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Investors Lose $11.7 Million In Risky Hedge Fund Through Lincoln Financial

According to a FINRA Letter of Acceptance, Waiver and Consent ("AWC"), between about October 2008 and April 2009, registered representatives in two of Lincoln Financial Advisors Corporation (“LFA”) branch offices allegedly recommended that customers invest in a hedge fund offered as a sub-account to a private placement variable annuity (the ”PPVA”). The Hedge Fund engaged in a complex options trading strategy, including trading uncovered options. LFA approved the PPVA and the Hedge Fund, after it was added as a sub-account by the PPVA sponsor, for investment by the LFA’s customers. According to the AWC, based on recommendations of the Firm’s registered representatives, 25 of the Firm’s customers invested a total of approximately $11.7 million in the Hedge Fund. In 2010, the Hedge Fund was shut down. Although the Hedge Fund allegedly engaged in a complicated options trading strategy that differed significantly from traditional investments and even other alternative investments, LFA also allegedly failed to provide adequate training or guidance to [...]

By |September 24th, 2015|FINRA, Press Releases & News|
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FINRA August 2015 Disciplinary Actions: Part II

Newbridge Securities Corporation of Fort Lauderdale, Florida submitted a letter of acceptance, waiver, and consent that censured the firm, fined it $22,500, and mandated that it change its written supervisory procedures. According to FINRA's findings, Newbridge failed to report information pertaining to municipal securities transactions for clients to a real-time transaction reporting system within fifteen minutes of the trade time and failed to report the correct trade time on the memoranda of brokerage orders. The findings also showed that the firm's supervisory system did not provide for supervision reasonably designed to achieve compliance with respect to certain applicable securities laws and regulations. Prospera Financial Services, Inc. of Dallas, Texas submitted a letter of acceptance, waiver, and consent that censured the firm, fined it $12,500 and mandated that it change its written supervisory procedures. FINRA found that the firm failed to transmit reportable order events to the Order Audit Trail System on 140 business days. Further, the firm's supervisory system did not provide for [...]

By |September 16th, 2015|FINRA, Press Releases & News, SEC|
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Former Broker, Robert K. Smith, Under Investigation

Robert Keith Smith, formerly a broker with Berthel Fisher, has been accused by more than ten of his clients throughout his career of overconcentrating their accounts in private placement securities, including equipment leasing programs, oil and gas investments, and non-traded real estate investment trusts. Smith started his career in 2000 with American General Securities and was registered with the firm until May 2006. Subsequently, he was associated with ProEquities until June 2010 and with Berthel, Fisher & Company Financial Services until June 2014. Numerous complaints against the same broker regarding the same or similar charges of misconduct is unusual in the brokerage industry. The majority of brokers go their whole careers without having a complaint against them. The number of brokers who have more than two customer complaints against them is remarkably low. Accordingly, having over ten customer complaints against Smith, all of which regard private placement securities, is highly irregular. The kinds of products Smith sold to investors on [...]

By |August 4th, 2015|Broker Check, FINRA, Press Releases & News|
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FINRA Sanctions Brookville Capital Partners And Bars President

FINRA announced today that it has ordered Brookville Capital Partners, LLC of Uniondale, New York to pay restitution of over $1 million to the victims of a fraud relating to the sales of a private placement offering. The regulatory authority also ordered the firm to pay a $500,000 fine and barred its President, Anthony Lodati, from the securities industry. FINRA found that Brookville and Lodati defrauded their customers between January and October 2011 in a scheme pertaining to the sale of a private placement offering called Wilshire Capital Partners Group LLC, through which investors would supposedly have an indirect interest in pre-initial public offering shares of Fisker Automotive. During the period of illicit activity, Lodati discovered that John Mattera, a man with a substantial criminal and regulatory background, had effected transactions on behalf of Wilshire as Wilshire's CEO and Managing Director. Lodati failed to disclose that Mattera had been sanctioned by the SEC in 2010 for securities fraud and convicted [...]

By |March 12th, 2015|Press Releases & News|
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