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Mar 18, 2023

J.P. Morgan Sued For Edward Turley’s Alleged Misconduct: $55 Million!

The Law Offices of Robert Wayne Pearce, P.A. has filed another case against Ex-J.P. Morgan broker Ed Turley for alleged misrepresentations, misleading statements, unsuitable recommendations, and mismanagement of Claimants’ accounts. The Law Offices of Robert Wayne Pearce has filed another case against J.P. Morgan Securities for alleged misrepresentations, misleading statements, unsuitable recommendations, and mismanagement of Claimants’ accounts continuing in fall 2019 and thereafter by Edward Turley (“Turley”), a former “Vice-Chairman” of J.P. Morgan. At the outset, it is important for our readers to know that our clients’ allegations have not yet been proven. IMPORTANT: We are providing information about our clients’ allegations and seeking information from other investors who did business with J.P. Morgan and Mr. Turley and had similar investments, a similar investment strategy, and a similar bad experience to help us win our clients’ case. Please contact us online via our contact form or by giving us a ring at (800) 732-2889. Latest Updates on Ed Turley – November 18, 2022 The Advisor Hub reported today that the former star broker with J.P. Morgan Advisors in San Francisco Edward Turley agreed to an industry bar rather than cooperate with FINRA’s probe of numerous allegations of excessive and unauthorized trading that resulted in more than $100 million worth of customer complaints. FINRA had initiated its investigation of Edward Turley as it related to numerous customer complaints in 2020. The regulator noted in its Acceptance Waiver and Consent Agreement (AWC) that the investors had generally alleged “sales practice violations including improper exercise of discretion and unsuitable trading.” According to Edward Turley’s BrokerCheck report, he had been fired in August 2021 for “loss of confidence concerning adherence to firm policies and brokerage order handling requirements.” On October 28th, FINRA requested Turley provide on-the-record testimony related to his trading patterns, including the “use of foreign currency and margin, and the purchasing and selling of high-yield bonds and preferred stock,” but Edward Turley through counsel declined to do so. As a result, Edward Turley violated FINRA’s Rule 8210 requiring cooperation with enforcement probes, and its catch-all Rule 2010 requiring “high standards of commercial honor,” the regulator said and he was barred permanently from the securities industry. Related Read: Can You Sue a Financial Advisor or Stockbroker Over Losses? Turley Allegedly Misrepresented And Misled Claimants About His Investment Strategy The claims arise out of Turley’s “one-size-fits-all” fixed income credit spread investment strategy involving high-yield “junk” bonds, preferred stocks, exchange traded funds (“ETFs”), master limited partnerships (“MLPs”), and foreign bonds. Instead of purchasing those securities in ordinary margin accounts, Turley executed foreign currency transactions to raise capital and leverage clients’ accounts to earn undisclosed commissions. Turley over-leveraged and over-concentrated his best and biggest clients’ accounts, including Claimants’ accounts, in junk bonds, preferred stocks, and MLPs in the financial and energy sectors, which are notoriously illiquid and subject to sharp price declines when the financial markets become stressed as they did in March 2020. In the beginning and throughout the investment advisory relationship, Turley described his investment strategy to Claimants as one which would generate “equity returns with very low bond-type risk.” Turley and his partners also described the strategy to clients and prospects as one “which provided equity-like returns without equity-like risk.” J.P. Morgan supervisors even documented Turley’s description of the strategy as “creating portfolio with similar returns, but less volatility than an all-equity portfolio.” Note: It appears that no J.P. Morgan supervisor ever checked to see if the representations were true and if anybody did, they would have known Turley was lying and have directly participated in the scheme. The Claimants’ representative was also told Turley used leverage derived from selling foreign currencies, Yen and Euros, to get the “equity-like” returns he promised. Turley also told the investor not to be concerned because he “carefully” added leverage to enhance returns. According to Turley, the securities of the companies he invested in for clients “did not move up or down like the stock market,” so there was no need to worry about him using leverage in Claimants’ accounts and their cash would be available whenever it was needed. The Claimants’ representative was not the only client who heard this from Turley; that is, he did not own volatile stocks and not to worry about leverage. Turley did not discuss the amount of leverage he used in clients’ accounts, which ranged from 1:1 to 3:1, nor did Turley discuss the risks currency transactions added to the portfolio, margin calls or forced liquidations as a result of his investment strategy. After all, Turley knew he could get away without disclosing those risks. This was because J.P. Morgan suppressed any margin calls being sent to Turley’s clients and he liquidated securities on his own to meet those margin calls without alarming clients.  This “one-size-fits-all” strategy was a recipe for disaster. J.P. Morgan and Turley have both admitted that Turley’s investment strategy was not suitable for any investor whose liquid net worth was fully invested in the strategy. It was especially unsuitable for those customers like Claimants who had other plans for the funds in their J.P. Morgan accounts in fall 2019 and spring 2020. Unfortunately, Turley recommended and managed the “one-size-fits-all” strategy for his best clients and friends, including Claimants. Turley was Claimants’ investment advisor and portfolio manager and required under the law to serve them as a “fiduciary.” He breached his “fiduciary” duties in making misrepresentations, misleading statements, unsuitable recommendations, and mismanagement of Claimants’ accounts. The most egregious breach was his failure to take any action to protect his clients at the end of February 2020, when J.P. Morgan raised the red flags about COVID-19 and recommended defensive action be taken in clients’ accounts. Turley Allegedly Managed Claimants’ Accounts Without Written Discretionary Authority Claimants’ representative hired Turley to manage his “dry powder,” the cash in Claimants’ accounts at J.P. Morgan, which he would need on short notice when business opportunities arose. At one point, Claimants had over $100 million on deposit with J.P. Morgan. It was not...

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Sep 1, 2020

Investors With “Blown-Out” Securities-Backed Credit Line and Margin Accounts: How do You Recover Your Investment Losses?

If you are reading this article, we are guessing you had a bad experience recently in either a securities-backed line of credit (“SBL”) or margin account that suffered margin calls and was liquidated without notice, causing you to realize losses. Ordinarily, investors with margin calls receive 3 to 5 days to meet them; and if that happened, the value of the securities in your account might have increased within that period and the firm might have erased the margin call and might not have liquidated your account. If you are an investor who has experienced margin calls in the past, and that is your only complaint then, read no further because when you signed the account agreement with the brokerage firm you chose to do business with, you probably gave it the right to liquidate all of the securities in your account at any time without notice. On the other hand, if you are an investor with little experience or one with a modest financial condition who was talked into opening a securities-backed line of credit account without being advised of the true nature, mechanics, and/or risks of opening such an account, then you should call us now! Alternatively, if you are an investor who needed to withdraw money for a house or to pay for your taxes or child’s education but was talked into holding a risky or concentrated portfolio of stocks and/or junk bonds in a pledged collateral account for a credit-line or a margin account, then we can probably help you recover your investment losses as well. The key to a successful recovery of your investment loss is not to focus on the brokerage firm’s liquidation of the securities in your account without notice. Instead, the focus on your case should be on what you were told and whether the recommendation was suitable for you before you opened the account and suffered the liquidation.

