New York Securities Lawyer Blog
On June 11, 2015, the Department of Enforcement for the Financial Industry Regulatory Authority (“FINRA”) initiated disciplinary proceedings against John Waszolek (“Waszolek”), a Raymond James & Associates, Inc. (“Raymond James”) broker. According to a 2012 press release by Raymond James, Waszolek, along with his son, Eric Waszolek, managed approximately $200 million is customer assets, generating approximately $800,000 in annual revenue. A copy of the FINRA Complaint may be found here.
Specifically, the Complaint alleged that Waszolek improperly exercised undue influence over a widowed customer (the “Widow”), who lived alone. This improper influence led to the Widow naming Waszolek beneficiary to a $1.8 million bequest through her will. The Widow’s late husband initially became a Waszolek’s customer in 1982; however, Waszolek did not become close to the Widow until late 2007, when her mental facilities began to fade. In 2008, Waszolek drove the Widow to a doctor’s appointment where she was diagnosed with Alzheimer’s disease.
According to the Complaint, approximately one month later, Waszolek met with an estate planning attorney to have himself named as the Widow’s residual beneficiary. When the estate planning attorney declined because of potential issues regarding Widow’s capacity due to her Alzheimer’s, Waszolek referred the Widow to a second attorney who named him as beneficiary to her residual estate.
The FINRA Complaint alleged that the day after Waszolek was named the Widow’s residual beneficiary, he resigned from UBS Financial Services, Inc. (“UBS”) and transferred his business to Morgan Stanley Wealth Management (“Morgan Stanley”). In violation of both firm’s rules, Waszolek neither informed UBS nor Morgan Stanley that he was named as a beneficiary in one of his client’s wills. The FINRA Compliant alleges that by violating firm rules and falsely stating that he was not named as a beneficiary to any of his clients’ wills, Waszolek violated FINRA Rule 2010.
Waszolek’s alleged impropriety came to light in 2010 when, upon the Widow’s death, the bank set to distribute the Widow’s funds refused to do so unless Morgan Stanley approved the transfer. Morgan Stanley denied the request and in 2011, Waszolek was discharged from the firm with “concerns regarding failure to follow policies and disclosures regarding a client’s testamentary bequest” listed on his Form U-5. Approximately two months later, Waszolek joined Raymond James.
Despite being reprimanded and terminated by Morgan Stanley, as well as having his request to receive his distribution of the Widow’s bequest denied, on August 2, 2011, Waszolek filed a “Petition for Trust Administration” in the Superior Court of the State of Arizona seeking distribution of his alleged bequest. According to FINRA, the case ultimately settled for $50,000.
When a registered representative takes advantage of their client, either by preying upon their inexperience, age, or medical condition, that broker may be subject to discipline by FINRA. Additionally, that customer, or their estate, may be able to recover damages through arbitration. The investment fraud attorneys at Lax & Neville LLP have represented hundreds of clients in securities arbitration. If you are a victim of stockbroker sales practice abuses, Contact Lax & Neville LLP today at (212) 696-1999 and schedule a consultation.