Articles Tagged with Ladenburg Thalmann Financial Services

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Phillip Frost

The Securities and Exchange Commission has charged Phillip Frost, non-executive chairman of Ladenburg Thalmann Financial Services, with fraud in connection to an alleged “pump-and-dump” scheme. He was charged alongside nine other defendants, as well as related businesses and entities. The alleged schemes generated millions for the defendants while leaving retail investors “holding virtually worthless stock,” according to the SEC.

Philip Frost is also the Chief Executive Officer and board chairman of OPKO Health and a noted investor in biotechnology. Ladenburg Thallman is a network of independent broker-dealer firms such as Securities America, Triad Investors, and Investacorp.

The SEC’s complaint alleges that Mr. Frost was part of “a group of prolific South Florida-based microcap fraudsters led by Barry Honig” who participated in the manipulation of the share price of three companies’ stock; Mr. Frost allegedly participated in two of the three schemes. His co-defendants include Barry Honig, John Stetson, Michael Brauser, John O’Rourke III, Mark Groussman, John Ford, Alpha Capital, Anstalt, ATG Capital, Frost Gamma Investments, Trust, GRQ Consultants, Grander Holdings, Melechdavid, OPKO Health, Southern Biotech, and Stetson Capital Investments.

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InvestacorpPublic records published by the Financial Industry Regulatory Authority (FINRA) and accessed on December 15, 2017 indicate that Florida-based brokerage firm Investacorp, a subsidiary of Ladenburg Thalmann Financial Services, has been sanctioned by FINRA in connection to alleged rule violations. Fitapelli Kurta is interested in speaking to investors who have complaints regarding Investacorp (CRD# 7684).

According to a report by Investment News, the firm was censured in connection to allegations it failed to have proper procedures in place to detect the sales of high priced mutual fund shares, by certain of its representatives, to customers who were eligible for certain discounts.

The relevant disclosure on Investacorp’s BrokerCheck report states additionally that FINRA alleged the firm “disadvantaged certain retirement plan and charitable organization customers” who could have purchased class A shares in certain funds without a front-end sales charge, but who instead were sold either Class A shares with such a charge, or Class B or C shares with back-end charges and increased fees and expenses. These sales allegedly disadvantaged the customers in question by causing them to pay more than they were in fact required, according to FINRA. FINRA’s findings also state that Investacorp failed in its duty to supervise the application of sales charge waivers for eligible sales of mutual funds. While the firm relied on its representatives to determine whether the sales charge waivers applied, it allegedly failed to put in place written policies or procedures that wold help these representatives make such determinations. For example, FINRA states, Investacorp “failed to establish and maintain written procedures to identify applicable sales charge waivers in fund prospectuses for eligible customers.” It also allegedly failed to properly notify and train its advisors with respect to the availability of waivers for certain customers, and did not adopt proper controls to detect cases in which waivers were not provided to eligible customers.