investment fraud lawyers

Published on: July 13, 2012

Elder Financial Abuse Targeted by CFPB

On June 15, coinciding with World Elder Abuse Awareness Day, the Consumer Financial Protection Bureau (CFPB) announced that it would be launching a public inquiry regarding the financial exploitation of elder Americans. The CFPB is a new agency that will be policing consumer financial products, and investment fraud lawyers applaud its choice to focus its attention on elder financial abuse.

Elder Financial Abuse Targeted by CFPB

It is clear to securities fraud attorneys, who regularly file claims on behalf of elderly individuals, that financial abuse against the elderly is a common problem. This sentiment was reflected in the June 15 announcement by the CFPB.

“Older Americans have lost billions of dollars to the silent crime of financial exploitation,” says Richard Cordray, CFPB director. “Our older adult population is growing every year, which makes it even more critical that we study this issue. Today, the Bureau will launch a public inquiry to learn more about financial fraud of older Americans and the credentials of financial advisors who counsel them.”

Published on: July 12, 2012

News: New Pilot Program Launched by FINRA

by InvestorLawyers

According to a recent announcement by the Financial Industry Regulatory Authority (FINRA), the regulator has launched a new pilot program. Securities arbitration lawyers say this program is designed specifically for large arbitration cases, or those cases involving claims of $10 million or more.

News: New Pilot Program Launched by FINRA

Under the terms of the program, parties are able to customize the administrative process in order to better suit the special needs of bigger cases. Furthermore, it allows certain FINRA arbitration rules to be bypassed. The program is open to all cases that meet the monetary requirement. Participation is strictly voluntary. In order to take advantage of the program, however, parties must be represented by counsel, such as an investment fraud attorney, and must pay for any and all additional costs associated with the program.

“In response to the increasing number of very large cases, we wanted to introduce a more formal approach to give parties greater flexibility and more control over the administration of their case,” says FINRA Dispute Resolution President Linda Fienberg.

Published on: July 11, 2012

Victims of Bruce Harada Fraud Could Recover Losses

by InvestorLawyers

Stock fraud lawyers are currently investigating claims on behalf of investors who suffered losses as a result of their investment with Bruce Harada, a former financial advisor for ING Financial Partners/ING Financial Advisors LLC. Reportedly, Harada has been charged with one count of money laundering and two counts of securities fraud. According to the accusations, Harada allegedly stole over $2 million from a minimum of 21 victims in Hawaii. At the time of the theft, Harada reportedly managed compensation plans for retired and active employees of ING, and was acting as an independent financial adviser for the firm.

Victims of Bruce Harada Fraud Could Recover Losses

According to securities arbitration lawyers, brokerage firms have an obligation to adequately supervise financial advisors in their employ. They must ensure that agents comply with any applicable securities laws. ING may be liable for losses suffered by investors as a result of Harada’s actions if it can be proven that the firm failed to execute adequate supervision of Harada.

The FINRA Broker Report (CRD) for Bruce Harada states that he was working for ING Financial Partners/ING Financial Advisors LLC from January 2007 until the end of May 2012. Harada worked out of ING’s Honolulu, Hawaii office. Furthermore, the CRD indicates that before working for ING, Harada worked, from March 1999 through December 2006, for Financial Network Investment Corporation. In addition, stock fraud lawyers say Harada is the subject of 9 ongoing customer complaints. ING has terminated his employment for “violation of firm’s policies and procedures regarding the handling of customer funds.”

Published on: July 9, 2012

Desert Capital REIT Investors Could Recover Losses

by InvestorLawyers

Investment fraud lawyers are currently filing claims on behalf of investors who suffered significant losses as a result of their investment in Desert Capital REIT. Recently, a claim was filed on behalf of two individuals. Both of these investors were retirees, ages 81 and 88. The claim, which is seeking $130,000 in damages, was filed with the Financial Industry Regulatory Authority (FINRA).