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Jul 1, 2020

FINRA Arbitration: What To Expect And Why You Should Choose Our Law Firm

If you are reading this article, you are probably an investor who has lost a substantial amount of money, Googled “FINRA Arbitration Lawyer,” clicked on a number of attorney websites, and maybe even spoken with a so-called “Securities Arbitration Lawyer” who told you after a five minute telephone call that “you have a great case;” “you need to sign a retainer agreement on a ‘contingency fee’ basis;” and “you need to act now because the statute of limitations is going to run.”

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Mar 2, 2019

A Stockbroker’s Introduction to FINRA Examinations and Investigations

Brokers and financial advisors oftentimes do not understand what their responsibilities and obligations are and what may result from a Financial Industry Regulatory Authority (FINRA) examination or investigation. Many brokers do not even know the role that FINRA plays within the industry. This may be due to the fact that FINRA, a self-regulatory organization, is not a government entity and cannot sentence financial professionals to jail time for violation of industry rules and regulations. Nevertheless, all broker-dealers doing business with members of the public must register with FINRA. As registered members, broker-dealers, and the brokers working for them, have agreed to abide by industry rules and regulations, which include FINRA rules.

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Jun 17, 2023

What is Securities Fraud? Definition, Examples, & How to Report

Securities fraud, which can also be referred to as investment fraud or stock fraud, is the deceptive practice by an individual or group in the securities markets that typically involves a victim (an investor) losing investment capital due to false or misleading information perpetuated by the perpetrator (the fraudster). If you’ve been the victim of securities fraud, you may be able to take legal action. Almost anyone can be a victim of securities fraud. While the elderly and inexperienced investors are frequent targets, even savvy investors can fall prey to securities fraud if they’re not careful. Perpetrators of securities fraud will often make false or misleading statements in order to persuade investors to buy or sell securities, usually at the benefit of the perpetrator. If you believe you have been a victim of securities fraud, it is important to take action. Securities fraud is an illegal or unethical activity punishable by law. You may be able to recover your losses by filing a lawsuit against the person or entity who committed the fraud, as well as protect yourself and other investors from future harm. You should consider talking with an investment fraud lawyer to learn more about your legal options. Key Takeaways Securities Fraud is an illegal and deceptive practice targeting investors to make investment decisions based on false or misleading information. There are many different perpetrators of securities fraud, and almost anyone can be a victim. Commons forms of securities fraud include but are not limited to: High Yield Investment Frauds, Ponzi & Pyramid Schemes, Advance Fee Schemes, Misconduct by an Investment Advisor, and Structured Notes. There are legal actions you can take if you have been the victim of securities fraud, especially if you’ve suffered substantial investment losses as a result. What is Securities Fraud? Securities fraud, also known as investment fraud or stock fraud, involves using false or misleading information to convince investors to make investment decisions that result in substantial losses. All forms of securities fraud aim to deceive investors into taking actions that benefit the perpetrator financially. Need Legal Help? Let’s talk. or, give us a ring at 561-338-0037. The Different Perpetrators of Securities Fraud There are many different perpetrators of securities fraud, and they all have different motivations. Some may be driven by greed, while others may simply be trying to take advantage of investors. Regardless of their motivations, all perpetrators of securities fraud share one goal: to make money by deception. Securities fraud can be committed by a single person, such as a stockbroker or a financial advisor. It might also be perpetrated by an organization, such as a brokerage firm, corporation, or investment bank. In these scenarios, the target is usually an unsophisticated investor who is unaware of the fraud being committed. Independent individuals may also commit securities fraud, such as insider trading or market manipulation. In these cases, the individual investor is usually the perpetrator rather than the victim. Due to the actions of the independent individual, the entire market may be impacted, and other investors may suffer losses as a result. Unfortunately, the perpetrator of securities fraud may be unknown. This is often the case with internet fraud, where scammers set up fake websites or send out mass emails to trick investors into giving them money. Anyone can be a perpetrator of securities fraud, and anyone can be a victim. The best way to protect yourself is to be aware of the different types of securities fraud and to know what red flags to look for. What are Common Examples of Securities Fraud? There are many different types of securities fraud, but some are more common than others. When a broker or investment firm takes your money with the promise of investing it and then uses it for other things, you’ve been a victim of securities fraud. Securities fraud schemes are often characterized by offers of guaranteed returns and low- to no-risk investments. The most typical forms of securities fraud, as defined by the FBI, are: High-Yield Investment Frauds These types of securities fraud are often characterized by promises of high returns on investment with little to no risk. They may involve a few different forms of investments, such as securities, commodities, real estate, or other highly-valuable investments. You can identify these schemes due to their “Too good to be true” offers. These types of fraud tend to be unsolicited. Perpetrators may elicit investments from investors by internet postings, emails, social media, job boards, or even personal contact. They may also use mass marketing techniques to reach a large number of potential investors at once. Once the fraudster has received the investment money, they may simply disappear with it or use it to fund their own lifestyle. The investment itself may not even exist. Ponzi & Pyramid Schemes These types of securities fraud use the money collected from new investors to pay the high rates of return that were promised to earlier investors in the scheme. Payouts over time give the early impression that the scheme is a legitimate investment. However, eventually, there are not enough new investors to support the payouts, and the entire scheme collapses. When this happens, the people who invested at the beginning of the scheme often lose all of their money. In these schemes, the investors were the only source of funding. Advance Fee Schemes In these types of securities fraud, the investor is promised a large sum of money if they pay an upfront fee. The fees may be called “commissions”, “processing fees”, or something similar. The fraudulent organization will often require that the fee be paid in cash, wire transfer, or even cryptocurrency. They may also ask the investor to provide personal information such as bank account numbers or social security numbers. Once the fee is paid, the fraudulent organization will often disappear and the investor will never receive the promised money. Other Securities Fraud In addition to the above list provided by the FBI, at The Law Offices of Robert Wayne Pearce, P.A., we have found that the following types of securities fraud are...

