securities arbitration lawyer

Published on: July 25, 2012

Investors of Patriot Minerals Private Placements Could Recover Losses

Investment fraud lawyers are currently investigating potential claims on behalf of investors who suffered losses as a result of their investment in Patriot Minerals. Patriot Minerals, according to its Securities and Exchange Commission Form D filing, is a San Antonio, Texas-based oil and gas exploration company. Patriot Minerals has several offerings of Regulation D private placements that are designed to generate capital for its offerings. These private placements include Tri-State Development Program and Patriot Minerals Arapaho. Certain Financial Industry Regulatory Authority (FINRA)-registered broker-dealers offered and sold these private placements and, in some cases, may have done so inappropriately.

Investors of Patriot Minerals Private Placements 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.

Investment 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 16, 2012

Thompson National Properties 12 Percent Note Investors Could Recover Losses

by InvestorLawyers

Securities arbitration lawyers are currently investigating potential claims on behalf of investors who suffered significant losses as a result of their investment in the Thompson National Properties 12 Percent Notes Program. Many investors of this program, also known as TNP 12 Percent Notes, are concerned about the recent announcement which stated that interest payments on TNP 12 Percent Notes have been suspended, and what this announcement may indicate about the value of the investment.

Thompson National Properties 12 Percent Note Investors Could Recover Losses

TNP 12 Percent Notes were designed to raise capital for the tenant-in-common, or TIC, real estate operations of Thompson National Properties. A Securities and Exchange Commission filing states that the program, in 2008 and 2009, raised $21.5 million from 418 investors. The filing also states that the investment required a $50,000 minimum investment, and agreements to sell the notes were held by 22 independent broker-dealers. Reportedly, a recent announcement informed investors that the TNP 12 Percent Notes Program LLC would cease interest payments, but that it intends to restart payments in 2013.

Since its 2008 launch, TNP has launched 16 investment programs in addition to the TNP 12 Percent Notes. The largest of these investments was TNP Strategic Retail Trust, a non-traded real estate investment trust (REIT). Reportedly, this REIT has acquired necessity-anchored and grocery retail shopping centers. Its investments are valued at $200 million and the REIT raised nearly $91 million from investors. For more on this REIT, see the blog post “TNP Strategic Retail Trust Investors Could Recover Losses.”

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: July 2, 2012

Investors of Bank of America Structured Products Could Recover Losses

by InvestorLawyers

Securities fraud attorneys are currently investigating potential claims on behalf of customers who suffered losses as a result in their investment in a Bank of America-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 Bank of America.

Investors of Bank of America 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, securities arbitration 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: June 29, 2012

News: Merrill Lynch Fined by FINRA

by InvestorLawyers

A June 21^st announcement by the Financial Industry Regulatory Authority (FINRA) stated that the regulator has fined Merrill Lynch, Pierce, Fenner & Smith Inc. The firm was fined $2.8 million for supervisory failures and failing to provide required trade notices, and ordered to pay $32 million in remediation to affected customers, plus interest. The supervisory failures allegedly resulted in overcharging customers in the form of unwarranted fees amounting to $32 million. Securities arbitration lawyers continue to file claims on behalf of investors who have been overcharged by the firms with which they invest.

News: Merrill Lynch Fined by FINRA

According to FINRA’s findings, Merrill Lynch failed to provide an adequate supervisory system from April 2003 to December 2011. This lack of adequate supervision allegedly resulted in customer billing that was not in accordance with contract and disclosure documents. This inaccurate billing affected almost 95,000 customer accounts. The unwarranted fees, plus interest, have since been returned to the affected customers by Merrill Lynch. Securities fraud attorneys say that when firms do not provide adequate supervisory systems, they can be held responsible for investor losses. This applies to both overcharges and instances where the firm does not supervise its brokers, some of whom then commit fraud.

In addition, Merrill Lynch did not provide customers with timely trade confirmations, as a result of computer programming errors, in certain advisory programs. Because of these errors, over 10.6 million trades in more than 230,000 customer accounts did not receive trade confirmations. Furthermore, Merrill Lynch did not properly identify its role on account statements and trade confirmations in certain transactions, specifically whether it acted as principal or agent. Securities arbitration lawyers, and FINRA’s decision, support the idea that computer programming errors are never an excuse for improper conduct on the part of a securities firm.

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 25, 2012

Paladin Realty Income Properties REIT, Wells REIT Investors Could Recover Losses

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of investors who have suffered significant losses as a result of their investment in Wells or Paladin Realty Income Properties REITs.

Paladin Realty Income Properties REIT and Wells REIT Investors Could Recover Losses

Reportedly, investors were recently told by Paladin Reality Income Properties Inc. that its stock would cease to be sold next month because its current scale cannot cover expenses. This comes after it raised, in more than four years, $78.7 million. Reports about Wells Real Estate Funds state that, in an attempt to cut costs, the firm laid off its executive sales staff recently. This is not a good sign for investors, who are hoping their investment will rebound after dividend cuts and price drops.

