stock fraud lawyer

Published on: September 12, 2012

Victims of Clinton D. Fraley Could Recover Losses

Securities fraud attorneys are currently investigating claims on behalf of former clients of Northwestern Mutual Investment Services LLC, MML Investors Services LLC, Wealth By Design Inc. and Clinton D. Fraley. In August, an emergency law enforcement action was filed by the Colorado Securities Commissioner to enjoin Wealth by Design and Clinton Fraley from violating the Colorado Securities Act. According to the allegations, Fraley violated the Colorado Securities Act by accessing investors’ mutual fund accounts without authorization, converting their securities into cash illegally and forging checks in order to access funds for personal use.

Victims of Clinton D. Fraley Could Recover Losses

“Fraley, who was a licensed securities professional employed with licensed broker-dealers until he was terminated in 2011, solicited hundreds of thousands of dollars from Colorado investors, promising the investors that their money would be invested in ‘a well-balanced portfolio of investments’ consisting of Roth IRAs, traditional investments such as stocks and bonds, mutual funds and non-qualified investments,” says the statement from Colorado enforcement officials. However, “Fraley gained unauthorized access to the investors’ accounts, forged the investors’ signatures on checks, deposited the money in a Wealth bank account and converted the money for his own personal benefit, including the purchase of a house.”

Stock fraud lawyers say Fraley was registered from March 2007 to May 2011 with Northwestern Mutual Investment Services, a FINRA-registered broker-dealer. Fraley was registered with another FINRA-registered broker-dealer, MML Investors Services, from May 2011 to October 2011. All FINRA-registered broker dealers are, according to securities fraud attorneys, required to properly supervise the activities of their brokers during the time in which they are registered with the firm. As a result, these firms may be held liable for failing to adequately supervise Fraley.

Published on: September 7, 2012

Defrauded Investors of James Ryan Lanier, Recently Arrested Merrill Lynch Financial Advisor, Could Recover Losses

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of victims of James Ryan Lanier, a financial advisor for Merrill Lynch. Reportedly, Lanier was arrested on fraud, identity theft and money laundering related to embezzlement. Allegedly, Lanier, 33, embezzled over $800,000 from Merrill Lynch clients and was arrested in San Diego, California.

Defrauded Investors of James Ryan Lanier, Recently Arrested Merrill Lynch Financial Advisor, Could Recover Losses

According to the allegations listed in the 65-count indictment against Lanier, while he was working for Merrill Lynch as a financial advisor between 2008 and 2010, Lanier forged client signatures on fraudulent letters of authorization to Merrill Lynch client associates. These client associates were responsible for processing client funds through wire transfers. Purportedly, these letters also contained misleading and false statements that were intended to persuade the client associates to transfer funds from the investment accounts of clients to bank accounts under Lanier’s control.

According to the indictment, stock fraud lawyers say that Lanier deliberately sought out assistance from client associates who were not familiar with his clients to direct funds transfers. Lanier allegedly claimed Merrill Lynch clients had given voice approval on a recorded telephone conversation, though no such approval was given. Choosing client associates who were unfamiliar with his clients aided Lanier in his scheme.

Published on: September 6, 2012

CNL Lifestyle Properties REIT Investors Could Recover Losses

by InvestorLawyers

Stock fraud lawyers are currently investigating claims on behalf of investors who have suffered significant losses as a result of their investment in CNL Lifestyle Properties Inc. Reportedly, a recent announcement from CNL Lifestyle Properties stated that its per share value estimate has dropped from its original share price of $10 to $7.31. This decline represents a drop of 27 percent, which could mean significant losses for many investors. Furthermore, the REIT is reportedly cutting investor dividends, or distribution.

CNL Lifestyle Properties REIT Investors Could Recover Losses

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.

The CNL Lifestyle Properties REIT is, according to investment fraud lawyers, another in a long line of non-traded REITs currently under investigation. REITs typically carry a high commission which motivates brokers to make the recommendation to investors despite the investment’s unsuitability. The commission on a non-traded REIT is often as high as 15 percent. Non-traded REITs, such as the CNL Lifestyle Properties REIT, carry a relatively high dividend or high interest, making them attractive to investors. However, these investments are inherently risky and illiquid, which limits access of funds to investors. This becomes a major problem for investors, especially retired individuals, who may need to access their funds when the need arises. For more information on REITs, see the previous blog post “FINRA Investor Alert: Public Non-Traded REITs.”

Published on: September 3, 2012

Mutual Fund Investors Could Recover Losses

by InvestorLawyers

Securities arbitration lawyers currently are investigating claims on behalf of investors who suffered significant losses in various mutual fund investments. A number of mutual funds experienced a gross underperformance in the 2011 market. Investors of these mutual funds have lost a large portion of their investments.

Mutual Fund Investors Could Recover Losses

According to stock fraud lawyers, 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. If a broker or adviser makes a recommendation that is unsuitable for their client, the broker or brokerage firm can be held responsible for the investor’s losses in Financial Industry Regulatory Authority arbitration.

