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

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Jun/11

8

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

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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. 

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Jun/11

5

Was Joseph Louis Jacoby Your Broker?

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Joseph Louis Jacoby was employed by Legend Securities, Inc., since 2002. According to the information listed in Jacoby’s broker check report,  he has received 6 customer disputes.
According to “FINRA NOTICE to MEMBERS 03-49,”  in 2003, FINRA conducted a review of the CRD’s (Central Registration Depository -the central licensing and registration system for the U.S. securities industry and its regulators that FINRA operates) of all 663,000 registered representatives, only 2,751 (.41%) had been the subject of (3) or more customer complaints.
In other words Joseph Jacoby’s customer complaints rank him in the top one-hundredth percent of all registered representatives for customer complaints.
 
Soreide Law Group is currently investigating potential claims against Legend Securities Broker Joseph Jacoby.  If you or a family member have become  victims of the alleged fraudulent schemes of Joseph Louis Jacoby,  call a Securities Arbitration Lawyer for a free consultation on how you could potentially recover you 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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May/11

30

Have you Invested in Outrageous ETFs?

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In an article from Forbes.com, May 27, 2011, Zack O’Malley Greenburg writes that a little over a year ago, fund provider Direxion launched an ETF (Exhange Traded Fund) called the Daily Semiconductor Bull 3x Shares. Its aim was to triple the performance of the PHLX Semiconductor Sector Index. Not as simple a task as it seems, apparently: Over the next seven months the index rose 5%, while the Direxion fund returned -6.25%.

Maybe investors should have heeded Direxion’s own disclaimer: “There is no guarantee the fund will meet its stated investment objective.”

This is the way of things in the world of ETFs, writes Greenburg, where offerings have exploded in recent years. Nearly 900 ETFs have been launched over the past five years, leading to a preponderance of funds that straddle the line from obscure to downright bizarre. Among them are leveraged ETFs like the aforementioned semiconductor fund that seek to double or triple the performance of sectors–and don’t always succeed. Examples range from the ProShares Ultra KBW Regional Banking ETF, to the Direxion Daily Agribusiness Bear 3x Shares ETF, which trades under ticker symbol COWS. There is also a smattering of international offerings, which comprised half of all new S&P-based index funds launched last year. Market Vectors parent Van Eck recently announced plans to launch a Mongolia ETF.

Forbes.com writes that there are a few ETFs so outrageous that they’ve already been shut down–for example, the HealthShares Dermatology and Wound Care ETF, shuttered in 2008 due to lack of demand. Others, like the PowerShares Dynamic Brand Name Products Portfolio and the PowerShares Autonomic Allocation Research Affiliates Portfolio, never even made it past the planning stages.

We are reminded that many obscure ETFs like Direxion’s leveraged semiconductor fund can be hazardous to investors who aren’t careful. These leveraged funds are designed for day-traders and backed by derivatives. Though providers warn that these funds are not meant to be held as long-term assets, many investors miss the fine print.

The Forbes.com article says that the SEC launched a review of all funds last March, deferring applications for “actively managed and leveraged ETFs that particularly rely on swaps and other derivative instruments to achieve their investment objectives” in the meantime. There has been a lot of concern generally about derivatives in the last few years, and specifically in our division about the use of derivatives by investment companies, including ETFs,” says Elizabeth Osterman, head of the exemptive applications office of SEC’s Division of Investment Management. “Our decision to defer the review of exemptive applications for derivatives-based ETFs reflects concerns about whether granting exemptive relief for those funds would be consistent with required regulatory standards in light of those concerns.”

Greenburg goes on to say that the SEC hasn’t yet resumed allowing providers to launch new leveraged ETFs, but it hasn’t banned existing products or disallowed existing issuers from creating new ones. The three leading providers of such funds–Direxion, Rydex and ProShares–now have something of a lock on leveraged ETFs. And no matter how outlandish their products may sound, they continue to be popular.

If you have invested in an ETFs and lost your investment, you may have valuable legal rights to be compensated for your losses. Call a Securities Arbitration Lawyer at Soreide Law Group 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.

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May/11

30

Puerto Rico and Global Income Targe Maturity Funds

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Puerto Rico and Global Income Target Maturity Fund, are two funds that are currently being investigated by Soreide Law Group, PLLC.