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Jun 11, 2023

Margin Call: Definition, Triggers and How to Handle One

Increased volatility in the market can sometimes bring about uncomfortable and surprising situations for investors, especially when it comes to a margin call. You may find yourself asking when do margin calls happen and how do they work. When you buy stock on a margin, you’re essentially borrowing money from your broker to finance the purchase. While this is a strategy that can amplify your gains if the stock price goes up, it can also lead to painful losses if the stock price falls and you’re forced to sell other assets or put more money into your account to meet the margin call. In this article, you will learn everything there is to know about margin calls, including: IMPORTANT: If you have suffered significant investment losses as a result of being forced to liquidate a margin account, you should speak to an experienced securities fraud attorney about your legal options. What is a Margin Call? A margin call is a demand from your broker that you must deposit more money or securities into your margin account to cover potential losses. This typically occurs when a margin account runs low on funds, usually due to heavy losses in investments. Investment Losses? Let’s Talk. or, give us a ring at 800-732-2889. In most, but not all cases, your broker will notify you of a margin call and give you a set amount of time to deposit more funds or securities into your account. You typically will have two to five days to respond to a margin call. Timeframes for responding to a call may vary depending on your broker and the circumstances. Regardless of the time frame, it is important that you take action as soon as possible. IMPORTANT: If you aren’t able to meet the margin call fast enough or don’t have any extra funds to deposit, your broker may also force you to sell some of your securities at a loss in order to free up cash. This is known as forced liquidation. In fact, many margin account agreements allow brokerage firms to liquidate your portfolio at their discretion without notice. What Triggers a Margin Call? There are several things that can trigger a margin call, but the most common is when the value of securities in your account falls below a certain level set by your broker (house maintenance margin requirement) or securities exchange where securities are traded (exchange margin requirement). When this occurs, your broker will issue a margin call in order to protect themselves from losses and to ensure that your account has enough funds to cover potential losses. You’re then required to deposit additional funds or securities into your account to meet the call to bring your account back to the maintenance margin level. If you don’t make a deposit, your broker may sell some of your securities at a loss to cover the shortfall. Margin calls can occur at any time, but tend to occur during periods when there is high volatility in the markets. What happens when you get a margin call? A margin call is most often issued these days electronically, through your broker’s online platform. You can also receive an email or other notification from your broker informing you of the margin call and how much money you need to deposit by a certain time. What happens next depends on your broker and the situation. If your broker is not worried about the situation, they may give you some time to raise the extra funds to deposit into your account. If they are worried, they may demand that you meet the call immediately or they may even sell some of your securities to cover the shortfall if you don’t have the extra cash on hand without notice. Yes, a broker can sell your securities without your permission if you don’t have enough money in your account to meet a margin call. All of this depends upon the contract you signed when you opened your account which outlines the broker’s rights in these situations. It’s important to remember that your broker will most likely be interested in protecting their own financial interests rather than yours, so you should make sure that you understand your rights and obligations before entering into a margin agreement. Because they are not always required to give you time to meet a margin call, unless they are under contractual agreement to do so, they may not notify you before liquidating assets in your account to pay off any margin debt. If this happens, your investment portfolio may suffer significant losses. Unfortunately, even if you are in a position to meet the call, you may not be able to get your securities back if they have already been sold by your broker. When you opened up your margin account, you likely signed an agreement that gave your broker the right to sell your securities without notifying you first. This is why it’s important to understand the terms of your margin agreement before signing it. You should also be aware of the risks involved in trading on margin. MPORTANT: If your broker decides to sell your highly appreciated securities, you can be left with large deferred-tax liabilities as well as major capital gain tax expenses that must be paid in the relevant tax year. In addition, brokers can sell your securities within the margin account at an undervalued price, leaving you with even more investment losses. How long do you have to pay a margin call? The time frame for responding to a margin call can vary depending on your broker and the circumstances. Typically, brokers will allow from two to five days to meet the call. You will need to review your account agreement with your broker to be sure. Beware, most margin account agreements do not require the broker to give you any amount of time or notice before they liquidate. What happens if you cannot pay the margin call? Not meeting a margin call can have long-term consequences for...

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Jun 10, 2023

Insider Trading: Definition, Rules, Punishment and Penalties

Using insider information to make investment decisions on the stock market is illegal and can lead to serious financial penalties. This type of investment fraud is commonly referred to as insider trading. In this article, we will cover the definition of insider trading, how it is detected and prosecuted when insider trading is illegal, and the potential penalties that a person may face if convicted. What is insider trading? Insider trading is the practice of trading a company’s stocks or other securities by a privileged individual (insider) to one’s own advantage through having access to confidential or non-public information. Need Legal Help? Let’s talk. or, give us a ring at 561-338-0037. For example, if a company insider tells his or her friend about an upcoming merger that has not been made public, both the company insider and the friend could be held liable for insider trading if the friend buys the stock. IMPORTANT: The definition of an “insider” for insider trading purposes is far broader than most people realize. While it includes corporate officers and directors, it also covers employees at lower levels, friends and family members, and other persons who have access to nonpublic information. Who is an “insider”? An “insider” is anyone who is an officer, director, 10% stockholder or has access to inside information as a result of his or her relationship with the Company or an officer, director, or principal stockholder of the Company. According to SEC Rule 10b-5, the definition of an “insider” goes considerably beyond these key company personnel. In fact, this rule also covers ANY employee who has access to confidential information as part of his or her job duties. In addition, if ANY person outside of the company has received a “tip” from an “insider” about the material, nonpublic information, that person would also be considered an “insider” under this rule. Lastly, Rule 10b-5 also covers any family members or close friends of an “insider.” For example, if the CEO of a company tells his son about an upcoming merger, and the son then buys stock in the company before the merger is public knowledge, both the CEO and his son would be considered “insiders” under this rule. Who can be charged with insider trading? An individual is liable for insider trading when they have acted on privileged knowledge or confidential information that is not available to the general public to attempt to make a quick/easy profit. This may include using information about: Identifying insider threats might be simple at times: CEOs, executives, and directors are immediately exposed to important information before it’s made public. However, lower-level employees may also have access to this type of information, which means that anyone from an entry-level analyst to a janitor could be susceptible to committing insider trading. Note: If you are under investigation or have been charged with insider trading, it is important to seek legal counsel immediately. An experienced SEC defense attorney can help you understand the charges against you and build a strong defense. How is insider trading detected? Both companies and regulators try to prevent insider trading to ensure the integrity of a fair marketplace. Despite what you may have read before, not all insider trading is illegal. Directors, workers, and management of a corporation may buy or sell the company’s stock with special knowledge as long as they notify the Securities and Exchange Commission (SEC) about those transactions; these trades are then made public. Unfortunately, not all insider trading is this transparent. Illegal insider trading happens when people use confidential information to make profits in the stock market. The SEC investigates and prosecutes these cases as they are a form of securities fraud. Here are a few of the ways that the SEC detects insider trading: Monitoring Trading Activity The government tracks stocks that are being bought and sold to look for patterns that may be indicative of insider trading. The SEC monitors trading activity, especially around the time when significant events happen, such as a major announcement or earnings release. This practice of surveillance can lead to the discovery of large, irregular trades around the time of these events. The SEC may then investigate the people behind those trades to see if they had access to nonpublic information. Complaints From The Public The SEC also relies on tips from the public to help detect insider trading. When the SEC receives a large number of complaints from investors who lose substantial sums of money around the same time, it can be an indication that insider trading has taken place. Since the insider trader has special knowledge, they can leverage investment tactics like options trading on the company’s stock to make a lot of money in a short period. When this occurs, it can lead to other investors losing money and filing complaints with the SEC. Whistleblowers The SEC’s Office of the Whistleblower was created in 2011 to reward people who come forward with information about securities law violations, including insider trading. The SEC gets tips from whistleblowers who come forward with information about potential violations. Whistleblowers can be current or former employees, lawyers, accountants, or anyone else with knowledge of insider trading. Whistleblowers have incentives to come forward, as they may be eligible for a portion of the money recovered by the SEC. The maximum award is 30% of the amount recovered, and it can be higher if the SEC takes action based on the information provided. Which regulatory agencies are involved in investigating insider trading? The SEC is the primary federal regulator that investigates and prosecutes cases of insider trading. The agency has a division, called the Division of Enforcement, which is responsible for bringing enforcement actions against individuals and companies who violate securities laws. The Department of Justice (DOJ) also plays a role in investigating and prosecuting insider trading cases. The DOJ can bring criminal charges against individuals who engage in insider trading. In addition to government agencies, FINRA (Financial Industry Regulatory Authority) is a private organization that regulates the securities industry. FINRA can bring...

