A Purshe Kaplan investment advisor, Gopi Krishna Vungarala, has been charged by FINRA for lying to his customer, a Native American tribe, in connection with the sale of $190 million worth of non- publicly traded REIT investments. FINRA alleges that Mr. Vungarala's firm eared $11 million in commissions on the sales.
Alternative fund manager Equinox Fund Management, LLC recently settled charges with the Securities and Exchange Commission (SEC). The SEC alleged that Equinox misrepresented and misled investors about a specific fund named The Frontier Fund (TFF). The SEC alleged that Equinox misrepresented the amount of management fees it charged. As a result of the SEC allegations, Equinox agreed to refund its investors about $5.4 million plus $600,000 in prejudgment interest. The SEC has also imposed a $400,000 fine.
A FINRA arbitration panel awarded investors $1.9 million in compensatory and punative damages against a broker-dealer named NSM Securities, Inc., and its founder, Niyukt Raghu Bhasin. The investors claimed the firm churned their accounts. The firm has been barred from any membership or association with FINRA. Mr. Bhasin was barred from the securities industry in January 2015.
A couple in North Carolina recently filed a statement of claim against Morgan Stanley due to investment losses in an energy investment named Morgan Stanley Cushing MLP High Income ETN. The couple are claiming that they lost over $100,000 of the $150,000 they had invested. This investment has been struggling since the second half of 2014 when oil prices in the United States declined. The couple is alleging that Morgan Stanley breached its fiduciary duties and committed fraud.
Miguel Ortiz, a New York financial advisor, was barred from the securities industry by FINRA after allegations of fraud. FINRA claims that Ortiz falsified account statements and concealed the account value of a joint account held by his one of his customers. The victims believe that they lost $162,843 due to Ortiz's misrepresentations. Ortiz was also reprimanded for failing to disclose a $4.9 million civil judgment against him on his Form U-4. Ortiz has appealed FINRA's findings.
Charles J. Broida, an attorney from Columbia, Maryland, pleaded guilty to stealing over $28,000 from a client. Broida received a six month suspended jail sentence and was ordered to complete 300 hours of community service. The state's attorney charged Broida with one count of theft. Broida, in connection with his representation of an estate, stole investment dividends instead of distributing the dividends to the widow of the decedent. The widow thought that the dividend checks were going into an account that would be reassigned to her, but found out later that she had no access to the account or funds. Shortly after her discovery, she filed a complaint with the Maryland Attorney Grievance Commission.
Donald Toomer, an investment advisor from Henderson, Nevada, was recently indicted by a grand jury in New Jersey on fraud charges related to kick backs he received. The federal prosecutors allege that Toomer was involved in a "pump and dump" scheme. The prosecutors believe that Toomer received money in exchange of getting his clients to purchase specific microcap stocks targeted by his co-conspirators. Toomer allegedly received hundreds of thousands of dollars in kickbacks for his participation in the scheme.
Jacqueline Stanfill, a financial planner from Knoxville, who was charged with multiple felonies, decided to take a plea deal. The charges stemmed from an alleged fraud scheme that cost at least ten investors between $3.5-$9.5 million. Charles Schwab Investment Co. Inc. alerted the Federal Bureau of Investigation that it was receiving calls from clients of Stanfill regarding Schwab accounts that did not exist. Stanfill also faces civil litigation for the alleged scheme.
Two investors, a mother and daughter, were awarded $52,062 by a FINRA arbitration panel after they allegedly received unsuitable recommendations from their LPL broker, Samuel Izaguirre. The investors were only claiming about $9,000 in damages, but because of one of the investor's age and diminished mental capacity, they were awarded treble damages and attorney's fees. Izaguirre is still registered with FINRA and LPL has stood by him, claiming he acted in "good faith." The claims related to advice Izaguirre provide in connection with an IRA account.
The former president of Coastal Investment Advisors Inc., Michael Donnelly, admitted to defrauding his clients. Donnelly swindled almost $2 million from 13 clients, many of whom were over the age of 65. According to the SEC, Donnelly misappropriated money provided to him by his clients for investment and used it to pay personal expenses. Donnelly was able to perpetuate his scheme by providing false account statements and trade confirmations to the clients. Donnelley's settlement of the SEC's charges requires him to pay $1.9 million in disgorgement and interest of $365,723.