FINRA

Published on: February 25, 2014

Customers of Wade James Lawrence Could Recover Losses

Securities fraud attorneys are currently investigating claims on behalf of investors who suffered significant losses as a result of doing business with Wade James Lawrence. Lawrence, a former broker for Lubbock Investments, recently surrendered his securities license because the Financial Industry Regulatory Authority (FINRA) requested he give testimony regarding his conduct and Lawrence failed to appear for the on-the-record interview.

Customers of Wade James Lawrence, Merrill Lynch, Oppenheimer Could Recover Losses

Lawrence is also the defendant in two lawsuits filed in November. According to the allegations in these lawsuits, Lawrence failed to repay $1 million in loans made by private individuals. Reportedly, Lawrence stated in November 2013 that he would turn himself over to regulators “regarding allegations of illegal securities trading practices.”

According to FINRA reports, Lawrence has been accused of causing $140,000 in customer losses because of inappropriate trades during the time he worked with Southwest Securities and $71,000 in customer losses because of unauthorized trading when he was with Oppenheimer.

Published on: February 20, 2014

Have Your Loved Ones Been the Victims of Affinity Fraud?

by InvestorLawyers

Investment fraud lawyers continue to investigate claims on behalf of elderly individuals who have been the victims of affinity fraud. In many cases, it is up to the children and grandchildren of elderly individuals to discover and put a stop to the victimization of their loved ones by fraudsters.

Have Your Loved Ones Been the Victims of Affinity Fraud?

A recent article in Forbes examined why elderly parents are susceptible to scams that seem obvious to younger individuals. According to the article, there are three main reasons for this: isolation and loneliness, diminished cognition and feelings of financial insecurity. Fraudsters know how to talk to lonely elders in a way that garners trust and makes them feel engaged. In addition, Alzheimer’s Disease research indicates that the first kind of judgment to be impaired is financial judgment, which may go undetected in the beginning stages of Alzheimer’s.

In one example, Gary H. Lane, a former Bank of America financial advisor, pleaded guilty to five counts of tax evasion and 12 counts of fraud on September 3, 2013 and was sentenced to a 10-year prison sentence on February 10, 2014. Allegedly, Lane defrauded six investors of more than $2 million from January 2010 until March 2011. During that time, Lane was reportedly employed by Bank of America Investment Services. Allegedly, Lane convinced these clients to invest their money through an E-trade account instead of following normal bank procedures.

Published on: February 18, 2014

Oriental Financial Services Customers Could Recover Losses From Puerto Rico Closed-end Bond Funds

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of investors who suffered significant losses as a result of doing business with Oriental Financial Services. Allegedly, Oriental Financial Services, part of OFG Bancorp, was responsible for investor losses sustained in at least two Puerto Rico Closed-end Bond Funds: Puerto Rico Investors Tax Free Fund IV and Puerto Rico Income Fund II.

Oriental Financial Services Customers Could Recover Losses From Puerto Rico Closed-end Bond Funds

A claim was recently filed on behalf of one couple who wanted to invest the money from their matured CDs in conservative investments. However, Oriental Financial Services allegedly recommended they invest 65 percent in the Puerto Rico Closed-end Bond Funds. According to the claim, the couple was unaware that this significant portion of their $1 million investment would be put into investments that were illiquid, concentrated, high-risk and leveraged. Reportedly, when the Puerto Rico market declined, their investment value declined by around 60 percent. In addition, the couple is unable to get out of their declining investments because there is no secondary market readily available.

Under FINRA rules, 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. According to stock fraud lawyers, many of the investors who have suffered significant losses in Puerto Rico closed-end bond funds were unaware of the risks, and these investments were unsuitable given their risk tolerance.

Published on: February 6, 2014

Icon Leasing Fund Investors Could Recover Losses

by InvestorLawyers

Investment fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses because of the unsuitable recommendation and sale of Icon Leasing Funds. An arbitration claim was recently filed on behalf of a retired woman who was sold these risky, illiquid investments by WFG Investments Inc. and NFP Securities Inc.

