Articles Posted in Firm Investigations

FINRA has barred former Cetera Advisors LLC broker Donna Jean Hines from the securities industry. Hines consented to the sanction and to the entry of findings that she refused to appear for on-the-record testimony in connection with FINRA’s investigation into whether she facilitated a customer’s bitcoin investment for compensation. The FINRA findings stated that although Hines initially cooperated with FINRA’s investigation, she eventually ceased doing so.

If you have lost money with Donna Jean Hines, or Cetera Advisors LLC, contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.

Iorio Altamirano LLP represents investors nationwide that have disputes with their financial advisors or brokerage firms.

FINRA has barred former Cambria Capital, LLC broker Steven Musielski from the securities industry. Musielski consented to the sanction and to the entry of findings that he refused to provide documents and information requested by FINRA in connection with an investigation into his sales practice activity. The FINRA findings stated that the request sought to investigate Musielski’s potential exercise of discretion without written authorization, potential excessive trading, and potentially unsuitable investments in leveraged and inverse-leveraged securities.

If you have lost money with Steven Musielski, or Cambria Capital, LLC, contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.

Iorio Altamirano LLP represents investors nationwide that have disputes with their financial advisors or brokerage firms.

Over the past calendar year, GPB Capital investors have won over $2.4 million in monetary awards in 10 out of 11 (nearly 91%) arbitration claims that have proceeded to a final hearing.  According to public records, many other claims filed against broker-dealers who sold the private placements offered by GPB Capital have been settled for monetary compensation.

The judgments and awards come after years of filing lawsuits and arbitration claims by GPB Capital investors.

For our latest posts related to GPB Capital, please click here.

Energy 11, L.P. is an illiquid, non-traded limited partnership sold as private placement security exclusively by broker-dealer David Lerner Associates, Inc. The limited partnership invests in the oil, gas, and energy sector, which has been extremely volatile the past several years.  Energy 11 was not suitable for most conservative or retired investors.

On November 5, 2011, the Chairman and Chief Executive Officer of Energy 11 GP, LLC, the general partner of Energy 11, L.P. (“Energy 11”), sent a letter to investors of Energy 11 notifying them that partial distributions would resume after a nearly two-year hiatus. The amount of the distribution will be 50% of the regular monthly distribution.

In March 2020, Energy 11 suspended monthly distributions to its limited partners as the partnership took on massive debt.  Unbeknownst to many investors, the distributions were merely a return of the limited partner’s original capital investment, not a dividend.   Energy 11 currently owes 21 months of unpaid distributions to its limited partners, totaling approximately $42 million.

Between July 2013 and June 2018, limited partners invested $675 million into GPB Automotive Portfolio, LP, which was sold as a private placement offering by broker-dealers and registered investment advisory firms across the country. Financial advisors, who received large commissions for selling limited partnership units of GPB Automotive, lured investors into this high-risk and illiquid security by emphasizing a high rate of return and monthly distributions.  Unfortunately for investors, distributions have not been paid since December 2018.

With the recent announcement that GPB Automotive Portfolio, LP agreed to sell Prime Automotive for $880 million, limited partners have been wondering what that means for them.

Below, we delve into GPB Automotive LP’s latest quarterly filing with the SEC to look for answers.

Iorio Altamirano LLP, a leading securities arbitration law firm, has filed a case through the Financial Industry Regulatory Authority (FINRA) Dispute Resolution Services’ arbitration forum against Aegis Capital Corp.

The claim, which Iorio Altamirano LLP filed on behalf of an investor in the GPB Automotive Portfolio, LP fund, seeks to recover investment losses as a result of the investment advisor’s recommendation to invest in GPB Capital.

GPB Capital sold unregistered and high commission limited partnership interests in a total of eight alternative-asset investment funds. The GPB Funds were marketed to independent broker-dealers and investment advisers who would, in turn, sell the GPB Funds to their retail investors. There are serious concerns that broker-dealers may have failed to conduct reasonable due diligence about the GPB Funds and GPB Capital.

On November 8, 2021, the Financial Industry Regulatory Authority (“FINRA”) and Aegis Capital Corp. (“Aegis Capital”) entered into Letter of Acceptance, Waiver, and Consent No. 2016051704305 (the “AWC”).  After conducting an investigation, FINRA alleged in the AWC that from July 2014 through December 2018, Aegis Capital failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures (WSPs), reasonably designed to achieve compliance with the suitability requirements of FINRA Rule 2111 as it pertains to excessive trading. As a result, Aegis Capital failed to identify trading in hundreds of customer accounts that were potentially excessive and unsuitable, including trading conducted by eight Aegis Capital registered representatives in the firm’s Melville and Wall Street branches whose trading in the accounts of 31 firm customers resulted in an average annualized cost-to-equity ratio (or break-even point) of 71.6%, an average annualized turnover rate of 34.9, combined customer costs (including commissions, markups or markdowns, margin interest, and fees) of more than $2.9 million, and cumulative losses of $4.6 million.

