Compliance Officer Claims Retaliation in Firing from Purshe Kaplan Sterling After Reporting Alt Investment Red Flags to FINRA

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Former Purshe Kaplan Sterling Investments, Inc. compliance officer Toni Caiazzo Neff filed a lawsuit against her former employer, claiming that Purshe Kaplan fired her after she contacted a senior attorney at FINRA regarding a handful of violations at Purshe Kaplan Sterling related to the firm's alternative investments business, including supervisory and suitability concerns.

An InvestmentNews report states that Caiazzo Neff claims she experienced harassment, threats, wrongful termination, and retaliation after the purported whistleblower contacted FINRA to express her concerns of several violations at Purshe Kaplan uncovered during an audit. According to the report, Purshe Kaplan fired Neff a few days after she contacted FINRA about the alleged violations.

The complaint identifies one particular alternative investment Neff reported as Spring Hills Holdings and the affiliated company Spring Hills Senior Communities, whose CEO, Alex Markowits, also happens to be the new majority owner of Purshe Kaplan through his stake in Purshe Kaplan's new owner, Wentworth Management, which purchased Purshe Kaplan Sterling Investments in December 2017.

The complaint lists the violations at Purshe Kaplan as "execution of selling agreements before conducting due diligence; a pattern of quid pro quo with regard to new product approvals; failure to follow internal procedures; self-dealing; suitability and best execution concerns; and failure to supervise."

In February 2017, FINRA ordered Purshe Kaplan Sterling Investments to pay $3.4 million in restitution to a Native American tribe it says paid excessive sales charges on fraudulent non-traded real estate investment trust (REIT) and business development company purchases (BDC) purchases which FINRA says stemmed, in part, from the firm's supervisory failure in its inability to detect and prevent broker Gopi Krishna Vungarala's fraud and the firm's inadequate investigation of a related conflict-of-interest.

In 2015, FINRA suspended Purshe Kaplan's Larry M Phillips of Woodland Hills for overcharging customers via markups and fees.

If you have invested in alternative investments at Purshe Kaplan Sterling Investments, Inc., or with any broker, financial adviser, or firm whose inadequate supervision, including deficient due diligence, conflicts of interests, self-dealing, or a general failure to follow the firm's internal procedures has proven harmful to your investments or interests due to excessive charges and fees, or losses due to such unsuitable recommendations, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.

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