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

TAG | finra securities arbitration lawyer

Feb/13

7

Tenant-In-Common (TIC) Investments

Comments off · Posted by admin in FINRA

Tenant-in-Common (TIC) investments, or 1031 exchanges, are a form of real estate ownership in which multiple investors own fractional interests in a property. Many brokers and brokerage firms sold billions of these products to investors across the country allegedly charging high fees, and doing little or no due diligence. They were investments with high risk and highly illiquid, often not suitable for certain investors’ portfolios. Due to the high interest or dividend offered by TICs, the retired investor is often more attracted to these products.  TICs are generally unsuitable for the retired or income seeking investors with conservative portfolios.  TICs are risky because they are dependent on the performance of the underlying real estate properties and the real estate market.

TICs generally pay a high commission – as much as 10%, which gives the stockbroker motivation in recommending the TICs to their investors.

Recently, a FINRA Arbitration Panel ordered LPL Financial to pay two investors $1.4 million for losses sustained in these two TIC exchanges: Heron Cove, LLC and Braintree Park, LLC. The sponsor of the two deals was Direct Invest, LLC. LPL was also held responsible for $35,700 in hearing session fees.

Securities Lawyer, Lars Soreide, points out that, “One of the errors investors make in TIC cases is to assume that the unit value of the investment equals the property value divided by the units.” When TIC cases are litigated, “many of these cases bog down in property valuation when in reality the issue in not the property value but the investment value, which is next to worthless even if the property has residual value. Think of this way, who would buy a unit in this investment given that the purchaser would have to take on 150% on additional debt, give up all property rights to become a tenant in common that is worthless as collateral and cannot be turned into cash? Given the structure of ownership with loans with covenants signed by the sponsor and cross collateralized usually, property value is secondary in these cases.” Often these investments are sold by a stock broker or financial adviser because a Tenant-in-Common Investment is a security. In a FINRA arbitration, “often Respondents/Defendants put on an appraiser to prove the property value, but there is an objection on relevance of this testimony because the appraiser does not opine on the market value of the security on the notional value of the unit which is usually not much at all if anything,” says Soreide. It is “critical to obtain the principal loan documents and assumption agreements to ascertain how encumbered and how much real estate you actually own.”

Soreide Law Group, PLLC,  represents investors nationwide in Tenant-In-Common (TIC) cases before the Financial Industry Regulatory Authority. For a free consultation on how to potentially recover your financial losses call: 888-760-6552. More information on TICs and FINRA Arbitrations can be found on http://www.securitieslawyer.com.

· · · · · · · · · · · · · · · · · · · · · · · · · ·

Feb/12

6

Key Biscayne Rep Barred by FINRA

Comments off · Posted by admin in FINRA

The following information appeared on FINRA’s website:
 
Ricardo Blanco (CRD #1793188, Registered Representative, Key Biscayne, Florida)
 
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, Blanco consented to the described sanction and to the entry of findings that he sent documents that contained false and inflated account values to a customer and also sent the customer a false account statement, which indicated that the account’s value was approximately $3 million when, in fact, it was worth less than a dollar. The findings stated that Blanco sent a false account statement with an inflated value to another customer; the false statement indicated that the value of the account was approximately $2 million when the account had, in fact, been closed. The findings also stated that Blanco failed to respond to FINRA requests to provide certain documents and access to other documents.
(FINRA Case #2011027098601)
 
The above information was obtained on FINRA’s website under ‘Disciplinary Actions’ January, 2012, and at this point, has ended.
 
Securities Attorney, Lars Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a family member have sustained investment losses due to Ricardo Blanco of Key Biscayne, FL, or to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: www.stockmarketlawsuit.com.
 
Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.
 

· · · · · · · · · · · · · · · ·

Jan/12

26

Doug Mirabelli, Ex-Red Sox backstop, Wins $1.2M in Damages from Merrill

Comments off · Posted by admin in FINRA

In a January 25th., 2012, article from InvestmentNews.com, the staff writes that Former Boston Red Sox catcher and two-time World Series winner Doug Mirabelli, who made a nice career of being the preferred backstop to knuckleballer Tim Wakefield, finally saw a pitch even he couldn’t handle.