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May 29, 2023

William King of Merrill Lynch Resigns Amid Unsuitable Investment Claims

Did William Worthen King Cause You Investment Losses? William W. (Bill) King, a prominent broker at Merrill Lynch, has resigned from the company following a surge in client complaints. King has faced allegations from at least ten customers since August. These individuals voiced their concerns over account mismanagement, specifically citing unsuitable investments and unauthorized trading of options positions. The disputes are currently under review, as reported by BrokerCheck. If you believe you have a claim against William King, you should strongly consider hiring an investment fraud lawyer. Do not wait until it’s too late to file a claim. The Law Offices of Robert Wayne Pearce, P.A., offers free consultations. Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve. William King Formerly With Merrill Lynch, Pierce, Fenner & Smith Incorporated Has 18 Customer Complaints For Alleged Broker Misconduct Who is William King formerly with Merrill Lynch, Pierce, Fenner & Smith Incorporated? William King (CRD #1432593) is a broker and investment advisor who was formerly registered with Merrill Lynch, Pierce, Fenner & Smith Incorporated. He is currently a subject under investigation for securities industry sales practice abuse. Investment Losses? Let’s Talk. or, give us a ring at 800-732-2889. William King Customer Complaints William King has been the subject of 18 customer complaints that we know about to recover investment losses. Four of the customer complaints were settled by his employer in favor of the investors. Merrill Lynch denied 5 of the customer complaints.  To date, the customers have not taken any further action. There are 9 other customer complaints made within the last year relating to option transactions that are still pending. A Summary of Recent News Around Merrill Lynch Broker, William W. (Bill) King A well-known Merrill Lynch broker, William W. (Bill) King, who operated from Vero Beach, Florida, and New York, has recently resigned from the firm amid a significant increase in client complaints. Since August, a minimum of ten customers have come forward with grievances, expressing concerns over the mismanagement of their accounts, particularly relating to claims of unsuitable or unauthorized trading of options positions. These disputes are currently pending review, according to information obtained from BrokerCheck. Bill King, boasting an impressive 37-year tenure at Merrill Lynch, made the decision to voluntarily resign on April 21. Recognized for his expertise as an “international” broker, with a specific focus on serving foreign clients, King successfully managed a substantial $1.4 billion in client assets, an achievement acknowledged by Forbes. In fact, Forbes ranked him at #166 on their prestigious list of top wealth advisors in 2022, while also including him in their best-in-state wealth management teams list for this year. Furthermore, King consistently appeared among Barron’s top 1,200 financial advisors from 2018 to 2022, as confirmed by his former team webpage on Merrill’s platform. This recent departure by King aligns with a disconcerting trend observed among several prominent brokers who often secure positions on industry lists, only to later encounter regulatory issues or face client complaints. Notably, King already had six customer disputes on record, covering the period from 1999 to 2014. However, it is worth mentioning that four of those disputes were either resolved without any action or withdrawn. Just because Merrill Lynch rejects your complaint doesn’t mean your claim is invalid. Merrill Lynch has a history of legal action and regulatory scrutiny for investment losses. So, it’s important to know that their rejection doesn’t automatically mean your claim isn’t valid. If you have lost money due to the actions of William King, it’s important that you reach out to an investment loss attorney quickly because the statutes of limitations can bar your claims. Call us at 800-732-2889. Allegations Against William King    A sample of the allegations made in the FINRA reported arbitration claim settlements and/or pending complaints for investment losses are as follows: William King Red Flags & Your Rights As An Investor Of course, William King did not admit to any of the allegations. But regardless of whether an arbitration award was entered, a settlement occurred, or the customer complaint is still pending, the allegations made by customers are red flags which should put all current and former customers of William King at Merrill Lynch, Pierce, Fenner & Smith Incorporated on alert to review carefully the activity and performance of their accounts and question whether William King has engaged in any stockbroker misconduct that may have caused them investment losses. The large number of customer complaints at Merrill Lynch, Pierce, Fenner & Smith Incorporated also raises questions about the brokerage firm’s supervisory practices. If these red flags raise questions, call us and we will inform you of your rights as an investor. Did You Lose Money Because of Broker Misconduct? If you have lost money due to negligence or fraud by a stockbroker or advisor, the easiest way to know if you have a case is to call our office at 800-732-2889. Our investment fraud attorneys will evaluate your claim for free and let you know if we can help you recover your losses. Need Legal Help? Let’s talk. or, give us a ring at 561-338-0037. File A Claim To Recover Your Investment Losses At Merrill Lynch, Pierce, Fenner & Smith Incorporated Due To William King If you have questions about Merrill Lynch, Pierce, Fenner & Smith Incorporated and/or William King and the management or performance of your accounts, please contact Attorney Pearce for a free initial consultation via email or Toll Free at 1-800-732-2889.

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May 10, 2023

How SEC Investigations Work: Process, Timeline, and Causes

You never want to be in the situation where the SEC is investigating you, but when they do, you must act quickly and decisively to minimize any harm. In this article, we’ll take a look at some of the most common reasons why the SEC might initiate an investigation into a company or individual, the SEC investigation process, how long SEC investigations take, and some steps you can take to protect yourself if it happens to you. What Causes an SEC Investigation? The SEC’s Division of Enforcement is in charge of investigating alleged breaches of securities law. Unregistered securities offerings, insider trading, accounting errors, negligence, market manipulation, and fraud are all common reasons for SEC investigations. Need Legal Help? Let’s talk. or, give us a ring at 561-338-0037. The SEC may also investigate a company or individual if they receive a complaint from someone who has been harmed by the alleged violations. Note: If you are under investigation by the SEC, it’s generally safe to assume that you’re under investigation for or a witness to securities fraud. You are strongly enouraged to seek an expereinced SEC defense lawyer. There are Two Types of SEC Investigations: The SEC can conduct two types of investigations: formal and informal. Informal Investigations: For a vast majority of cases, investigations are informal. An informal investigation is less formal and typically occurs when the SEC has general concerns about a company or individual’s compliance with securities laws. The focus of an informal investigation is broader, and the SEC typically relies on information provided by the company or individual under investigation as well as other sources such as whistleblowers. This means that the SEC staff will review the facts and evidence available to them and make a determination as to whether or not an enforcement action is warranted. Following an informal investigation, the SEC may choose to take no action, issue a warning letter, or file a formal enforcement action. Formal Investigation: A formal investigation is more serious and typically occurs when the SEC has specific evidence that a violation of securities laws has occurred. In a formal investigation, the SEC will often use its subpoena power to obtain documents and other information from the company or individual being investigated. The SEC generally reserves formal investigations for more-important matters involving large sums of money or a large number of investors. However, this isn’t always the case, and Enforcement Division staff may elect to pursue a formal inquiry in any situation where it appears that administrative, civil, or criminal fines might be appropriate. All SEC investigations are conducted privately. Facts and evidence obtained by the SEC during an investigation are not made public unless and until the SEC files a formal enforcement action. What Happens When You are Under Investigation? First, you will NOT be told you are under investigation by the SEC. But you will likely receive a letter from the SEC’s Division of Enforcement with a Subpoena requesting documents and/or requiring you to give testimony. At that point, you can request the opportunity to view the Formal Order of Investigation with a summary of the investigation underway. It is a very general description and rarely identifies who or what conduct is under investigation. In most cases, it is important to respond to the SEC as quickly as possible and to provide them with all of the relevant information. Failure to respond or provide false information can lead to civil and criminal penalties. It is strongly advised that you seek legal representation if you are under investigation by the SEC before you respond to the SEC’s letter. An experienced securities defense lawyer will be able to help you navigate the process and protect your rights. What are the Risks of Not Responding to an SEC Investigation? If you do not respond to an SEC investigation, the SEC may take enforcement action against you. This could include filing a lawsuit against you or seeking a court order requiring you to take specific actions such as making restitution to investors or ceasing and desisting from certain activities. The SEC may also seek to bar you from working in the securities industry or from participating in penny stock offerings if you are a registered person. How Long Do SEC Investigations Take? The length of an SEC investigation can vary depending on the facts and circumstances of the case. However, in most cases, the SEC will take a many months to investigate a company or individual before making a decision on whether to take enforcement action. Need Legal Help? Let’s talk. or, give us a ring at 561-338-0037. Of course there are factors outside of the SEC’s control that can also affect the length of an investigation, such as the availability of witnesses or the need to gather evidence from foreign jurisdictions. You can learn more about the SEC’s enforcement process by visiting the SEC’s website. What Happens After an SEC Investigation? After an SEC investigation, the Enforcement Division will decide whether to take enforcement action. Of course, the ideal case (when the SEC has started an investigation) is to conclude the inquiry with no evidence of wrongdoing. However, if the SEC’s Enforcement Division decides to take action, the division will file a lawsuit in federal court. The SEC’s litigation is generally public, and the agency will typically issue a press release announcing its action. The press release will include a summary of the allegations and the relief being sought by the SEC. Defendants in SEC lawsuits have the right to be represented by an attorney and to file a response to the SEC’s allegations. The litigation will proceed through the court system, and a final judgment will be issued by the court. What’s a Wells Notice? If the SEC decides that they want to pursue a formal enforcement action against you, they will send you what is known as a Wells Notice. A Wells Notice is a formal notification from the SEC that they are considering bringing an enforcement action against you for violating securities law. It gives you an opportunity to respond to the...

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May 10, 2023

What is the Difference Between Solicited & Unsolicited Trades?

Ideally, hiring a skilled broker takes some of the risk out of investing. Unfortunately, however, some brokers fail to act with the appropriate level of integrity. As an investor, it’s very important to understand the difference between solicited and unsolicited trades. The distinction has significant consequences on your ability to recover losses from a bad trade. What’s the Difference Between a Solicited and an Unsolicited Trade? The main difference between a solicited and unsolicited trade is: a solicited trade is a transaction that the broker recommends to the client. In contrast, an unsolicited transaction is one that the investor initially proposed to the broker. Need Legal Help? Let’s talk. or, give us a ring at 561-338-0037. In regards to solicited trades, the broker is ultimately responsible for the consideration and execution of the trade because he or she brought it to the investor’s attention. The responsibility for unsolicited trades therefore lies primarily with the investor, while the broker merely facilitates the investor’s proposed transaction. Why does the Difference Between an Unsolicited and Socilited Trade Matters? The status of a trade as solicited or unsolicited is hugely important when an investor claims unsuitability. An investor who wants to recover losses may be able to do so if the broker is the one who initially suggests the transaction. Take the following example. You purchase $150,000 of stock in a new company. Shortly after the trade is complete, the stock loses nearly all its original value. As an investor, you will want to recover as much of that loss as possible. One way is to file a claim against your broker on the basis that the stock was an unsuitable investment. When you say that an investment was unsuitable, you are essentially saying that based on the information your broker had about you as an investor, the broker should not have made the trade in the first place. If the stock purchase was at your request—that is, it was unsolicited—then it’s unlikely you’d be able to hold your broker liable for your losses. After all, the trade was originally your idea.  IMPORTANT: If the stock was suggested to you as a good investment by your broker, however, then you may have an argument that you were pushed into a solicited trade that was not in your best interests. If this is the case, you would have a much stronger argument for holding your broker liable. What Is Suitability? The Financial Industry Regulatory Authority (FINRA) imposes rules on registered brokers to protect investors against broker misconduct. Under FINRA Rule 2111, brokers are generally required to engage in trades only if the broker has “a reasonable basis to believe that the recommended transaction or investment strategy involving a security or securities is suitable for the customer.” Whether an investment is suitable depends on diligent consideration of several aspects of a client’s investment profile, including: When a broker makes a trade without a reasonable basis for believing that the trade is suitable, the broker violates FINRA Rule 2111. Investors may then be able to recover losses from the broker, and FINRA may impose sanctions, suspension, or other penalties on the broker. Broker Obligations to Their Clients When a broker conducts a trade on behalf of an investor, the broker uses an order ticket with the details of the trade. Brokers mark these tickets as “solicited” or “unsolicited” to reflect the status of the trade. For the reasons explained above, this marking is very important. On one hand, it protects a broker from unsuitability claims following a trade suggested by the broker’s client. On the other, it provides an avenue to recover losses in the case of a solicited trade that turns out poorly. FINRA Rule 2010 covers properly marking trade tickets. This rule requires brokers to observe “high standards of commercial honor and just and equitable principles of trade” in their practice. If a broker fails to properly mark a trade ticket, that broker violates Rule 2010. As an investor, you should always receive a confirmation of any trades your broker conducts on your account.  FINRA has found that abuse of authority by mismarking tickets is an issue within the securities industry. The 2018 report found that brokers sometimes mismarked tickets as “unsolicited” to hide trading activity on discretionary accounts. If your broker feels the need to hide a trade from you, that trade is likely unsuitable. How to Protect Yourself Against Trade Ticket Mismarking Whether your account is discretionary or non-discretionary, and whether you’re new to investing or a skilled tycoon, you should always pay close attention to your investment accounts. Carefully review your trade confirmations to make sure that all trades are properly marked. If you find a mistake, immediately report it to your broker or the compliance department of their brokerage firm. It’s their job to correct these mistakes and make sure they don’t happen in the future. Negative or suspicious responses to a legitimate correction request are red flags that should not be ignored. If you discover your broker intentionally mismarking your trade tickets, contact an investment fraud attorney immediately. Can Litigation Finance Help Your Legal Case? Exploring Options for Investment Losses Caused by a Broker Litigation finance can help your legal case by providing financial support for legal fees and expenses. It allows you to pursue your claim without upfront costs and levels the playing field against well-resourced opponents. However, it’s important to carefully consider the costs, choose a reputable provider, and understand the terms of the funding agreement. Concerned About a Solicited Trade? The Law Offices of Robert Wayne Pearce, P.A., have been helping investors recover losses for over 40 years. We have extensive experience representing investors and have helped our clients recover over $170 million in total. If you’ve become the victim of unsuitable or fraudulent investing, we can help you. Contact us today or give us a call at 561-338-0037 for a free consultation.