The following is a list of mutual funds currently being investigated by securities arbitration lawyers:

Published on: August 30, 2012

Unregistered Securities: Inofin Investors Could Recover Losses

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of investors who suffered significant losses as a result of their investment in an Inofin promissory note or Inofin offering. A recent announcement by the Securities and Exchange Commission (SEC) stated that on July 23 and 24, final judgments were entered in a civil injunctive action against Michael J. Cuomo and Kevin Mann Sr. This action was filed in the United States District Court of Massachusetts.

Unregistered Securities: Inofin Investors Could Recover Losses

Allegations included in the SEC complaint were that Inofin and Inofin executives illegally raised money from investors in 25 states and the District of Columbia totaling at least $110 million. These funds were raised through unregistered note sales. Furthermore, Inofin allegedly materially misrepresented the company’s financial performance as well as how it was using investors’ money. Thomas K. Keough and David Affeldt, two sales agents, were also charged by the SEC. Allegations against Affeldt and Keough stated that they offered and sold the aforementioned unregistered securities.

Stock fraud lawyers say Keough’s FINRA Broker Report stated that he was registered with FINRA during a significant portion of the time that he sold these unregistered securities. As a result, investors who, in accordance with Keough’s recommendation, purchased an Inofin investmentvcould be able to recover losses through securities arbitration.

Published on: August 29, 2012

Investors Beware as Gas Prepayment Bonds Downgraded by Moody

by InvestorLawyers

As a significant number of gas prepayment bonds ratings have been downgraded by Moody’s Investors Service, stock fraud lawyers are advising investors to be cautious regarding their investments in these bonds. As a result of downgrades in Goldman Sachs Group Inc., Citigroup Inc., JPMorgan Chase & Co., Credit Agricole Corporate & Investment Bank, Merrill Lynch & Co., BNP Paribas, Morgan Stanley, Royal Bank of Canada and Societe Generale, numerous bonds became subject to review and subsequent downgrades.

Investors Beware as Gas Prepayment Bonds Downgraded by Moody

Securities arbitration lawyers say this situation is similar in some ways to what happened when, after Lehman declared bankruptcy, Series 2008A of Main Street Natural Gas Inc. Gas Project Revenue Bonds were downgraded. In the case of the Lehman bonds, the bonds were not guaranteed by Lehman Brothers, though certain payment obligations of the gas supplier were guaranteed.

The following is a list of gas prepayment bonds that have been affected by downgrades:

Published on: August 24, 2012

Charles Schwab, Fidelity Investors Who Opted Out of Class Actions Could Recover Losses Through Securities Arbitration

by InvestorLawyers

Following settlements with the Financial Industry Regulatory Authority (FINRA), stock fraud lawyers say Charles Schwab and Fidelity investors could recover losses through securities arbitration. Fidelity reportedly has agreed to pay a $375,000 fine in a settlement with FINRA over allegations that the firm committed sales violations from December 2006 through December 2008 involving the Fidelity Ultra Short Bond Fund.

According to FINRA’s allegations, Fidelity Investments Institutional Services Co. Inc. and Fidelity Brokerage Services LLC, two Fidelity broker-dealers, failed to provide adequate supervisory procedures and produced misleading advertising and sales materials for the fund. Apparently when the subprime crisis unfolded, the fund began losing value in June 2007, but the sales materials for Fidelity continued to purport fixed-income securities of “high credit quality” being held by the fund. The fund’s net asset value fell to $8.25 per share by April 2008, from $10 per share before June 2007, according to investment fraud lawyers.

In a separate ruling in May, a settlement was approved by a federal court in a class action filed against Fidelity units in 2008. In that settlement, Fidelity paid $7.5 million to investors of the bond fund. The Charles Schwab Corp. settled a similar case last year in which they paid almost $119 million over its YieldPlus bond fund. A separate class action claim saw Schwab pay another $235 million to investors in 2010. However, stock fraud lawyers believe that not all investors were compensated.

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 17, 2012

Investors of ArciTerra National REIT Could Recover Losses

by InvestorLawyers

Investment fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses as a result of their investment in ArciTerra National REIT. According to ArciTerra National REIT’s Form D filing with the Securities and Exchange Commission, ArciTerra is a real estate investment trust based in Phoenix, Arizona.

Investors of ArciTerra National REIT Could Recover Losses

REIT Investments like the ArciTerra National 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.

Stock fraud lawyers are investigating the possibility that brokerage firms may be held liable for the recommendation of ArciTerra National 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 are illiquid and inherently risky and, therefore, not suitable for many investors.

Published on: August 13, 2012

Investors of Bradford Exploration, Bradford Drilling 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 Bradford Drilling or Bradford Exploration. Bradford Exploration is, according to its Form D filing with the Securities and Exchange Commission, an oil and natural gas development company based in Buffalo, New York. Bradford Drilling Associates filed a Form D Notice of Sale of Securities with the SEC to raise capital. This type of filing is a limited offering exemption that allows small companies to use private placements to raise funds. This private placement was then sold by broker-dealers registered with the Financial Industry Regulatory Authority.

Investors of Bradford Exploration and Bradford Drilling Could Recover Losses

According to stock fraud 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 that those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance.