American Portfolios Financial Services Review – Broker Fraud, Customer Complaints and Regulatory Actions
The White Law Group is investigating potential securities claims involving American Portfolios Financial Services (CRD#: 18487, Holbrook, NY)
American Portfolios Financial Services, headquartered in Holbrook, NY, is a national financial advisory firm. According to its FINRA Broker Report, the firm reportedly has 6 disclosure events on its broker record including 5 regulatory events, and 1 arbitration.
SEC Charges American Portfolios Financial Services with Failure to Supervise
November 2020- the Securities and Exchange Commission reportedly settled actions against American Portfolios Financial Services/American Portfolios Advisors Inc.in connection with the sales of volatility-linked exchange-traded products between January 2016 and April 2020.
According to the SEC’s order, the value of the products attempted to track short-term volatility expectations in the market, typically measured against derivatives of the CBOE volatility index. The SEC notes that the offering documents for the products made clear that the short-term nature of these products made investments in the products more likely to experience a decline in value when held over a longer period.
The SEC found that despite the warnings, and without understanding the products, representatives of the firm purportedly recommended their customers and clients buy and hold the products for longer periods, including in some circumstances, for months and years.
Further, the firm allegedly failed to adopt or implement policies and procedures regarding suitability and volatility-linked exchange-traded products.
The SEC also found that the firm purportedly failed to implement written policies and procedures reasonably designed to prevent violations of the Investment Advisers Act and its rules.
Further, American Portfolios allegedly failed reasonably to supervise certain brokerage representatives who recommended their customers buy and hold a volatility-linked product. The firm agreed to cease and desist from future violations of the charged provisions, a censure, and to pay disgorgement and prejudgment interest.
American Portfolios agreed to pay a civil penalty of $650,000.
Broker Misconduct and Customer Complaints
There have been several cases of registered representatives employed by American Portfolios Financial Services who were allegedly involved in broker misconduct and fraudulent activities.
December 2020 – According to a Letter of Acceptance, Waiver and Consent (AWC) on December 3, FINRA barred former American Portfolios advisor Bob Halldin after he refused to appear for on-the-record testimony requested by FINRA as a part of an investigation in connection with a series of Form U5 amendments filed by his former member firm. FINRA stated that the Form U5s disclosed complaints and arbitrations filed against Halldin alleging that he traded securities in individuals’ brokerage accounts held away from the firm.
According to his FINRA BrokerCheck report, Halldin was registered with American Portfolios Financial Services Advisors in Newington, CT from 2012 until 2017. His broker report indicates that he has 3 customer complaints for allegations of unsuitable investments, overconcentration and unauthorized trading, among others. He also reportedly has 2 judgment/liens and 6 financial disclosures including a bankruptcy from August 2020, according to FINRA.
July 2020 The Securities and Exchange Commission (SEC) charged former American Portfolios broker Mark Hopkins of Grand Blanc, Michigan with allegedly stealing more than $1 million from clients.
In 2017 Hopkins allegedly raised at least $1.15 million from at least five clients for what he said was an investment program at a local credit union that would return 6% or 7% profit, according to a complaint filed in the U.S. District Court for the Eastern District of Michigan.
Instead, Hopkins allegedly deposited the clients’ funds into an account he controlled at the credit union and misappropriated the money, according to the SEC. To cover up his alleged fraud, Hopkins allegedly falsified account statements, according to the regulator.
The SEC is reportedly seeking injunctive relief, disgorgement of ill-gotten gains and prejudgment interest, and civil money penalties.
Hopkins was reportedly registered with American Portfolios Financial Services in Grand Blanc, Michigan from 2009 until 2018, when he was permitted to resign, after allegations, according to his FINRA BrokerCheck profile. Hopkins reportedly “accepted customer funds for an investment not on the books of the [broker-dealer] without obtaining pre-approval,” and purportedly failed “to update outside business activities and report judgment,” according to FINRA.
FINRA reportedly barred Hopkins from working in the securities industry in May 2019.
Investigating Potential Claims
All broker-dealers have a responsibility to adequately supervise its employees. They must ensure the necessary procedures and systems to detect misconduct. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.
When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.
Free Consultation with a Securities Attorney
The foregoing information, which is all publicly available, is being provided by The White Law Group. The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois.
If you have concerns regarding investments you purchased through American Portfolios Financial Services and would like to speak with a securities attorney, please call The White Law Group at 888-637-5510.
For more information on The White Law Group, visit www.whitesecuritieslaw.com.
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