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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

19

Non-Traded REITS Investment Losses

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“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:

Apple REIT Six, Inc.

Apple REIT Seven, Inc.

Apple REIT Eight, Inc.

Apple REIT Nine, Inc.

Behringer Harvard REIT I, Inc.

Behringer Harvard Multifamily REIT I, Inc.

Behringer Harvard Opportunity REIT I, Inc.

Behringer Harvard Opportunity REIT II, Inc.

CNL Lifestyle Properties, Inc.

Cole Credit Property Trust, Inc.

Cole Credit Property Trust II, Inc.

Cole Credit Property Trust III, Inc.

Grubb & Ellis Apartment REIT, Inc.

Healthcare Trust of America, Inc.

Hines REIT, Inc.

Inland American Real Estate Trust, Inc.

Inland Western Retail Real Estate Trust, Inc.

KBS Real Estate Investment Trust I, Inc.

KBS Real Estate Investment Trust II, Inc.

Piedmont Office Realty Trust, Inc.

Steadfast Income REIT, Inc.

Wells Real Estate Investment Trust II

Anderson-Tully Company

Archstone

Beacon Capital Partners, LLC

Blackstone Real Estate Advisors

Fairfield Residential LLC

Federal Capital Partners

Forest Capital Partners LLC

Gables Residential Trust

INREIT Real Estate Investment Trust

RREEF America REIT II, Inc.

RREEF America REIT III, Inc.

Spirit Finance Corporation

The Community Development Trust

Verde Realty

Watson Land Company

Wereldhave USA, Inc.

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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May/11

19

Couple Awarded $265K in Maddoff Losses by FINRA

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Jeffrey and Marisel Lieberman invested $200,000 in 2007, with Morgan Keegan, in what they allegedly felt was a safe and conservative investment. All of their money was deposited into the Fairfield Greenwich Group hedge fund, which was a conduit to Bernie Madoff’s Ponzi scheme.
Recently they were awarded a $265,000 arbitration settlement against Morgan Keegan by FINRA.  Besides the $200,000.00 restitution, Morgan Keegan was also ordered to pay the Liebermans $65,000 in damages and court costs.
The Financial Industry Regulatory Authority (FINRA) arbitration panel called Morgan Keegan “grossly negligent” in its ruling. FINRA stated that “there is clear and convincing evidence that Morgan Keegan was grossly negligent in not performing substantial due diligence and as a result it fraudulently misrepresented the risk of this investment.” The FINRA panel also found Morgan Keegan liable for failing to conduct “substantial due diligence” as required by Morgan Keegan’s own internal procedures. It should be noted that the FINRA arbitration panel also mentioned in their ruling, that not only do Morgan Keegan’s internal procedures require them to perform due diligence, but this obligation extends to all brokerage firms that recommend these types of investments to their customers.
Soreide Law Group, PLLC, is currently investigating potential claims on behalf of investors who lost money through the purchase of hedge funds recommended by  brokers/brokerages. If you invested in these “feeder hedge funds,” such as Greenwich, 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

10

The Z Seven Fund ( ZSEVX ) , is down 73.2%

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Soreide Law Group would like to know if your stock broker or financial advisor recommend to you the this year’s worst-performing fund? According to Smart Money, the Z-Seven Fund decided to liquidate the fund as of December 29.
The Z Seven fund’s stock-picking system was designed to incorporate the lessons learned in the 1973-74 bear market, and the international stock fund did outperform a world stock index during the downturn in late 2008 and early 2009, but it fell behind in the recovery. If you put $10,000 in this fund at the beginning of this year would have lost more than $7,000 in the last 12 months.
So, you ask, what went wrong? Smart Money says that with just 14 stocks in its portfolio at the end of the third quarter, the fund may have suffered from bad timing – some of its top holdings, including British investment management company Rathbone Brothers PLC, PetMed Express, and British consulting firm RPS Group suffered steep losses in the spring and summer. While shares of those companies have since recovered, this fund’s shareholders never did.

If you were an investor in the Z-Seven Fund (ZSEVX), 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.

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May/11

9

Recover Bernstein Multi-Strategy Fixed Income Hedge Fund “MFSI Fund” Losses

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Sanford C. Bernstein & Co., LLC, and Alliance Bernstein, LP, have been actively marketing the Berstein Multi-Strategy Fixed Income Hedge Fund (or MFSI Fund) as a safe investment with less volatility than a comparable intermediate bond fund. The MFSI Fund was in fact a hedge fund that exceeded leverage of 12 times with excessive volatility.
Soreide Law Group is actively investigating the Bernstein Multi-Strategy Fixed Income Hedge Fund and is pursuing claims against Sanford C. Bernstein & Co., LLC, and Alliance Bernstein, for various misrepresentations and omissions made in connection with the sale of the MFSI fund.
If you were an investor in the Bernstein Multi-Strategy Fixed Income Fund contact Soreide Law Group today at (888) 760-6552 or visit www.stockmarketlawsuit.com,  you may be able to recover a portion or possibly all of your losses. Soreide Law Group, PLLC, representing defrauded investors nationwide before the Financial Industry Regulatory Authority (FINRA). No fee if no recovery.

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Apr/11

19

Citigroup Inc., Ordered by FINRA to Pay $51 Mill to Investors

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In an April 12, 2011, article from InvestmentNews.com states that Citigroup Inc., the third-biggest U.S. bank, was ordered to pay more than $51 million to a group of investors in its MAT and ASTA municipal-bond hedge funds, which regulators began examining more than two years ago.

The Financial Industry Regulatory Authority arbitrators, which oversees U.S. brokerages, includes $17 million in punitive damages, according to a copy of the panel’s decision on Finra’s website. It’s the third-largest arbitration award by Finra and predecessor NASD since 1988, according to Securities Arbitration Commentator Inc., a Maplewood, New Jersey-based legal publishing and research firm.

The SEC or U.S. Securities and Exchange Commission has questioned former Citigroup brokers as part of a probe into whether the bank misled investors about risks associated with certain debt funds, people familiar with the matter said last year. Citigroup disclosed the inquiry into the MAT and ASTA funds in August 2008, after the funds tumbled to values ranging from 10 cents to 60 cents on the dollar amid souring credit markets early that year.

“We are disappointed with the decision, which we believe is not supported by the facts or law, and we are reviewing our options,” Danielle Romero-Apsilos, a spokeswoman for the New York-based bank, said in an e-mailed statement.

The FINRA arbitrators didn’t explain the reasoning behind their ruling. They ordered Citigroup to pay $21.7 million to patent attorney Gerald Hosier, $8.5 million to Brush Creek Capital LLC, which is owned by Hosier’s family, and $3.9 million to venture capitalist Jerry Murdock Jr., the ruling shows. Among their claims, plaintiffs had accused the bank of breaching a fiduciary duty, contract violation, fraud, breaking Finra rules and supervisory failures.

It was noted in the InvestmentNews.com article that Citigroup said in a regulatory filing last month that “several” investors in funds including MAT and ASTA had filed lawsuits and arbitration claims against the bank, and that many of the disputes are already resolved. The SEC is examining the marketing, management and accounting treatment of the funds, the company said, adding that it is fully cooperating.

If you feel you have been an alleged victim of  Citigroup, Inc., or it’s brokers, or you have found yourself in a similar situation, 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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Apr/11

14

Former Hedge Fund Portfolio Manager Charged With Insider Trading by SEC. Hedge Fund to Pay $33 Million.

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Washington, D.C. — It was announced April 13, 2011 on The Securities and Exchange Commission’s (SEC) website that a former hedge fund portfolio manager was charged with insider trading in a bio-pharmaceutical company based on confidential information about negative results of the company’s clinical drug trial.

We learn from the SEC website article that the SEC alleges that Dr. Joseph F. “Chip” Skowron, a former portfolio manager for six health care-related hedge funds affiliated with FrontPoint Partners LLC, sold hedge fund holdings of Human Genome Sciences Inc. (HGSI) based on a tip he received unlawfully from a medical researcher overseeing the drug trial. HGSI’s stock fell 44 percent after it publicly announced negative results from the trial of Albumin Interferon Alfa 2-a (Albuferon), and the hedge funds avoided at least $30 million in losses.

“It’s a prescription for an SEC enforcement action to illegally trade on confidential clinical trial information from doctors and other purported consultants,” said Lorin L. Reisner, Deputy Director of the SEC’s Enforcement Division.

The SEC previously charged – Dr. Yves M. Benhamou – who illegally tipped Skowron with the non-public information and received envelopes of cash in return according to the SEC’s amended complaint filed today in federal court in Manhattan to additionally charge Skowron. The hedge funds, which have been charged as relief defendants in the SEC’s amended complaint, have agreed to pay $33 million to settle the charges.

Also, Cheryl Scarboro, Chief of the Enforcement Division’s FCPA Unit, added, “Skowron attempted to game the markets and buy the silence of his tipper. His sale of his hedge funds’ entire position in HGSI stock before the announcement of negative news is precisely the sort of conduct that telegraphs insider trading.”

