Attorney Pasieczny at 40th Annual NWSI in Seattle

Darlene Pasieczny moderates panel at the 40th Annual Northwest Securities Institute (March 2020)

As current chair-elect of the Oregon State Bar’s Securities Regulation Section, attorney Darlene Pasieczny (pictured here moderating a panel via webcast) assisted with the program planning for the 40th Annual Northwest Securities Institute (NWSI) program in Seattle, Washington.  As part of this panel presentation, attorney Dan Keppler and SEC trial counsel Brent Smyth spoke on SEC receiverships, and attorneys Heidi Brooks Bradley and Diana Breaux spoke on the FHLB v. Credit Suisse litigation and the Securities Act of Washington.  The remaining program saw excellent presentations by SEC and state regulators (including Dorothy Bean from the Oregon Division of Financial Regulation) and securities attorneys from Oregon, Washington, and Canada, on a wide range of topics.   

Darlene Pasieczny’s practice at Samuels Yoelin Kantor LLP focuses on all stages of corporate and securities law issues, securities litigation and FINRA arbitration, as well as fiduciary litigation in trust and estate disputes, and elder financial abuse.



Attorneys Blachly & Pasieczny Present on Combating Financial Elder Abuse

Recent Tools to Combat Financial Elder Abuse”: a closer look at mandatory and permissive conduct for Oregon securities professionals.

Today, over 46 million Americans are 65 years of age or older. This accounts for nearly 15% of the population. According to the Population Reference Bureau, that number is projected to more than double by the year 2060. It will reach an estimated 98 million and 24% of the U.S. population. Approximately 1 out of every 10 Americans, age 60 and older have experienced some form of elder abuse. Estimates of financial elder abuse and fraud costs range from $2.9 billion to $36.5 billion annually

On Thursday, February 21st, SYK attorneys Victoria Blachly and Darlene Pasieczny will speak to the Oregon State Bar Securities Regulation Section about financial elder abuse in the securities industry. Their program “Recent Tools to Combat Financial Elder Abuse: Mandatory and Permissive Conduct Under FINRA Rules and Oregon Law for Securities Professionals,” will take a closer look at Oregon statues and FINRA rules regarding mandatory and permissive conduct for brokers and investment advisers when there is reasonable suspicion of financial abuse.

Meet the experts – Victoria Blachly and Darlene Pasieczny

Victoria Blachly is a fiduciary litigator, licensed in Oregon and Washington. She represents individual trustees, corporate trustees, beneficiaries, and personal representatives in often difficult and challenging cases including:

  • Trust and estate litigation
  • Will contests
  • Trust disputes
  • Undue influence
  • Capacity cases
  • Claims of fiduciary breach
  • Financial elder abuse cases
  • Petitioning for court instructions
  • Contested guardianship and conservatorship cases.

Darlene Pasieczny is a fiduciary and securities litigator. She represents clients both in Oregon and Washington, with matters regarding trust and estate disputes, financial elder abuse cases, securities litigation, and represents investors nationwide in FINRA arbitration. Her article, New Tools Help Financial Professionals Prevent Elder Abuse, was featured in the January 2019, Oregon State Bar Elder Law Newsletter.

Report abuse

If you suspect someone is being abused, neglected, or financially exploited, please reach out to the Oregon Department of Human Services. Also, you may consider hiring a private attorney to help employ legal tools to prevent harm, or recover financial losses.

Securities Attorney Darlene Pasieczny to Speak on FINRA Expungement Issues in Washington DC

Securities attorney Darlene Pasieczny will speak about FINRA expungement issues at the PIABA Mid-Year Meeting: Current Issues in Securities Arbitration. The panel presentation will be on April 4, 2019, in Washington DC.

Presentation topics to include:

Expungement of customer dispute information from a broker’s or brokerage firm’s CRD and Bro­kerCheck disclosure reports continues to be a heated topic for securities professionals. Expungement requests are routinely made in customer cases, sometimes years after settlement. Despite FINRA’s position that expungement of customer infor­mation should be an “extraordinary remedy,” panels routinely grant expungement requests in FINRA arbitration. This panel will discuss current trends in expungement requests and litigation tactics by attorneys and non-attorney firms, as well as re­cent FINRA expanded guidance to arbitrators and proposed amendments to applicable FINRA rules.  We will also discuss ethical considerations for lawyers regarding expungement.