If you or a family member have purchased Puerto Rico and/or Global Income Target Maturity Funds, call Soreide Law Group, PLLC, for a free consultation about potentially recovering 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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May/11

25

Nuveen Investments Fined $3 Million by FINRA for Use of Misleading Marketing Materials Concerning Auction Rate Securities

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WASHINGTON — On May 23, 2011, the Financial Industry Regulatory Authority (FINRA) announced that it has fined Nuveen Investments, LLC, of Chicago, $3 million for creating misleading marketing materials used in sales of auction rate preferred securities (ARPS). The Nuveen Funds’ ARPS were a form of auction rate securities, which are long-term securities with interest rates or dividend yields that are reset periodically through an auction process. In contrast to other types of auction rate securities, the Nuveen ARPS were preferred shares issued by closed end mutual funds to raise money for the funds to use to invest.

It was reported on the FINRA website that by early 2008, over $15 billion of Nuveen Funds’ ARPS had been sold to retail customers by third-party broker-dealers. Nuveen did not sell the ARPS to customers, but in its role as distributor for Nuveen Funds, it created marketing brochures that were used by the broker-dealers who sold the ARPS to retail customers. The brochures were the primary sales and marketing material Nuveen created for the auction rate preferred securities. FINRA found that the brochures, also available on Nuveen’s website, failed to adequately disclose liquidity risks for ARPS. Nuveen neglected to include the risks that auctions for the ARPS could fail, investments could become illiquid and that customers might be unable to obtain access to funds invested in the ARPS for a period of time should the auctions fail. Instead, the brochures contained misleading statements which described the ARPS as safe and liquid investments. Also, FINRA found that Nuveen failed to maintain adequate supervisory procedures to ensure that the materials it used to market the auction rate preferred securities accurately described the features and risks of the securities.

 Brad Bennett, FINRA Executive Vice President and Chief of Enforcement, said, “Nuveen was aware of facts that raised significant red flags about the ability of investors to obtain liquidity for their Nuveen auction rate securities yet failed to revise their marketing brochures to disclose these risks. This failure deprived investors of important information.”

It was reported that Nuveen failed to revise disclosures in their brochures after a lead auction manager responsible for approximately $2.5 billion of the ARPS notified Nuveen in early January 2008 that it intended to stop managing Nuveen auctions. On January 22, 2008, the lead manager did not submit support bids in an auction for a series of Nuveen auction rate preferred stock and that auction failed. FINRA found that the auction failure and Nuveen’s inability to find a replacement for the lead manager raised serious questions for Nuveen about whether investors in Nuveen’s ARPS would be able to obtain liquidity for the securities in future auctions. Despite this, Nuveen failed to revise its marketing brochures to reflect these risks and, thus, the brochures were misleading. In February 2008, widespread auction failures occurred throughout the auction rate securities market, including auctions for Nuveen funds ARPS.

The Nuveen funds have redeemed approximately $14.2 billion of the $15.4 billion of the ARPS that were outstanding on February 12, 2008. As part of the settlement, Nuveen agreed to use its best efforts to effect redemptions of any remaining outstanding Nuveen funds ARPS. Nuveen neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.

This information was obtained on FINRA’s website.

If you or a family member have become a victim of the alleged fraudulent schemes of Nuveen Investments, LLC, call a Securities Arbitration Lawyer for a free consultation on how you could potentially recover you 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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May/11

25

Lloyd V. Barriger, Monticello, New York Investment Adviser, Charged with Multi-Million Dollar Fraud by SEC

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On May 13, 2011, it was reported on the SEC’s website that the Securities and Exchange Commission filed a civil injunctive action charging Monticello, New York investment adviser Lloyd V. Barriger with fraud in connection with two upstate New York real estate funds he managed – the Gaffken & Barriger Fund, LLC (the G&B Fund or the Fund), and Campus Capital Corp. (Campus). According to the complaint, the G&B Fund raised approximately $20 million from January 1998 until March 2008, and Campus raised approximately $12 million from October 2001 until July 2008. The Commission charged Barriger with defrauding the funds and their investors and prospective investors to whom he offered and sold interests in these funds.

The SEC complaint alleges that Barriger defrauded the G&B Fund itself by (a) allocating the Preferred Return to investors when the Fund did not have sufficient income to justify the allocation; and (b) by, when the Fund lacked the income to support those allocations and payments causing the Fund to pay cash distributions of the Preferred Returns to those Fund investors who requested them, and to redeem investors at values reflecting the purported accrued 8% per year Preferred Return.