Icon Leasing Fund Investors Could Recover Losses

Specifically, potential claims involve the Icon Leasing Fund Eleven LLC and Icon Leasing Fund Twelve LLC. Allegedly, the advisor who sold the investments did not adequately explain that the funds operated as an equipment leasing program. The nature of the investment, in which capital is pooled for equipment subject to a lease, made it very risky and illiquid.

According to securities arbitration lawyers, during the offering period, the funds paid healthy distributions. However, not long after the funds were no longer for sale to new investors, the investment’s value began to rapidly decline and dividend payments became erratic. On December 31, 2012, Icon Leasing Fund 12 had suffered a 53 percent loss in value from the original offering price. For the same time period, Icon Leasing Fund Eleven suffered a staggering 84 percent decline in value.

Published on: February 4, 2014

Victims of Robert G. Bard Could Recover Losses

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of the customers of Robert G. Bard. Current claims against Bard on behalf of investors seek compensation for investment losses that resulted from securities laws violations in the amount of as much as $6 million.

Victims of Robert G. Bard Could Recover Losses

Current allegations against Bard include breach of contract, negligence, fraud through omission of material fact and violation of Financial Industry Regulatory Authority (FINRA) regulations and other securities laws, among others. Before incorporating his investment firm in December 2004, Bard was terminated from the investment firm where he worked for allegedly preparing and submitting investment documents with forged signatures of his customers. A FINRA investigation confirmed these charges and Bard signed a Letter of Acceptance, Waiver and Consent.

In August 2013, Bard was found guilty of 21 felony counts of offenses related to securities fraud. According to stock fraud lawyers, FINRA rules have established that firms must properly supervise brokers’ activities while they are registered with the firm. Reportedly, Scottrade, Ameritrade, Choice Investments and E-Trade have been named in an arbitration claim soon to be filed on behalf of some of Bard’s clients and these investment firms could be ordered to compensate clients for losses sustained for the period Bard was registered with the firms.

Published on: January 28, 2014

Loss Recovery: REIT Investors Suffer Significant Losses in 2013

by InvestorLawyers

Investment fraud lawyers currently are investigating claims on behalf of investors who suffered significant losses as a result of unsuitable recommendations of real estate investment trusts, or REITs. Though the risks of non-traded REITs are now well-known, publicly-traded REITs also are not without risks. Reportedly, many investors suffered significant losses in 2013 because they were invested in these products for the wrong reasons.

Loss Recovery REIT Investors Suffer Significant Losses in 2013

Reportedly, from January until May 2013, investors spent $10.3 billion on real estate funds. However, in May 2013, the Federal Reserve began discussing tapering its purchase of assets under the so-called “quantitative easing” policy, causing a spike in interest rates, and REITs suffered a loss of 5.9 percent in that month alone. As prices fell, investors pulled $2.5 billion out of REITs, suffering significant losses. Then, last month, the Federal Reserve tapered its bond-buying program from $85 billion per month to $75 billion per month.

According to a Wall Street Journal article last month, “You should own REITs because you want to diversify some of the risks of stocks and bonds and to combat inflation — not because you are chasing high dividend yields or because you think the hot returns of the past will persist.” The articles goes on to say, “Anyone who overpays for lower-quality, higher-yielding assets could be crushed if interest rates rise sharply.”

Published on: January 28, 2014

Variable Annuities Unsuitable for Many Investors, Especially Retirees

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of investors — especially older, retired investors — who suffered significant losses because of the unsuitable recommendation of variable annuities. Variable annuities are a type of insurance product. With this product, the investor pays into an account now in exchange for the guarantee of a future payout. The investment is tied to a stock index return, making it variable.

Variable Annuities Unsuitable for Many Investors, Especially Retirees

According to stock fraud lawyers, variable annuities typically offer large sales commissions to brokers and, as a result, some brokers make unsuitable recommendations. Furthermore, tax deferrals associated with variable annuities make them particularly unsuitable for retirees if the retirees’ assets are already held in an account that provides tax deferral (such as an IRA). Reportedly, an arbitration panel recently awarded $112,000 to one investor who was sold variable annuities which then were put into the investor’s tax-deferred IRA account. This strategy negates or renders irrelevant any tax benefit that would have been provided by the variable annuity.