Registration for the PIABA Mid-Year meeting can be done through PIABA’s website.

Why is FINRA expungement an important topic?

When an investor considers hiring a new financial advisor, they might look for publicly available information about the advisor’s background and customer complaints. FINRA’s BrokerCheck database is available online for exactly that kind of investor research. By current FINRA rules, a broker or brokerage firm must disclose certain customer dispute information on their CRD record. If FINRA grants expungement of that information, the disclosure is effectively wiped clean. That may be appropriate in some circumstances. But expungement can harm the investing public, who might otherwise think twice about hiring a broker with a negative track record.

Darlene Pasieczny’sSecurities Attorney Darlene Pasieczny practice at Samuels Yoelin Kantor LLP focuses on all stages of corporate and securities law issues, securities litigation and FINRA arbitration, fiduciary litigation in trust and estate disputes, elder financial abuse, and complex civil litigation. Darlene’s practice includes representing investors nationwide in investment disputes through FINRA arbitration.


Pasieczny Moderates PIABA Panel on Cryptocurrency Investment Regulation

Current cryptocurrency regulation and cryptocurrency investment regulation can be summed up in one phrase:  Regulation by Enforcement.

I moderated a great panel presentation this weekend on Cryptocurrency Investments, Supervision and Securities Regulation at PIABA’s mid-year CLE event in Los Angeles on May 5, 2018.  We discussed the current state of regulation as well as the nuts-and-bolts of blockchain technology: everything from Bitcoin, the basics of utility tokens, security keys, and even ranging into CryptoKitties.  Our audience included securities attorneys, law professors, and representatives from the Financial Industry Regulatory Authority (FINRA).  I was joined by Professor Benjamin Edwards (William S. Boyd School of Law, University of Las Vegas, Nevada), securities attorney and former SEC Enforcement officer Celiza Braganca (Braganca Law LLC), and industry expert Louis Straney (Arbitration Insight LLC).

Most securities professionals that I’ve talked with consider cryptocurrency investments the Wild West in terms of regulation and safeguards (minimal to none) for the investing public.   The North American Securities Administrators Association (NASAA), the association of state securities regulators, would agree.

Accumulating SEC enforcement actions and reports like the “DAO Report,” Release No. 81207 (June 25, 2017), are the current guides that issuers and industry participants have for what to do, or not do, so that an Initial Coin Offering (ICO) or Initial Token Offering (ITO) complies with existing federal and state securities laws. This kind of “regulation by enforcement” leaves industry participants guessing at what they can do as the technology changes.   And, the SEC and state securities regulators are by no means the only regulatory bodies overlapping with enforcement.  The Internal Revenue Service, FinCen, the CFTC, criminal law, and private class actions are all taking their pound of flesh from industry participants.   FINRA’s 2018 Regulatory and Examination Priorities Letter notes that the SRO will be keeping an eye on developments with ICOs and the supervisory and compliance mechanisms that brokerage firms have put in place for compliance with securities laws and FINRA rules.

But, since December, 2017, the US Commodity Futures Trading Commission (CFTC) has allowed cryptocurrency futures contract trading on the Chicago Mercantile Exchange.  Goldman Sachs recently announced that it will open a Bitcoin trading desk, and now the New York Times reports that the parent company of the New York Stock Exchange, Intercontinental Exchange, has been working on an online trading platform for large investors to buy and hold Bitcoin.   The confidence of these institutions may lead the market in another round of soaring blockchain hype and eager investors buying in … to what?

Warren Buffet made his feelings about clear when he called Bitcoin “probably rat poison squared” in an interview with CNBC over the weekend.

If a FINRA-licensed broker or SEC-licensed registered financial advisor makes recommendations for a customer to buy cryptocurrency investments, it could be a big red flag for a compliance department.  SEC Chairman Jay Clayton has basically said that he thinks all cryptocurrency-related investments are securities.  But the SEC hasn’t issued specific cryptocurrency regulations, and it seems to be relying on shutting down unregistered ICOs and ITOs to create a regulatory roadmap.  Do those offerings sound like Initial Public Offerings (IPOs)?  You are correct, that’s on purpose.  But, importantly, unlike an IPO, you get no ownership interest when buying into an ICO or ITO. There’s no there, there. Unfortunately for investors duped into participating in a fraudulent cryptocurrency offering or hacked offering, the likelihood is that your money is halfway around the world and difficult to recover from the issuer.

