FINRA

Published on: August 7, 2011

SELEWACH SENTENCED TO 8-12 YEARS IN PRISON

Shane Selewach, a former Ameriprise Financial Services Inc. broker, has been convicted of stealing nearly $335,000 from clients and sentenced to 8-12 years in prison for broker misconduct. Selewach’s misconduct includes six counts of larceny, six counts of securities fraud and conducting business as an unregistered broker dealer.

SELEWACH SENTENCED TO 8-12 YEARS IN PRISON

Selewach was employed with Ameriprise from September 1997 until he was fired in April 2006. In February of 2008, he was permanently barred from acting as a securities broker by the Financial Industry Regulatory Authority. His broker misconduct took place between July 2005 and November 2008, during which time he stole nearly $350,000 from six victims. For the last nine months of this time period, he was barred from being a broker but continued to operate as one regardless. Selewach led investors to believe that he was investing their money in hedge funds, commodities and real estate, but in reality he was using it for personal benefit including travel, mortgage payments and sporting event tickets.

During the trial, Selewach’s defense argued that the monies he received were loans rather than “high-interest-rate investments,” according to the Cape Cod Times. Selewach himself testified to this effect. However, victims of his crimes testified otherwise. One of his victims, Patricia Conti, lost more than $150,000 to Selewach. Conti testified that Selewach did not disclose that his departure from Ameriprise was a result of termination, that he continually pressured her and that he asked her to sign documents which she was unable to read fully because they were largely concealed from view.

Published on: August 3, 2011

FINRA RULING: EX-BROKER WILLIAM BAILEY SUSPENDED FOR TWO YEARS

by InvestorLawyers

William Bailey, a former broker for NEXT Financial Group Inc., was suspended for two years in Financial Industry Regulatory Authority (FINRA) securities arbitration. Bailey’s official cause for suspension, according to FINRA, was “unsuitable and excessive trading of mutual funds and variable annuities.” In addition, Bailey was charged with discretionary trading without prior written approval.

FINRA Ruling, Ex-Broker William Bailey Suspended for Two Years

Bailey’s broker misconduct took place over the span of nearly two years, from January 2006 to December 2007. His misconduct affected seven investors between the ages of 66 and 93. In addition, three customers were convinced by Bailey to hold their variable annuities for only a short time before switching them to new ones. FINRA determined that this was a violation to the broker’s suitability standard because it did not improve their financial situations and was not in keeping with their needs and financial objectives.

During this time period, Bailey recommended 484 “short-term mutual fund switch transactions,” according to FINRA. The average turnover for Bailey’s trades was only 60 days — a practice known as "churning." Sales charges and trading fees for these 484 transactions amounted to $147,000 and Bailey’s commissions for these transactions amounted to more than $120,000. Currently, there is no mention of financial restitution and Bailey did not admit or deny wrongdoing.

Published on: July 29, 2011

THREE INVESTORS WIN $5.5 MILLION FROM NEUBERGER BERMAN

by InvestorLawyers

Securities arbitration ended this month for a claim made by three clients against Neuberger Berman. The Financial Industry Regulatory Authority (FINRA) panel ruled on July 15^th that Neuberger Berman must pay $5 million in damages, $450,000 in (3 percent annual) interest and $7,500 in legal fees. Investment attorneys stated that the financial award covered the investments of all three clients.

Three Investors Win $5.5 Million from Neuberger Berman

In 2008, the claimants were persuaded by broker Brian Hahn to invest in Lehman Brothers Structured Notes, named comBATS and XLF, despite the customers’ previous insistence to avoid any Lehman investments. According to investment attorney Alan Block, “The way the notes were sold it wasn’t clear that Lehman was the underwriter.”

Nicholas P. Lavarone, who also represented the claimants in securities arbitration, said, “The customers were all told that the principal of the structured notes were either fully protected or partially protected.” It was clear, however, once Lehman Brothers filed for bankruptcy and the structured notes became practically worthless, that Lehman was, in fact, the underwriter and they were neither fully nor partially protected. In addition to the structured notes, one of the claimants invested a sum of $1 million in a private-equity hedge fund named Libertyview Credit Select. The assets of this fund were lent to Lehman Brothers.

Published on: July 21, 2011

SECURITIES ARBITRATION FILED AGAINST JAMES J. ALBRIGHT, AIG

by InvestorLawyers

On July 5, a securities arbitration claim was filed against James J. Albright Jr. and what was formerly known as AIG Financial Advisors. Claims were made on behalf of eight individuals against Albright and what is now Sagepoint Financial Inc., but more slighted customers are expected to come forward.

Securities Arbitration Filed Against James J. Albright, AIG

The claim states that Albright recommended the purchase of risky, non-traded, illiquid Real Estate Investment Trusts (REITs) to the eight claimants but failed to sufficiently disclose the risks. Inland Western Retail Real Estate Trust, KBS REIT and Behringer Havard are among the unsuitable REITs Albright recommended to his investors. These investments reportedly caused hardships and financial ruin among the investors, including substantial losses and locked assets.

“We believe that tens if not hundreds more of his trusted clients were invested in those REITs, and we anticipate filing many more arbitration actions to seek damages and other relief for them," James Eccleston of Eccleston Law, the firm that filed claim with the Financial Industry Regulatory Authority (FINRA), stated.