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W. Scott Greco
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Securities Fraud Lawyer representing investors against brokerage firms and stockbrokers.
Securities Fraud Lawyer representing investors against brokerage firms and stockbrokers.

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Prudential Fined for Failure to Supervise Fraudulent Withdrawals From Variable Annuity
FINRA fined Prudential Annuities Distributors $950,000 this month for its failure to detect and prevent the theft by its agent, Travis Wetzel, of almost $1,300,000 from a customer's variable annuity. The FINRA Letter of Acceptance, Waiver, and Consent may be found below.

Mr. Wetzel, who was a former registered representative of LPL Financial, allegedly submitted multiple forged wire transfer requests from the variable annuity, to be paid to a third party account in Mr. Wetzel's wife's maiden name.

FINRA alleged that Prudential failed to investigate red flags and audits associated with the repeated payments to third parties. FINRA stated "PAD failed to establish and maintain reasonable supervisory procedures and controls to supervise third-party distributions and prevent fraudulent withdrawals from VA accounts."

Although the FINRA press release states that the victim was repaid her losses, brokerage firms do not always voluntarily do so in broker theft cases. Greco & Greco has extensive experience in broker theft and forged withdrawal/wire cases. Although the individual thief may not have the funds to return the stolen monies, the associated firms required to supervise the activities of their agents may be found responsible under multiple legal theories. If you are the victim of a fraudulent theft, wire, or withdrawal, please contact Scott Greco for a free attorney consultation about your case. www.securities-lawyers.net


Posted by W. Scott Greco on 07/22/16.
Arbitration • Brokerage Firms • Prudential • LPL Financial • FINRA • Fraud • Securities Fraud • Unauthorized Trading • Permalink

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Washington DC Investment Advisor Dawn Bennett Barred by SEC
As set out in this SEC Order from an Administrative Law Judge (https://www.sec.gov/alj/aljdec/2016/id1033jeg.pdf), Dawn Bennett has been barred from the securities industry by the SEC. Dawn Bennett was a Washington DC area advisor who was previously registered to sell securities with Western International Securities.


Judge Grimes also imposed over one million dollars of fines and disgorgement against Ms. Bennett. The findings in the above Order included the following:


"Respondents repeatedly overstated their AUM [Assets Under Management] by at least $1.5 billion in Barron’s magazine, on a radio show hosted by Bennett, and in various other advertisements and communications with existing and prospective clients to create the impression that Respondents were larger and more successful players in the industry than was actually the case."


Judge Grimes' Order ultimately found that "Respondents made multiple material misstatements with scienter regarding AUM and investor performance. They therefore violated Securities Act Section 17(a)(1) and (2), Exchange Act Section 10(b), and Exchange Act Rule 10b-5(a), (b), and (c)."


Greco & Greco is a law firm located in the Virginia, DC, Maryland area representing investors against securities brokerage firms and advisors involving cases of securities fraud, unsuitable investments, misstatements, churning, and other investment fraud causes of action. We have previously represented harmed investors in FINRA arbitration proceedings against Ms. Bennett and Western International Securities. If you would like to discuss potential claims, please contact Scott Greco for a free consultation. (http://www.securities-lawyers.net/contact.html)


Posted by W. Scott Greco on 07/12/16.
Arbitration ??? Brokerage Firms ??? Western International Securities ??? FINRA ??? Fraud ??? SEC ??? Suitability ???Permalink

Our websites:


www.securities-lawyers.net


www.grecogrecolaw.com


http://securities-fraud-blog.com/index.php/site/washington_dc_investment_advisor_dawn_bennett_barred_by_sec

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Virginia Broker Andrew Corbman Suspended by FINRA
FINRA, a regulator of the securities industry, recently issued a Letter of Acceptance, Waiver, and Consent (AWC) regarding former FSC Securities Corporation broker, Andrew Corbman. Pursuant to the AWC, Mr. Corbman was suspended for one month from being registered with any FINRA firm.

Mr. Corbman was registered with FSC Securities from 2/2008 - 1/2011, Kovack Securities from 01/2011 - 11/2015, and Newbridge Securities from 11/2015 - 3/2016.