Desert Capital REIT Investors Could Recover Losses

The claim alleges that the Calton representative who solicited the Desert Capital REIT investment to the claimants was aware that the investors were retired and represented the investment as an income-producing, low-risk investment. Allegedly, the representative stated the REIT had a good reputation of paying dividends and would, therefore, be a good addition to the income-producing portfolio of the claimants. The claimants could not afford an illiquid, high-risk, speculative investment because their only source of income came from their investments and social security.

Securities fraud attorneys have stated that since REITs are, in fact, illiquid, non-traded investments, many REITs are not a suitable investment for all investors. FINRA rules have established that 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. Furthermore, brokerage firms must, before approving an investment’s sale to a customer, conduct a reasonable investigation of the securities and issuer. The claim states that the Calton representative and the firm itself did not perform the necessary due diligence and misrepresented the risks of Desert Capital REIT.

Published on: July 6, 2012

Investors of Deutsche Bank Structured Products Could Recover Losses

by InvestorLawyers

Stock fraud lawyers are currently investigating potential claims on behalf of customers who suffered losses as a result in their investment in a Deutsche Bank-created structured product or products. In some cases, Financial Industry Regulatory Authority-registered brokerage firms may be held liable for having improperly sold structured products to their clients, such as those created by Deutsche Bank.

Investors of Deutsche Bank Structured Products Could Recover Losses

Typically, structured products are notes or debt instruments created by investment sponsors. These products are linked to assets such as stock, which are linked to another asset or assets. These investments are extremely complex and, as a result, are not appropriate for unsophisticated investors who are not capable of understanding the risks and complexity of the investment.

Because an income component is typically offered with structured products, they are appealing to fixed income individuals, such as retirees. Despite the fact the investment is not suitable for many individuals, they continue to be pushed by brokerage firms because of the high commissions offered in association with their creation and sale. Financial Industry Regulatory Authority rules have established that 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. Furthermore, investment fraud lawyers say that brokerage firms must, before approving an investment’s sale to a customer, conduct a reasonable investigation of the securities and issuer.

Published on: July 4, 2012

Broker Charged with Fraud Related to Astrology-based Investment Strategy

by InvestorLawyers

Investment fraud lawyers are currently investigating potential claims on behalf of customers of Gurudeo “Buddy” Persaud, an Orlando, Florida broker. A recent announcement by the Securities and Exchange Commission stated that the SEC has charged Persaud with defrauding investors. Allegedly, Persaud’s fraud involved the use of an investment strategy based on astrology.

Broker Charged with Fraud Related to Astrology-based Investment Strategy

According to the charges, which were filed in the U.S. District Court for the Middle District of Florida, Persaud allegedly persuaded investors to give him money for investments he promised were “safe” and that would return 6-18 percent on their investment. Persaud managed to raise $1 million from investors. However, SEC enforcers allege that Persaud’s market-timing service made forecasts that were based on gravitational pull and lunar cycles. The strategy is apparently based on the idea that mass human behavior and, as a result, the stock market, are affected by gravitational forces. Investors were not made aware of the alleged basis of Persaud’s strategy and most securities arbitration lawyers would agree that astrology is not a sound basis for an investment strategy.

Furthermore, Persaud allegedly misappropriated around $415,000 of investor money for his personal use and lost $400,000 as a result of the investment strategy.

Published on: June 28, 2012

Investors Beware Retirement Account Fraud

by InvestorLawyers

Investment fraud lawyers are currently investigating potential claims on behalf of investors who suffered losses as a result of a breach of fiduciary duty related to their retirement accounts.

Investors Beware Retirement Account Fraud

Cofounder and director of Results One Financial LLC, Steven Salutric, was recently ordered to restore $1,211,902.25 to clients who held pension plans with him. The money was allegedly withdrawn from four pension plans between 2005 and 2009. This action violated the Employee Retirement Income Security Act. Allegations against Salutric stated that he misdirected client assets to entities such as a restaurant, a film distribution company, a real estate partnership and the church at which he served as treasurer. Salutric had a personal interest in all these entities, according to stock fraud lawyers.

