securities arbitration lawyer

Published on: August 23, 2012

Following KBS Class Action Withdrawal, Investors Can Still Recover Losses Through Arbitration

According to securities arbitration lawyers, investors who suffered significant losses as a result of their losses in the KBS REIT still may recover those losses through securities arbitration following the withdrawal of a class action against KBS REIT. Plaintiff George Steward led investors in suing KBS REIT in May. Allegations stated that misrepresentations about the REIT were made by KBS. These alleged misrepresentations included the dividend payment policy, investment objects and the REIT’s investments value. Reportedly, a voluntary dismissal was filed by the plaintiffs in the U.S. District Court in Fort Myers, Florida last month.

Following KBS Class Action Withdrawal, Investors Can Still Recover Losses Through Arbitration

In March, KBS REIT I investors were notified that the investment’s value would drop from $7.32 to $5.16 per share, representing a 29 percent decline in value. The investment’s offering price was $10 per share. Furthermore, KBS also stated it would cease distributions to investors. An investor presentation filed with the SEC in March stated that KBS REIT I raised $1.7 billion in equity during its initial offering. The investment holds loans and other debt of $2.3 billion and property assets of $3.4 billion.

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. Non-traded REITs are illiquid and inherently risky and, therefore, not suitable for many investors. According to securities fraud attorneys, because of the high-commissions these investments generally offer, many brokers make unsuitable recommendations of REITs to investors. Based on information now known about KBS REIT, many of the firms that sold this investment will be unable to prove the adequate due diligence was performed before recommending this product to investors.

Published on: August 20, 2012

Investors of Highland Floating Rate Funds Could Recover Losses

by InvestorLawyers

Stock fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses as a result of their investment in a Highland Floating Rate Fund. The sales literature for this fund understates the risk of the fund when it states that the funds seek “capital preservation and the management of credit risk while utilizing leverage to increase yield potential.” In recent years, the Highland Floating Rate Funds have suffered significant declines in value. These funds include the Highland Floating Rate Opportunities Fund, the Highland Floating Rate Advantage Fund and the Highland Floating Rate Fund. For example, in 2008, the Highland Floating Rate Advantage Fund’s value declined by more than half. Even relative to the market’s overall decline in 2008, these are significant losses.

Investors of Highland Floating Rate Funds Could Recover Losses

According to securities arbitration lawyers, the increase in floating rate funds sales has caused the Financial Industry Regulatory Authority (FINRA) to pay more attention to these funds — specifically how they are marketed and sold. A recent FINRA Investor Alert exhibited concern related to how financial advisors may place emphasis on high potential returns while placing less emphasis on the potential risks associated with floating rate funds.

FINRA 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. As a result, stock fraud lawyers are investigating whether firms and advisers registered with FINRA recommended floating rate funds unsuitably, given investors’ risk tolerance.

Published on: August 15, 2012

Private Placement Loss Recovery: Cypress Leasing

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of investors who suffered significant losses as a result of their investments in Cypress Leasing private placements. Based in San Francisco, California, Cypress Financial Corporation is an equipment leasing company. The company’s website states that Cypress’s investments are in long-lived core equipment assets and that these assets are vital to the energy, industrial and transportation sectors.

Private Placement Loss Recovery: Cypress Leasing

Private placements have been offered by Cypress Leasing, which were then offered and sold by certain broker-dealers registered with the Financial Industry Regulatory Authority. Reportedly, the market decline of 2008 impacted the equipment leasing business and, as a result, many of the Cypress Leasing private placements may have experienced a decline in value. It is believed that the following offerings are included in these criteria:

CypressEquipment Fund 13

Published on: August 10, 2012

Recovery of Private Placement Losses: Mewbourne Oil

by InvestorLawyers

Stock fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses as a result of their investment in Mewbourne Energy Partners or Mewbourne Oil. Based in Tyler, Texas, Mewbourne Energy Partners is, according to its Securities and Exchange Commission Form 10-Q filing, an oil and gas development company.

