stock fraud lawyer

Published on: August 10, 2012

Recovery of Private Placement Losses: Mewbourne Oil

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 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 30, 2012

Investors of ETR Pasco Fund II Private Placement 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 ETR Pasco Fund II. ETR Pasco Fund II is, according to its Securities and Exchange Commission Form D filing, a real estate company based in Miami, Florida. Sometime between late 2006 and early 2007, ETR Pasco Fund II applied for a Form D Notice of Sale of Securities in order to generate capital. Certain Financial Industry Regulatory Authority (FINRA)-registered broker-dealers then offered and sold these private placements.

Investors of ETR Pasco Fund II Private Placement 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.

They also tend to carry high commissions. Securities fraud attorneys say that because the creation and sale of private placements often carry such 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 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.

Published on: July 23, 2012

News: David Lerner Associates to Face FINRA Panel in September

by InvestorLawyers

David Lerner Associates is in the spotlight once again as it is threatened by charges alleging that the company and its principle, David Lerner, deceived customers — many of whom were elderly, unsophisticated investors. David Lerner, 75, is surrounded by controversy regarding 20 years of real estate investment sales. As a result of his alleged misdeeds, an abundance of complaints, regulatory sanctions and litigation have been left in his wake. Lerner has used seminars and radio to sell shares of a Virginia-based Real Estate Investment Trust (REIT) that, in turn, invests in extended-stay hotels. Stock fraud lawyers and industry regulators say that David Lerner Associates has sold shares of Apple REIT amounting to almost $7 billion, in 120,000 customer accounts, since 1992. Those sales have generated a staggering $600 million in fees.

News: David Lerner Associates to Face FINRA Panel in September

Furthermore, according to FINRA’s complaint, David Lerner Associates allegedly earns 10 percent from the Apple REIT offerings, and that these fees account for 60-70 percent of the firm’s business since 1996. The complaint also alleges that the firm is “targeting unsophisticated and elderly customers” while making false claims and omissions about market values, investment returns, prospects and performance of the REIT.

Investment fraud lawyers say that sales strategies employed by the 350 or more brokers employed by Lerner include mailings, cold calls and seminars at hotels, restaurants, country clubs and senior centers. Lerner is also known in New York and Florida for his spots on an AM radio station.

Published on: July 19, 2012

NHB Holdings Investors 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 NHB Holdings. Operating as a bank holding company, NHB Holdings uses its subsidiary, Proficio Bank, to offer banking services. NHB Holdings is based in Jacksonville, Florida, and was founded in 2007.

NHB Holdings Investors Could Recover Losses

Information now available leads stock fraud lawyers to believe that a Regulation D private placement was offered by NHB Holdings in order to raise capital. Certain FINRA registered broker-dealers offered and sold this private placement. 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.

According to investment fraud lawyers, 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 18, 2012

TNP Strategic Retail Trust Investors Could Recover Losses

by InvestorLawyers

Securities fraud attorneys are investigating potential claims on behalf of investors who suffered losses in the TNP Strategic Retail Trust. Declared effective on August 7, 2009 by the SEC, TNP Strategic Retail Trust is a non-traded REIT that, according to REIT Wrecks, raised only $21 million through the end of Q3 2010.

TNP Strategic Retail Trust Investors Could Recover Losses

Reportedly, the money raised by the investment was used to acquire the 94,574 sq ft. Moreno Valley Marketplace in Rancho Belago, California, and the 170,000 sq ft. Waianae Mall, which sits on the North Shore of Oahu. Additionally, TNP Strategic Retail Trust reportedly suffered a net loss and had a negative operating cash flow throughout the first nine months of 2010. Given this information, stock fraud lawyers question whether TNP Strategic Retail Trust will be able to move forward.

Securities fraud attorneys are investigating the possibility that brokerage firms may be held liable for the recommendation of this and other TNP investments. 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. Furthermore, brokerage firms must, before approving an investment’s sale to a customer, conduct a reasonable investigation of the securities and issuer. The firms that recommended this investment to clients may have done so improperly, based on information now available about the investment.

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.”