Also on April 13, 2011, the U.S. Attorney’s Office for the Southern District of New York announced criminal charges against Skowron. According to the SEC’s amended complaint, Benhamou served on the Steering Committee overseeing HGSI’s trial for Albuferon, a potential drug to treat Hepatitis C. While serving on the Steering Committee, Benhamou provided consulting services to Skowron through an expert networking firm. But over time, he and Skowron developed a friendship. By April 2007, many of their communications were independent of the expert networking firm. Benhamou tipped Skowron with material, non-public information about the trial as he learned of negative developments that occurred during Phase 3 of the trial.

In the SEC’s amended complaint, Skowron gave Benhamou an envelope of containing 5,000 Euros while they were attending a medical conference in Barcelona, Spain in April 2007. The cash was in appreciation for Benhamou’s work as a consultant. In February 2008, after the illegal HGSI trades were completed, Skowron asked Benhamou to lie about his communications with Skowron, which he did. In late February 2008, Skowron met Benhamou in Boston and attempted to hand him a bag containing cash in appreciation for his tips on the Albuferon trial and his continued silence. Benhamou refused the cash. However, while attending a medical conference in Milan, Italy in April 2008, Skowron gave Benhamou another envelope containing at least $10,000 in cash that Benhamou accepted.

Also, the SEC alleges that Skowron acted on confidential information he received from Benhamou prior to the public announcement and ordered the sale of the entire position in HGSI stock – approximately six million shares held by the six health-care related funds that Skowron co-managed. These sales occurred during the six-week period prior to HGSI’s public announcement. Skowron caused the hedge funds to sell two million shares in a block trade just before the markets closed Jan. 22, 2008. Changes to the trial resulting from the negative developments were announced publicly on January 23. When HGSI’s share price dropped 44 percent by the end of that day, the hedge funds avoided losses of at least $30 million.

It was announced that the SEC is seeking permanent injunctions, disgorgement of any ill-gotten gains with prejudgment interest, and financial penalties against Skowron and Benhamou. Simultaneous with the filing of the SEC’s amended complaint, the six hedge funds named as relief defendants agreed to settle with the Commission and pay disgorgement of $29,017,156.00 plus prejudgment interest of $4,003,669.00 without admitting or denying the allegations. The proposed settlement is subject to court approval.

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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Jan/11

24

Robert Thomas Conway and Kakit Ng Fined and Suspended by FINRA Under Appeal

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Robert Thomas Conway (CRD #2329507, registered representative, East Islip, New York) and Kakit Ng(CRD # 2677132, registered representative, Bronx, New York).  Conway was fined $100,000 and suspended from association with any FINRA member in any capacity for 18 months. Ng was fined $20,000 and suspended from association with any FINRA member in any capacity for 9 months.  The NAC imposed the sanctions following an appeal of an OHO decision.  The sanctions were based on findings that Conway and Ng failed to observe high standards of commercial honor and just and equitable principles of trade by executing trades involving mutual fund shares after the close of the market, and as if the instructions had been received prior to the time mutual fund shares were valued.  The findings stated that Conway and Ng actively assisted customers who were known to be market timers to trade or attempt to trade, mutual funds in a deceitful manner and contrary to mutual fund market timing provisions and prohibitions.  The findings also stated that Conway, with Ng’s assistance, opened multiple accounts in different names for the same customers and permitted hedge funds to use these multiple accounts to evade market-timing restrictions mutual fund companies placed upon them.

This decision has been appealed to the Securities and Exchange Commission and the sanctions are not in effect pending consideration of the appeal. (FINRA case #E102003025201)

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  Robert Conway or Kakit Ng, 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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Dec/10

13

Tips at Avoiding a Ponzi Scheme

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The Madoff Ponzi scheme happened two years ago this past week.  Ponzi schemes are in the news again. The Justice Department announced this week that it had brought criminal and civil cases against more than 500 people for fraud schemes that involved more than $10 billion in losses.  The reality is that small-time Ponzi schemes have been coming to light with regularity since the financial crisis began and investors started asking for their money back. That’s a big problem when an investment scheme is built on paying out old investors with money brought in from new ones. According to data compiled by Investment News, a trade publication, schemes involving $9.244 billion in losses have been revealed so far this year.

Last week, a former Denver-area hedge fund manager, Sean Mueller, was convicted of running a scheme that bilked some 65 investors out of $71 million. One of those investors, John Elway, the former Denver Broncos quarterback,  lost $15 million.

Small investors who handed over their life savings to Mr. Mueller or other swindlers, will, in all likelihood, not fare well; they will probably never see that money again.

Here is a look at what all investors should consider to keep their money safe.

The people who are most likely to involve you in a swindle are friends and relatives. It has become so common that it now has its own name: affinity fraud.

We have a tendency to trust people we think are like ourselves.