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Apr 11, 2023

What are Structured Notes?

Structured notes are a type of investment that can offer higher returns than traditional investments, but they also come with more risks. Structured notes are created by banks and other financial institutions, and they are typically sold to investors through brokerages. The issuer of the note will bundle together different types of securities, such as stocks, bonds, and commodities, and then structure them in a way that offers potential for higher returns. For example, a bank might create a structured note that pays out if the stock market goes up by a certain percentage over the course of the year. The downside of investing in structured notes is that they are complex financial products, which means that investors may not fully understand the risks involved. Additionally, if the underlying securities perform poorly, investors could lose all of their money. In this article, we will cover the following topics: – What are structured notes? – How do structured notes work? – The advantages and disadvantages of investing in structured notes – Legal action you can take if you’ve been sold a structured note If you’re thinking about investing in a structured note, it’s important that you understand how these products work before making a decision. Keep reading to learn more. What are Structured Notes? Structured notes are investments that often combine securities of different asset classes as one investment for the desired risk and return over a period of time. They are complex investments that are often misunderstood by not only investors but the financial advisors who recommend them. Note: The lack of understanding around how these investments actually work and the fees charged to purchase them have resulted in many investors losing a great deal of money. If you find yourself in this situation, you should speak with a securities attorney about your legal options. Types of Structured Notes There are different types of structured notes, but they all have one goal in common: to give the investor a higher return than what they would get from a traditional investment, like a savings account or government bond. Structured notes can be created with different underlying assets, including stocks, bonds, commodities, and even currencies. The most common type of structured note is the principal protected note, which is designed to protect the investor’s original investment while still offering the potential for growth. Other types of structured notes include: How do Structured Notes Work? Structured notes are created by banks and other financial institutions. The issuer of the note will bundle together different types of securities, such as stocks, bonds, and commodities. The way these assets are bundled together will create the desired risk and return for the investor over a period of time. All structured notes have two parts: a bond component and a derivative component. Most of the note is invested in bonds for principal protection, with the rest allocated to a derivative product for upside potential. The derivative product investment allows exposure to any asset class. It’s important to remember that a structured note is a debt obligation. The issuer of the structured note typically pays interest or dividends to the investor, similar to a bond, during the terms of the notes. This makes this type of investment seem safe and secure to many investors. However, there is always the potential for loss with a structured note. Structured notes suffer from a higher degree of interest rate risk, market risk, and liquidity risk than their underlying debt obligations and derivatives. If the issuer of the note defaults, the entire value of the investment could be lost. This means that if the issuing bank were to go bankrupt, investors could lose their entire investment. The Advantages of Investing in Structured Notes The versatility of structured notes allows them to provide a wide range of potentially lucrative outcomes that are difficult to come by elsewhere. Structured notes typically offer investors returns that are higher than the interest rates offered on traditional deposits. They may even offer the potential for capital appreciation. However, such gains or capital gains are subject to the performance of the underlying reference asset(s) or benchmark(s), which exposes investors to a wider range of risks than with a traditional deposit. IMPORTANT: Structured notes are often considered too risky and complicated for the individual investor. Unfortunately, the promise of greater commissions in recent years has prompted stockbrokers to push structured notes on investors, including those for whom they were unsuitable, too dangerous, or just not in line with their objectives. Related Read: Can I Sue My Financial Advisor For Structured Note Investment Losses? The Disadvantages of Investing in Structured Notes Investing in structured notes may not be suitable for everyone. The main reason is that they are complex products that are often misunderstood. A vast majority of structured notes are not principal-guaranteed. You may lose all or a substantial amount of the money you invested in certain situations, including if the reference asset or benchmark performs poorly, interest rates rise, or the issuer of the note defaults as outlined by the terms of the product. The principal repayments or the dividends payable, or both may be linked to the performance of a referenced asset, which is often highly volatile. As a result, if the referenced asset underperforms, you may suffer the loss of dividend payments and/or the loss of your principal investment. In addition, the issuer may have the right to call back, or redeem, the notes early, which could also trigger a loss of your investment. What are the risks? An investor will be exposed to a greater variety of risks when investing in structured notes than when investing in traditional products such as deposits. An investor will lose money if: Although structured notes have the potential to generate greater returns, investors also assume more risks. Investors may find themselves confused by the complex terms and conditions associated with structured notes. To make matters worse, some issuers have been known to market their products aggressively, without adequately disclosing the risks involved. In some cases, investors...