InvestmentNews recently reported that individuals who invest in variable annuities are facing a risk of forced annuitizations. If so, the annuitizations will eliminate some death benefits, which are a primary reason many investors have chosen to invest in variable annuities. A report by the Wall Street Journal states that while variable annuity claims lagged in 2013 after surging in 2012, the 2013 claims were still higher than the number of mutual fund and stock lawsuits.

Published on: January 21, 2014

Unsuitable ETF Sales Lead to Restitution for Investors

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of customers of full-service brokerage firms for unsuitable sales of leveraged and inverse ETFs, or exchange-traded funds. On January 9, the Financial Industry Regulatory Authority (FINRA) announced that it ordered Stifel, Nicolaus & Co. Inc. and Century Securities Associates Inc. to pay $475,000 in restitution and $550,000 in fines regarding the sales of leveraged and inverse ETFs to 65 customers.

Unsuitable ETF Sales Lead to Restitution for Investors

Stifel and Century, both affiliate broker-dealers based in St. Louis, are owned by Stifel Financial Corp. According to stock fraud lawyers, leveraged and inverse ETFs are designed to meet daily objectives and “reset” each day. As a result, the performance of these investments can diverge from the performance of the underlying benchmark or index very quickly. Naturally, this problem is exacerbated in volatile markets.

According to securities fraud attorneys, because of the nature of these investments, leveraged and inverse ETF investors can suffer enormous losses, even if there is a gain in the index performance over the long-term.

Published on: January 16, 2014

New Research Indicates Investors Already Lost Billions in Puerto Rico Bond Funds

by InvestorLawyers

New Research Indicates Investors Already Lost Billions in Puerto Rico Bond Funds

Investment fraud lawyers continue to investigate claims on behalf of investors who have suffered significant losses in UBS Puerto Rico closed-end municipal bond funds. Allegedly, UBS Puerto Rico has engaged in questionable sales practices related to certain closed-end bond funds, including leveraged fixed income funds. New research has indicated that investor losses now amount to billions of dollars.

According to InvestmentNews, 19 of these bond funds lost a total of $1.6 billion from January to September of last year alone. Reportedly, the funds that caused the most significant investor losses were the ones underwritten by UBS with large municipal bond holdings. Around $10 billion in closed-end bond funds were sold by the Puerto Rican unit of UBS Financial Services from 2002 to 2012.

The Puerto Rican economic downturn has caused the value of the funds — as well as the value of other funds not underwritten by UBS that purchased Puerto Rican debt — to significantly decline. Municipal market weaknesses and rumors regarding interest rates have led to illiquidity and value declines for these products. In many cases, the risks associated with these investments reportedly were not properly disclosed to clients prior to their sale. In these circumstances, some UBS Puerto Rico customers may have claims for unsuitable recommendations, over-concentration and/or improper use of leverage.

Published on: December 31, 2013

LPL Broker Barred for Improper Non-traded REIT Sales; Customers Could Recover Losses

by InvestorLawyers

Securities fraud attorneys are investigating claims on behalf of customers who suffered significant losses in non-traded REITs as a result of doing business with Gary Chackman, an LPL Financial broker. In December, the Financial Industry Regulatory Authority barred Chackman for violating securities industry rules related to the sales of non-traded real estate investment trusts.

LPL Broker Barred for Improper Non-traded REIT Sales Customers Could Recover Losses

The alleged misconduct relates to the time period from 2009 to 2012, but Chackman was registered with LPL between 2001 and 2012. In 2012, his registration was terminated by the firm for violating the firm’s policies and procedures regarding alternative investment sales.

According to the letter of acceptance waiver and consent, Chackman “recommended and effected unsuitable transactions in the accounts of at least eight LPL customers, by overconcentrating his customers’ assets in [REITs] and other illiquid securities.” The letter, dated December 12, 2012, also states that by submitting falsified documents, Chackman “was able to increase his customers’ accounts’ concentration in REITs and other alternative investments beyond the allocation limits established by [LPL].”