A former broker and branch manager of a Michigan office of GunnAllen Financial, Inc. is accused of selling fraudulent investments. His clients, many of whom are retirees, recently learned that the partnership investments may have been part of a Ponzi scheme. According to reports, a mastermind of the scheme stated in a sworn statement that the investments were fraudulent and that he had acted on advice of the GunnAllen broker/manager.
Frank Bluestein, who has been in the investment business for a over decade, joined GunnAllen Financial in 2004. There, he was not only a registered stockbroker but also as one of the firms’ branch office managers. According to reports, Bluestein, his son and another broker worked in a Detroit area office fo GunnAllen.
Along with other investments, Bluestein’s clients were persuaded to invest millions of dollars into partnerships which ceased paying earlier this year. Those who invested recently learned about investigationa, a court action seeking to freeze partnership assets and that their total investment in the partnerships could be in peril
Bluestein sometimes operated through a firm he formed called “Maximum Financial,” yet he was a licensed representative and manager through GunnAllen, where he maintained client accounts. Securities industry regulations require firms to have in place and enforce compliance procedures to supervise brokers and managers. It was recently reported that Bluestein has retired from both GunnAllen and the securities industry, while there is an additional report that he is in the process of joining another securities firm.
When most investors seek recovery, based on documents they signed, any claims filed against a brokerage firm andor its representatives must be filed in securities arbitration and can not be filed in court.
Shepherd Smith and Edwards represents investors nationwide in claims against securities firms. We have represented investors in more than 1,000 securities cases, including several against GunnAllen Securities. To learn whether we might assist you with a claim contact us to arrange a free consultation with one of our attorneys.
Michigan Rep Probed By Regulators, Investment News, by Bruce Kelley, October 11, 2007