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Craig Scott Capital Subject Of FINRA Complaint

FINRA recently filed an amended complaint against Craig Scott Capital, LLC and its co-founders, Craig Scott Taddonio and Brent Morgan Porges, alleging, among other things, excessive trading, churning, failure to supervise. Churning and Excessive Trading According to the complaint, Respondents churned and excessively traded Craig Scott Capital customer accounts. They encouraged their sales team to recommend active trading in customer accounts to maximize commissions to the detriment of their customers. FINRA claims that for nearly three years Craig Scott Capital fostered a culture of aggressive, excessive trading of customer accounts. By encouraging the firm's representatives to recommend hundreds of short-term trades in customer accounts, the firm earned over $5 million in commissions while customers lost over $9 million dollars in losses in accounts where the annualized turnover rates were as high as over 200 and the annualized cost-to-equity ratios were as high as 800%. Failure to Supervise FINRA also alleged that Respondents failed to establish and enforce a reasonable supervisory [...]

By |February 12th, 2016|FINRA, Press Releases & News|
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Broker Lies About Charging $11M In Commissions For Nontraded REITs and BDCs

FINRA charged a broker for lying to a Native American tribe about the $11 million in commissions he charged when he sold the tribe $190 million in nontraded real estate investment trusts and business development companies. Between June 2011 and January 2015, broker Gopi Krishna Vungarala “regularly lied to his customer, a Native American tribe, regarding investments he recommended,” according to the FINRA complaint. Vungarala served as the unnamed tribe's registered representative as well as its treasury investment manager, according to the complaint. He “fraudulently induced the tribe to invest hundreds of millions of dollars in nontraded REITs and BDCs, without revealing he and his firm received commissions for the sales (usually 7%) or the availability of certain volume discounts.” Also according to the complaint, the tribe bought $190.4 million of illiquid REITs and BDCs and were charged $11.4 million in commissions, which went to his broker-dealer Purshe Kaplan Sterling Investments. Mr. Vungarala was paid $9.6 million – or 84.3% - of those [...]

By |February 9th, 2016|FINRA, Fraud|
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Stephens, Inc. Submits AWC Letter To FINRA For Failing To Apply Sales Charge Discounts

Stephens, Inc. submitted a letter of Acceptance, Waiver, and Consent to FINRA for failing to apply sales charge discounts to certain customers' eligible purchases of unit investment trusts ("UITs") between June 1, 2010 and May 31, 2015 in violation of FINRA's rules. Stephens alse failed to establish, maintain, and enforce a supervisory system and written supervisory procedures reasonably designed to ensure that customers received sales charge discounts on all eligible UIT purchases in violation of both NASD and FINRA rules. On March 31, 2004, FINRA issued Notice to Members 04-26, Unit Investment Trust Sales, which reminded broker-dealers that they should develop and implement procedures to ensure customers receive available sales charge discounts for UITs. The Notice further stated that UIT transactions must take place "on the most advantageous terms available to the customer" and that it is the firm's responsibility to "take appropriate steps to ensure that they and their employees understand, inform customers about, and apply correctly any applicable [...]

By |February 8th, 2016|FINRA, Press Releases & News|
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Frankowski Firm Investigating UBS Broker

The Frankowski Firm is currently investigating the possible wrongdoing of current UBS Financial Services broker Bradley Ross of Fort Lauderdale, Florida. According to FINRA's BrokerCheck, Ross has been the subject of a number of customer complaints. In 2015, a customer alleged Ross, while employed at UBS, recommended investments not consistent with their risk tolerance. The customer claimed Ross's recommendation was made with total disregard for their risk tolerance and was a radically unsuitable recommendation based on both their risk tolerance and investment history. Again in 2015, a customer alleged Ross, while employed at UBS, refused to follow the customer's directives to sell, violated multiple fiduciary obligations including the buying of unsuitable investments and making unauthorized trading. The customer requested $94,862 in damages. Also in 2015, a customer alleged Ross, while employed at UBS, recommended unsuitable investments and over-concentrated their account. The customer sought $400,000 in damages in the complaint. In 2014, a customer alleged Bradley Ross, while employed at UBS Financial [...]

By |February 5th, 2016|Broker Check, FINRA, Press Releases & News, SEC|
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