As recently reported, the Financial Industry Regulatory Authority (“FINRA”) barred broker John Phillip Correnti (CRD# 5319471) in light of his failure to provide testimony and documents in connection with an investigation into potential violations of applicable securities industry rules. Publicly available information through FINRA indicates that, in a career spanning 2007 – 2016, Mr. Correnti was previously affiliated with four different brokerage firms. Most recently, Mr. Correnti was associated with AXA Advisors, LLC (“AXA”) (CRD# 6627) (2015-2016).

FINRA records also indicate that Mr. Correnti was the subject of a customer dispute in 2011, which concerned allegations of mismanagement, misrepresentations, breach of fiduciary duty, as well as claims grounded in negligence / negligent misrepresentation. Furthermore, FINRA records indicate that Mr. Correnti was discharged from his employment with AXA in July 2016, following allegations concerning “[h]is apparent involvement in the possible manipulation of a low-price security.”

In August 2017, Mr. Correnti, who worked as a registered representative for AXA in Cleveland, Ohio, was barred from the securities industry by FINRA. Specifically, FINRA sanctioned Mr. Correnti with an industry bar following his failure to completely respond to FINRA’s request for documents, as well as his incomplete testimony. In addition, FINRA records suggest that the investigation was aimed, at least in part, on whether Mr. Correnti “[e]ngaged in undisclosed business activities….”

Publicly available information suggests that Mr. Correnti may have been involved in “possible manipulation of a low-price security.” According to the Securities and Exchange Commission (“SEC”), a penny stock generally refers to a security issued by a very small company that trades for less than $5 per share. Penny stocks are typically quoted over-the-counter (“OTC”) for trading purposes, meaning these stocks trade over a decentralized market. Prices of penny stocks may be susceptible to price manipulation due to the relatively low trading volumes in their shares.

The attorneys at Law Office of Christopher J. Gray, P.C. have significant experience in recovering funds on behalf of investors who have incurred losses as a result of alleged misconduct by their financial advisor and/or brokerage firm. Investors may contact our office at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

Individuals who have made investments based on a cold-call may have been the victim of fraud. Here are several indicators that a cold-call may have been a scam:

• The caller used high-pressure sales tactics. Cold-calling fraudsters often use scripts that contain a list of retorts for every possible objection and will continue to attempt a sale as long as the investor remains on the line.
• You can’t get a word in edgewise. Because these scam artists have a response to every objection, they will often try to talk over the investor in the process of convincing them that they should invest.
• The caller offers a “once-in-a-lifetime” opportunity. A “once-in-a-lifetime” opportunity that the caller claims to have received through “confidential” or “inside” information is a red flag that the investor is being scammed.
• The caller claims the investment is based on a company’s “breakthrough technologies.” These are especially dangerous because said technologies play off legitimate technologies. However, they often sound too good to be true.
• The caller refuses to send written information on the investment. Investors should always be able to receive written investment information and take their time to review it and make a decision. However, cold-call fraudsters want to push a quick decision so they will avoid sending any information. Bear in mind that fraudsters are crafty and will often agree to send information but then steer away from doing so.
• The caller is an unregistered broker. Many cold-calling fraudsters are not properly registered to sell securities, and frequently are not properly supervised. Be sure to look up the name of the broker using FINRA’s BrokerCheck to find out if they are registered.

If you have made investments based on a cold-call and suffered significant losses as a result, find out more about your legal rights and options by contacting an investment attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

Ralph Edward Thomas Jr., Vice President of Harbor Financial from August 2000 through February 2004 and a financial advisor for Wells Fargo Advisors LLC from February 2004 through July 2010, is allegedly the perpetrator of a particularly heinous fraud. Thomas controlled a trust of $3 million that had been granted as a result of birth injuries that resulted in cerebral palsy for a child. According to allegations against Thomas, he stole more than $756,900 from the trust through cashier’s checks and unauthorized withdrawals and used the money to pay personal expenses and personal credit card accounts. How did he do it? The settlement funds were used to purchase an annuity which would pay the child at least $3,990 per month. In reality, the monthly payment actually averaged around $6,287 per month. However, when Thomas should have dispersed this monthly sum to the mother for care of the child, he only dispersed $1,000 to $1,500 a month. In addition, Thomas allegedly used forgery to initiate three mortgages in the name of the fund’s trustee. Proceeds from the mortgages were deposited into the account and then withdrawn by Thomas for personal use. In this way, Thomas obtained an additional $205,000.

Stock broker fraud lawyers strongly urge investors to keep a close eye on their monthly statements and any other documentation received from entities controlling their investments. Investors that have not, up to this point, been diligent in monitoring their statements should go back and review statements immediately. If any discrepancies, irregularities or unauthorized transactions are found that may indicate stock broker fraud has occurred, contact an investment attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

Kleck, who was LPL Financial’s branch manager in La Grande, “sold investments in high-risk oil and gas partnerships to nearly three dozen Oregon residents, including many elderly people,” according to the State of Oregon. In addition, Kleck’s recommendations were unsuitable for his clientele and were not in keeping with their age and investment objectives. The State of Oregon stated, “Many of Kleck’s clients were in their 70s and 80s, and some were not capable, due to poor health, of making sound investment decisions.” According to Oregon’s decision, LPL violated securities laws including failure to supervise and failure to properly enforce company policies and procedures.