Recovery of Private Placement Losses: Mewbourne Oil

Beginning May 1, 2007, Mewbourne Energy Partners has offered the public private placements, which certain Financial Industry Regulatory Authority registered broker-dealers then offered and sold, in order for Mewbourne to raise capital. The private placement offering consisted of general and limited partner interests and was a part of the Mewbourne Energy Partners ’07 Drilling Program. When the offering concluded on August 13, 2007, the total investor contributions, originally sold to accredited investors, amounted to $70,000,000. Of this total, accredited investors as limited partner interests amounted to $4,290,000 and accredited investors as general partner interests amounted to $65,710,000.

According to securities arbitration lawyers, private placements allow smaller companies to use the sale of debt securities or equities to raise capital without it becoming necessary for them to register these securities with the Securities and Exchange Commission. Because these investments are typically more complicated and carry more risk than other traditional investments, they are usually only suitable for sophisticated, high-net-worth investors.

Published on: August 9, 2012

Investors of Whitestone REIT Could Recover Losses

by InvestorLawyers

Investment fraud lawyers are currently investigating claims on behalf of investors who suffered losses as a result of their investment in Whitestone REIT. Whitestone REIT was previously known as Hartman Commercial Properties REIT, and was a non-traded, publicly offered REIT. Shares of Hartman REIT were first offered to investors in 2004 through stock brokerage firms. A 2009 statement informed investors that Whitestone REIT’s value had declined by around 50 percent. Many investors were unaware of any problems with their investment until this 2009 announcement.

Investors of Whitestone REIT Could Recover Losses

Whitestone REIT started trading on the New York Stock Exchange in 2010, but securities arbitration lawyers say the shares are still trading at significantly lower prices than what most investors paid. Non-traded REIT investments like the Whitestone REIT typically offer commissions between 7-10 percent, which is significantly higher than traditional investments like mutual funds and stocks. In some cases, the commission generated by these investments can be as high as 15 percent. This higher commission can explain why brokerage firms are motivated to recommend these investments despite their possible unsuitability.

Investment fraud lawyers are investigating the possibility that brokerage firms may be held liable for the recommendation of Whitestone REIT. 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. Non-traded REITs like this one are illiquid and inherently risky and, therefore, not suitable for many investors.

Published on: August 8, 2012

SEC Charges Mizuho Securities USA; CDO Investors 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 in a collateralized debt obligation (CDO) from Mizuho Securities USA. Mizuho Securities USA and three of its former employees were recently charged by the Securities and Exchange Commission with misleading investors in a CDO through the use of “dummy assets” which inflated the credit ratings of the deal.

SEC Charges Mizuho Securities USA; CDO Investors Could Recover Losses

According to the complaint filed by the SEC, Mizuho Securities made around $10 million in marketing and structuring fees through the deal. The firm has agreed to settle the SEC’s charges by paying $127.5 million. The SEC’s allegations state that Mizuho marketed and structured a CDO, Delphinus CDO 2007-1, which was backed by subprime bonds, when signs of severe distress were being exhibited by the housing market. Allegedly, when Mizuho employees realized the CDO would not be able to satisfy a rating agency’s criteria meant to protect investors of CDOs from rating downgrade uncertainties, they submitted a portfolio which contained dummy assets amounting to millions of dollars. This portfolio inaccurately reflected the CDO’s collateral. Once this inaccurate portfolio was rated, the transaction was closed and Mizuho sold the notes to investors. The CDO defaulted in 2008 and was liquidated in 2010.

“This case demonstrates once again that bankers and market participants who embrace a ‘get the deal done at all costs’ strategy will be identified, charged and punished,” says the director of the SEC’s Division of Enforcement, Robert Khuzami.

Published on: August 3, 2012

FINRA Alert: Exchange-traded Notes

by InvestorLawyers

Stock fraud lawyers encourage investors to read the Financial Industry Regulatory Authority (FINRA)’s new Investor Alert, which was announced on July 10. This alert, titled “Exchange-traded Notes — Avoid Unpleasant Surprises,” is meant to help investors become more informed of the risks and features of exchange-traded notes, or ETNs. This investor alert can help investors make smart decisions about investing in ETNs. And if you’ve already invested in an ETN, it can also help you determine if you were unsuitably recommended exchange-traded notes by your broker or adviser.

