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TAG | unauthorized trades

Jan/12

26

Doug Mirabelli, Ex-Red Sox backstop, Wins $1.2M in Damages from Merrill

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In a January 25th., 2012, article from InvestmentNews.com, the staff writes that Former Boston Red Sox catcher and two-time World Series winner Doug Mirabelli, who made a nice career of being the preferred backstop to knuckleballer Tim Wakefield, finally saw a pitch even he couldn’t handle.

In March 2008, the same month he was released by the Red Sox, Mirabelli and his wife invested $880,219 with Bank of America Merrill Lynch adviser Phil Scott and took out loans that brought their account value to $1.8 million, according to an article in The New York Times. Scott put the money into the Merrill Lynch Phil Scott Team Income Portfolios, a bundle of 33 dividend-paying growth stocks. The loans were made on the condition that the account not dip below $1 million.

The InvestmentNews.com article goes on to say that by November, the Mirabellis’ account had dropped below that level, and they liquidated it to cover the loans. The Mirabellis argued in arbitration that Scott had put his client’s money into unsuitable, all-growth-stock investments and improperly briefed the couple on the loans and their requirements.

This arbitration panel ruled in favor of the Mirabellis and awarded them $1.2 million to cover their initial investment, plus all legal fees and arbitration costs. This was the second defeat for Scott in the last 12 months, according to The New York Times article. Merrill has moved to vacate the previous award and it’s unclear if they will do the same with Mirabelli’s.

“We disagree with the panel’s decision given the facts presented in this case,” said Bill Halldin, a spokesman for Merrill. “This account was handled properly during a very difficult time when there was extreme market volatility.”

Doug Mirabelli, 41, earned roughly $7 million over a dozen seasons. He now works as a real estate agent in Michigan.

Securities Attorney, Lars Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a family member have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 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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Jun/11

5

Finra files complaint against David Lerner Associates For REIT Sales to Elderly

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In a June, 2011, article from Bloomberg News, it was written that David Lerner Associates Inc. has been accused of targeting unsophisticated and elderly customers while selling real estate investment trust (REITs) shares without considering whether the illiquid security was suitable for its clients.

David Lerner Associates is based in Syosset, New York, and known for its “Take a tip from Poppy” advertising slogan, misled investors who bought more than $300 million of shares in the $2 billion Apple REIT Ten offering this year, the Financial Industry Regulatory Authority(FINRA) said in a disciplinary complaint on its website. The firm denies the allegations, according to a statement.

It was reported in the Bloomberg News article that David Lerner Associates solicited customers for Apple REIT Ten, it provided misleading information about distribution rates for a series of predecessor securities that are now closed to investors, Finra said. The figures failed to show that distributions far exceeded income and were funded by debt that increased leverage in the REITs, which invest in extended-stay hotels, the regulator said.  David Lerner Associates has sold almost $6.8 billion of Apple REIT shares to more than 122,000 customers since 1992, according to the Finra complaint, the industry-funded regulator for U.S. brokerages. Those sales have generated more than $600 million, accounting for more than 60 percent of the firm’s business since 1996, Finra said.

This complaint is the first step in a formal proceeding, Finra said. It isn’t filed in court, and the firm can request a hearing before a disciplinary panel, the regulator said in its statement.

“The firm conducted thorough due diligence of Apple REIT Ten’s offering documents and audited financial statements,” DLA said in its statement. “DLA will vigorously defend these claims. It looks forward to the opportunity to set the record straight and expects to be completely vindicated.”

Also, in the Bloomberg News article it was stated that in September, DLA paid a $255,000 fine for failing to provide required information in connection with the replacement of variable life insurance policies and annuity contracts from November 1998 through February 2004, according to the New York State Insurance Department. A year ago this month, DLA was accused by Finra of overcharging customers on sales of municipal bonds and mortgage securities. That case is still pending, according to Finra’s brokerage records.

If you or a family member have become a victim of the alleged fraudulent schemes of David Lerner Associates, Inc., 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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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

28

Multiple Chinese Companies Listed on U.S. Stock Exchanges Shut Down by SEC

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Throughout 2010, the Security and Exchange Commission (SEC) began an investigation into Chinese companies in the United States that became public through a process called “reverse mergers.”  The term, reverse merger, is also referred to as a reverse takeover or RTO. In an RTO, a Chinese company is acquired by an American “shell” company. An American shell company is a company which already has stock trading in the U.S., but the company does not operate a business or own assets. These Chinese companis merge into the shell. Through this process, the Chinese company can be brought public without the regulatory scrutiny of the Initial Public Offering (IPO) process in the United Sates.

