Frederick Baerenz was ordered by a FINRA arbitration panel to pay $331,000 for damages caused by unsuitable investment recommendations to clients. The clients invested $1.3 million with Baernez's Virginia-based firm, AOG Wealth Management. The clients claim that Baerenz invested a large majority of their money in private placements without fully explaining the risks of such investments.
The Securities and Exchange Commission has ordered Lee Weiss and his brokerage firm, Family Endowment Partners, LLC, to refund $8.4 million to defrauded investors. Additionally, the SEC fined Mr. Weiss $1.5 million and barred him from the securities industry. The SEC believes that Mr. Weiss had clients invest $40 million over a two year period in a stock named Biosyntec. Weiss received over $600,000 in compensation directly from the company. The SEC also alleges that Weiss failed to disclose the risks of the investment to his clients and the fact that the company was failing to meet its ongoing financial obligations.
William Marshall Dratel and his firm, The Dratel Group, Inc., were both expelled from the securities industry by the Financial Industry Regulatory Authority (FINRA). The Securities and Exchange Commission (SEC) also imposed sanctions on the firm for allegedly engaging in a trading scheme in which Dratel picked profitable day trades for his own account and designated the non-profitable trades for his customers' accounts. Through his scheme, Dratel's clients lost more than $200,000 in their discretionary accounts and Dratel profited about $489,000. FINRA is requiring Dratel to disgorge all profits from the scheme.
Washington, D.C. based financial advisor and radio talk show host, Dawn Bennett, and her firm, Bennett Financial Group, have been barred by the Securities and Exchange Commission (SEC). The SEC announced their charges of fraud against Bennett in September 2015. Leading up to these charges, Bennett has been the subject of multiple client complaints. Early this year, Bennett failed to appear and testify at the SEC hearing.
Louis Martin Blazer, III, a financial advisor from Pittsburgh, was charged by the Securities and Exchange Commission (SEC) for allegedly creating a Ponzi scheme. The SEC believes Blazer defrauded his pro athlete clients by taking about $2.35 million out of their accounts, without their authorization, and invested it into two films he was producing. One of Blazer's clients noticed that Blazer had taken $500,000 from his account for the films. When the client told Blazer he was going to file a lawsuit, Blazer said he would return the money. The SEC believes that he was able to make the repayment by using money misappropriated from another client's account.
Guy Gentile, an owner of a broker-dealer in New York, was recently indicted on charges of securities fraud. Mr. Gentile is accused of participating in a pump and dump scheme that generated $17.2 million in trading proceeds. The scheme involved the manipulation of the share prices of Raven Gold Corp. and Kentucky USA Energy, Inc. If found guilty, Gentile can face up to twenty years in prison.
Michael Roger Griffith of Middle River, Maryland was barred from the securities industry by the Financial Industry Regulatory Authority (FINRA). Griffith was accused of allegedly submitting an unauthorized life insurance application and setting up unauthorized automatic withdrawals from the customer's bank account to fund the policy. Once the customer discovered the unauthorized debits, the firm was alerted and the money was returned.
Michael Oppenheim, an ex JP Morgan broker, was sentenced to five years after stealing over $20 million of his client's money. At one point, Oppenheim was a successful broker managing 500 clients with combined assets of $90 million. Oppenheim is now claiming, according to an Investment News article, that his brain was 'hijacked' by a sports gambling addiction. The U.S. District judge presiding over the case gave him five years, instead of the ten years the prosecutors requested. Oppenheim pleaded guilty in November 2015.
Claus Foerster, a financial advisor from South Carolina, has been indicted on fraud charges. Mr. Foerster was barred by FINRA from the securities industry in 2014 after allegations that he was running a Ponzi scheme. Foerster allegedly ran the Ponzi scheme for 14 years and was able to defraud his clients out of $2.8 million. Foerster perpetuated the Ponzi scheme by providing his clients with fictitious account statements. The Ponzi scheme began while Foerster was a financial advisor employed by Smith Barney and continued through his employment with Raymond James. Raymond James terminated Foerster when they learned of the fraud and made restitution to the clients that were involved in Foerster's scheme.
Last month the pop music icon Prince died a sudden and untimely death at the age of 57. During the course of his career, Prince amassed a massive estate that includes the rights to his music catalog and unreleased music reportedly worth more well over $300 million. Prince did not make a will prior to his death. A comprehensive estate plan could have significantly reduced his estate's tax liability and controlled the release of his unpublished music after his death. In addition, and arguably more importantly, Prince's estate is facing costly and time-consuming litigation that likely would have been avoided if he had made a will.