FINRA Alert: Exchange-traded Notes

ETNs are, according to the FINRA alert, a type of debt security that trades on exchanges and promises a return that is linked to a market index or some other benchmark. Unlike exchange-traded funds (ETFs), however, exchange-traded notes don’t replicate or approximate the performance of that index through the purchase or holding of assets. According to stock fraud lawyers, brokers have been known to sell ETFs and ETNs as conservative ways to track a sector of the market or the market as a whole. However, complicated trading strategies are necessary to accomplish this, and using these investments to track a sector of the market, even if valid, may or may not be a conservative trading strategy. FINRA wants investors to be aware of the fact that an ETN’s market price can deviate from its indicative value, and in some cases this deviation is significant.

FINRA’s Vice President for Investor Education, Gerri Wals, stated that “ETNs are complex products and can carry a raft of risks. Investors considering ETNs should only invest if they are confident the ETN can help them meet their investment objectives and they full understand and are comfortable with the risks.”

Published on: August 1, 2012

Woodlark Capital Investment Private Placement Investors Could Recover Losses

by InvestorLawyers

Stock fraud lawyers are currently investigating potential claims on behalf of investors who suffered losses as a result of their investment in Woodlark Capital. Woodlark Capital LLC is, according to its Securities and Exchange Commission Form D filing, a real estate company based in New York. In 2007, the company applied for a Form D Notice of Sale of Securities in order to generate capital. Certain Financial Industry Regulatory Authority (FINRA)-registered broker-dealers offered and sold these private placements.

Woodlark Capital Investment Private Placement Investors Could Recover Losses

According to securities arbitration lawyers, private placements allow smaller companies to use the sale of debt securities or equities to raise capital without it becoming necessary for them to register these securities with the Securities and Exchange Commission. Because these investments are typically more complicated and carry more risk than other traditional investments, they are usually only suitable for sophisticated, high-net-worth investors.

Stock fraud lawyers say that because the creation and sale of private placements often carry high commissions, these investments continue to be pushed by brokerage firms despite the fact that they may be unsuitable for investors. FINRA 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.

Published on: July 27, 2012

Accoona Corp. Investors Could Recover Losses

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of investors who suffered losses as a result of their investment in Accoona Corp. Inc. Accoona serves as an online multi-lingual business portal and search engine through its operation as a website, according to its Securities and Exchange Commission Form D filing. It is primarily designed to help chambers of commerce, small- and medium-sized businesses and governments publicize information to other businesses. In order to raise capital, Accoona offered a Regulation D private placement. Reportedly, this private placement was offered and sold by certain broker-dealers that were registered with FINRA.

Accoona Corp. Investors Could Recover Losses

According to securities arbitration lawyers, private placements allow smaller companies to use the sale of debt securities or equities to raise capital without it becoming necessary for them to register these securities with the Securities and Exchange Commission. Because these investments are typically more complicated and carry more risk than other traditional investments, they are usually only suitable for sophisticated, high-net-worth investors.

Securities fraud attorneys say that because the creation and sale of private placements often carry high commissions, these investments continue to be pushed by brokerage firms despite the fact that they may be unsuitable for investors. 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.

Published on: July 26, 2012

Dividend Capital Total Realty Trust Non-traded REIT Investors 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 in Dividend Capital Total Realty Trust Inc. Dividend Capital Total Realty Trust was formed on April 11, 2005 and is a Maryland corporation, according to its filing with the Securities and Exchange Commission. Dividend Capital is located in Denver, Colorado and was designed to invest in a diverse portfolio of real estate-related and real property investments. The targeted investments of the company include direct investments that consist of high-quality retail, industrial, multi-family and other properties. The properties are primarily located in North America. The company also targets securities investments that include mortgage loans which are secured by income-producing real estate, and those issued by other real estate companies.

Dividend Capital Total Realty Trust Non-traded REIT Investors Could Recover Losses

Securities arbitration lawyers believe that secondary market offers indicate that Dividend Capital Total Realty Trust’s value has appeared to have substantially declined.

Non-traded REIT investments like the Dividend Capital Total Realty Trust typically offer commissions between 7-10 percent, which is significantly higher than traditional investments like mutual funds and stocks. In some cases, the commission generated by these investments can be as high as 15 percent. This higher commission can explain why brokerage firms are motivated to recommend these investments despite their possible unsuitability.