On February 1, 2011, the SEC charged eight individuals and three RTO companies – China Digital, Global Peopleline and m-Wise – in a $33 million fraud. The SEC alleges that defendants engaged in schemes to pump up the price and trading volume  then dumped (sold) millions of shares of these securities into the market making millions of dollars in profits, leaving unsuspecting investors with shares worth next to nothing. Other such examples include China Energy Savings Technology, Fuwei Films, and China Water and Drinks.

The U.S. exchange trade officials have halted the trading of four Chinese companies brought public by WestPark Capital of California. WestPark brought the following four Chinese based companies public: NIVS IntelliMedia (NIV), China Intelligent Lighting and Electronics (CIL), China Century Dragon Media (CDM), and China Electric Motor (CELM). Allegedly to inflate their income statements and assets on their balance sheets.

If you or a family member have lost money in a Chinese company stock listed on a U.S. stock exchange 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

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

6

Gebharts Sanctioned by FINRA

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Alvin Waino Gebhart Jr. (CRD #1005905, Registered Principal, Fallbrook, California) and Donna Traina Gebhart (CRD #2708528, Registered Principal, Fallbrook, California).

On the FINRA website, it was reported that Alvin Gebhart was barred from association with any FINRA member in any capacity. Donna Gebhart was fined $15,000, suspended from association with any FINRA member in any capacity for one year, and must requalify by exam in all capacities. The Supreme Court of the United States denied a petition following the United States Court of Appeals for the Ninth Circuit’s denial of petition for review. The SEC had previously sustained the NAC decision.

The sanctions were based on findings that Alvin and Donna Gebhart engaged in private securities transactions without prior written notification to, or prior approval from, their member firm. The findings stated that Alvin and Donna Gebhart sold unregistered securities that were not exempt from registration, and recklessly made material misrepresentations and omissions in connection with the sale of securities.

Donna Gebhart’s suspension is in effect from June 7, 2010, through June 6, 2011. (FINRA Case #C0220020057)

If you have become a victim of the alleged fraudulent schemes of  Alvin Waino Gebhart, Jr., or Donna Taina Gebhart, 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

6

Joey Wade Dean, Hot Springs, Arkansas, Barred by FINRA

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Joey Wade Dean (CRD #3061136, Registered Representative, Hot Springs, Arkansas)
was barred from association with any FINRA member in any capacity. The sanction was based on findings that Dean willfully made material misrepresentations and omissions to customers that were either intentional or reckless in connection with the purchase of securities.

The findings stated that Dean sold the customers unsecured firm debts and
misrepresented that their principal was protected and falsely guaranteed the customers a rate of return.

The findings also stated that Dean executed unauthorized sales of shares of the securities from customers’ accounts. The findings also included that Dean
recommended and effected unsuitable transactions in customers’ accounts because of
the extraordinary concentration of a single issuer’s securities in the customers’ accounts.
(FINRA Case #2008012833801)

This information was obtained on FINRA’s website.

If you have become a victim of these alleged fraudulent schemes of  Joey Wade Dean, 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

6

FINRA Sanctions Daniel A. Contreras

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Daniel A. Contreras (CRD #4151950, Registered Principal, Ontario, California) submitted a Letter of Acceptance, Waiver and Consent in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Contreras consented to the described sanction and to the entry of findings that he engaged in private securities transactions by recommending that customers invest in promissory notes, which were not approved investments of his member firm.

The FINRA findings stated that Contreras failed to provide written notice to his firm describing in detail the proposed transactions and his proposed role therein, and stating whether he had received, or might receive, selling compensation in connection with the transactions.

 The findings also stated that the company that issued the promissory notes filed for Chapter 13 Bankruptcy, and all of Contreras’ customers lost their entire investment. The findings also included that Contreras borrowed approximately $65,000 from his customers, contrary to his firm’s written procedures prohibiting registered representatives from borrowing money or securities from any prospects or customers, including non-firm prospects/customers, and Contreras failed to pay back the money he borrowed.

This information was obtained on FINRA’s website.

