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First Financial Equity Corporation Financial Advisor Joseph Yanofsky Investment Losses

Posted on Tuesday, January 16th, 2018 at 8:43 pm    

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Erez Law is currently investigating First Financial Equity Corporation financial advisor Joseph Yanofsky (CRD# 870054) regarding discretionary trading, unauthorized trading, excessive trading and unsuitable investments. Yanofsky has been registered with First Financial Equity Corporation in Greenwood Village, Colorado since 2015. Previously, Yanofsky was registered with Merrill Lynch, Pierce, Fenner & Smith Incorporated in Greenwood Village, Colorado from 1990 to 2015, when he was terminated regarding, “Allegations relating to exercising discretion in non-discretionary accounts, providing inaccurate responses to related internal compliance questionnaires, directing an employee to enter trades utilizing another employee’s user identification and password and failing to report a customer complaint on a timely basis.”

In October 2017, FINRA suspended Yanofsky for 20 days and sentenced him to $10,000 in civil and administrative penalties and fines after he consented to the sanctions and to the entry of findings that he exercised discretion in customer accounts without written authorization to do so. FINRA found that while Yanofsky’s customers verbally expressed their general desire and authorization to participate in every syndicate offering the firm made available, these customers did not have discretionary accounts and their verbal authorization to participate in every syndicate offering. The FINRA investigation found that Yanofsky purchased the syndicate offering shares for some customers without having received the customers’ specific authorization to participate in those offerings. Additionally, FINRA found that Yanofsky directed a subordinate employee to use another registered representative’s login credentials and computer to enter syndicate offering orders as soon as ticketing opened. This maximized the number of Yanofsky’s customers’ orders that could be filled prior to the firm’s allocation of offering shares being depleted, which caused the firm’s trading records to be inaccurate and falsely reflect the true identity of the person who had entered or accepted those orders on behalf of customers.

Yanofsky has been the subject of nine customer complaints between 1983 and 2017, two of which were denied and two were closed without action, according to his CRD report:

August 2017. “The customers allege failure to follow instructions, unauthorized trading, excessive trading and unsuitable investment recommendations from february 2013 to april 2015.” The customer is seeking $2,268,095 in damages and the case is currently pending.

August 2015. “The Customer alleges unsuitable investment recommendations and misrepresentation from 2012 to 2015.” The customer sought $400,000 in damages and the case was settled for $75,000.

July 2015. “Customer through his attorney alleges failure to follow instructions and unauthorized trading from October 2012 to March 2015.” The customer sought $200,000 in damages and the case was settled for $35,000.

May 1985. “Customer claimed that he gave me an order to sell 25 NYSE puts that he owned. I stated that he had an opportunity to get out at a price slightly lower and decided to keep the position. Subsequently lost a total of $2,455.00.” The customer was awarded $750.

September 1983. “Alleged misrepresentation, churning, discretion and unsuitability for the losses amounting approximately $17,108.50. He seeked judgement joint and severally in the amount of $126,325.50.” The case was settled for $20,000.

Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Merrill Lynch, Pierce, Fenner & Smith Incorporated and First Financial Equity Corporation may be liable for investment or other losses suffered by Yanofsky’s customers.

Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.