, issued by a panel of arbitrators with the Financial Industry Regulatory Authority (“FINRA”). The arbitration arose from customer complaints that Oppenheimer’s broker John Woods sold them an alleged private equity fund investment which turned out to be a massive Ponzi scheme. The investors alleged violations of FINRA rules, breach of fiduciary duty, negligence, violation of Georgia’s RICO statute, and breach of contract. The investors claimed $6 million in lost investment principal, while also demanding treble damages under the RICO statute, punitive damages, attorneys fees and case expenses, and interest. SEC Action Against Oppenheimer Broker John Woods The claims followed an SEC action against John Woods, of the Marietta, Georgia area. The SEC obtained a restraining order and freeze of assets against Woods last August, based on charges that Woods was operating a $110 million Ponzi scheme while registered as a stockbroker through Oppenheimer. According to the [...]

Michael Todd, of Crystal River, Florida, has been fired by Centaurus Financial, Inc. after failing to cooperate with an investigation into a customer's complaint, according to his FINRA BrokerCheck Report. Michael Todd Customer Complaint Alleges Selling Away On May 27, 2022, one of Michael Todd's customers filed a Financial Industry Regulatory Authority ("FINRA") arbitration claim alleging that Todd misrepresented a mortgage fund investment which turned out to be illiquid, high risk, and unsuitable and sold without Centaurus's knowledge or approval. The customer alleged $100,000 in damages. Following the complaint, Centaurus launched an investigation into the customer's allegations, investigating whether Todd violated firm policy and/or industry rules by selling away and receiving customer funds. According to Todd's BrokerCheck report, Todd failed to cooperate with Centaurus's ongoing investigation, resulting in his dismissal. FINRA rules 3280 and 2010, prohibit “selling away” (i.e., the sale of securities not offered or held by the brokerage firm with which the broker is associated) and require FINRA [...]

The Financial Industry Regulatory Authority ("FINRA") has barred former T3 Trading Group stockbroker Suresh Kumar, of Mission, Kansas, from ever working or associating as a FINRA registered broker in all capacities. Kumar consented to the sanction for the entry of FINRA's findings that he made material misrepresentations to clients regarding why he could not repay their funds. Kumar worked as a stockbroker at Echotrade LLC from 2009 to 2013 then moved to T3 Trading Group, LLC from 2013 to 2020, according to his FINRA BrokerCheck report. FINRA's Findings Against Suresh Kumar According to FINRA, Kumar operated an undisclosed outside business activity where he received hundreds of thousands of dollars from clients who thought he was a registered stockbroker working for and through an official brokerage firm. Through various verbal and written agreements, Kumar convinced participants to sign up and pay for a course where he would train them on how to pass the Series 57 exam, how to trade securities [...]

David N. Wood, a stockbroker with Moloney Securities, Inc.’s Manchester, Missouri office, is the subject of a $600,000 customer complaint filed with the Financial Industry Regulatory Authority (“FINRA”), according to his FINRA BrokerCheck report. Customer Allegations Against David N. Wood According to the customer’s allegations, David N. Wood made unsuitable recommendations of direct investments to the customer from 1990 to 2017. The direct investments at issue include interest in direct participation programs and limited partnerships. The customer is claiming $600,000 in damages based on the alleged unsuitable recommendations. FINRA’s Rule 2111 requires brokers and brokerage firms to have a “reasonable basis” to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer. To aid in this requirement, brokers are also obligated to know the essential facts concerning their client. Some of the factors included in a suitability analysis should include (but not be limited to) a customer’s age, other investments, financial situation [...]