FINRA

Published on: September 12, 2012

Victims of Clinton D. Fraley Could Recover Losses

Securities fraud attorneys are currently investigating claims on behalf of former clients of Northwestern Mutual Investment Services LLC, MML Investors Services LLC, Wealth By Design Inc. and Clinton D. Fraley. In August, an emergency law enforcement action was filed by the Colorado Securities Commissioner to enjoin Wealth by Design and Clinton Fraley from violating the Colorado Securities Act. According to the allegations, Fraley violated the Colorado Securities Act by accessing investors’ mutual fund accounts without authorization, converting their securities into cash illegally and forging checks in order to access funds for personal use.

Victims of Clinton D. Fraley Could Recover Losses

“Fraley, who was a licensed securities professional employed with licensed broker-dealers until he was terminated in 2011, solicited hundreds of thousands of dollars from Colorado investors, promising the investors that their money would be invested in ‘a well-balanced portfolio of investments’ consisting of Roth IRAs, traditional investments such as stocks and bonds, mutual funds and non-qualified investments,” says the statement from Colorado enforcement officials. However, “Fraley gained unauthorized access to the investors’ accounts, forged the investors’ signatures on checks, deposited the money in a Wealth bank account and converted the money for his own personal benefit, including the purchase of a house.”

Stock fraud lawyers say Fraley was registered from March 2007 to May 2011 with Northwestern Mutual Investment Services, a FINRA-registered broker-dealer. Fraley was registered with another FINRA-registered broker-dealer, MML Investors Services, from May 2011 to October 2011. All FINRA-registered broker dealers are, according to securities fraud attorneys, required to properly supervise the activities of their brokers during the time in which they are registered with the firm. As a result, these firms may be held liable for failing to adequately supervise Fraley.

Published on: September 10, 2012

Dividend Capital REIT and Seven Other Non-traded REITs Suffer Significant Losses

by InvestorLawyers

Securities arbitration lawyers are currently investigating claims on behalf of investors who suffered significant losses as a result of their investment in eight of the biggest non-traded REITs, including Dividend Capital Total Realty Trust Inc. According to a recent analysis, over the last seven years, eight of the biggest REITs have lost 37 percent of their equity value, or around $11.3 billion.

Dividend Capital REIT and Seven Other Non-Traded REITs Suffer Significant Losses

In July, Dividend Capital Total Realty Trust Inc. revised its per share value to $6.69, down from its March value of $8.45 per share. The Dividend Capital REIT raised $1.8 billion at a $10 per share price. Dividend Capital REIT president, Guy Arnold, failed to return calls seeking comment on the REIT’s performance. For more information about the Dividend Capital REIT, see the previous blog post, “Dividend Capital REIT Restructuring Could be a Sign of Trouble.”

Another non-traded REIT, CNL Lifestyle Properties Inc., experienced a share price drop to $7.31. The CNL Lifestyle Properties REIT raised $2.7 billion at a $10 per share price, according to investment fraud lawyers.

Published on: September 7, 2012

Defrauded Investors of James Ryan Lanier, Recently Arrested Merrill Lynch Financial Advisor, Could Recover Losses

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of victims of James Ryan Lanier, a financial advisor for Merrill Lynch. Reportedly, Lanier was arrested on fraud, identity theft and money laundering related to embezzlement. Allegedly, Lanier, 33, embezzled over $800,000 from Merrill Lynch clients and was arrested in San Diego, California.

Defrauded Investors of James Ryan Lanier, Recently Arrested Merrill Lynch Financial Advisor, Could Recover Losses

According to the allegations listed in the 65-count indictment against Lanier, while he was working for Merrill Lynch as a financial advisor between 2008 and 2010, Lanier forged client signatures on fraudulent letters of authorization to Merrill Lynch client associates. These client associates were responsible for processing client funds through wire transfers. Purportedly, these letters also contained misleading and false statements that were intended to persuade the client associates to transfer funds from the investment accounts of clients to bank accounts under Lanier’s control.

According to the indictment, stock fraud lawyers say that Lanier deliberately sought out assistance from client associates who were not familiar with his clients to direct funds transfers. Lanier allegedly claimed Merrill Lynch clients had given voice approval on a recorded telephone conversation, though no such approval was given. Choosing client associates who were unfamiliar with his clients aided Lanier in his scheme.