One of the most egregious recent examples of this involved Imperia Invest IBC, whose assets were frozen by the Securities and Exchange Commission in October. According to the S.E.C., Imperia defrauded some 14,000 investors out of $7 million. About $4 million was collected primarily from the deaf.

Another big risk is to associate Ponzi schemes with hedge funds. The reality is that Mr. Madoff and the others who have been caught were not running hedge funds; they were running swindles.

The two most common themes were, “I have a complex strategy that I cannot divulge,”  and, ”I have a strategy that supplies double-digit returns year after year.”

Make sure to do your research before investing. The truth is, few people take the time to really do it.

One of the first things to do is a Google search of the accused schemer. Many people do not even do something as simple as a Google search, because someone they know recommended them or uses them as their broker.  It’s amazing to see the looks on clients faces when a simple Google search reveals previous complaints.

An investor should first ask the manager of the fund what institutions have invested with him. If the manager has been in the business for decades yet has not secured any institutional investments, that should be a warning sign.

Next, people should consider the manager’s background and ask where he learned how to manage money.  Then ask who the manager’s bosses were at those places.

Also, another approach is to make sure that all your investment eggs are not in one basket.  One of the easiest things investors could do was insist that a hedge fund use different firms for the three main services it needs: a clearinghouse to buy and sell securities, a custodian to hold the money and an administrator to ensure that the value of the assets is correct. Having one firm do all three can be a recipe for disaster.

If you have been caught up in a ponzi scheme, you may be able to recover your losses. 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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Oct/10

26

SEC Charges Georgia-Based Hedge Fund Managers With Fraud in Valuing a “Side Pocket” and Theft of Investor Assets

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Washington, D.C., — On October 19th., 2010,  the Securities and Exchange Commission (SEC) charged two hedge fund portfolio managers and their investment advisory businesses with defrauding investors in the Palisades Master Fund, L.P. by overvaluing illiquid fund assets they placed in a “side pocket.” The SEC alleges that the hedge fund managers also stole investor money to pay for their own personal investments and made material misrepresentations in connection with a private securities transaction.

SEC alleges that Paul T. Mannion, Jr., of Norcross, Ga., and Andrews S. Reckles of Milton, Ga., placed the Palisades hedge fund’s investments in World Health Alternatives Inc. in a side pocket and valued those investments in a manner that was inconsistent with fund policy and contrary to an undisclosed internal assessment. A side pocket is a type of account that hedge funds use to separate particular investments that are typically illiquid from the remainder of the investments in the fund. The SEC’s Asset Management Unit has been probing whether funds have overvalued assets in side pockets while charging investors higher fees based on those inflated values.

In the complaint, the SEC further alleges that Mannion and Reckles stole more than approximately $1.6 million worth of warrants belonging to the fund. They also improperly used investors’ cash on at least two occasions to make personal investments, and they deceived a securities issuer by making false representations about their trading positions in order to participate in a private offering by the issuer.

“Mannion and Reckles put their own selfish interests ahead of Palisades’ investors, treating the fund like their own personal bank account by stealing and improperly borrowing millions of dollars in fund assets,” said Scott W. Friestad, Associate Director of the SEC’s Division of Enforcement.

Robert B. Kaplan, Co-Chief of the SEC’s Asset Management Unit, added, “Side pockets are not supposed to be a dumping ground for hedge fund managers to conceal overvalued assets. Mannion and Reckles deceived investors about the fund’s performance and extracted excessive management fees based on the inflated asset values in a side pocket.”

In the SEC’s complaint filed in the U.S. District Court for the Northern District of Georgia, Mannion and Reckles defrauded investors for at least a three-month period in 2005 through PEF Advisors LLC and PEF Advisors Ltd., two investment adviser entities they controlled. The fraudulent valuations of a convertible debenture, restricted stock, and bridge loans enabled Mannion and Reckles to report to investors misleadingly inflated net asset values, allowing them to take excessive management fees from the fund.

SEC’s complaint alleges that Mannion and Reckles stole more than one million warrants in World Health that belonged to the fund. At the time Mannion and Reckles exercised those warrants, they were worth $1.6 million. In July 2005, Mannion and Reckles took an undisclosed $2 million from the fund as an apparent short-term loan to finance their personal investments. They separately used approximately $13,000 from the fund to pay for services not rendered to the fund.

In the SEC’s complaint it is alledged that Mannion and Reckles also made material misrepresentations in connection with a PIPE (private investment in public equity) offering conducted by Radyne ComStream Inc. in February 2004.

The SEC complaint charges defendants with violations of 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. The Commission seeks injunctive relief, disgorgement of profits, prejudgment interest, and financial penalties.

This information was obtained from the SEC’s website.

If you feel you are a victim of these alleged fraudulent schemes of these individuals or companies, 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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