I suspect the future of cryptocurrency regulation will include increased claims for participant liability under state securities laws that offer broader investor protections than those provided by federal law.  Attorneys and accountants assisting issuers in these fraudulent offering should be held accountable under appropriate circumstances.  I bring participant liability claims under state blue sky laws to recover investment losses for individuals and groups of individuals.  And, if financial advisors are actively making purchase recommendations to clients otherwise unwilling to take on high risk, speculative investments, there could be viable FINRA arbitration claims against the brokerage firms that allow their brokers to make irresponsible, unsuitable recommendations.

If you have concerns about how your money is being handled by your financial professional, or concerns that you or a loved one might be the victim of financial exploitation, call me at 1-800-647-8130.  Consultations are free, and confidential.

Darlene Pasieczny’s practice at Samuels Yoelin Kantor LLP focuses on all stages of corporate and securities law issues, securities litigation and FINRA arbitration, fiduciary litigation in trust and estate disputes, and complex civil litigation. Darlene’s practice includes representing investors nationwide in investment disputes through FINRA arbitration.

Investor Alert: Kevin Winder Lesson – Beware of Promised High Return Investments

Oregonian article alerts investors to the dangers of high return investments

The Chief of Enforcement at the Division of Finance and Corporate Securities Consumer & Business Services Department (DFCS), Van Pounds,  was both quoted in Molly Young’s recent Oregonian article about high return investments and Salem investment adviser Kevin Winder.  Winder lost his license for selling promissory notes to clients in businesses in which he had a personal interest. Misrepresenting investments is not a new storyline, but it is uniquely tragic for every new set of victims. You can read the full story here.

Use caution when advisors recommend alternative Investments with high return rates

As a general rule Banks says, “If you can’t sell your investment at will, and you can’t find out its true value on any given day, then you should avoid it. Some private investments are certainly legitimate, but so many of them involve far more risk than the investor understands. Don’t risk it unless you really understand the potential for loss.”

Investor Defender attorney Darlene Pasieczny represent investors in securities industry disputes in FINRA arbitrations across the U.S. The Investor Defenders at Samuels Yoelin Kantor know the rules, and we fight for our clients in recovering investment losses. Contact us at 800.647.8130

LPL’s Trail of REIT Sales Draws Complaints – Recover your LPL Loss

Investment News reported today that LPL Financial is being asked to pay $3.6 million in investor repayments and fines. The state of New Hampshire and LPL financial on Monday slapping LPL with a $1 million fine and $200,000 in investigative costs in addition to the $2.4 million in buybacks and restitution for clients.The state alleges unsuitable sales of real estate investments to elderly clients and adds that LPL failed to supervise its agents.

This is not  the first time that LPL has been in the news for problems with REITs. In March of 2013 Investment News reported that the Montana State Auditor’s Department was concerned with the sale of REITs to unsophisticated investors. The New York Times collaborated the story and also questioned LPL’s broader compliance efforts.

We applaud The New Hampshire Bureau of Securities and the Montana State Auditor’s Department for taking action, and wish other state securities regulators would do the same.  Unfortunately, the New Hampshire action can only benefit New Hampshire investors. Our firm has successfully represented investors nationwide in claims against LPL Financial and other firms selling non-traded REITS, both in court and in the FINRA arbitration process. Our claims have most commonly been based on the fact that our clients were not told that the REITs and other so-called alternative investments they were sold could not be sold in the public market, and were laden with undisclosed fees. We continue to investigate firms that sell these products and welcome calls from investors with questions about their investments that they cannot sell.

Darlene Pasieczny’s practice at Samuels Yoelin Kantor LLP focuses on all stages of corporate and securities law issues, securities litigation and FINRA arbitration, fiduciary litigation in trust and estate disputes, and complex civil litigation. Darlene’s practice includes representing investors nationwide in investment disputes through FINRA arbitration.