By law, broker-dealers must make “suitable” recommendations to their clients. Under FINRA Rule 2111, brokers are required to consider investment objectives, tax status, financial status, age, risk tolerance, time horizon, liquidity needs, other investments and experience when determining if a recommendation is a suitable investment for a client. For example, broker-dealers handling a customer’s conservative investment portfolio may not recommend high-risk investments that are not in keeping with the customer’s investment objectives. For more on the suitability standard, see the previous blog post, “FINRA Revises Suitability Rule 2111.”

While LPL Financial was fined and given a consent order, this action does not correct the wrong done to individual investors. If you sustained losses as the result of an investment with Jack Kleck and LPL, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact an investment attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

The following suggestions will help you prevent unauthorized trading and determine if you have been a victim of unauthorized trading:

1. Take notes! This can be especially helpful in determining if you have been a victim of the second method of unauthorized trading described above. It is important to keep careful notes of all conversations between you and your broker. Notes should include dates, times, what was discussed and what your instructions were to your broker. These notes can be compared with monthly statements to determine if your broker conducted trades that were either unapproved or conducted before your approval was given. Remember, unauthorized trading is still fraud, even if you later consented to the trade, and should not go unchecked.

2. Check statements! You should always read your account statements, confirmations and anything else related to your investments in a timely fashion. Do not put off reviewing your statements and be sure to keep them for future reference. In the event that you need to file a securities arbitration claim, it is important that you have both your statements and your notes for your stock broker fraud lawyer to review.

3. Be clear! Always be abundantly clear of your wishes in communications to your stock broker. Repeat your instructions and be firm about your decisions. If you do not want your broker to execute a trade, say so clearly, distinctly and at least twice. Then record your decision in your notes as well as the number of times you expressed your instructions to your broker. Doing so will ensure that there is a clear understanding between you and your broker about the transaction being discussed, as well as help to prevent confusion in the event that you file a securities arbitration claim.

If you believe you have been the victim of unauthorized trading, contact an investment attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

Brokers usually have a choice of markets in which they can execute a trade. If the stock is listed on an exchange, the order may be directed — by the broker — to the same exchange, a different exchange or a “market maker.” A market maker is a firm which remains ready to pay publicly-quoted prices for a stock listed on an exchange and sometimes offers “payment for order flow,” a term that refers to a payment made from the market maker to a broker in exchange for having the order routed to it. OTC stocks can be sent to an “OTC market maker.” Brokers can also use internalization, in which the order is sent to another division of the firm and is then filled from the inventory of the firm. Finally, the broker may use an ECN, or electronic communications network, in which orders are automatically matched at specified prices.

The broker may choose any of the above methods for executing a buy or sell order so long as the method falls within the limits of “best execution.” Best execution refers to the broker’s duty to seek the method that is both reasonably available and most favorable to the customer. “Price improvement” is an important part of determining which method is determined to be the best execution. When an order has an opportunity to be executed at a price that is better than the current quote, this is an opportunity for price improvement. It is important to note, however, that price improvement is an opportunity, not a guarantee.

SEC regulations don’t have a set amount of time in which a trade can be executed, but investors should check to see if their firm advertises a specific speed of execution. In the case that a firm does advertise a speed of execution, the firm then is required to notify investors of significant delays and is not permitted to exaggerate the speed of execution.

If you believe you have been a victim of broker misconduct in which your broker failed to adhere to the duty of “best execution,” contact a stock broker fraud lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

Not even Gould’s own mother was safe, and she lost around $500,000 to her son, the bulk of her inheritance. All in all, more than 25 people were swindled out of more than $5 million. Gould spent some of the money on charitable donations to boost his reputation while at the same time spending it on strippers and entertaining them at St. Louis hotel parties. In addition, he paid the rent of at least one stripper. Gould also paid off personal debt, renovated his home, started several businesses, and facilitated a ponzi scheme.

Once the theft was discovered, Gould confessed and, according to his lawyer, has cooperated and attempted to remedy the losses of his victims. During his trial, he expressed remorse for his actions and disdain for himself.

During proceedings, there was no shortage of touching victim testimony. One victim lost the last $7,000 of her husband’s death settlement while another widow wrote of the loss of her savings, some of which was the last money her husband earned while battling cancer.

Of the 97 to 121 months in prison Gould was facing, he received only the minimum sentence. According to Assistant U.S. Attorney Hal Goldsmith, Gould has currently only repaid between $40,000 and $50,000. However, he has now been ordered to pay $3.1 million on his own and another $1.2 million together with David Rubin of Chesterfield with whom he defrauded one man. Gould and Rubin both pleaded guilty on April 29. Rubin has not yet been sentenced.