Galvin Legal Advances Significant Arbitration Claim Against Taglich Brothers, Michael Taglich, Robert Taglich, and Richard Oh; Panel Denies Dismissal of Bioventrix Claims With Prejudice
Galvin Legal is actively pursuing a significant FINRA arbitration claim filed on behalf of investors against Taglich Brothers, Inc., and its principals, Michael Nicolas Taglich, Robert Francis Taglich, and Richard C. Oh. The claim details a disturbing pattern of alleged misconduct surrounding high-risk private placement investments, including Bioventrix (formerly CHF Technologies, Inc.), Dilon Technologies, Inc., and Autonet Investors, LLC.
Core Allegations of Widespread Misconduct
The arbitration asserts multiple serious causes of action. These include allegations of fraud and common law fraud, market manipulation, and material misrepresentations and omissions concerning the nature and risks of the investments. The claims further detail unauthorized trading, negligence in account handling, and profound breaches of fiduciary duty, loyalty, and care. The latter is particularly emphasized given Michael Taglich’s alleged dual role as a principal of the firm and a board member for some of the invested companies, including Bioventrix.
Further allegations include breach of contract, negligent supervision within the firm, and claims for restitution due to unjust enrichment. The Statement of Claim also outlines numerous violations of FINRA’s Fair Practice Rules, a failure to conduct adequate due diligence into the speculative private placements recommended, and undisclosed conflicts of interest. A significant portion of the allegations involves the unsuitability of these illiquid investments and the overconcentration of client retirement assets in these high-risk ventures.
Allegations of Fraudulent Concealment via Regulatory Filings
A central pillar of the claim is the assertion that the Respondents engaged in a “fraud conspiracy.” A key component of this alleged conspiracy involves the systematic failure to report numerous mandatory disclosure items to FINRA’s Central Registration Depository (CRD) system and, consequently, to BrokerCheck. It is alleged that this concealment was a deliberate tactic to hide their regulatory and dispute history from investors and regulators, thereby delaying the discovery of the full extent of the wrongdoing. Claimants have argued that even when confronted, Respondents’ subsequent disclosures have been belated and incomplete, further evidencing a pattern of concealment.
Key Victory: Motion to Dismiss on Eligibility Largely Denied for Bioventrix
Respondents attempted to have the claims dismissed entirely, arguing they were ineligible under FINRA Rule 12206, which generally imposes a six-year time limit for filing claims. They contended this rule was an absolute bar, not subject to tolling for fraudulent concealment.
Galvin Legal vigorously opposed this motion. We argued that the Respondents’ ongoing fraudulent concealment delayed our clients’ ability to discover the claims. Furthermore, we identified specific “occurrences or events” falling squarely within the six-year eligibility window. These included the detrimental 2023 Bioventrix Recapitalization (a reverse stock split that severely diluted shareholder value, voted for by Michael Taglich as a Bioventrix board member), continued fraudulent misrepresentations and omissions by the Respondents extending into late 2022 and 2023, and the persistent, ongoing fraudulent concealment through their failure to make mandatory disclosures on CRD/BrokerCheck.
Following arguments on the motion, the FINRA Arbitration Panel issued a critical Order. The Panel DENIED the Respondents’ Eligibility Motion to Dismiss with respect to all claims concerning the Bioventrix investment, and importantly, this denial was made with prejudice. This means the arbitrators found the Bioventrix claims eligible and they cannot be dismissed on these grounds again. The Panel did, however, grant the motion to dismiss claims related to certain other investments, including SCOLR Pharma, Autonet Investors, Autonet Mobile, and Dilon Technologies, based on the specific timing of those investments.
The discovery process, where parties exchange relevant documents and information, has commenced and is ongoing.
Moving Forward
The Panel’s decision to deny the dismissal of the Bioventrix claims with prejudice is a significant development, allowing these serious allegations to proceed to a hearing on the merits. Galvin Legal remains steadfast in its commitment to vigorously prosecuting these claims and holding Taglich Brothers and its principals accountable for the substantial harm allegedly caused to our clients. We will continue to provide updates as the case progresses.