Investor Rights Update: Investor Choice and a Uniform Fiduciary Standard

Investor Choice. Since 1987, when the Supreme Court decided McMahon v. Shearson Lehman Brothers, investors have been denied their Constitutional right to a jury trial. Instead, if they have lost money through the fraud or negligence of a FINRA-licensed stockbroker, financial advisor or brokerage firm, investors are required to bring their cases through the FINRA arbitration process. Although we have seen benefits for many of our clients in using the FINRA arbitration forum over the last 23 years, some cases are better resolved in court by a judge and jury. Investor Choice simply allows investors to choose between FINRA arbitration and court. Congressman Ellison from Minnesota has introduced the Investor Choice Act, which would give investors that choice. There is no legitimate reason for barring investors from the courthouse doors. Congress should side with individuals and not with Wall Street firms. Call your representatives and urge them to support Investor Choice!

Uniform Fiduciary Standard. A fiduciary standard requires nothing more than putting the investor’s needs ahead of the brokerage firm. That is what investors expect from a financial adviser, and that is what brokerage firms claim to provide. But, that is not what happens in reality. PIABA prepared and distributed to Congress and the press a compelling report that collected advertisements of brokerage firms, all of which declare that they put investors first. When those same firms face FINRA arbitration claims from investors for mismanagement and fraud, however, they deny that they owe any fiduciary obligations to their clients. The PIABA report includes specific examples of the defenses that the firms file. We see the same tired defense routinely raised when we include claims for breach of fiduciary duty. The Wall Street firms claim that their only obligation is to make “suitable” investment recommendations.

What’s the difference between a suitability standard and a fiduciary standard?

Commissions and fees. A suitable investment must be in line with an investor’s investment objectives and risk tolerance levels, but it need not necessarily be in the investor’s best interest. Say that there are two mutual funds, each consisting of a similar broad mix of stocks and bonds. One charges the investor a 3% commission and the other 1%. Under the pure suitability standard, the financial advisor may be able to recommend only the higher commissioned product, even if he is fully aware of the lower cost fund and it is readily available. Under a fiduciary standard, he could not. Does that matter? It does. The White House issued a report recently that explained that even a 1% difference in commissions results in many thousands of dollars in the value of a retirement account over time. Jason Zweig, an insightful columnist on investor issues at The Wall Street Journal, has made similar observations. Currently, registered investment advisors are held to a fiduciary standard, but financial advisers who work at a brokerage firm are not, at least under federal law.   Investors don’t know the difference between investment advisors who are registered with the SEC and financial advisors who are FINRA licensed.  And, practically speaking, there is no difference. Both provide investment advice to their clients. SEC Chairperson Mary Jo White and the White House have stated that we need a uniform federal fiduciary standard for all advisers, whether they are FINRA licensed or SEC registered. PIABA agrees, and I agree. You should too. The claims of the financial services industry that a fiduciary standard would prevent middle class Americans from getting financial advice is bunk. Many states, including Oregon and California, already impose fiduciary obligations on advisers that advise their clients on what investments to make, and investors in those states get the same advice and service as investors in non-fiduciary duty states.

Darlene Pasieczny’s practice at Samuels Yoelin Kantor LLP focuses on all stages of corporate and securities law issues, securities litigation and FINRA arbitration, fiduciary litigation in trust and estate disputes, and complex civil litigation. Darlene’s practice includes representing investors nationwide in investment disputes through FINRA arbitration.

Will the Texas Supreme Court Rule That Life Settlement Policies Are Investment Contracts?

On December 12, 2014, NASAA presented an amicus brief supporting the Respondents in the Texas Supreme Court case Arnold v. Life Partners, Inc. The brief argued that that life insurance contracts sold as life settlement contracts to third parties as investments during an insured’s lifetime should be classified as investment contracts under Texas law, and thus be subjected to regulations under the Texas Securities Act.

In 2013, the Dallas Court of Appeals held that life insurance contracts were investment contracts under Texas law. Life Partners appealed the decision to the Texas Supreme Court.

In the Supreme Court, Life Partners heavily relies on the Supreme Court’s decision SEC v. W.J. Howey. In Howey, the Court held that one requirement for an “investment contract” is that profits must be derived from the significant efforts of others. A life insurance insurance contract, according to Life Partners, does not meet this criteria because the promoter does not “take specific efforts after the sale of an investment to enhance the investment value.”