In March 2008, the same month he was released by the Red Sox, Mirabelli and his wife invested $880,219 with Bank of America Merrill Lynch adviser Phil Scott and took out loans that brought their account value to $1.8 million, according to an article in The New York Times. Scott put the money into the Merrill Lynch Phil Scott Team Income Portfolios, a bundle of 33 dividend-paying growth stocks. The loans were made on the condition that the account not dip below $1 million.

The InvestmentNews.com article goes on to say that by November, the Mirabellis’ account had dropped below that level, and they liquidated it to cover the loans. The Mirabellis argued in arbitration that Scott had put his client’s money into unsuitable, all-growth-stock investments and improperly briefed the couple on the loans and their requirements.

This arbitration panel ruled in favor of the Mirabellis and awarded them $1.2 million to cover their initial investment, plus all legal fees and arbitration costs. This was the second defeat for Scott in the last 12 months, according to The New York Times article. Merrill has moved to vacate the previous award and it’s unclear if they will do the same with Mirabelli’s.

“We disagree with the panel’s decision given the facts presented in this case,” said Bill Halldin, a spokesman for Merrill. “This account was handled properly during a very difficult time when there was extreme market volatility.”

Doug Mirabelli, 41, earned roughly $7 million over a dozen seasons. He now works as a real estate agent in Michigan.

Securities Attorney, Lars Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a family member have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: www.stockmarketlawsuit.com.
 
Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.

· · · · · · · · · · · · · · · · · · · · · · · · ·

Jun/11

28

Did You Experience Significant Losses with Morgan Keegan?

Comments off · Posted by admin in FINRA

Morgan Keegan Fund Losses*
Ticker Bond Fund 2007 2008
RMH RMK High Income Fund (-)58.0% (-)39.0%
RHY RMK Multi-Sector High Income Fund (-)60.6% (-)44.5%
RMA RMK Advantage Income Fund (-)56.9% (-)39.1%
RSF RMK Strategic Income Fund (-)58.1% (-)42.0%
RHICX RMK Select High Income-C (-)59.9% (-)45.9%
MKHIX RMK Select High Income-A (-)59.7% (-)46.1%
RHIIX RMK Select High Income-I (-)59.6% (-)46.0%
RIBCX RMK Select Intermediate Bond Fund-C (-)50.6% (-)66.6%
MKIBX RMK Select Intermediate Bond Fund-A (-)50.3% (-)66.5%
RIBIX RMK Select Intermediate Bond Fund-I (-)50.1% (-)66.5%
*Information accurate as of July 1, 2008 (4:25 CST) c/o Morningstar.

Soreide Law Group, PLLC, is currently investigating, for several clients, Morgan Keegan fund losses.

Morgan Keegan allegedly marketed the funds as safe investments that were suitable for low-risk investors. When the housing market crashed in 2007, the funds fell in value. Investors meanwhile experienced huge financial losses.

Many lawsuits and arbitration claims have been filed against Morgan Keegan, as well as against several of the company’s top executives. Evidence has continued to back up investors’ claims that the Memphis-based brokerage allegedly misled clients when it marketed and sold the bond funds.

Additional charges came in April, 2010, when the Securities and Exchange Commission, (SEC) state regulators and FINRA charged Morgan Keegan and two employees – James Kelsoe and Joe Weller – with fraud for inflating the value of the risky securities held by the bond funds.

If you or a loved one have lost money in an RMK bond fund, call Soreide Law Group, PLLC at (888) 760-6552 and speak to a FINRA Arbitration Lawyer free of charge to discuss how you could potentially recover your losses, or visit http://www.stockmarketlawsuit.com.

 

· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · ·

Jun/11

25

Life Insurance Sold to Church Members Alleged Scam by Agents

Comments off · Posted by admin in FINRA

In a June 17, 2011, article written by Darla Mercado for InvestmentNews.com, she writes that six life insurance agents claim that Aviva Life and Annuity Co. had consented to the offer of insurance coverage to some 119 churchgoers in Los Angeles.

It was reported that insurance agents, Kazimir Patelski, Glenda Smith-Lee, Napoleon B. Kinney, Cheralynne Bridgewater, Candice H. Hobdy and Rene Williams responded to a lawsuit filed by the insurer in U.S. District Court in the Central District of California.

Mercado writes that originally, Aviva had sued the agents in March, claiming that the six had sold life insurance to the church parishioners in 2009 and 2010 under false pretenses. Wilshire Coast Consultants Inc., a named defendant, was trustee over 119 irrevocable life insurance trusts, each one holding an Aviva policy on the life of a churchgoer, according to the suit.

The carrier alleged that the parishioners were solicited at church for an “endowment program,” which involved taking out a policy on a church member and dividing the death benefits between that person’s beneficiaries, the church and an unknown third party. Aviva claimed that some parishioners who contacted the insurer said they either never paid premiums on the policy or that they paid only the initial premium and another entity made subsequent payments. Indeed, two churchgoers contacted by InvestmentNews in April had claimed that the program was offered as a way to help their church.

InvestmentNews.com reports that in the latest chapter of the litigation, the agents have turned the table, claiming that Aviva is guilty of “unclean hands” and had consented to the very acts it accuses the insurance agents of participating in.

“Plaintiff directed, ordered, approved, and in all other respects, ratified the acts and performance of these answering defendants,” the agents claim in their response. The insurer had “consented to the acts and omissions alleged in the complaint.”

The defendants specifically denied perpetrating a “Choli” or charity-owned life insurance scheme involving the provision of fraudulent marketing tactics, undisclosed premium finance payments and other financial incentives. Choli is a variation of stranger-owned life insurance (Stoli). The agents also denied Aviva’s allegation that the insurer’s producer guidelines don’t permit policy sales to be sold in the manner the agents had used.

The InvestmentNews.com article said that Mr. Patelski and the other defendants acknowledge that people who apply for coverage from Aviva need to answer questions about whether anyone other than the insured will pay for the premiums or whether the insured intends to transfer the policy to another party. However, the defendants denied the allegations, claiming they lacked the sufficient knowledge to determine the veracity of the accusations.

“We are fortunate this issue was discovered early before any claims were made on any of the policies,” Aviva spokesman Steve Carlson said. “Multiple misrepresentations were made to Aviva as part of these transactions.”

If you feel you’ve been allegedly defrauded by any of the above agents who sold life insurance policies through Aviva Life and Annuity Co. , contact Soreide Law Group.  For more information about our services please visit:  www.stockmarketlawsuit.com or call for a free consultation with an attorney at:  (888) 760-6552.

· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · ·

Jun/11

16

Robin Bush, Fined and Suspended by FINRA

Comments off · Posted by admin in FINRA

 Robin Fran Bush (CRD #1994431, Registered Principal, Coral Springs, Florida) submitted a Letter of Acceptance, Waiver and Consent in which she was fined $15,000 and suspended from association with any FINRA member in any principal capacity for six months. The fine must be paid either immediately upon Bush’s reassociation with a FINRA member firm following her suspension, or prior to the filing of any application or request for relief from any statutory disqualification, whichever is earlier. Without admitting or denying the findings, Bush consented to the described sanctions and to the entry of findings that, as her member firm’s CCO, she was responsible for creating, maintaining and updating her firm’s WSPs and for conducting due diligence for private offerings. The findings stated that Bush’s firm approved for sale, and sold, various private offerings and for one offering, Bush’s due diligence consisted of reviewing the PPM and investor subscription documents, but she did not seek or obtain financial documents or information from the issuer regarding the offering, did not obtain any due diligence report, did not visit the issuer’s facilities or meet with its key personnel. The findings also stated that Bush did not take steps to ensure, or otherwise verify, that other firm principals were conducting any due diligence of the offering’s issuer. FINRA found that the firm and Bush obtained a third-party due diligence report after firm customers had already invested in the offering. FINRA also found that for a third private offering her firm approved for sale and sold, Bush conducted due diligence after the product had been sold to customers; Bush’s due diligence consisted of obtaining investor subscription documents without obtaining PPMs for the offerings, did not obtain any due diligence report from an independent third party and did not meet with any executives to understand the nature of the offerings.

 

In addition, FINRA determined that Bush’s firm sold additional, different unregistered offering to customers, and Bush, acting in her capacity as CCO and the designed principal for private offerings, failed to conduct due diligence for each of these other offerings. Moreover, FINRA found that the firm’s supervisory system and the firm’s written procedures for private offerings Bush drafted and maintained were deficient; these procedures Bush drafted and maintained did not identify, in any detail,specific due diligence steps to be taken for private offerings or identify specific documents to be obtained for private offerings the firm was contemplating selling.

Furthermore, FINRA found that the firm’s written procedures for private offering due diligence were conclusory, non-specific and lacking in the requisite minimum detail regarding steps to be taken and firm personnel responsible for such steps. The suspension will be in effect from September 7, 2011, through March 6, 2012.

 (FINRA Case #2009016159402) 
 This information was obtained on FINRA’s website under “May, 2011, Disciplanary and Other Actions.”
 
 If you feel you have been a victim of the alleged fraudulent schemes of  Robin Fran Bush, 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.

· · · · · · · · · · · · · · · · · · · · · · · ·

Jun/11

15

Pricing Gap Revealed in Apple REIT Eight

Comments off · Posted by admin in FINRA

David Kelly of InvestmentNews.com, June 15, 2011, writes that the price of one in a series of 10 nontraded REITs sold exclusively through David Lerner Associates Inc. took a hit yesterday when management from Apple REIT Eight Inc. said that its book value was $7.57 per share at the end of March, according to a filing with the Securities and Exchange Commission. That’s in contrast to the $11-per-share price that Apple REIT Eight posted last week in a separate SEC filing and had consistently listed as an estimated share price on client account statements.

With about 370 registered reps, David Lerner Associates, has been on the hot seat over pricing of the Apple REITs since the end of May, when the Financial Industry Regulatory Authority Inc. filed a complaint against the firm in which it voiced concern over the fact that it had marketed shares in Apple REITS that hadn’t been re-priced in years. Finra said in the complaint that it was misleading to investors not to reflect the updated value of the REITs on the David Lerner Associates website, especially in those cases where the REITs were paying dividends with principal and borrowed funds instead of operating income. David Lerner Associates allegedly violated Finra suitability rules selling the Apple REITs, according to the complaint, and could face Finra fines and potentially pay restitution to clients.

David Lerner Associates has been the sole underwriter and distributor of the 10 REITs since 1992, most of them dubbed Apple REITs, that have issued $6.8 billion in securities, according to the Finra complaint. Investors have been attracted to the REITs’ steady dividends of 7% to 8%.

Apple REIT Eight took the step to restate its value in order to recommend to the owners of the REIT not to sell shares in response to a $3 tender offer by a series of pooled investment funds managed by Mackenzie Patterson Fuller LP, which buys illiquid real estate investments at deep discounts according to yesterday’s filing with the SEC.

“The board of directors believes that the offer price represents an opportunistic attempt by the bidders to purchase units at an unreasonably low price and as a result, deprive the stockholders who tender the units of the potential opportunity to realize the long-term value of their investment in the company,” the company said in the filing.

Kelly writes, adding to the confusion over the value of Apple REIT shares, David Lerner client account statements report an estimated value of $11 per share, said a plaintiff’s lawyer in New York. He said that he had spoken with about two dozen David Lerner investors, but had so far not filed any complaints against the firm.

An SEC filing on Apple REIT Ten Inc. yesterday stated that a member of the board of directors, Ronald Rosenfeld, resigned earlier this month. The board plans to fill his seat at a later date.

The InvestmentNew.com article goes on to say that accurate pricing of shares of the illiquid, long-term nontraded REITs has been an issue for almost two years. Before 2009, the common practice in the brokerage industry was to list the share price on client account statements at par value, or the amount at which the broker-dealer sold it, with the product typically priced at $10 or $11 a share.

Finra told broker-dealers that they needed to adjust the prices on the investments more frequently in 2009. In a notice to members, Finra said that it was prohibiting broker-dealers from using information that was more than 18 months old to estimate the value of a nontraded REIT.

If you or a family member have become a victim of the sale of Apple REITs by David Lerner Associates, Inc., call a Securities Arbitration Lawyer for a free consultation on how you could potentially 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.

· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · ·

Jun/11

12

FINRA Fines Northern Trust Securities $600,000 for Failure to Supervise Accounts

Comments off · Posted by admin in FINRA

FINRA, the Financial Industry Regulatory Industry, has found that during an 18 month period, Northern Trust Securities, failed in their supervision and monitoring of 43.5% of their total business.

