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Woman Receives Over $1M Award In Churning Case Against Former Morgan Stanley Broker

A FINRA arbitration panel awarded over $1 million to an elderly woman who claim to be ripped off by an ex-Morgan Stanley broker. Arbitrators recently found for Genevieve Lenehan, giving her punitive and compensatory damages, attorneys' fees, and other costs that amounted to $1.06 million. Lenehan claimed that the broker, Justin Amaral, both churned and reverse-churned her account. Amaral was a financial adviser to Lenehan and her husband, who passed away five years ago. When Mr. Lenehan died, Amaral allegedly began a systematic investment strategy in which he bought and sold closed-end funds and initial public offerings to generate fees, according to Ms. Lenehan's attorney. In addition, Amaral moved into a wrap account thousands of shares of General Electric stock that Ms. Lenehan had accumulated while working as a secretary at the manufacturing firm, beginning during World War II. By putting them in a wrap account, Amaral could charge a fee on shares that she had no intention of selling [...]

By |December 11th, 2015|FINRA, Press Releases & News|
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FINRA Expels Halcyon Cabot Partners And Bars CEO And CCO

FINRA expelled New York-based Halcyon Cabot Partners, Ltd., and barred Chief Executive Officer Michael Morris and Chief Compliance Officer Ronald Heineman from the securities industry, for fraud, sales practice abuses, and widespread supervisory and anti-money laundering failures. FINRA found that Halcyon, Morris and Heineman engaged in a scheme to conceal a kickback of private placement fees. FINRA further found that Halcyon, Morris and Heineman, along with a previously barred registered representative, Craig Josephberg, agreed to conceal the discount the issuer provided to a venture capital firm when it purchased a private placement in a cancer drug development company. The scheme was effected through a bogus placement fee agreement that was entered into after the venture capital firm had already agreed to purchase the entirety of the offerings. Halcyon did not perform any work, as there was already a buyer in place, but rather returned almost all of its $1.75 million placement fee to the investor through sham consulting agreements. This fraudulent [...]

By |October 8th, 2015|FINRA, Fraud, Press Releases & News|
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FINRA Sanctions Ten Former Global Arena Representatives

During a 2014 onsite exam, FINRA found numerous securities violations at Global Arena Capital Corp., including misleading sales pitches, customer account churning, as well as other business misconduct. The regulatory authority has banned seven former registered representatives from the industry, suspended an eighth, and barred two former branch managers from serving in a principal capacity. FINRA's sanctions are part of the agency's continuing effort to track groups of brokers that move from one risky firm to another. Seven of the ten people sanctioned had switched from HFP Capital Markets LLC, a firm which FINRA later expelled, to Global Arena Capital Corp., which opened a branch in October 2013 to register a number of brokers who had been discharged by HFP. As HFP did, Global Arena's new branch's business model included cold-calling customers, including the elderly, to make solicited recommendations of securities. "FINRA carefully monitors broker migration particularly with respect to brokers that move in groups from an expelled or high-risk [...]

By |September 23rd, 2015|FINRA, Fraud, Press Releases & News|
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FINRA Investigating National Securities Broker

FINRA has filed a complaint against broker Vito Balsamo alleging that Balsamo was "selling away" ownership interests in a limited liability company named V.W. Industries, LLC without getting prior written approval from his member firm. Selling away occurs when an investment professional sells or offers securities not held or offered by the brokerage firm with which he is affiliated. FINRA also accuses Balsamo of failing to provide testimony asked for by FINRA staff. According to FINRA's BrokerCheck records, customers have complained about Balsamo on at least four occasions; he has also been involved in two criminal matters, one regulatory action, and one judgment and lien throughout his career. Balsamo's customers have accused Balsamo of a number of securities law violations, including selling unsuitable investments, unauthorized trading, breaching his fiduciary duty, making misrepresentations and false statements, and churning. By industry standards, Balsamo has received a substantial number of complaints. Only roughly twelve percent of financial advisors have any type of disclosure [...]

By |May 12th, 2015|Broker Check, FINRA, Press Releases & News|
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