National Securities Corporation was named in a 2017 Reuters report that identified 48 brokerage firms in which at least 30% of the firm’s brokers have flags on their records according to FINRA reports. According to the report, National Securities Corporation’s disclosures include:

  • Fined by FINRA at least 25 times since 2000
  • 35% of brokers had a history of regulatory run-ins, legal disputes, or personal financial difficulties (compared to an industry average of 9%)

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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

Firmwide Allegations Against National Securities Corporation

According to the 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

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

How Our Financial Fraud Lawyers Can Help

Investors who have been misled otherwise wronged by their broker or brokerage firm may seek recourse through FINRA arbitration, a forum for resolving disputes between investors and financial institutions or professionals.

FINRA recommends that investors get legal representation to offer direction and advice, as banks and brokers will likely be represented by an attorney as well. Securities arbitration lawyers play an important role in ensuring investors are given a fair chance in FINRA arbitration proceedings.

Girard Gibbs' Financial Fraud Experience

Girard Gibbs’ financial fraud and securities lawyers have more than two decades of experience prosecuting fraud. Our attorneys have successfully litigated against some of the largest companies in the United States, and we have recovered more than a billion dollars on our clients’ behalf.

We have fought some of the most complex cases brought under federal and state laws nationwide, and our attorneys have been recognized with numerous awards and honors for their accomplishments, including Top 100 Super Lawyers in Northern California, Top Plaintiff Lawyers in California, The Best Lawyers in America, and rated AV Preeminent (among the highest class of attorneys for professional ethics and legal skills).

Noteworthy Financial Fraud Cases

American Express Financial Advisors Securities Litigation $100 million cash settlement for clients alleging American Express steered them into under-performing “shelf space funds” to reap kickbacks
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 Court-appointed Co-Lead Counsel in a securities class action alleging the company’s founder violated federal securities law and artificially inflated stock prices

Our Team

Eric Gibbs

Eric has served in leadership positions in a number of high profile, complex financial lawsuits. He has been recognized as a Daily Journal, among the Top 100 Super Lawyers in Northern California, and a Law360 MVP for Consumer Protection.

David Stein

David’s advocacy has generated major recoveries for consumers impacted by financial fraud. He was named to the Top 40 Under 40 by Daily Journal and a “Rising Star in Class Actions” by Law360.

Michael Schrag

Michael has over 20 years of experience representing individuals in complex cases involving banking credit card and other financial frauds.

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