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Apr 11, 2023

Everything You Need to Know about an SEC Wells Notice

If you’ve received a Wells Notice from the SEC, it’s important to understand what it is and how to respond. What is a Wells Notice? A Wells Notice is usually a formal letter (sometimes just a telephone call) in which the staff enforcement attorneys of the U.S. Securities and Exchange Commission (SEC) notify individuals and/or firms that they are planning to recommend that the SEC authorize the attorneys to bring an enforcement action against the individual and/or the firm.  Investment Losses? Let’s talk. or, give us a ring at 800-732-2889. A Wells Notice will typically set forth the specific allegations against the individual and/or firm, as well as provide an opportunity for a response before the SEC makes a final decision on whether to bring charges. After an SEC investigation has turned up evidence of potential securities law infractions, the staff enforcement attorneys will usually provide a Wells Notice but, not always! Note: If you have received a Wells Notice, it means the SEC enforcement attorneys believe you have been violating securities laws and regulations, it is not a finding of guilt. It is important that you act quickly and consult with an experienced securities defense attorney to protect your rights and interests. What information is contained in a Wells Notice? A Wells Notice from the SEC will usually contain the following information: The majority of what appears in a written Wells notice is boilerplate. Typically, the written notice details statutory and regulatory infractions under consideration but does not allude to the specifics of the specific case. Are public companies required to disclose a Wells Notice? A Wells notice is a private communication to the recipient, and the Commission will not disclose it. In the past, many companies elected to not make any public disclosure of a Wells Notice. However, in recent years, some companies have voluntarily disclosed the receipt of a Wells Notice in their public filings with the SEC. Generally, such disclosures are a discretionary choice, rather than a requirement. The decision turns on whether the investigation and potential consequences would be a material fact that needs to be disclosed in light of other statements being publicly made by the company. Are registered broker-dealers and investment advisors required to disclose a Wells Notice? Yes, if you are a registered broker-dealer or investment advisor, you will be required to disclose the receipt of a Wells Notice in your Form U4. Related Reads: SEC Subpoenas: How to Respond How to Respond to a Wells Notice If you’ve received a Wells Notice, the first thing you should do is consult with an experienced securities defense attorney. Your attorney will help you understand the specific allegations against you and decide whether you should respond at all. If so, the attorney will craft a strategic and customized response on your behalf. Your response to a Wells Notice (also known as a Wells Submission) will be incredibly important in determining whether or not the SEC takes enforcement action against you. In some cases, a well-crafted response may convince the SEC to drop the matter entirely. In other cases, it may result in a more lenient punishment if the SEC does decide to bring charges. Before responding to a Wells Notice, you and your attorney will need to carefully review all of the evidence collected during the SEC’s investigation. This may include: Once the analysis of the evidence is complete, your attorney will work with you to prepare a persuasive response that addresses the SEC’s specific concerns. This is a very important step as a Wells Submission presents the facts and the first arguments to persuade the SEC Enforcement Division to not pursue an enforcement action or to recommend a less severe action. The SEC will review the response and make a final determination on whether or not to bring charges. Even though the Wells Notice process is confidential, it may become public if the SEC decides to bring an enforcement action against you. More important, whatever is written in the response to the Wells notice could be deemed an admission of the facts stated within the Wells Notice. What Happens if the SEC decides to bring Charges? If the SEC decides to bring charges after you’ve received a Wells Notice, it will file a formal complaint against you in federal court or administrative proceeding. At this point, you will have an opportunity to defend yourself against the SEC’s charges. This is a complex process, and you will need to have an experienced securities defense attorney by your side to protect your rights and help you navigate the legal system. A Wells Notice is just the beginning of the SEC’s enforcement process, but it’s a very important step. If you’ve received a Wells Notice, make sure you consult with an experienced SEC defense attorney as soon as possible to ensure the best possible outcome in your case. Consider Consulting with an Experienced SEC Defense Attorney If you’ve received a Wells Notice, you should consult with an experienced securities defense attorney as soon as possible. The Law Firm of Robert Wayne Pearce, P.A., has represented individuals and entities in SEC investigations and enforcement actions for over 40 years. For dedicated representation by attorneys with substantial experience in all aspects of SEC investigations and enforcement proceedings nationwide, contact our law firm by phone toll-free at 800-732-2889, locally at 561-338-0037, or Contact Us online. We will help you understand the specific allegations against you and will work with you to prepare a persuasive response to the SEC.

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Apr 4, 2023

Broker-Dealer Fraud & Misconduct

This is the ultimate guide to understanding broker-dealer fraud and misconduct for investors. For more than 40 years, the Law Offices of Robert Wayne Pearce, P.A. has been helping investors understand brokers, broker-dealers and the rules governing their activities. We understand that brokers and broker-dealers do not always act in the best interests of their customers. As a result, we have devoted our practice to helping investors who have been harmed by unscrupulous or negligent broker-dealers recover their losses through litigation or arbitration proceedings. In this guide, we’ll cover: What is Broker-Dealer Fraud? Broker-dealer fraud occurs when stockbrokers put their own financial interests ahead of their customers, violating their fiduciary duty. This can take many forms, including churning accounts to generate more commissions, misappropriating funds from customer accounts, making unsuitable investment recommendations, or even outright theft. Broker-dealers are held to a high standard of care in their dealings with customers. They must exercise care, skill and diligence when recommending investments, executing trades, and providing advice. When they fail to do so, they can be held liable for any losses suffered by their customers. Sometimes fraud is easy to spot – if a broker-dealer is stealing funds directly from an account, for example. Other times it may be more subtle, such as recommending investments that are not suitable for the customer’s needs or risk tolerance. When investors suffer significant losses due to broker-dealer fraud or misconduct, they may be able to recover damages through a process called FINRA arbitration. In these situations, it is best to consult with a securities attorney to determine the best course of action. What’s the Difference Between Broker-Dealer Fraud and Misconduct? Broker-dealer fraud is the intentional act of causing financial harm to customers by deliberately making false or misleading statements or omissions or engaging in dishonest or unethical practices. On the other hand, broker-dealer misconduct refers to negligence by a stockbroker in failing to meet their responsibilities and obligations as outlined in FINRA rules and regulations. For example, if a broker-dealer provides incorrect information to their customers or fails to take reasonable steps to ensure the accuracy of statements they make, this could be considered misconduct. Similarly, recommending investments that are not suitable for a customer’s needs or risk tolerance can also be considered misconduct. Investment losses due to either fraud or misconduct can be recovered through a FINRA arbitration. What are the Most Common Types of Broker-Dealer Fraud? There is a wide variety of broker-dealer fraud schemes, but there tend to be a few that are more common than others. When a broker-dealer fails to act in the best interest of their client, they may be engaging in one or more of the following practices: High-Yield Investment Frauds High-yield investment frauds are characterized by promises of high returns on investment with little to no risk. These types of fraud can involve several forms of investments, including securities, commodities, real estate, or other highly-valuable investments. You can identify these schemes by their “too good to be true” offers. Perpetrators may elicit investments from investors by internet postings, emails, social media, job boards, or even personal contact. They may also use mass marketing techniques to reach a large number of potential investors at once. Once the fraudster has received the investment money, they may simply disappear with it or use it to fund their own lifestyle. The investment itself may not even exist. Ponzi & Pyramid Schemes Ponzi and pyramid schemes use the money collected from new investors to pay the high rates of return that were promised to earlier investors in the scheme. Payouts over time give the early impression that the scheme is a legitimate investment. However, eventually, there are not enough new investors to support the payouts, and the entire scheme collapses. When this happens, the people who invested at the beginning of the scheme often lose all of their money. In these schemes, the investors were the only source of funding. Other Broker-Dealer Fraud In addition to the above list, at The Law Offices of Robert Wayne Pearce, P.A., we have found that the following types of securities fraud are also common: Misconduct by an Investment Advisor By far the most common type of broker-dealer securities fraud that our firm sees is misconduct by brokers. Brokers are supposed to act in their clients’ best interests (fiduciary duty), but some broker-dealers put their own interests ahead of their clients. For example, a broker-dealer might recommend that a client invests in a certain stock or mutual fund because it will generate a high commission for the broker, not because it is a good investment for the client. Other examples of misconduct by an investment advisor or broker include: Structured Notes Structured notes are investments that often combine securities of different asset classes as one investment for a desired risk and return over a period of time. They are complex investments that are often misunderstood by not only investors but the financial advisors who recommend them. Due to their complexity, it is easy for the terms of the investment to be misrepresented. For example, an advisor might tell their client that a structured note is “risk-free” when, in reality, there is a significant risk of loss. What Actions Can You Take if You Suspect Broker-Dealer Fraud? Broker-dealers must register with FINRA to participate in the securities industry, and FINRA’s arbitration program typically handles disputes between investors and broker-dealers rather than court proceedings. Compared to court proceedings, FINRA arbitration is typically faster, less expensive, and more private. To seek justice for losses due to broker-dealer fraud, filing a claim with FINRA’s arbitration program is recommended. Investors are advised to consult with an attorney to understand their rights and determine if they have a valid claim against the broker-dealer or associated financial professionals. An experienced investment fraud attorney can provide valuable guidance throughout the process. If you’ve lost a significant amount of your investments due to fraudulent broker-dealer activities, don’t hesitate to reach out for help. The Law Offices of Robert Wayne Pearce, P.A., can assess your case and represent you in the FINRA...

