TAG | high-risk
“Non-traded REITs”are public companies, but their shares are not listed on any stock exchange. This makes non-traded REITs a very opaque and a private market (not to mention illiquid). Unlike publicly traded REITs, non-traded REITs are illiquid and specify when investors can redeem shares, typically after seven years. At that point, the REIT may go public and begin trading on an exchange — or it may be liquidated.
Unfortunately, many conservative or elderly clients were sold non-traded REITs. Occasionally, the true risks of these investments allegedly were not disclosed to the clients. Many retirees who couldn’t afford to take the risks associated with non-traded REITs had a substantial percentage of their net worth in these investments. In some instances, they may have been unsuitable investments. Fortunately, some, or all, of the frozen funds or investment losses in non-traded REITs may be recoverable against the brokerage firms who sold them through FINRA arbitration claims and lawsuits.
The following are examples of non-traded REITs sold to investors by brokers and full service brokerage firms are as follows:
Soreide Law Group, PLLC, believes that many of the non-traded REITs are far riskier than people knew and were not appropriate for some investors, particularly the elderly, retired or the conservative investors. If you feel these risks were not disclosed by your broker or the brokerage firms who sold them to you, call 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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We believe that the credit crisis and total collapse of the sub-prime mortgage market has also led to the collapse of both Fannie Mae and Freddie Mac, two of the nation’s largest issuers of preferred stock. As a result, Wall Street has underwritten much of this debt, nearly $6 billion, to unsuspecting investors.
Most investors were led to believe these stocks were conservative and would provide a steady income through above-average dividends. Investors were also told that the Federal Government would assure that their investments were safe.
In July of 2008, the U.S. Federal Government provided Freddie Mac and Fannie Mae with an unlimited credit line at the U.S. Treasury, and authorized the U.S. Treasury to purchase equity shares in the two entities, if necessary. A little over a month later, in September of 2008, the U.S. Federal Government seized control of Freddie Mac and Fannie Mae in order to avoid a complete financial collapse.
Investors have seen their portfolios and retirement accounts depleted by the collapse of Fannie Mae and Freddie Mac. All brokers have a responsibility to only recommend investments that are in line with their client’s risk tolerance and they should never over expose a client to single investment.
Brokers should have worked with their clients to diversify out of their Fannie Mae and Freddie Mac holdings as it became clear that the subprime mortgage crisis would have effects on these two companies.
If you feel your broker or brokerage failed to protect your portfolio by investing in Fannie Mae or Freddie Mac by putting their interests ahead of yours or because of incompetence or negligence, contact a Securities Arbitration Lawyer for a free consultation on how to recover your losses and hold your broker accountable. 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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Soreide Law Group, PLLC, is currently representing investors who were sold ProShares Funds and other ETFs by their brokers. These funds have subjected investors to more risk than was disclosed and resulted in huge losses by investors. The leveraged ETFs include but are not limited to the following ProShares Funds in which investors have suffered sizable losses:
o ProShares UltraShort Russell 2000 (SKK)
o ProShares UltraShort Real Estate ETF (SRS)
o ProShares Ultra Financials ETF (UYG)
o ProShares UltraShort Dow 30 ETF (DXD)
o ProShares UltraShort Financials ETF (SKF)
o ProShares UltraShort FTSE/Xinhua 25 ETF (FXP)
o ProShares UltraShort Gold ETF (GLL)
o ProShares UltraShort DJ-AIG Crude Oil ETF (SCO)
o ProShares UltraShort Oil & Gas ETF (DUG)
o ProShares UltraShort MSCI Emerging Markets
If you have suffered losses from your broker recommending the highly risky ProShare Funds and ETFs, call a FINRA Securities arbitration lawyer for a free consultation on how to recover your losses. Call 888-760-6552, or visit www.stockmarketlawsuit.com. Soreide Law Group, PLLC. Representing investors nationwide before FINRA and the NFA.
ETFs · Exchange-Traded Funds · Financial Industry Regulatory Authority · FINRA · FINRA arbitration · finra lawyer · finra securities arbitration · Florida Securities Lawyer · Ft. Lauderdale Securities Lawyer · high-risk · investment fraud · Leveraged ETFs · leveraged inverse ETF's · ProShares Funds · securities arbitraton lawyer · Stock fraud lawyer · stockbroker misconduct · Ultra Proshares Funds · UltraShort Proshare Funds · unauthorized trades
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Firm Also Improperly Extended Credit to Cash Account Customers
Washington, DC — The Financial Industry Regulatory Authority (FINRA) announced that it has fined Scottrade, Inc., $200,000 for violating pattern day trading margin rules and for extending credit to customers in violation of federal securities laws and banking regulations.