Also, the SEC’s complaint, filed in federal court in Manhattan, alleges that from at least July 2006 until March 5, 2008, when he froze the Fund and disclosed to investors its true financial condition, Barriger defrauded investors and prospective investors in the G&B Fund by misrepresenting that the Fund was a relatively safe and liquid investment that paid a minimum “Preferred Return” of 8% per year. The complaint further alleges that Barriger made these misrepresentations knowing, or recklessly disregarding, that the Fund’s actual performance did not justify these performance claims, and without disclosing information about the Fund’s true performance and financial condition – which rapidly deteriorated in 2007 and early 2008 as Barriger continued to raise money from new and existing investors.

Lastly, the complaint alleges that Barriger defrauded Campus and its prospective investors by causing Campus to inject a total of nearly $2.5 million into the G&B Fund between August 2007 and April 2008 at a time when the G&B Fund was in distress, and by raising money for Campus without disclosing to investors his use of Campus’s assets to prop up the ailing G&B Fund. The complaint also alleges that Barriger caused Campus to engage in other transactions that personally benefitted Barriger, none of which he disclosed to prospective Campus investors.

On the Securities and Exchange Commision’s (SEC) website, the complaint alleges that Barriger violated Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940.

It was reported that in its complaint, the SEC seeks a final judgment permanently enjoining Barriger from future violations of the foregoing provisions and ordering him to pay civil penalties and disgorgement of ill-gotten gains with prejudgment interest.

This information was obtained from the SEC’s website.

If you or a family member have become a victim of the alleged fraudulent schemes of Lloyd V. Barriger, Gaffken & Barriger Fund, LLC, or Campus Capital Corp., call a Securities Arbitration Lawyer for a free consultation on how you could potentially recover you 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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May/11

25

John Hancock to Pay $1 millon to State of Louisiana in Death Benefit Fallout

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In an InvestmentNews.com article by Darla Mercado, May 24, 2011, it was reported that the State of Louisiana will collect about $1 million in a settlement with John Hancock Life Insurance Co. as part of a massive investigation into the insurer’s payment of death benefits. This agreement will go into effect next month, according to an announcement from Louisiana’s Treasury Department. Some 35 states are also participating in the settlement with the insurer.

This is the third such announcement for John Hancock, which last week reached a settlement with Florida that included a $3 million payment to three Florida regulatory agencies. They also agreed to return funds to beneficiaries and to establish a $10 million fund to facilitate payments to beneficiaries who can’t be contacted. In April, John Hancock reached a settlement with California valued at $20 million.

In the InvestmentNew.com article it was reported that an audit into John Hancock revealed that the insurer failed to report unclaimed life insurance benefits properly, according to Louisiana’s Treasury Department.

“In many cases, those who were owed benefits because of the death of a loved one were never even notified,” said Louisiana’s treasurer, John Kennedy. “We will do everything we can to find these families and return the money that rightfully belongs to them.”

Mercado reports that the announcement happens to fall on the same day that regulators in California are holding a hearing with MetLife Inc. executives. State officials plan to question the execs about the carrier’s use of the Social Security Administration’s master death list, as well as its process for notifying beneficiaries who are owed money.

If you or a family member have become alleged victims of non-payment of death benefits through John Hancock Life Insurance Co, or MetLife, or any other life insurance company, contact an insurance fraud attorney for a free consultation on how to recover your investment losses.  To speak with an attorney, call 888-760-6552, or visit stockmarketlawsuit.com. 

We stand up and fight for the rights of consumers. Soreide Law Group, PLLC, representing Insurance Fraud Victims in Federal Court, State Court and before the Financial Industry Regulatory Authority (“FINRA”).

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May/11

23

Chinese Stock Losses

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Did your broker or financial advisor recommend Chinese stock? The past two months have brought a spate of de-listings and trading halts for these Chinese based companies — at least 24 according to the SEC. Forbes’ Walter Pavlo recently detailed a smattering of them:
  • China Electric Motor – Shareholders lawsuit filed claiming underwriters violated federal securities laws by issuing materially false and misleading information.
  • China Natural Gas – Class action lawsuit alleges directors and officers issued materially false and misleading statements. CFO of company resigned in late 2010.
  • Duoyuan Printing - SEC investigating company for fraud, NYSE delisted April 4, 2011
  • China MediaExpress Holdings, Inc. – Deloitte quit as auditor because “no longer able to rely on the representations of management”. CFO resigned. Stock trading halted March 11
  • China Agritech – Shareholder lawsuit pending. Dismissed its auditor Ernst & Young.
  • China Sky One Medical – Under investigation by SEC.
  • Orient Paper, Inc. – Reauditing previous financials due to license issues with previous auditor (Davis Accounting Group)
If your broker of financial advisor recommended the purchase of more than $100,000 of any of these or other “Chinese Corporations” contact Soreide Law Group, PLLC, at 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.