If you have been a victim of these alleged fraudulent schemes of  Daniel A. Contreras, 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

5

Thomas Anthony Chrestman Fined and Suspended by FINRA

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Thomas Anthony Chrestman (CRD #1135841, Registered Representative, Cordova, Tennessee) submitted a Letter of Acceptance, Waiver and Consent in which he was fined $20,000 and suspended from association with any FINRA member in any capacity for three months. Without admitting or denying the findings, Chrestman consented to the described sanctions and to the entry of findings that he engaged in pre-arranged trading of collateralized mortgage obligation (CMO) bonds in a trading account of his member firm.

The findings stated that Chrestman effected CMO bond transactions in the firm’s trading account for which a registered principal/trader or another trader, whose transactions the principal also coordinated, was the contra-party. The findings also stated that the transactions were pre-arranged and directed by the registered principal, who set the price of the bonds and, simultaneously, agreed to repurchase them from Chrestman at a specified time, at an agreed-upon price that provided Chrestman with a profit. The findings also included that Chrestman participated in the pre-arranged trading with the registered principal because the principal asked that he do so; Chrestman was not familiar with all of the risks and attributes of the “inverse floater” CMOs that he was trading with the principal, and did not ascertain whether the transaction prices were at or away from the current market.

FINRA found that the registered principal consistently repurchased, or caused the
repurchase of, the bonds within a short time after Chrestman acquired them, the
transactions were not without risk and an increasing number of the transactions occurred at prices away from the current independent market. FINRA also found that had the principal failed to repurchase those CMO bonds, the firm’s trading account would have owned them at a price exceeding the price the firm was likely to obtain in an open-market sell transaction.
The suspension is in effect from March 21, 2011, through June 20, 2011. (FINRA Case
#2008012444204).

This information was obtained on FINRA’s website.

If you feel you have been a victim of these alleged fraudulent schemes of  Thomas Anthony Chrestman, 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

2

Final Judgement Entered Against Anthony Fareri and Fareri Financial Services for Defrauding Customers for More than $4.7mill.

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It was announced on the SEC’s website that on February 28, 2011, the United States District Court for the Southern District of Florida entered judgments by default against defendants Anthony Fareri, Fareri Financial Services d/b/a Amerifinancial, and Relief Defendant Anthony Fareri & Associates, Inc. The district court’s order enjoins Fareri and Fareri Financial Services from violating Section 17(a) of the Securities Act, Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder. The order also enjoins defendant Fareri Financial Services, a broker-dealer controlled by Fareri, from violating Section 15(c)(1) of the Securities Exchange Act. As part of the court’s judgment, Fareri is subject to a disgorgement order requiring him to pay either individually or jointly-and-severally a combined total of $1,840,703 plus prejudgment interest of $667,031.73 for a grand total of $2,507,734.73. Under the order, Fareri Financial Services is jointly and severally liable for $160,703.74 of the disgorgement and Anthony Fareri & Associates is jointly and severally liable for $820,000 in disgorgement plus prejudgment interest of $297,150.61 for a total of $1,117,150.61.

It was also announced that the district court imposed a civil penalty in the amount of $100,000 on Fareri and permanently barred him from participating in the offering of penny stocks.

In its complaint against the defendants, the SEC alleged that in 2004 and 2005:

     

*Fareri defrauded his customers of more than $4.7 million by purchasing and otherwise acquiring for their accounts worthless shares of two shell companies as part of a fraudulent scheme to manipulate the companies’ stock. 

*Fareri worked together with a Florida investor, Paul Harary, to create an artificial market for the two stocks. Fareri created the demand for the stocks by purchasing them for FFS’s customers. Harary controlled the supply of the unrestricted shares and sold them.   

*Fareri and Harary manipulated the price of the two stocks using pre-arranged matched orders to move up the price and to create the illusion of market demand. 

*As part of the scheme, Fareri received kickbacks totaling more than $1 million. He also received more than $160,000 in commissions and/or markups  

*Fareri’s defrauded customers included retirees who had limited investment experience and relied exclusively on Fareri to invest their money in accordance with their conservative risk tolerance and investment objectives.

 The SEC article goes on to say that according to the complaint, the two shell companies were Secure Solutions Holdings, Inc. (SSLX) and American Financial Holdings, Inc. (AFHJ). Each traded on the over-the-counter market and was quoted on the Pink Sheets. Fareri pleaded guilty to mail fraud and Harary pleaded guilty to conspiracy to commit mail and wire fraud in parallel criminal actions brought the U.S. Attorney’s Office for the District of Columbia.

This article was obtained on the SEC’s website.

If  you or a family member have become an alleged victim of Anthony Fareri of Fareri Financial Services or any of the other alleged associated brokerages, 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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