Published on: September 6, 2012

CNL Lifestyle Properties REIT Investors Could Recover Losses

by InvestorLawyers

Stock fraud lawyers are currently investigating claims on behalf of investors who have suffered significant losses as a result of their investment in CNL Lifestyle Properties Inc. Reportedly, a recent announcement from CNL Lifestyle Properties stated that its per share value estimate has dropped from its original share price of $10 to $7.31. This decline represents a drop of 27 percent, which could mean significant losses for many investors. Furthermore, the REIT is reportedly cutting investor dividends, or distribution.

CNL Lifestyle Properties REIT Investors Could Recover Losses

Financial Industry Regulatory Authority rules have established that brokers and firms have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance.

The CNL Lifestyle Properties REIT is, according to investment fraud lawyers, another in a long line of non-traded REITs currently under investigation. REITs typically carry a high commission which motivates brokers to make the recommendation to investors despite the investment’s unsuitability. The commission on a non-traded REIT is often as high as 15 percent. Non-traded REITs, such as the CNL Lifestyle Properties REIT, carry a relatively high dividend or high interest, making them attractive to investors. However, these investments are inherently risky and illiquid, which limits access of funds to investors. This becomes a major problem for investors, especially retired individuals, who may need to access their funds when the need arises. For more information on REITs, see the previous blog post “FINRA Investor Alert: Public Non-Traded REITs.”

Published on: September 5, 2012

Behringer Harvard Strategic Opportunity Fund I Investors Could Recover Losses

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of investors who suffered significant losses as a result of their investment in Behringer Harvard Strategic Opportunity Fund I. Reportedly, this investment is in serious trouble, with its assets being far outweighed by its liabilities. Behringer Harvard Strategic Opportunity Fund I was initially offered in 2005 and, since then, has raised $65 million. Six properties were involved in the fund’s investing, including a hotel in Los Angeles and an office building in Amsterdam. It has been reported that, around the middle of August, Behringer Harvard informed brokers of the fund’s problems.

Behringer Harvard Strategic Opportunity Fund I Investors Could Recover Losses

Allegedly, many brokers recommended Behringer Harvard Strategic Opportunity Fund I to their clients, misrepresenting the investment as low risk and safe. Furthermore, investment fraud lawyers say some brokers unsuitably placed an overconcentration of client assets in the product.

Chief executive of the funds of which Behringer Harvard’s opportunity platform consist, Michael O’Hanlon, stated that Behringer Harvard Strategic Opportunity Fund I’s “liabilities are greater than its assets.” O’Hanlon also stated that a “swing issue” is in effect over the Los Angeles hotel and the fund is currently negotiating with banks on the issue.

Published on: September 3, 2012

Mutual Fund Investors Could Recover Losses

by InvestorLawyers

Securities arbitration lawyers currently are investigating claims on behalf of investors who suffered significant losses in various mutual fund investments. A number of mutual funds experienced a gross underperformance in the 2011 market. Investors of these mutual funds have lost a large portion of their investments.

Mutual Fund Investors Could Recover Losses

According to stock fraud lawyers, Financial Industry Regulatory Authority rules have established that brokers and firms have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives, and risk tolerance. If a broker or adviser makes a recommendation that is unsuitable for their client, the broker or brokerage firm can be held responsible for the investor’s losses in Financial Industry Regulatory Authority arbitration.

The following is a list of mutual funds currently being investigated by securities arbitration lawyers:

Published on: August 31, 2012

Victims of Lewis J. Hunter’s Fraud Could Recover Losses

by InvestorLawyers

Investment fraud lawyers are currently investigating claims on behalf of individuals who invested with Lewis J. Hunter, a former broker in Michigan. A cease-and-desist and administrative proceedings order was recently instituted by the Securities and Exchange Commission against Hunter, who allegedly misappropriated money from his brokerage customers and, in turn, used the funds to pay personal expenses. The amount of money allegedly misappropriated is estimated to be around $300,000.

Victims of Lewis J. Hunter’s Fraud Could Recover Losses

The SEC’s Division of Enforcement’s allegations of misappropriation of funds state that Hunter promised guaranteed returns in both domestic and foreign bank investments while registered with HD Vest Investment Securities Inc. Further, the SEC’s claims allege that Hunter paid personal and business expenses with the funds and made false and misleading representations to conceal his actions from his clients. Reportedly, these misrepresentations included fabricating bank documents.