“It is particularly egregious when those entrusted with protecting workers’ retirement assets jeopardize them by committing illegal acts for personal gain,” Hilda L.Solis, secretary of the U.S. Department of Labor, said.

Published on: June 27, 2012

Mountain V Oil and Gas Investors Could Recover Losses

by InvestorLawyers

Investment fraud lawyers currently are investigating potential claims on behalf of investors who suffered significant losses as a result of their investment in a Mountain V Oil and Gas investment, or other similar investments. In many cases, broker-dealers improperly recommended these risky investments to clients for whom the investment was unsuitable.

Mountain V Oil and Gas Investors Could Recover Losses

Mountain V’s headquarters are in Bridgeport, West Virginia. Steve and Mike Shaver founded Mountain V Oil & Gas Inc. in March of 1994. It was founded in order to acquire and develop gas and oil reserves located in the Appalachian Basin.

According to investment fraud lawyers, oil and gas investments are not suitable for unsophisticated investors because of the substantial risks involved. These investments should only be recommended to sophisticated investors.

Published on: June 22, 2012

Customers of Benjamin Daniel DeHaan Could Recover Losses

by InvestorLawyers

Potential claims are currently being investigated by securities fraud attorneys on behalf of Benjamin Daniel DeHaan customers. The Securities and Exchange Commission filed a civil action on June 9, 2012, against Lighthouse Financial Partners LLC and Benjamin Daniel DeHaan in the United States District Court for the Northern District of Georgia. Lighthouse has been owned and operated by DeHaan since 2007.

Customers of Benjamin Daniel DeHaan Could Recover Losses

According to the SEC’s complaint, from January 2011 until early May 2012, DeHaan allegedly moved about $1.2 million of investor funds to a bank account under his control, in Lighthouse’s name. By moving the funds to this account from the client accounts that were held at a custodial broker-dealer, DeHaan was able to gain control and custody of the client assets. Allegedly, the customers were told that new accounts at another broker-dealer would be opened through the use of these funds. However, once the funds were in the Lighthouse account, at least some of them were moved to DeHaan’s personal account and other accounts used for Lighthouse business expenses.

Client funds totaling at least $600,000 are still unaccounted for. Furthermore, DeHaan allegedly provided false documents to the SEC’s staff and the State of Georgia’s examiner.

Published on: June 20, 2012

Arbitration Claim Filed Against Securities America for Churning

by InvestorLawyers

Stock fraud lawyers are investigating potential claims on behalf of investors of Securities America who may have suffered significant losses as a result of life insurance investment twisting and churning.

Arbitration Claim Filed Against Securities America for Churning

Investment fraud lawyers say churning is a common problem in the securities industry. According to the S.E.C., “Churning refers to the excessive buying and selling of securities in your account by your broker, for the purpose of generating commissions and without regard to your investment objectives.” In short, churning is a form of broker misconduct in which the broker performs excessive trading to generate personal profit. For more information on churning, see the previous blog post, “Investment Churning: A Slippery Slope of Broker Misconduct.”

A Financial Industry Regulatory Authority arbitration claim was recently filed on behalf of an 81-year-old Peoria, Illinois resident. The claimant, a retired widow, was sold various life insurance policies and annuities. These investments were allegedly held for only a short period of time before being liquidated. According to the claim, the investments’ proceeds were then rolled into other annuity contracts and policies. Allegedly, most of these transactions incurred surrender charges and fees that were charged to the claimant. As an example detailed by the Statement of Claim, the funds of a Lincoln Annuity, purchased on August 20, 2003 and surrendered two years later, were rolled into a 15-month Fidelity Annuity. The proceeds of this transaction were rolled, on the same day of the sale, into a Hancock Annuity. The Hancock Annuity was held for just over two years. When it was sold, its proceeds were rolled into a Jackson Annuity.