Additionally, the FINRA AWC alleged from July 2014 to June 2019, Aegis Capital failed to establish, maintain, and enforce a supervisory system, including WSPs, reasonably designed to achieve compliance with the suitability requirements of FINRA Rule 2111 when selling leveraged, inverse, and inverse-leveraged Exchange-Traded Funds (Non-Traditional ETFs) to retail customers. As a result, Aegis Capital failed to identify customers who purchased and held Non-Traditional ETFs for extended periods of time or whose purchase was inconsistent with their recorded investment objective, risk tolerance, or finances.

Customers of Aegis Capital, including customers that have been notified that they may be receiving restitution, should consult with a securities arbitration law firm.  If you or a loved one were a customer of Aegis Capital, contact  New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential consultation and review of your legal rights.

The Financial Industry Regulatory Authority (“FINRA”) has suspended stockbroker Leonard Marzocco from the securities industry.  Mr. Marzocco consented to the suspension after FINRA alleged that between June 2019 and December 2019, while associated with Woodstock Financial Group, Inc. (“Woodstock Financial Group”), Mr. Marzocco excessively and unsuitable traded a customer’s account, in violation of FINRA Rules 2111 and 2010.   As part of the agreement, Mr. Marzocco also agreed to pay $27,078 in restitution and a fine of $5,000.

Mr. Marzocco was registered as a broker with Woodstock Financial Group, Inc. in Nesconset, New York, from June 2019 to December 2019.   Prior to joining Woodstock Financial Group, Mr. Marzocco was a registered stockbroker with First Standard Financial Company LLC in Miller Place, New York, from June 2017 to June 2019.

This is the second time Mr. Marzocco has been suspended for excessive trading.  In July 2020, Mr. Marzocco contended to an 11-month suspension after FINRA alleged that he engaged in quantitatively unsuitable trading in a customer’s account.  The findings stated that Marzocco’s trading of the accounts resulted in high turnover rates and cost-to-equity ratios, as well as significant losses. The customers suffered collective losses of $196,331 and paid $81,523 in commissions and fees. Marzocco also recommended a significant number of trades using margin in the customer accounts. In particular, Marzocco recommended using margin to a customer, even though he was aware that the customer’s financial circumstances made it unsuitable for him.

The Financial Industry Regulatory Authority (“FINRA”) has barred stockbroker David Melilli from the securities industry for refusing to cooperate with a FINRA investigation into whether Mr. Melilli, among other things, exercised discretion without written authorization in a customer’s account.  The investigation was launched after Cambridge Investment Research, Inc. terminated Mr. Melilli in January 2020, alleging that he placed discretionary trades without authority.

Mr. Melilli was associated with Cambridge Investment Research, Inc. in Moorestown, New Jersey, from September 2019 to February 2020.   He was previously registered with SagePoint Financial, Inc. in Moorestown, NJ, from January 2010 until August 2019.

Customers of Mr. Melilli, Cambridge Investment Research, Inc., or SagePoint Financial, Inc. who have suffered financial losses, or suspect that Mr. Melilli did not have their best interest in mind when recommending investments or making account transactions, can contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential consultation and review of their legal rights.

The Financial Industry Regulatory Authority (“FINRA”) has suspended stockbroker Michael May from the securities industry.  Mr. May consented to the suspension after FINRA alleged that between June 2017 and May 2018, while associated with Joseph Stone Capital L.L.C. (“Joseph Stone Capital”), Mr. May excessively and unsuitable traded a customer’s account, in violation of FINRA Rules 2111 and 2010.   As part of the agreement, Mr. May also agreed to pay $10,349 in restitution and a fine of $5,000.

Mr. May was registered as a broker with Joseph Stone Capital L.L.C. from July 2015 to June 2020 and again from March 2021 to October 2021.   He is currently registered with VCS Venture Securities in New York, NY.

Iorio Altamirano LLP is investigating potential legal claims on behalf of customers of Michael May and Joseph Stone Capital related to investment recommendations and account activity made by Mr. May.

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