Based on the SEC’s allegations, securities arbitration lawyers believe that Hunter was a registered representative for HD Vest Investment Securities Inc. from November 15, 2006 through October 19, 2011. HD Vest Investment Securities is headquartered in Texas and is a registered broker-dealer. While registered there, Hunter reportedly became a partner in National Business Concepts LLC, purportedly in bookkeeping, accounting, business consulting, management and tax preparation.

Published on: August 30, 2012

Unregistered Securities: Inofin Investors Could Recover Losses

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of investors who suffered significant losses as a result of their investment in an Inofin promissory note or Inofin offering. A recent announcement by the Securities and Exchange Commission (SEC) stated that on July 23 and 24, final judgments were entered in a civil injunctive action against Michael J. Cuomo and Kevin Mann Sr. This action was filed in the United States District Court of Massachusetts.

Unregistered Securities: Inofin Investors Could Recover Losses

Allegations included in the SEC complaint were that Inofin and Inofin executives illegally raised money from investors in 25 states and the District of Columbia totaling at least $110 million. These funds were raised through unregistered note sales. Furthermore, Inofin allegedly materially misrepresented the company’s financial performance as well as how it was using investors’ money. Thomas K. Keough and David Affeldt, two sales agents, were also charged by the SEC. Allegations against Affeldt and Keough stated that they offered and sold the aforementioned unregistered securities.

Stock fraud lawyers say Keough’s FINRA Broker Report stated that he was registered with FINRA during a significant portion of the time that he sold these unregistered securities. As a result, investors who, in accordance with Keough’s recommendation, purchased an Inofin investmentvcould be able to recover losses through securities arbitration.

Published on: August 29, 2012

Investors Beware as Gas Prepayment Bonds Downgraded by Moody

by InvestorLawyers

As a significant number of gas prepayment bonds ratings have been downgraded by Moody’s Investors Service, stock fraud lawyers are advising investors to be cautious regarding their investments in these bonds. As a result of downgrades in Goldman Sachs Group Inc., Citigroup Inc., JPMorgan Chase & Co., Credit Agricole Corporate & Investment Bank, Merrill Lynch & Co., BNP Paribas, Morgan Stanley, Royal Bank of Canada and Societe Generale, numerous bonds became subject to review and subsequent downgrades.

Investors Beware as Gas Prepayment Bonds Downgraded by Moody

Securities arbitration lawyers say this situation is similar in some ways to what happened when, after Lehman declared bankruptcy, Series 2008A of Main Street Natural Gas Inc. Gas Project Revenue Bonds were downgraded. In the case of the Lehman bonds, the bonds were not guaranteed by Lehman Brothers, though certain payment obligations of the gas supplier were guaranteed.

The following is a list of gas prepayment bonds that have been affected by downgrades:

Published on: August 27, 2012

Retail Properties of America, Formerly Inland Western, Faces More Problems

by InvestorLawyers

For quite some time now, securities fraud attorneys have been investigating claims on behalf of investors who suffered significant losses as a result of their investments in Retail Properties of America REIT, formerly known as Inland Western. Reportedly, the chief executive of Inland Real Estate Group of Cos. Inc., Daniel Goodwin, recently expressed criticism about the Retail Properties of America Inc.’s IPO timing. A new lawsuit states that in January 2011, the REIT told investors before the offering that they could expect a value of $17.25 per share. However, at the time of the offering, the REIT’s shares, adjusted for the stock split, were actually only valued at $3.20 a share. This also was significantly lower than the $10 price which the majority of investors paid per share.

Retail Properties of America, Formerly Inland Western, Faces More Problems

According to Goodwin, Inland Real Estate Group of Cos. Inc. has no control over Retail Properties of America. Furthermore, when asked if Inland would join in the lawsuit filed in the U.S. District Court for the Northern District of Illinois — which is seeking class action status — Goodwin said, “We have discussed various potential actions but haven’t reached a conclusion. Our interests are clearly aligned with the shareholders.”

Investment fraud lawyers say Retail Properties of America is the third-largest shopping center REIT in the nation. In April 2012, Retail Properties of America was converted to a publicly traded New York Stock Exchange company from a non-traded REIT.