Securities Fraud Blog | Find out if your broker is liable for your losses

TAG | brokers stealing funds from customers

Jun/11

14

FRAUD CHARGES BROUGHT BY SEC IN SILICON VALLEY REAL ESTATE INVESTMENT SCHEME

Comments off · Posted by admin in FINRA

On the U. S. Securities and Exchange Commission’s website, it was announced that the Securities and Exchange Commission (SEC) charged Mountain View, Calif.-based JSW Financial Inc. and five officers for defrauding investors in two real estate funds, alleging that the firm used investor funds to prop up the officers’ own failing real estate development projects while concealing the loss of $17 million of investors’ money.

In the article it says that the SEC alleges that from 2002 to 2008, JSW and its predecessor, Jim Ward & Associates (JWA), created two real estate investment funds – Blue Chip Realty Fund and Shoreline Investment Fund – and told investors that their money would be used to make loans secured by residential real estate. In reality, according to the SEC, the firms’ officers used most of the money to make unsecured and undocumented loans to entities that the officers themselves controlled, which were suffering mounting losses and protracted delays on Silicon Valley real estate development projects. Meanwhile, as the enterprise collapsed, investors continued receiving monthly statements showing steady growth in the value of their portfolios.

In the SEC’s complaint, filed in federal district court in San Francisco, names as defendants founder James S. Ward and Edward G. Locker (both of Ohio) and David S. Lee, Richard F. Tipton and David C. Lin (all Silicon Valley residents). The complaint alleges that JSW and JWA, through these individual officers, breached their fiduciary duties by misusing investors’ money to benefit the officers rather than the funds. The SEC also alleges that the officers concealed millions of dollars in losses from Blue Chip and Shoreline investors by sending fraudulent account statements claiming that the Funds were earning more than 10% in annual profits, until the scheme collapsed in November 2008 and the officers finally revealed to investors that nearly all of the Blue Chip and Shoreline loans were unsecured. The SEC also alleges that Ward and Locker together took $900,000 of investor money to purchase homes for themselves.

On the SEC’s website it was announced that the SEC’s complaint charges JSW, Ward, Lee, Locker, Tipton and Lin with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint also charges JSW with violating Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 (Advisers Act) and Rule 206(4)-8 thereunder, and charges Ward, Lee, Locker, Tipton and Lin with aiding and abetting violations of Sections 206(1), 206(2) and 206(4) of the Advisers Act and Rule 206(4)-8 thereunder. The SEC seeks injunctive relief and disgorgement of ill-gotten gains against JSW, Ward, Lee, Locker, Tipton and Lin, as well as monetary penalties against the five officers. The complaint also seeks disgorgement of ill-gotten gains and appointment of a receiver over Blue Chip and Shoreline as relief defendants.

If you feel you or a family member has become an alleged victim of  JSW Financial Inc., Jim Ward & Associates, James Ward, Edward Locker, David Lee, Richard Tipton , David Lin, or a similar situation, call a Securities Arbitration Lawyer for a free consultation on how to recover your investment losses.  To speak with an attorney, call 888-760-6552, or visit www.stockmarketlawsuit.com.

Soreide Law Group, PLLC., representing investors nationwide before FINRA  the Financial Industry Regulatory Authority.

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Jan/11

24

Chad R. Duncan Barred by FINRA

Comments off · Posted by admin in FINRA

Chad R. Duncan (CRD #4119031, Registered Principal, Hermitage, Pennsylvania) submitted a Letter of Acceptance, Waiver and Consent in which he was barred from association with any FINRA member in any capacity.  Without admitting or denying the findings, Duncan consented to the described sanctions and to the entry of findings that without permission or authority, he used $100,000 drawn from an elderly person’s bank account to pay his personal credit card expenses, which were related to costs associated with the construction of his home.  The findings stated that when the executor of the deceased person’s estate became concerned about the withdrawals totaling $100,000, Duncan created fictitious cashier’s checks totaling $100,000 and payable to charities, falsely representing that the checks represented evidence of the payments made by the deceased and the beneficiaries of the payments.  The findings also stated that the withdrawals were earlier used to purchase cashier’s checks payable to an international commercial bank to pay down Duncan’s credit card expenses.  The findings also included that a bank compensated the customer for the wrongfully taken funds, and Duncan has reimbursed the bank approximately $91,484.75 and continues to make monthly payments to cover the amounts the bank paid to the customer.  (FINRA Case #2009017755101)

This listing appeared on the FINRA website’s Disciplinary Actions for January, 2011.

If you have been a victim of the alleged fraudulent schemes of  Chad R. Duncan, call a Securities Arbitration Lawyer for a free consultation on how to recover your losses.  To speak with an attorney, call 888-760-6552, or visit www.stockmarketlawsuit.com. Soreide Law Group, PLLC., representing investors nationwide before FINRA  the Financial Industry Regulatory Authority.

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