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

TAG | risky investments for conservative clients

Jun/11

14

INVESTMENT ADVISER, FUND MANAGER, AND TWO INDIVIDUALS WITH CHARGED BY SEC WITH SECURITIES FRAUD INVOLVING CLIENT FUNDS

Comments off · Posted by admin in FINRA

Recently on the US Securities and Exchange Commission’s website, they announced the filing of a civil injunctive action in U.S. District Court in Los Angeles, California against MAM Wealth Management, LLC (MAM), MAMW Real Estate General Partner, LLC (MAMW), Alex Martinez and Ralph Sanchez, alleging fraud in connection with client investments in a $10.3 million risky real estate venture.

According to the Commission’s complaint, from July 2007 through March 2009, Martinez, a MAM and MAMW principal, and Ralph Sanchez, a MAM registered representative and MAMW principal, had 50 of their advisory clients invest in MAM Wealth Management Real Estate Fund, LLC (Fund). The complaint alleges that Martinez and Sanchez misrepresented to some clients that the Fund was a safe, relatively liquid investment, was earning 9% per year, and would show profits in three years. The complaint alleges that they used their discretionary authority over other clients’ funds to invest them in the Fund, even though it was unsuitable for their conservative investment goals. The complaint alleges that many accounts were retirement accounts and that the Fund was an unsuitable investment for clients who did not have the ability and willingness to accept the risks of losing their entire investment. The complaint further alleges that the defendants caused the Fund to use client funds to make risky mortgage loans.

On the U.S. Securities and Exchange Commission’s website they write that there was a complaint alleging that the defendants have violated the antifraud provisions of the federal securities laws, including violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder by MAM, MAMW, Martinez and Sanchez and Sections 206(1) and 206(2) of the Investment Advisers Act by MAM and Martinez and aiding and abetting violations of Sections 206(1) and 206(2) of the Investment Advisers Act by Sanchez. The SEC seeks permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest, and monetary penalties.

If you feel you or a family member has become an alleged victim of  MAM, MAMW, Alex Martinez, Ralph Sanchez or any of their brokers, or a similar situation, 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.

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

Comments off · Posted by admin in FINRA

“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

14

Did you Purchase “Reverse Convertible Notes?”

Comments off · Posted by admin in FINRA

Reverse convertibles notes (RCNs), sometimes referred to as “reverse convertibles,” “reverse converts,” “knock-in notes,” or “revcons,” are short-term, unsecured bonds that are issued by banks and financial institutions. These notes are often linked to the performance of a well-known stock and may pay double-digit yields. Once the notes mature, investors should get their full principal investment back. However, if the value of the underlying stock falls to a certain point, sometimes referred to as the “knock-in” or “barrier” level, investors get shares of the devalued stock in lieu of their full principal investment.

The more the price goes down, the more money the issuer can make. They will “swap” your note at some point, for shares of stock, worth far less than the principal value of the note. That is why the interest rate you receive, at times as much as 18%, is the enticement to get you to buy the notes.  There may be some unscrupulous brokers who really want you to buy their reverse convertible notes because they allegedly believe the underlying stock will go down. The brokers should almost never consider individuals who wish to take below average, average or even above average risks with their investment dollars for RCNs. They should never be considered appropriate for retirees or other income oriented investors. Don’t let the high yields entice you.

It has been reported that some brokerage firms may have been allegedly charging fees on reverse convertible notes that equal or exceed the securities’ highest possible yield.  There are also many undisclosed costs, making it very difficult for the typical individual retail investor to determine whether the reverse convertible represents a good investment. The Financial Industry Regulatory Authority or FINRA, has recently made sales of reverse convertibles one of its priorities for the examination and enforcement divisions.

Have you or a family member been a victim of the sale of risky Reverse Convertible Notes or RCNs by your broker or brokerage?  If so 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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May/11

13

Are you Invested in Non-Traded REITs?

Comments off · Posted by admin in FINRA

“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. 

We believe 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 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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Apr/11

29

INVESTMENT ADVISER, FUND MANAGER AND TWO INDIVIDUALS CHARGED BY SEC WITH SECURITIES FRAUD INVOLVING CLIENT FUNDS

Comments off · Posted by admin in FINRA

It was announced on the SEC’s website, April 7, 2011, that The Securities and Exchange Commission filed of a civil injunctive action in U.S. District Court in Los Angeles, California against MAM Wealth Management, LLC (MAM), MAMW Real Estate General Partner, LLC (MAMW), Alex Martinez and Ralph Sanchez, alleging fraud in connection with client investments in a $10.3 million risky real estate venture. According to the Commission’s complaint, from July 2007 through March 2009, Martinez, a MAM and MAMW principal, and Ralph Sanchez, a MAM registered representative and MAMW principal, had 50 of their advisory clients invest in MAM Wealth Management Real Estate Fund, LLC (Fund). The complaint alleges that Martinez and Sanchez misrepresented to some clients that the Fund was a safe, relatively liquid investment, was earning 9% per year, and would show profits in three years.

This complaint alleges that the defendants have violated the antifraud provisions of the federal securities laws, including violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder by MAM, MAMW, Martinez and Sanchez and Sections 206(1) and 206(2) of the Investment Advisers Act by MAM and Martinez and aiding and abetting violations of Sections 206(1) and 206(2) of the Investment Advisers Act by Sanchez. The SEC seeks permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest, and monetary penalties.

The complaint also alleges that they used their discretionary authority over other clients’ funds to invest them in the Fund, even though it was unsuitable for their conservative investment goals. The complaint alleges that many accounts were retirement accounts and that the Fund was an unsuitable investment for clients who did not have the ability and willingness to accept the risks of losing their entire investment. The complaint further alleges that the defendants caused the Fund to use client funds to make risky mortgage loans.

If you feel you or a family member has become an alleged victim of  MAM, MAMW, Alex Martinez, Ralph Sanchez or any of their brokers, or a similar situation, 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.

Soreide Law Group, PLLC., representing investors nationwide before FINRA  the Financial Industry Regulatory Authority.

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