stock fraud lawyer

Published on: July 6, 2012

Investors of Deutsche Bank Structured Products Could Recover Losses

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 5, 2012

More Trouble for Investors of Behringer Harvard

by InvestorLawyers

Stock fraud lawyers have been investigating claims on behalf of investors of Behringer Harvard Holdings LLC for several months, but recent news shows even more trouble may be ahead for these investors. Apparently, Behringer Harvard is having significant difficulty making loan payments on two of its offerings. As a result, Behringer is losing real estate assets.

More Trouble for Investors of Behringer Harvard

Securities fraud attorneys say that earlier this month, several properties related to the nontraded Behringer Harvard Opportunity REIT I went into bankruptcy protection after negotiations over debt, amounting to $48.3 million, failed. Furthermore, the Behringer Harvard Short-term Opportunity Fund I LP, a private placement, entered into a “deed in lieu of foreclosure agreement.” This agreement was entered into in June 2012 and transferred properties to the lender.

At the end of 2011, Behringer Harvard Opportunity REIT I suffered an estimated value decline of 46 percent. According to stock fraud lawyers, this decline represents a reduction from $7.66 per share a year earlier to $4.12 at the end of 2011. In addition, as of December 31, 2011, Behringer Harvard Short-term Opportunity Fund I LP investors saw their investment drop in value from $6.48 per share on December 31, 2010 to a staggering 40 cents per share. The Short-term Opportunity Fund I had total assets amounting to around $130 million. To make matters worse, the Opportunity REIT I has total assets amounting to $524.4 million, with an additional $68.4 million in debt that will mature this year.

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 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 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.

Published on: June 15, 2012

FINRA Investor Alert: Beware Nutraceutical Stock Scams

by InvestorLawyers

Last month, the Financial Industry Regulatory Authority (FINRA) issued an Investor Alert, “Nutraceutical Stock Scams — Don’t Supplement Your Portfolio with These Companies.” The purpose of the alert is to warn investors to beware of stock scams related to nutraceuticals. Stock fraud lawyers are aware of these scams and say that pitches for these types of stocks can be received in many ways, including email, cold calls, blogs, tweets and message board posts.

FINRA Investor Alert: Beware Nutraceutical Stock Scams

Products that claim to assist in weight loss, provide an energy boost or help people live longer are nutraceuticals. These products can include food and drink products that contain additives that are allegedly beneficial for health and dietary supplements. Investment fraud lawyers say that while there are legitimate nutraceutical companies, many are illegitimate and could be targeting investors for fraud.

According to FINRA, “The con artists behind nutraceutical stock scams may try to lure investors with optimistic and potentially false and misleading information that in turn creates unwarranted demand for shares of small, thinly-traded companies that often have little or no history of financial success.”

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.

Published on: June 11, 2012

Is Healthcare Trust of America Following in Inland Western’s Footsteps

by InvestorLawyers

According to stock fraud lawyers, a recent announcement by Healthcare Trust of America Inc. stated that the company will be advised by Wells Fargo Securities LLC in connection with the listing, on the New York Stock Exchange, of its Class A common stock. Healthcare Trust of America will be guided through the listing processes by Wells Fargo, positioning it for its next move in becoming a publicly-traded REIT. Healthcare Trust of America expects to be listed on the NYSE on or around June 6, 2012, and this move is intended to provide current stockholders with staged, phased-in liquidity.

Is Healthcare Trust of America Following in Inland Western’s Footsteps

Healthcare Trust of America is hoping for an IPO price of $10.10 per share minimum, but considering Inland Western REIT’s recent IPO and the fact that it was set much lower than was anticipated, stock fraud lawyers are monitoring the situation with Healthcare Trust of America as it unfolds to see if its investors will suffer the same kinds of losses experienced by Inland Western’s investors. Healthcare Trust of America investors should pay close attention to what happens with the investment’s IPO because if it follows in the footsteps of Inland Western, they could have a valid securities arbitration claim.

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 7, 2012

Sun 1031 TIC Investors Could Recover Losses

by InvestorLawyers

Stock fraud lawyers are currently investigating potential claims on behalf of investors who purchased Sun 1031 TICs or other risky tenant-in-common investments. In many cases, broker-dealers improperly recommended these investments to clients for whom the investment was unsuitable.

Sun 1031 TIC Investors Could Recover Losses

TICs became popular in 2002, following a ruling by the Internal Revenue Service that allowed capital gains to be deferred by investors. In this property ownership, a fractional interest is owned by two or more parties. However, following the real estate crisis, TICs saw a significant decline in value. According to stock fraud lawyers, liquidity problems and high risks are not uncommon with TICs and, in many cases, these risks are misrepresented to the clients. Instead, brokers often focus on the promised income stream when persuading clients to purchase TICs. Because of the potential income stream associated with TICs, these investments can be attractive to retired investors who are not informed of the risks involved.

According to investment fraud lawyers, prior to recommending an investment to a client, brokers and firms are required to perform the necessary due diligence to establish whether the investment is suitable for the client, given their age, investment objectives and risk tolerance. This investment was clearly unsuitable for many of the investors who received the recommendation to purchase the TIC and, in some cases, the necessary due diligence likely went unperformed. Because TICs usually pay a high commission — often as much as 10 percent — many brokers recommend TICs to investors despite their unsuitability.

Published on: June 4, 2012

Possible Securities Arbitration Claims for David Lerner Associates Clients

by InvestorLawyers

In May 2012, the Financial Industry Regulatory Authority ordered David Lerner Associates Inc. to pay claimants Florence Hechtel and Joseph Graziose $24,450 following the return of their Apple REIT Nine shares to the firm. According to securities arbitration lawyers, this could be the first of possibly hundreds of securities arbitration proceedings that are related to David Lerner Associates Inc. and its sale of Apple REITs.

Possible Securities Arbitration Claims for David Lerner Associates Clients

The fourteenth largest non-traded REIT in the United States, Apple REIT Nine is only one of the Apple REIT investments involved in recent arbitration claims. Apple REIT Six, Apple REIT Seven and Apple REIT Eight are also involved in current and potential claims. Since 1992, David Lerner Associates allegedly sold almost $7 billion in Apple REITs, according to FINRA. As a result, stock fraud lawyers believe many more claims could potentially be filed on behalf of David Lerner clients.

With respect to David Lerner’s sales practices of Apple REITs, FINRA launched an investigation in May 2011 and class actions were filed in June 2011 with similar allegations. Recently, David Lerner allegedly changed the way the REITs are valued on account statements, stating that they are “unpriced.” This is the first time it has been acknowledged that the value of the Apple REIT shares may not be the same as what investors paid, according to securities arbitration lawyers. Furthermore, clients who requested a redemption prior to the last quarterly deadline on June 20, 2011 were allegedly informed that only a partial redemption was possible and the only known offer of purchase for Apple REIT shares is allegedly $3 per share, despite the alleged book value of around $7 per share.