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May/11

20

List of the Broker-Dealers that Sold Provident Royalties Private Placements

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The following is a list of the Broker-dealers that sold Provident Royalties private placements.

Firm name   Total sales   Total commission paid to BD  
Advisory Group Equity Services Ltd. $110,000 $70,650
AFA Financial Group LLC $2,455,000 $456,150
American Portfolios Financial Services Inc. $585,000 $66,650
Asset Management Strategies LLC $220,000 $2,250
Ausdal Financial Partners Inc. $100,000 $2,250
Barron Moore Inc. $250,000 $96,750
Boogie Investment Group Inc. $410,000 $110,150
Brookstone Securities Inc. $460,000 $76,500
Callaway Financial Services Inc. - $22,500
Calton & Associates Inc. $300,000 $40,750
Capital Financial Services Inc. $33,655,000 $5,510,725
CapWest Securities Inc. $21,745,000 $3,058,700
Chester Harris & Co. $340,000 $297,500
Community Bankers Securities LLC $2,780,000 $355,950
Crescent Securities Group - $9,375
David Harris & Co. Inc. $850,000 $94,000
DeWaay Financial Network LLC $850,000 $134,525
Eagle One Investments LLC $360,000 $42,500
Empire Financial Group Inc. $2,750,000 $234,200
Empire Securities Corp. $205,000 -
E-Planning.com Securities Inc. $3,765,000 $483,925
First Allied Securities Inc. $380,000 $11,250
Gk Securities LLC $50,000 -
Grant Bettingen Inc. $215,000 $19,350
GunnAllen Financial Inc. $22,255,000 -
Harrison Douglas Inc. $1,830,000 $569,900
Independent Financial Group $495,000 -
INVEST Financial Corp. $100,000 -
Investlinc Securities LLC $2,095,000 $183,275
Investors Capital Corp. $3,400,000 $427,975
J.P. Turner & Co. LLC $11,600,000 -
Jesup & Lamont Securities Corp. $100,000 $13,500
Kaiser & Co. $100,000 $160,650
Lighthouse Capital Corp. $250,000 $33,750
Main Street Securities LLC $205,000 $45,450
Matheson Securities LLC $100,000 $37,800
Milkie Ferguson Investments Inc. $4,145,000 $480,350
Morrow Wealth Management $30,000 -
National Securities Corp. $3,665,000 $437,250
Newbridge Securities Corp. $25,000 $15,750
NEXT Financial Group Inc. $33,485,000 $3,190,200
Okoboji Financial Services Inc, $21,910,000 $2,261,225
Private Asset Group Inc. $2,015,000 $204,150
Provident Asset Management $50,000 -
QA3 Financial Corp. $32,585,000 $6,974,450
Questar Capital Corp. $250,000 $24,125
Securian Financial Services Inc. $50,000 -
Securities America Inc. $17,995,000 $3,723,475
Securities Network LLC $215,000 $89,550
SII Investments Inc. $100,000 -
Sterling Enterprises Group Inc. $100,000 $13,000
Summit Brokerage Services Inc. $560,000 $81,000
Unaffiliated Broker-Dealer $150,000 -
United Equity Securities LLC $660,000 $173,200
United Securities Alliance Inc. $550,000 $401,850
Waterford Investor Services Inc. - $2,250
Wedbush Morgan Securities Inc. $325,000 -
WestPark Capital Inc. $785,000 $114,250
WFP Securities Corp. $6,755,000 $1,286,775
Williams Financial Group Inc. $175,000 -
Workman Securities Corp. $9,045,000 $1,239,025
  $250,990,000 $33,380,775

 

 

Source: U.S. Bankruptcy court filings, Northern District of Texas, case # 09-33886

If you feel you have been an alleged victim of these broker-dealers and were sold Provident Royalties private placements, 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.

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May/11

19

Did you Invest in These Companies?

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China Century Dragon Media, Inc. (CDM)

NIVS IntelliMedia Technology Group, Inc. (NIV)

China Electric Motor, Inc. (CELM)

China Intelligent Lighting (CIL)

Soreide Law Group, PLLC, is currently investigating the above companies.  Allegedly, investors may not have been made awar of the risks of these securities at the full service brokerage firms and some investors may have sustained losses. In some cases, these losses might potentially be recoverable. 

If you have stained losses in China Century Dragon Media, NIVS IntelliMedia, China Electric Motor, and China Intelligent Lighting, contact a Securities Arbitration Lawyer for a free consultation on how to potentially 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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