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Mar 30, 2023

Broker C. Raymond Weldon Investigation & Customer Complaints

C. Raymond Weldon Of Independent Financial Group, LLC And Formerly With The Investment Center, Inc. and Cetera Advisor Networks LLC, Has Six Customer Complaints For Alleged Broker Misconduct. C. Raymond Weldon has been the subject of at least six (6) customer complaints that we know about to recover investment losses. The Law Offices of Robert Wayne Pearce, P.A. currently represent five of his customers in a FINRA arbitration claim against Weldon’s employers. IMPORTANT: We are providing information about our clients’ allegations and seeking information from other investors who did business with C. Raymond Weldon and had similar investments, a similar investment strategy, and a similar bad experience to help us win our clients’ case. Please contact us online via our contact form or by giving us a ring at (800) 732-2889. Raymond Weldon Customer Complaints Weldon has been the subject of at least six (6) customer complaints that we know about to recover investment losses. We currently represent five of his customers against Weldon’s employers. A summary of the allegations made in the FINRA arbitration filed for investment losses realized by five of Weldon’s clients were as follows: 1. Introduction Claimants filed an arbitration claim against Respondents Cetera Advisors Networks, LLC (“CAN”), The Investment center, Inc. (“TIC”), and (“IFG”) for their registered representative C. Raymond Weldon (“Weldon”) failure to act in Claimants’ “best interest,” and his unsuitable recommendations, misrepresentations, misleading statements, acts, and omissions. Weldon had written discretionary authority to manage Claimants’ accounts and failed to do so. Respondents CAN and TIC formerly employed and IFG who currently employs Weldon held him out and other employees on his team as stockbrokers, investment advisers, investment managers, financial advisers, and financial planners with special skills and expertise in the management of securities portfolios and financial, estate, retirement, and tax planning matters. Weldon was a Chartered Financial Consultant, a professional with a certification which would indicate Respondents and Weldon knew or should have known his mismanagement Claimants’ accounts was in breach of his fiduciary duties and below the acceptable standard of care of professionals like him.  2. THE RELEVANT FACTS All Claimants, except one Claimant’s wife, worked together. They were introduced to Weldon as an investment manager who successfully managed securities brokerage accounts for a local synagogue and many of its members. With one limited exception, none of the Claimants had any securities brokerage accounts or experience investing in the stock or bond markets before they met Weldon. They were all interested in saving for retirement and he solicited them to establish an investment advisory and brokerage relationship for that purpose. Claimants Richard, Anthony, Alex, Chris, and, later on, Jessica, opened small, unleveraged, and well diversified mutual fund investment accounts, which Weldon managed for a fee on an annualized basis (the “ProFunds Accounts”). The Cetera Advisor Networks, LLC (“CAN”) Accounts In or about October 2020, Weldon boasted about his performance in managing the ProFunds Accounts and introduced them to another type of customized stock brokerage account he managed for synagogue members. He encouraged Claimants to open additional accounts with him to invest in the stock market for their retirement (the “CAN Accounts”). Weldon met with Claimants and showed them documents related to his performance managing other clients’ accounts. He spoke with the other Claimants over the telephone about his performance record. He provided little detail about his management style other than he had a “track record” for substantially growing the assets deposited in his clients’ securities brokerage accounts and preserving assets for their retirement. Weldon claimed that his pro-active management style allowed him to maximize growth in the up markets and minimize losses in down markets. There was no discussion with them about the true nature, mechanics, or risks of the highly leveraged and overly concentrated investment strategy he deployed in the technology sector of the stock market.  The individual Claimants gathered assets from savings, bonuses, and/or refinanced real estate to open and deposit cash in their CAN Accounts. They each deposited substantial amount of money in each of their accounts in December of that year and the following year for Weldon to manage for their retirement. The Claimants’ employer was the last to open an account and deposit funds it had reserved for working capital in January 2021. Weldon prepared and all the Claimants signed management agreements and gave Weldon the authority to manage their accounts on margin without any prior consultation about the investments being made or strategy deployed and paid him a management fee to do so. Claimants did not realize Weldon’s papers also allowed Respondents to get paid commissions on each transaction in their accounts. Weldon also prepared and completed new account opening documents and agreements for managed accounts with false and/or misleading information to suit his strategy and his own “best interest,” as opposed to Claimants. For example, he wrote that one Claimant that was a construction company had over 20 years’ experience investing in stocks, bonds, and mutual funds when he knew it did not even exist until 2013 and never had any securities brokerage accounts. Further, Weldon knew that the company was depositing working capital which needed to be conservatively invested in non-volatile liquid investments and yet he falsely identified the company’s investment objective as “aggressive growth” and risk tolerance as “significant” meaning “an investor who seeks maximum return and accepts the risk of significant volatility and decreases in the value of a portfolio.” According to Weldon, the company had no need for liquidity, which was untrue. These were not clerical errors; rather, they were intentional mischaracterizations by Weldon to slip under the Compliance Department’s radar and manage the accounts in a speculative manner against Claimants’ instructions.  Weldon regularly encouraged Claimants to bring in more money for him to manage. Why? Because it was in his “best interest,” not the Claimants. The greater the total account market value, the greater the management fees which were based upon assets under management. The more money Claimants deposited, the more transactions and more commissions, Respondents and he received, in addition...

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