According to FINRA’s 2022 BrokerCheck report, National Securities Corporation (“NSC”) has approximately 66 disclosures, and 16 customer-initiated arbitrations against it that include complaints for unsuitable recommendations, churning, and failing to diversify investment portfolios. National Securities was previously named in a 2017 Reuters report that identified 48 brokerage firms in which at least 30% of the firm’s brokers have red flags on their records.
National Securities Corporation sanctioned and fined by FINRA for artificially influencing the market and failing to disclose information to GPB customers
On June 23, 2022, FINRA announced that it had fined and sanctioned National Securities Corporation for approximately $9 million it received for underwriting 10 public offerings in an attempt to artificially influence the market. According to FINRA’s June press release, FINRA found NSC to be in violation of numerous securities laws and asserted that “NSC’s conduct was aimed at artificially stimulating demand and supporting the price of the offered securities, which tended to be thinly traded, in the immediate aftermarket.”
In addition, FINRA ordered NSC to “pay more than $625,000 in restitution for failing to disclose material information to customers who purchased GPB Capital Holdings, LLC private placements.” FINRA found that between April 2018 and July 2018, the brokerage “negligently omitted to tell investors in two offerings related to GPB Capital about delays in the issuer’s required public filings, including audited financial statements.”
If you invested in a GPB or another product through National Securities Corporation, you may have a legal claim.
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Report Suggests Conflicts of Interest by National Securities Brokers in Promoting Certain Biotech Stocks
In August 2018, Reuters published a report noting that in late 2016 Fortress Biotech acquired a controlling stake in National Securities’ parent company, National Holdings, and has since used the brokerage firm to raise money for some of Fortress’s high-risk bio-tech companies. The article notes that this conduct creates a potential conflict of interest with National Securities brokerage clients.
According to the article, some of the Fortress companies promoted by National Securities brokers include:
- Avenue Therapeutics (AXTI)
- Checkpoint Therapeutics (CKPT)
- Mustang Bio, Inc. (MBIO)
Other Fortress companies include:
- Aevitas Therapeutics
- Caelum Biosciences
- Cellvation
- Cyprium Therapeutics
- Helocyte, Inc
- Journey Medical
- Tamid Bio
If you invested in any of these companies based on the recommendation of your National Securities Broker, you may have a legal claim.
National Securities Broker Fraud Claims
FINRA, the regulatory agency that oversees broker-dealers, has recently barred several brokers who had been working at National Securities Corporation in the past few years. Some National Securities brokers who were recently barred, or have had other disclosures in their FINRA Broker Check reports, include:
- Zachary Bader
- Michael Banjany
- Robert Child
- Sam Collaku
- Todd Henrich
- John Labarca
- James Mariani
- Glenn McDowell
- John Moy
- Jason Wilk
- Maximillian Santos
- Steven Wood
- Marcus Keith Monett
- Peter Christopher Orthos
- Robert Trevlin Stewart
Firmwide Allegations Against National Securities Corporation
According to the 2018 Reuters report, based on 136 pages of disclosures, a sampling of the allegations against National Securities Corporation includes:
- Failing to report statistical information regarding customer complaints to FINRA within the required time period
- Selling non-investment grade “junk” bonds issued by the Commonwealth of Puerto Rico to customers below the minimum denomination (Minimum denominations are intended to limit sales of securities to retail investors for whom such bonds may not be suitable)
- Failing to identify or ignoring red flags involving numerous instances of potentially suspicious securities transactions
- Allowing its representatives to sell certain private placement investments without having reasonable grounds to believe that they were suitable for any customers
- Failure to adequately supervise brokers/ agents
- Selling securities below the public offering price in what was alleged to be a fixed-price offering
- Employing an unregistered agent and allowing that person to conduct securities transactions
According to FINRA’s BrokerCheck report, NCS has 82 disclosures as of June 2022, with similar complaints and allegations.
National Securities Corporation Stockbroker Complaints
According to FINRA’s BrokerCheck reports, a sampling of stock broker complaints against specific National Securities Corporation brokers includes the following allegations:
- Churning
- Negligent misrepresentation
- Acting as an unregistered sales agent
- Selling unregistered securities
- Numerous and excessive securities transactions
- Unsuitable use of margin considering the customer’s financial situation, investment objectives, and needs
- Unauthorized trading
- Misrepresentation of broker’s experience
Common Investor Complaints Against Brokerage Firms and Brokers
Disputes with brokerage firms are unfortunately not uncommon. Unethical stock brokers often prey on unsuspecting investors, and a broker scam can be difficult to identify until it is too late and excessive losses have occurred.
Investment fraud complaints can be widespread and relate to a variety of types of broker misconduct. Some of the most common complaints against a brokerage firm or stock broker include:
- Unsuitable investments/ unsuitable recommendations
- Unauthorized trading
- Failure to disclose material facts/ material omissions
- Overconcentration/ failure to diversify
- Churning
- Mutual fund sales abuse
- Excessive trading
- Material misrepresentations
- Broker negligence
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Noteworthy Financial Fraud Cases
| Chase Bank “Check Loan” Litigation | $100 million settlement for consumers alleging Chase offered long-term fixed-rate loans, only to later more-than-double required payments |
| Peregrine Financial Group Customer Litigation | Settlements worth $75 million for futures and commodities investors who lost millions in the collapse of Peregrine Financial Group, Inc. |
| NantHealth | 16.5 million settlement for investors in case alleging violations of federal securities laws related to the healthcare technology company’s 2016 initial public offering. |
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Gibbs Law Group
Gibbs Law Group’s financial fraud and securities lawyers have more than two decades of experience prosecuting fraud. The firm has successfully litigated against some of the largest companies in the United States, and has recovered more than a billion dollars on clients’ behalf.
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Silver Law Group
Silver Law Group is a team of securities lawyers, forensic accountants, and support staff who are dedicated to helping investors recover losses through securities arbitration and litigation.
The firm is led by Scott Silver, a former Wall Street defense attorney who has been representing customers in securities and investment fraud cases since 2002. Scott is admitted to practice in New York and Florida and the firm’s FINRA arbitration attorneys represents investors nationwide.