TAG | unsuitable investments
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In a January 25th., 2012, article from InvestmentNews.com, the staff writes that Former Boston Red Sox catcher and two-time World Series winner Doug Mirabelli, who made a nice career of being the preferred backstop to knuckleballer Tim Wakefield, finally saw a pitch even he couldn’t handle.
In March 2008, the same month he was released by the Red Sox, Mirabelli and his wife invested $880,219 with Bank of America Merrill Lynch adviser Phil Scott and took out loans that brought their account value to $1.8 million, according to an article in The New York Times. Scott put the money into the Merrill Lynch Phil Scott Team Income Portfolios, a bundle of 33 dividend-paying growth stocks. The loans were made on the condition that the account not dip below $1 million.
The InvestmentNews.com article goes on to say that by November, the Mirabellis’ account had dropped below that level, and they liquidated it to cover the loans. The Mirabellis argued in arbitration that Scott had put his client’s money into unsuitable, all-growth-stock investments and improperly briefed the couple on the loans and their requirements.
This arbitration panel ruled in favor of the Mirabellis and awarded them $1.2 million to cover their initial investment, plus all legal fees and arbitration costs. This was the second defeat for Scott in the last 12 months, according to The New York Times article. Merrill has moved to vacate the previous award and it’s unclear if they will do the same with Mirabelli’s.
“We disagree with the panel’s decision given the facts presented in this case,” said Bill Halldin, a spokesman for Merrill. “This account was handled properly during a very difficult time when there was extreme market volatility.”
Doug Mirabelli, 41, earned roughly $7 million over a dozen seasons. He now works as a real estate agent in Michigan.
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Comments off · Posted by admin in FINRA
Lawrence Ira Goldstein (CRD #3223787, Registered Representative, Beverly Hills, California)
submitted a Letter of Acceptance, Waiver and Consent in which he was fined $6,623, which includes the financial benefit Goldstein received, and suspended from association with any FINRA member in any capacity for 10 business days. Without admitting or denying the findings, Goldstein consented to the described sanctions and to the entry of findings that he recommended purchases and sales of securities to a customer of his member firm that were unsuitable for that customer based upon the customer’s financial status, tax status, investment objectives, and other information available to him about the customer’s circumstances and needs. The findings stated that the customer opened an account at Goldstein’s member firm, deposited a $100,000 inheritance into her account and indicated investment objectives of “current income (conservation)” and “current income (aggressive).” The findings also stated that Goldstein initially recommended that the customer invest in auction rate securities; the customer followed Goldstein’s recommendation and Goldstein invested the entirety of her account in auction rate securities even though these recommendations were not unsuitable for the customer. The findings also included that Goldstein later recommended that the customer begin to liquidate the auction rate securities and transition into preferred securities, focusing on new issues, with the understanding that if a particular preferred security appreciated to a degree that Goldstein believed it beneficial to sell the security rather than receive dividends, the security would be sold and another preferred security would be purchased; the customer agreed to follow his recommendation.
FINRA found that Goldstein recommended the purchase of preferred securities that were rated below investment grade. FINRA also found that Goldstein recommended, and the customer purchased, preferred securities that were increasingly below investment grade or not rated, and the recommendations that the customer purchase below-investment-grade securities were unsuitable for the customer because they exposed her principal to excessive risk of loss. In addition, FINRA determined that by recommending and then investing the customer’s assets in these preferred securities that were below investment grade, and also by over-concentrating the customer’s account in below investment-grade preferred securities, Goldstein recommended and made investments in the customer’s account that were unsuitable for the customer.The suspension was in effect from February 22, 2011, through March 7, 2011.
(FINRA Case #2008013000801)
This information was obtained on FINRA’s website.
If you feel you have been a victim of the alleged fraudulent schemes of Lawrence Ira Goldstein, call a Securities Arbitration Lawyer for a free consultation on how to recover your losses. To speak with an attorney, call 888-760-6552, or visit www.stockmarketlawsuit.com. Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.
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Soreide Law Group, PLLC, is investigating the management of portfolios at SMH Capital, Inc. There are allegations that many accounts under the direction of Max Silberman and other brokers were unsuitable based on the risk tolerance of the investors. Customers with little investment experience who were seeking stable investments were often sold highly risky investments.
Further, many portfolios were exposed to naked options which can lead to substantial losses.Soreide Law Group and other securities arbitration firms are exploring the sale of Franklin Bank common stock to SMH customers. SMH was the exclusive placement agent at issuance, and had an incentive to sell as many shares as possible.
It is believed that these incentives led to unsuitable concentrations of a single financial stock position in portfolios purporting to be low-risk.If your portfolio is managed at SMH, if you are a client of Max Silberman, or if you’ve been sold positions in Franklin Bank, please contact www.stockmarketlawsuit.com at (888) 760-6552 to review your potential claim.