FINRA also stated that “Northern Trust failed to monitor customer accounts for potentially unsuitable levels of concentration in CMOs, in large part because it used an exception reporting system that failed to capture or analyze substantial portions of the firm’s business”.  

These FINRA findings raise questions and doubts about broker-dealer reporting systems in general.  The failure of this supervision and exception reporting is not a question of software or technology.  Almost every failure of an automated exception reporting system relates to very human error in the design and implementation of the exception reporting rules and criteria.   These rules and criteria are established by the individual broker-dealer that implements an automated exception reporting system.  The software provider is providing the means and opportunity to generate the exception reporting.  The broker-dealer is defining the rules and establishing analysis standards.  FINRA reported that almost 50% of Northern Trust Securities business went without analysis, including all of the trading in CMO’s.   The potential risk to investors of over-concentration in CMO’s during the period in question, October 2006 to October 2009, would dwarf the amount of the FINRA fine.

It should not have gone unnoticed by Northern Trust that such a large percentage of their overall business was “escaping” surveillance.  Having such a large percentage of a broker-dealer’s business pass without analysis may be dramatic but, then again, what percentage is acceptable?  Implementation of an automated exception reporting system by a broker-dealer is only the beginning of a compliance and surveillance process.  An automated exception reporting system requires constant monitoring and audit.  In the absence of that, the broker-dealer exposes their business to severe potential failures of supervision and exception reporting. 

If you or a family member have invested with Northern Trust and feel your account was not properly supervised, call a Securities Arbitration Lawyer for a free consultation on how you could potentially 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.
  

· · · · · · · · · · · · · · · · · · · · · · · · · · · · · ·

Jun/11

8

Northern Trust Securities Fined by FINRA for Lack of Supervision

Comments off · Posted by admin in FINRA

WASHINGTON — In a June 2, 2011 article on FINRA’s website it stated that the Financial Industry Regulatory Authority (FINRA) announced  it has fined Northern Trust Securities $600,000 for deficiencies in supervising sales of collateralized mortgage obligations (CMOs) and failure to have adequate systems in place to monitor certain high-volume securities trades.

It was written in the FINRA article that FINRA found, from October 2006 through October 2009, Northern Trust failed to monitor customer accounts for potentially unsuitable levels of concentration in CMOs, in large part because it used an exception reporting system that failed to capture or analyze substantial portions of the firm’s business, including all CMO transactions, certain trades of 10,000 equity shares or more, and certain trades of 250 or more of fixed-income bonds. FINRA found that from January 2007 to June 2008, 43.5 percent of the firm’s business was excluded from review.

Also, FINRA found that the absence of systems to monitor equity trades of over 10,000 shares or fixed income trades of over 250 bonds also resulted in a failure to review these trades for suitability, concentration, excessive trading, excessive mark-ups or commissions, or for trading in restricted stocks.

 Brad Bennett, FINRA Executive Vice President and Chief of Enforcement, said, “Northern Trust’s deficient systems and procedures allowed more than 40 percent of its transactions to proceed without review, which in turn left vulnerable investors exposed to the risk of losing all or a substantial portion of their principal through potential over-concentration in CMOs.”

According to FINRA, in concluding this settlement,  orthern Trust neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.

This article was obtained on FINRA’s website.

If you or a family member have invested with Northern Trust and feel your account was not properly supervised, call a Securities Arbitration Lawyer for a free consultation on how you could potentially 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.

· · · · · · · · · · · · · · · · · · · · · · · · · · · · ·

Jun/11

8

Did You Invest in Merrill Lynch “Accelerated Return Notes” Structured Product?

Comments off · Posted by admin in FINRA

Currently Soreide Law Group, PLLC, is investigating, Merrill Lynch “Accelerated Return Notes” Structured Product. 

We have found on certain broker-dealer websites that these notes are touted as offering  “investors the opportunity to earn three times the upside appreciation potential of the underlying security, index or basket of securities, up to a specific cap, while only risking one for one on the downside.”

If in your experience as an investor, you have found this not to be true, or if you feel you have lost your investment with Merrill Lynch “Accelerated Return Notes” Structured Product, call a Securities Arbitration Lawyer for a free consultation on how to potentially 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. 

· · · · · · · · · · · · · · · · · · · · · · ·

Older posts >>

Find it!

Theme Design by devolux.nh2.me
To top