NASAA argued in its amicus brief that Life Partners’ interpretation of Howey is overly rigid. The reality is that investors rely on Petitioners’ expertise in selecting, evaluating, and pricing life insurance policies. Further, investors rely on the Petitioners’ services in making on-going premium payments and collecting the insurance benefits after a policyholder’s death. Thus, life insurance contracts meet the criteria for an investment contract stated in Howey.

NASAA also correctly pointed out “over the last fifteen years, there have been widespread problems in the sale of Life Settlement Contracts, and as a result, thousands of investors have lost significant amounts of money.” If Texas intends to prevent these problems in the future, it would be a mistake to exclude life insurance policies from regulations – including registration and disclosure requirements – under the Texas Securities Act.

Robert Banks, a nationally recognized securities attorney, has represented clients in lawsuits involving the sale of life settlement contracts and viatical settlements around the nation for many years. Our firm has seen fraud in these transaction, including opinions from persons masquerading as physicians representing to investors that an insured has a short life expectancy, when in fact they are middle-aged and have no life-threatening illnesses. Investors should know that the commissions earned by brokers in these transactions can be astronomical.In one of our pending cases, the brokers earned more than $225,000 on the sale of a life insurance policy that paid the insured selling the policy only $780,000.

Please contact our office immediately with any questions or concerns you might have regarding your investments. One of the biggest problems people have when trying to recover a loss is that they waited to long to get help.

By: Nico Emerson Banks

The Consumer Federation of America is Seeking Investor’s Stories

On Thursday the Wall Street Journal reported that The Consumer Federation of America (CFA) had launched a campaign to support proposed rules from the Labor Department and the Securities and Exchange Commission that would require more advisers to be held to a “fiduciary” standard. Your feedback to the CFA could ultimately help hold financial advisers more accountable for the investment advice they give to individual and institutional investors who trust them. If you can answer yes to any of the following questions, please share your story with the Consumer Federation in this online survey. Your story could help to set the law straight. Some advisers, including those registered with the SEC as investment advisers, are fiduciaries, which means that they are required to put investors’ interests ahead of their own. By contrast, many advisers who work for brokerage firms claim that they are held to a lower standard and can put their interests in earning commissions ahead of their clients’ interests in making the best investment choices. That is not right.

Attorney Robert Banks gave a presentation on the fiduciary standard to a group of attorneys and advisers and you can read about that here. The CFA survey questions are similar to questions we might ask clients when they call our office:

• Has your financial adviser recommended retirement investments that you did not FULLY understand?
• Do you FULLY understand all of the costs that you are paying for the products that your financial adviser recommends?
• Has anyone explained how to read your statements? Do you really understand them?
• Has your financial adviser boasted that the retirement investments he or she recommends can “beat the market”?
• Has your financial adviser encouraged you to buy a variable annuity or equity-indexed annuity within an IRA?

If you want answers to questions like these, or if you have other concerns about advice you received, we encourage you to share your story with the Consumer Federation, and contact Samuels Yoelin Kantor LLP if you have questions about a particular investment loss in your account. Robert Banks has been representing investors for more than 32 years.

FINRA’s New Director Of Dispute Resolution – Richard Berry

Banks Law Office, PC. is pleased to learn today that FINRA has chosen Richard Berry to replace Linda Fienberg as the new President of FINRA Dispute Resolution beginning December 1. Mr. Berry replaces Linda Fienberg who will retire in November after 18 years at the helm of Dispute Resolution. Our firm has known Rick Berry to be a smart, likeable, and fair-minded individual, and we congratulate him and look forward to working with Rick in his new position.

Banks Law Office, P.C. has a long history of working with FINRA on many projects to improve the FINRA securities arbitration forum. Mr. Banks served on the National Arbitration and Mediation Committee for 8 years, was the chair of FINRA subcommittees, and chaired FINRA’s Arbitrator Training Task Force and Discovery Task Force. In all of those capacities, Mr. Banks worked closely with both Ms. Fienberg and Mr. Berry on those projects. Banks Law Office represents investors in disputes with their brokerages, and represents individual brokers in disputes with broker-dealer firms.