According to the Financial Industry Regulatory Authority (FINRA), former InterSecurities, Inc (InterSecurities), now known as Transamerica Financial Advisors, Inc. (Transamerica), broker Harry Hammond (Hammond) was suspended from the securities industry for 12 months for allegedly referring 24 clients to invest with Nutmeg Group, LLC (Nutmeg) a firm specializing in Private Investment in Public Equity (PIPE) transactions.

Financial crisis Financial crisis

Hammond has been registered with the securities industry since 1997. He has previously been registered with FFP Securities, Inc. from 2000-2006, InterSecurities from 2006-2007, and Allegiant Securities, LLC from 2007-2011. Most recently, Hammond reportedly began his own firm, Hammond Asset Management, LLC, in Sarasota, Florida.

FINRA’s investigation found that Hammond had invested $100,000 of his own money in Nutmeg. In 2006, Hammond allegedly made a request to InterSecurities to form a general partnership in order to raise capital for Nutmeg. InterSecurities reportedly denied the request and prohibited Hammond from continuing with his plan.

Despite InterSecurities’ response to Hammond, he nonetheless allegedly recommended that 24 individual and entity clients invest in Nutmeg. In a letter to the clients, Hammond allegedly claimed Nutmeg had a 201% internal rate of return on investments. Hammond reportedly raised over $4 million in investments for Nutmeg.

In 2009, the Securities and Exchange Commission (SEC) filed a complaint against Nutmeg for misappropriation of funds, misrepresentations and failure to maintain required records. Nutmeg has since been placed in receivership, and the sum total investor losses has yet to be determined.

Brokerage firms have a duty to properly supervise all registered representatives with their firm. Firms also have a responsibility to make sure that financial advisors are following all securities rules and regulations as well as internal firm policies. If a brokerage firm fails to adequately supervise their registered representatives, they may be liable for losses suffered by investors.

If you believe you have been the victim of stockbroker misconduct, you may wish to consult an attorney to find out more about your legal rights and options. Investors may contact a securities arbitration attorney at Law Office of Christopher J. Gray at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

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Law Office of Christopher J. Gray wishes to alert investors to the possibility that recommendations of oil and gas investments by broker-dealers may be unsuitable, depending on the individual characteristics of investors and whether the broker had a reasonable basis for the recommendation.

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According to a Wall Street Journal article, there have been a total of 36 reported oil and gas company bankruptcies in 2015. The price of oil has dropped to $30-$35 per barrel or lower (a ten year low), which is leaving many oil and gas companies vulnerable. The bankruptcy cases so far involve $13 billion in secured and unsecured debt. Sixteen of the bankruptcies were reportedly filed in Texas, four each in Delaware and Colorado and the rest in Louisiana, Alaska, Massachusetts and New York and six in Canada.

Some of the companies that declared bankruptcy include: RAAM Global Energy Co., Endeavour International Corp. (ENDRQ), Quicksilver Resources Inc. (KWKAQ), Sabine Oil & Gas Corp. (SOGCQ), Hercules Offshore Inc. (HEROQ), Cal Dive International Inc. (CDVIQ), Dune Energy Inc. (DUNRQ), BPZ Resources Inc. (BPZRQ), ERG Intermediate Holdings LLC, American Eagle Energy Corp. (AMZGQ), Saratoga Resources Inc. (SARAQ), Milagro Oil & Gas Inc., and Miller Energy Resources Inc. (MILLQ). Canadian companies that entered bankruptcy include Verity Energy Ltd., Gasfrac Energy Services Inc., Southern Pacific Resource Corp., Laricina Energy Ltd., and Shoreline Energy Corp.

Several other companies, although not bankrupt, have reportedly hired restructuring advisors and consultants. These companies include: Vantage Drilling Co. (VTG), U.S. Shale Solutions Inc., Paragon Offshore plc (PGN), Midstates Petroleum Co. (MPO), Swift Energy Co. (SFY), Venoco Inc., Energy XXI Ltd. (EXXI), and Magnum Hunter Resources Corp. (MHR).

When a broker recommends that a client purchase or sell a security, the broker must have a reasonable basis for believing that the recommendation is suitable for the investor. In making this assessment, a broker must consider the investors income and net worth, investment objectives, risk tolerance, and other securities holdings. Recommendations of oil and gas companies with a high risk of loss of principal may be unsuitable for investors who cannot tolerate these risks.

If you believe you have been the victim of stockbroker misconduct, you may wish to consult an attorney to find out more about your legal rights and options. Investors may contact a securities arbitration attorney at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

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Customer Complaints Made Against Broker Robyn H. Lee Regarding TICs

February 19, 2016

According to the Financial Industry Regulatory Authority (FINRA), former Independent Financial Group (Independent), broker Robyn H. Lee (Lee) has had at least thirteen (13) customer complaints made against him, mostly involving sales of tenants in common (TICs). Customer complaintsreportedly included unsuitable investment recommendations, breach of fiduciary duty, misrepresentations and fraud. Lee has been registered with […]

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Massachusetts State Authorities Investigate Realty Capital Securities (RCS)

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JP Energy Partners, L.P. Investments May Be Unsuitable For Some Investors

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Recommendations to invest in JP Energy Partners L.P. (JP) by investment advisors and/or broker-dealers may be unsuitable, depending on the individual characteristics of investors and whether the broker had a reasonable basis for the recommendation. JP is a master limited partnership (MLP) that produces and markets coal primarily to utilities and industrial users in the […]

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Vanguard Funds File Suit Against VEREIT

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Former Cadaret, Grant & Co. Broker William M. Pottetti Barred From Securities Industry

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Reef Oil and Gas Investments May Give Rise To Investor Arbitration Claims

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Law Office of Christopher J. Gray wishes to alert investors to the possibility that recommendations of Reef Securities, Inc. (Reef) by broker-dealers may be unsuitable, depending on the individual characteristics of investors and whether the broker had a reasonable basis for the recommendation. Reef, a Texas based company, is an independent oil and gas company […]

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Former UBS Broker William Hightower Barred From Securities Industry

December 9, 2015

According to the Financial Industry Regulatory Authority (FINRA), former UBS Financial Services, Inc. (UBS) broker William Hightower (Hightower) was barred from the securities industry over failure to respond to regulatory requests concerning his alleged unapproved and undisclosed private securities transactions. In its investigation, FINRA noted that Hightower allegedly failed to provide a list of customers […]

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Former Morgan Stanley Broker William Matthew Kelley Barred From Securities Industry

December 9, 2015

According to the Financial Industry Regulatory Authority (FINRA), former Morgan Stanley & Co. (Morgan Stanley) broker Matthew Kelley (Kelley) was barred from the securities industry over failure to respond to regulatory requests concerning his alleged unapproved and undisclosed private securities transactions. Kelley has been registered with the securities industry since 2007. He has previously been […]

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