SEC Charges Father and Son Investment Advisers with Fraud (SEC Release)Negative Consent Morgan Stanley CARE Arbitration Program Sustained by Court (BrokeAndBroker.com Blog)SEC Charges Former Investment Adviser for Making Unsuitable Investments, Misleading Clients, and Misappropriating Client Funds (SEC Release)
[F]rom mid-2016 through mid-2018, Glick defrauded his advisory clients in three different ways. First, Glick allegedly placed the majority of his clients, many of whom had moderate or conservative risk tolerances, in unsuitable and risky investments that resulted in substantial losses. In addition, Glick failed to disclose the risks involved in these investments to clients. As also alleged in the complaint, after APA told Glick to liquidate the risky investments, he instead bought more of the same investments in client accounts. Second, Glick allegedly defrauded two advisory clients by representing that he would use their money for a real estate investment. As alleged, Glick instead misappropriated the clients' money and used it for his own options trading and to pay the clients purported interest payments on their investment. Third, after APA terminated Glick in June 2017, he allegedly misappropriated hundreds of thousands of dollars from an elderly widow who was a longtime advisory client. The complaint alleges that Glick told the client that he would invest all her money in real estate and instead, he misappropriated over $355,000 of her investment funds, including to pay his credit card bills. Glick also allegedly used a portion of her money to pay back other clients in Ponzi-like fashion.
SEC Charges California Resident with Fraudulent Free Riding Scheme (SEC Release)[F]rom November 2015 through March 2018, David and Michael Sztrom provided investment advice to clients through Sztrom Wealth Management (SWM). As alleged, David and Michael Sztrom concealed from clients that Michael Sztrom was not associated with APA or any registered investment adviser and was not subject to compliance oversight by APA or any other firm. As alleged in the complaint, David, without any disclosure to clients, also allowed Michael to use APA's clearing broker for client transactions. Furthermore, and again without disclosure to clients, Michael impersonated David on telephone calls with the clearing broker on at least 38 separate occasions, leading the clearing broker to terminate its agreement with APA. The Sztroms' and SWM's deception and multiple failures to disclose breached their fiduciary duties to clients. The complaint also alleges that David Sztrom allowed Michael Sztrom to access to confidential client information and to use his personal cell phone, instead of APA's email system, to text advisory clients about their investments.
transferred money from bank accounts to brokerage accounts via ACH, then used the funds to purchase speculative options contracts. The complaint further alleges that when the options trades lost money, Batra would recall the ACH transfers to the brokerage firm by falsely representing to the bank that he had not authorized the initial transfers. As a result, Batra allegedly imposed his trading losses on the brokerage firms. By contrast, according to the complaint, when his trading was profitable, Batra kept the profits for himself. As alleged, Batra engaged in the free-riding scheme between 2016 and 2020 in brokerage accounts in his name, and in the names of six others, at times without their knowledge or consent. In total, Batra allegedly recalled more than $1 million in ACH transfers, withdrew approximately $98,000 in trading profits from the brokerage accounts, and left losses in the brokerage accounts estimated at $665,000.
From May 24, 2019, through August 9, 2019, Scarfone was suspended in all capacities, pursuant to FINRA Rule 9552, for failing to timely respond to FINRA requests for information.
On December 5, 2018, HSBC issued a check in the amount of $1,798.14 to Scarfone's roommate. On January 7, 2019, Scarfone intentionally and without authority altered the check to his roommate by changing the check number and making the check payable to himself. On the same day, Scarfone endorsed the check and deposited the check into his savings account at HSBC's bank affiliate . In addition, on the same day, the check cleared. On January 8, 2019, Scarfone transferred the $1,798.14 from his HSBC savings account into his HSBC checking account and afterwards used the funds for his own benefit.