FINRA determined that Scottrade allowed certain margin account customers who were executing a high volume of trades, to continue to trade after the value of their accounts fell below the minimum equity requirement.
FINRA rules require margin account customers who meet the definition of “pattern day traders” to maintain at least $25,000 in their margin accounts. A day trader is someone who buys and then sells the same stock in the same day in a margin account. A pattern day trader is generally defined as a customer who day trades four or more times in five business days.
“The day trader margin rules were devised to limit the risk to which day traders expose clearing firms and the market while their positions are open during the course of the day,” said James S. Shorris, FINRA Executive Vice President and Executive Director of Enforcement. “Scottrade’s systems allowed day-trading customers to continue risky, leveraged day trading without meeting the $25,000 minimum equity requirement.”
FINRA found that from February, 2006 through October, 2007, Scottrade did not properly restrict pattern day traders’ trading activities when the value of those customers’ accounts fell below the required $25,000. Instead, Scottrade sent first-time violators a written notice advising them to restore their account value to at least $25,000 before continuing trading.
But customers who failed to restore their account values were allowed to continue day trading without restrictions. Customers who violated this margin requirement after the first warning were sent a second written notice, giving them five additional business days to meet the $25,000 requirement. Scottrade did not take action to restrict those customers’ margin until after the customers failed to heed the second notice.
Scottrade permitted customers in 11,708 margin accounts in which pattern day trading was being conducted to execute 171,910 day trades when the values of their accounts were below the minimum equity requirements.
FINRA also found that from February 2006 through January 2007, Scottrade improperly extended credit to certain cash account customers by failing to obtain timely cash payment from the customers for their purchases and by failing to cancel or liquidate those transactions within the time period specified by Federal Reserve Regulation T.
When a customer did not have sufficient funds to cover the cost of the stock purchase in a cash account, Scottrade sent the customer a “sellout” letter on the date the funds were due. This had the effect of allowing the customer additional days to pay for the transactions, in violation of Regulation T.
In concluding this settlement, Scottrade neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.
Call a FINRA Securities arbitration lawyer for a free consultation on how to recover stock losses and securities losses. Call 888-760-6552, or visit www.stockmarketlawsuit.com. Soreide Law Group, PLLC. Representing investors nationwide before FINRA and the NFA.
day trader · day trading · etrade · Financial Industry Regulatory Authority · FINRA · FINRA arbitration · high-risk · investment fraud · margin account · margin account customers · Scottrade · Scottrade Inc. · securities arbitration · securities fraud · unauthorized trades
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By Bruce Kelley
Mass. securities regulator looking for more info from independent firms Massachusetts securities regulators are chasing down information from six independent broker-dealers concerning the sales of two private placements that blew up last summer. Secretary of the Commonwealth William Galvin said in a statement today that subpoenas have been sent to QA3 Financial Corp., National Securities Corp., CapWest Securities Inc., Independent Financial Group LLC, Investors Capital Corp. and Centaurus Financial Inc. The Massachusetts Securities Division is requesting information on due-diligence efforts, suitability data and promotional materials related to the sale of private placements marketed by Medical Capital Holdings Inc. and Provident Royalities LLC, according to the statement. The regulator has been increasing its scrutiny of sales of private placements by independent broker-dealers. In late January, the Securities Division slapped Securities America Inc. with a lawsuit, alleging that the firm misled investors who were sold high-risk private placements. Specifically, the agency alleged that Securities America advisers sold $7.2 million in promissory notes to Massachusetts investors without disclosing all the risks involved. That case is pending. Medical Capital and Provident issued billions in notes and other securities sold by a number of broker-dealers, according to today’s statement. “It also has become apparent that Securities America Inc. was not the only broker-dealers selling these” private placements, according to the statement. Mark Goldwasser, CEO of National Securities, said he hadn’t yet seen the subpoena and therefore could not comment. Officials at the five other broker-dealers were not immediately available for comment. Dale Hall, the CEO of CapWest, said that the firm had done a preliminary search of its records so far, and it appeared that it had one client in Massachusetts. The information that Massachusetts regulators are looking for about the sale of private placements was similar to what the Securities and Exchange Commission and the Financial Industry Regulatory Authority had requested he said.
Call a FINRA Securities arbitration lawyer for a free consultation on how to recover stock losses and tax loss selling. Call 888-760-6552, or visit www.stockmarketlawsuit.com. Soreide Law Group, PLLC. Representing investors nationwide before FINRA and the NFA.