The AWC may be found here: http://disciplinaryactions.finra.org/Search/ViewDocument/64878 In the AWC, FINRA alleges that "Between April 2009 and March 2010, while registered with a FINRA member firm, Corbman made unsuitable recommendations to three customers that were inconsistent with the customers' investment objectives and risk tolerances and resulted in overconcentration oftheir liquid net worth in these investments. From April 2009 through June 2009, Corbman improperly recommended to two ofhis customers, who were a married couple with growth objectives and moderate risk tolerances, to purchase unsuitablehighly risky leveraged, inverse Exchange-Traded Funds (Non-Traditional ETFs")."

The AWC further states: "The investments that Corbman recommended were unsuitable as they were over-concentrated and exposed each customer to a risk of loss that exceeded each customer's risk tolerance and investment objectives. Therefore, Corbman's conduct violated NASD Rule 2310 and FINRA Rule 2010. Additionally, between March 2010 and January 2011, Corbman distributed a sales brochure for an alternative mutual fund to at least 10 of his customers that contained information that was misleading and failed to provide a sound basis for evaluating the alternative mutual fund referenced in it."

Mr. Corbman's registered offices over the last 12 years were in Ashburn and Lansdown, Virginia.

If you believe you may have a suitability or misrepresentation case regarding your investments, and wish to speak to a local Virginia attorney, please contact Scott Greco for a free consultation (http://grecogrecolaw.com/contact.html).

Posted by W. Scott Greco on 03/25/16.
Arbitration • Brokerage Firms • Kovack Securities • FSC Securities • FINRA • Securities Fraud • State Regulators • Virginia • Suitability • Permalink

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Investigation Regarding Randy Watts of Winchester, Virginia
Greco & Greco is currently investigating possible claims regarding a Winchester, Virginia financial advisor, Randy Watts. Mr. Watts operated under the name Watts Financial Group, and was registered to sell securities with Lincoln Financial Securities until November, 2015.

If you believe you may have a legal claim regarding investments with Mr. Watts or Lincoln Financial, please contact Scott Greco for a free consultation: http://www.securities-lawyers.net/contact.html

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SEC and FINRA FINE UBS OVER PUERTO RICO BOND FUNDS
The SEC and FINRA have brought charges and fined UBS relating to sales practices and supervision of their UBS Puerto Rico Bond Funds.

The SEC press release and Orders can be found here: http://www.sec.gov/news/pressrelease/2015-217.html.  The SEC alleged that UBS Financial Services of Puerto Rico (UBSPR) failed to supervise its broker in relation to solicited loans used to purchase additional UBSPR closed end funds, while failing to disclose the risks of this strategy and misrepresenting the safety of the strategy.  The SEC further alleged that UBSPR did not implement reasonable supervisory procedures and had inadequate systems in place to prevent and detect this wrongful conduct.  

UBS was censured and fined over fourteen million dollars.

FINRA also fined UBSPR for actions related to its Puerto Rico Bond funds - see the press release here (http://www.finra.org/newsroom/2015/finra-sanctions-ubs-puerto-rico-185-million-supervisory-failures) which states the following:

"...for more than four years, UBS PR failed to monitor the combination of leverage and concentration levels in customer accounts to ensure that the transactions were suitable given the customers' risk objectives and profiles. The firm failed to implement a reasonably designed system to identify and prevent unsuitable transactions in light of the unique Puerto Rican economy, in which retail customers typically maintained high levels of concentration in Puerto Rican assets and often used those highly concentrated accounts as collateral for cash loans. Despite UBS PR's knowledge of these common practices, it failed to adequately monitor concentration and leverage levels to identify whether certain customers' CEF transactions were suitable in light of the increased risks in their existing portfolio."

The above sales practices and lack of supervision have formed the basis of hundreds of FINRA arbitration claims pending against UBS and UBSPR.  If you would like to speak to an attorney about possible claims related to UBS of Puerto Rico bond funds, please read more about these claims at Greco & Greco's website (http://www.securities-lawyers.net/ubs_puerto_rico.html) and contact Scott Greco for a free consultation (http://www.securities-lawyers.net/contact.html). 

