TAG | recover losses from ponzi schemes
Comments off · Posted by admin in FINRA
The news-release states that the Information charges Cutaia with nine counts of mail fraud, in violation of Title 18, United States Code, Section, 1341. More specifically, the Information alleges that Cutaia was the managing member and beneficial owner of CMG Property Investment Group, LLC, which purportedly engaged in commercial real estate investment. Cutaia was also the host of “Talk About Mortgages and Real Estate,” a television and radio program.
From March 2003 through December 2006, Cutaia entered into Contract Participation Agreements with investors according to the charges. These contracts stated that investors’ money would be used solely to purchase real estate contracts in Palm Beach and Broward Counties and that CMG would not collect commissions or fees until the properties were sold and a profit was made. In fact, however, Cutaia allegedly invested little of the investors’ money in real estate and instead used the investors’ money to make payments to pre-existing investors and to pay his own business and personal expenses.
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Comments off · Posted by admin in FINRA
In an article from InvestmentNews.com, June 7, 2011, Bruce Kelly writes that the litigation stemming from a series of oil and gas private placements that failed two years ago have now ensnared a giant in the clearing and custody business, National Financial Services LLC, a unit of Fidelity Investments.
The trustee overseeing the liquidation of assets of Provident Royalties LLC, which the Securities and Exchange Commission charged with fraud in 2009, last month requested that a federal judge in Dallas issue a subpoena to National Financial. In the court filing, the trustee wants access to retirement account documents of clients of four broker-dealers that sold preferred stock of Provident and used National Financial as a clearing firm.
Bruce Kelly writes that dozens of broker-dealers sold the Provident offerings from September 2006 to January 2009, raising $485 million. Regarding National Financial records, the trustee wants documents of 579 clients who bought $39.1 million of Provident from four firms: J.P. Turner & Co. LLC, Milkie/Ferguson Investments Inc.,National Securities Corp. and Securities America, Inc.
A spokesman for National Financial, said the firm typically does not comment on matters involving its correspondent clearing, broker-dealer clients. Clearing firms do not sell securities but rather hold them for broker-dealers and their clients.
The InvestmentNews.com article goes on to say that calling Provident a “massive Ponzi scheme,” the trustee claimed that the “trustee is entitled to information concerning the relationship between the broker-dealers and their respective clearing houses, and how those funds were transferred, paid for and accounted for by the clearing houses,” the court filing stated.
“As custodial fiduciary, [National Financial] should have agreements with the various broker-dealers they did business with and records for every dollar that went through their controlled account,” according to the filing.
Last year the trustee sued dozens of broker-dealers to claw back revenue and commissions from the sale of Provident.
If you feel you have been an alleged victim of these or other 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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We have all heard of Bernie Madoff and his widely orchestrated Ponzi scheme, but his wasn’t the first and it will not be the last. Ponzi schemes have victimized numerous investors for years. Don’t let yourself be caught up in a Ponzi scheme. Soreide Law Group, PLLC, is here to help you recover your losses and navigate our clients through this very complicated process.
Briefly, Ponzi schemes use the money of new investors to pay old investors, making the investment seem attractive. A Ponzi scheme will eventually collapse. The Securities and Exchange Commission (“SEC”) can freeze the assets of the Ponzi scheme before the collapse, ensuring proper distribution of the remaining assets. Also, arbitration and litigation remain an option for recovering the losses in a Ponzi scheme
If involved in a Ponzi scheme, there are also some favorable recovery options available to the investor:
1.)The Investor can file a Receivership Claim in court. A receivership is created by the court at the request of the United States Securities and Exchange Commission (the “SEC”) in a securities fraud case involving a large number of investors and a large amounts of money. The SEC will usually ask the court to create a receivership and to appoint a receiver.
2.)The Investor can file a Fair Fund Claim. The SEC established the “Fair Fund” to help distribute disgorgements and penalties to victims of financial and/or securities fraud.
3.)The Investor can file a Theft Loss Tax Deduction with the IRS. The victims of financial fraud who have no reasonable prospect of recovery may deduct up to 95% of their investment losses in the Ponzi scheme as ordinary losses.
The Ponzi scheme seems even more difficult when investors receive demand letters and are sued in collection actions by bankruptcy trustees and receivers who seek to “clawback” money that some of the Ponzi scheme investors have already received.
Protect yourself and your investments from the unscrupulous brokers and brokerages who turn your investments into Ponzi schemes. 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.
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