Securities fraud attorneys have stated that as illiquid, non-traded investments, many REITs are not a suitable investment for all investors. 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. Furthermore, brokerage firms must, before approving an investment’s sale to a customer, conduct a reasonable investigation of the securities and issuer.

Published on: June 21, 2012

Victims of Burton Douglas Morriss Fraud Could Recover Losses

by InvestorLawyers

Securities arbitration lawyers are investigating potential claims on behalf of investors who suffered significant losses as a result of the alleged fraud committed by Burton Douglas Morriss. An announcement by the Securities and Exchange Commission stated that the SEC has obtained emergency relief, including the appointment of a receiver and an asset freeze, and has filed charges against several St. Louis, Missouri management companies and private investment funds. According to the complaint, the principal of these entities, Burton Douglas Morriss, allegedly misappropriated investor assets totaling more than $9 million.

Victims of Burton Douglas Morriss Fraud Could Recover Losses

The complaint, which was filed in the St. Louis federal court, states that between 2003 and 2011, Morriss, Acartha Group LLC and MIC VII LLC raised a minimum of $88 million from at least 97 investors. According to the SEC’s allegations, Morriss’ investors were told that their money would be invested in a portfolio of technology companies and financial services by his private management companies and investment funds. However, stock fraud lawyers say, investors were unaware that over the last several years, their money had been misappropriated by Morriss. Millions of dollars were allegedly misappropriated through fraudulent transfers to himself and an entity under his control, Morriss Holdings LLC. Securities arbitration lawyers say these funds were allegedly used for personal expenses including pleasure trips, household expenses, mortgage payments, alimony payments and personal loan payments. Allegedly, Morriss concealed his fraud by later disguising the fraudulent transfers as personal loans.

Another allegation included in the SEC’s complaint is that Morriss orchestrated a scheme to recruit investors to invest in membership interests in a private investment fund he owned, which would dilute the fund’s current investors’ investments, without the required unanimous consent of current investors.

Published on: June 18, 2012

Claim Against Stifel Nicolaus Could Mean More Arbitration Claims for Cardiac Network Promissory Note Investors

by InvestorLawyers

In light of a recent claim against Stifel Nicolaus, securities arbitration lawyers say other investors may come forward to recover losses sustained as a result of their investment in a Cardiac Network Promissory Note. This month, a claim was filed against Stifel to recover losses suffered by an 89-year-old veteran of World War II who suffered losses as a result of his investment in the Cardiac Network Promissory Note.

Claim Against Stifel Nicolaus Could Mean More Arbitration Claims for Cardiac Network Promissory Note Investors

According to securities fraud attorneys, the note was allegedly sold to the claimant, by a representative of Stifel, without prior approval by Stifel. This action is known as “selling away.” Securities brokerage firms have a legal obligation to provide reasonable supervision of their financial advisors’ activities. If a firm fails to reasonably supervise their advisors, they can sometimes be held responsible for losses sustained by investors.

The claim’s allegations state that the claimant was approached by the Stifel advisor and he was presented with an opportunity to earn 10 percent on a six-month investment. The advisor allegedly recommended a $150,000 Promissory Note investment but did not provide a prospectus or any other offering materials and did not mention he would be investing in “Cardiac Network.” Instead, the adviser allegedly only represented the investment as a Stifel enterprise that was being offered to affluent clients of the firm. The claimant agreed to the investment in the note based on its purported affiliation with Stifel. However, securities arbitration lawyers say that when the note came due, the claimant received no principal payment and the note is now believed to be worthless.

Published on: June 14, 2012

BNI Investors Could Recover Losses Through Securities Arbitration

by InvestorLawyers

Stock fraud lawyers are investigating potential claims on behalf of investors who suffered losses as a result of their investment in BNI Equities LLC, BNI TIC (tenant-in-common) or BNI Notes. In many cases, brokers improperly recommended the purchase of risky real estate and TIC investments offered by BNI. Many brokers were motivated to make these improper recommendations because of the high commission paid to them by real estate private placements. This commission is frequently as high as 10 percent.

BNI Investors Could Recover Losses Through Securities Arbitration

FINRA arbitrations involving real estate investments, such as TICs, are not uncommon. In many cases, securities arbitration lawyers were able to prove that the financial professionals that recommended the investments did not perform the necessary due diligence before they made the recommendation to their clients.

According to stock fraud lawyers, a major problem with structured real estate investments is that they often involve liquidity restrictions and high risks. To make matters worse, these risks are often misrepresented by brokerage firms. Instead, many firms focus on the investments’ promised income streams. Retired investors are often attracted to these income streams but don’t realize that because of the high risks involved, the investment could be unsuitable for them. 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, brokerage firms must, before approving an investment’s sale to a customer, conduct a reasonable investigation of the securities and issuer.