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Success of FINRA Arbitration Claims against UBS regarding Puerto Rico Bond Funds
To date, FINRA Arbitration Panels have issued five awards relating to claims filed by investors against UBS and UBS of Puerto Rico regarding their Puerto Rico Closed End Bond Funds (CEFs).  

The Awards (for cases filed after the 2013 crash of the CEF market) are summarized below:

1.  Bauza v. UBS Financial Services of Puerto Rico, et al..  Greco & Greco represented the Claimant in this case which resulted in the first award against UBS regarding the Puerto Rico CEFs.  UBS claimed that the Claimant only had $8,000 in net losses from the funds, but the panel awarded $200,000.00.  The case was tried in Washington, DC.

2.  Rosado v. UBS Fin. Serv. of Puerto Rico, et al.  Claimant sought $1,033,596 in damages.  The arbitration panel issued a written opinion (not common in FINRA arbitrations) making the following findings:  a.  "In the process of reducing its exposure in the CEFs by some 75%, UBS undertook an internal push for its brokers to sell its inventory to customers;" b. "this account was extremely over-concentrated and clearly unsuitable for Claimant;"  and c.  "proper and required supervision could have prevented Claimant's losses or at least limited them greatly."

The panel Ordered UBS to rescind the sales of the CEFs by repurchasing Claimant's account for $1,000,000.

3.  Ramis v. UBS Fin. Serv. of Puerto Rico, et al.  The Claimants in this case requested 2 - 2.5 million dollars in compensatory damages.  The panel awarded $250,000 against UBS.

4.  Rodriguez Gonzalez v. UBS Fin. Serv. of Puerto Rico, et al.  Claimants requested damages at the end of the hearing of 3 to 6 million dollars.  The panel awarded $2,545,000.00.  

5.  Lopez Del Valle v. UBS Fin. Serv. of Puerto Rico et al.  This case involved a large number of Claimants, however, all but three Claimants settled their claims prior to the final hearing.  The orignal Statement of Claim requested ten million dollars in damages, but the award is not clear how much of those damages were requested by the three remaining Claimants.  The arbitration panel awarded $2,395,402.00 in compensatory damages, interest from the filing of the Statement of Claim, $50,000 in costs, $5,000 in expert witness fees, and significantly, $479,079.80 in attorneys fees.

In summary, all of the arbitration panels that have heard these cases have issued awards in favor of Claimants, with one also awarding attorneys fees.  If you would like to speak to an attorney about possible claims related to UBS of Puerto Rico bond funds, please read more about these claims at Greco & Greco's website (http://www.securities-lawyers.net/ubs_puerto_rico.html) and contact Scott Greco for a free consultation (http://www.securities-lawyers.net/contact.html).

Posted by W. Scott Greco on 09/04/15. 
Closed End Funds ( CEF ) • Puerto Rico • Arbitration • Bonds • Brokerage Firms • UBS • FINRA • Fraud • Mutual Funds • Suitability • Permalink

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Article on recent FINRA arbitration awards against UBS regarding Puerto Rico Bond Funds including first award for W. Scott Greco client.

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Reuters article on first FINRA arbitration award out of hundreds of UBS of Puerto Rico bond fund arbitrations. Claimant represented by W. Scott Greco.

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First FINRA Arbitration Award Against UBS of Puerto Rico Regarding Bond Funds
Greco & Greco is pleased to report the first FINRA Arbitration Award against UBS Financial Services of Puerto Rico relating to the crash of UBS closed end bond funds in 2013 which were sold to Puerto Rico residents.  W. Scott Greco represented the Claimant customer in the case of Bauza v. UBS Financial Services of Puerto Rico, et al.  The arbitration panel awarded $200,000 in damages to the Claimant, despite claims by UBS that Claimant's net out of pocket losses were less than $10,000.  

The case involved a heavy over-concentration of the Claimant's UBS account in proprietary UBS closed end bond funds pursuant to UBS's recommendations.  The funds invested heavily in Puerto Rico bonds using leverage (a speculative investment technicque), and had significant geographic concentration risk.

If you wish to discuss claims againt UBS involving these funds, please contact Scott Greco for a free consulation.  www.securities-lawyers.net

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