SEC Category Archives — Page 2 of 13 — Investor Lawyers Blog Published by New York, New York Investor Attorneys

Published on: December 12, 2017

Former Bolton Capital Broker Paul Smith Indicted for Alleged Haverford Group Scheme

Stealing Money Paul Wescoe Smith, formerly associated with Bolton Global Capital, was the subject of a civil action and a criminal indictment filed by the United States Securities and Exchange Commission and the Department of Justice, through the United States Attorney for the Eastern District of Pennsylvania, on December 7, 2017. Smith, age 63, a resident of Wayne, Pennsylvania, has been accused of misconduct in connection with the sale and operation of a Ponzi scheme known as the Haverford Group.

Smith worked in the securities industry as a registered representative of several brokerage firms from 1982 until 2017, including with Bolton Global Capital from May 2007 to February 2017. Smith allegedly sold unregistered securities in a purported hedge fund known as The Haverford Group to more than a dozen investors.

Bolton Global Capital, Smith’s employer, reportedly notified Smith’s customers in early 2017 that their accounts were being transferred to another “financial representative” but reportedly gave no indication that Smith had been terminated and accused of wrongdoing in connection with The Haverford Group.

Published on: May 1, 2014

Investors May Recoup Losses as SEC Charges Robert J. Vitale with Fraud

by InvestorLawyers

While former stock promoter Robert J. Vitale sits in prison for two years for lying to investigators in a previous investigation about another matter, the U.S. Securities & Exchange Commission (SEC) has decided to file fraud charges against him. The complaint, filed in the U.S. District Court for the Southern District of Florida, accuses Vitale of defrauding investors in a real estate venture in Florida. While this investigation continues, victims of Vitale’s fraud are encouraged to begin talking with investment fraud lawyers, who may be able to help them recover their losses.

Investors May Recoup Losses as SEC Charges Robert J. Vitale with Fraud

Vitale is being charged with selling unregistered securities and acting as an unregistered broker. According to the charges, Vitale and his firm (Realty Acquisitions & Trust Inc.) were able to raise $8.7 million from their investors, many of whom were seniors who may now be looking to hire securities fraud lawyers to represent them in filing their claims. In a news release, the SEC stated that Vitale allegedly led the investors to believe that their money was “100% protected” even though that was untrue. That charge (if found guilty) could give the defrauded victims and their investment fraud lawyers great leverage during arbitration.

To get investors, Vitale also allegedly claimed to hold a business degree from the University of Notre Dame, and that he was a financial expert. While Vitale did go to Notre Dame high school in West Haven, Connecticut, he did not go to the South Bend, Indiana college. Also named in the complaint was the Coral Springs Investment Group (also known as Lauderdale-by-the-Sea Company), which stands accused of holding onto assets of the investors that should have been returned.

Published on: April 22, 2014

ETF, ETN Investors Could Recover Losses

by InvestorLawyers

Lawyers are investigating claims on behalf of investors who suffered significant losses in exchange-traded notes (ETNs) and exchange-traded funds (ETFs) issued by Credit Suisse and other full-service brokerage firms.

ETF, ETN Investors Could Recover Losses

According to Bloomberg, the $45,000 loss suffered by Jeff Steckbeck in TVIX, a Credit Suisse Group AG note, has set off a probe by the Securities and Exchange Commission. Reportedly, ETNs became more popular with the TVIX in February 2012. That month, Credit Suisse stopped selling the ETN and rising demand caused the investment to veer up to 89 percent from the index. When Credit Suisse began issuing the notes again in March of that year, a FINRA warning cautioned investors that ETNs could trade at a price that was higher than their underlying index.

Bloomberg data indicates that the estimated initial value of the securities is typically 2 to 4 percent less than the price investors paid. Exchange-traded notes like TVIX mimic assets through the use of derivatives and their value is based on volatility shifts in the market. However, the ETN market is small beans compared to the ETF market, which has around $2.4 trillion in assets.

Published on: April 8, 2014

Have You Been the Victim of Investment Scalping?

by InvestorLawyers

Investment fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses as a result of a securities fraud related to scalping. Scalping occurs when a broker or financial advisor recommends a security and immediately sells the security to turn a profit. According to securities arbitration lawyers, when many investors purchase the security, the price rises, allowing the fraudster to gain financially.

Have You Been the Victim of Investment Scalping?

In one recent scalping scheme, securities fraud charges were filed by the Securities and Exchange Commission (“SEC”) against John Babikian, the promoter behind AwesomePennyStocks.com and PennyStocksUniverse.com. Both websites are affiliated microcap stock promotion websites and are known collectively as “ABS.” The SEC charges allege that Babikian engaged in scalping through the websites.

According to the SEC, on February 23, 2012, the websites sent emails to around 700,000 people, recommending investing in a particular penny stock, America West Resources Inc. (AWSRQ). However, the fact that Babikian held over 1.4 million shares of America West was not disclosed in the email, nor was the fact that he had positioned the shares for immediate sale via a Swiss bank.

Published on: March 27, 2014

Recovering Mortgage-backed Securities Losses

by InvestorLawyers

Investment fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses in mortgage-backed securities. The investigations are concerning full-service brokerage firms that may have failed to properly supervise their traders and/or gave false pricing information to investors.

Recovering Mortgage-backed Securities Losses

Recently, Jefferies LLC agreed to settle charges with the Securities and Exchange Commission (“SEC”) by paying $25 million for allegedly failing to adequately supervise traders regarding mortgage-backed securities. In addition, authorities believe some of the Jefferies staff may have lied to investors regarding pricing. The alleged supervisory failures took place between 2009 and 2011. An SEC investigation reportedly found that Jefferies had lied to customers about the prices that hte firm piad for certain mortgage-backed securities that it later sold to customers, thus misleading the customers concerning the “markups” or trading profits received by Jefferies in connection with the sales.

The SEC argued that supervisors at Jefferies could not properly supervise trading activity with what they were given by the investment bank, and that they did not find out what customers were being told regarding what prices were paid by the bank for certain securities and whether or not this information was accurate. While the bank’s policy required supervisors to view electronic conversations, Jefferies has been accused of failing to review conversations on Bloomberg terminals, and the SEC contends that even when conversations were reviewed, the policy did not ensure that misrepresentations in price would be identified.

Published on: February 6, 2014

Icon Leasing Fund Investors Could Recover Losses

by InvestorLawyers

Investment fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses because of the unsuitable recommendation and sale of Icon Leasing Funds. An arbitration claim was recently filed on behalf of a retired woman who was sold these risky, illiquid investments by WFG Investments Inc. and NFP Securities Inc.

Icon Leasing Fund Investors Could Recover Losses

Specifically, potential claims involve the Icon Leasing Fund Eleven LLC and Icon Leasing Fund Twelve LLC. Allegedly, the advisor who sold the investments did not adequately explain that the funds operated as an equipment leasing program. The nature of the investment, in which capital is pooled for equipment subject to a lease, made it very risky and illiquid.

According to securities arbitration lawyers, during the offering period, the funds paid healthy distributions. However, not long after the funds were no longer for sale to new investors, the investment’s value began to rapidly decline and dividend payments became erratic. On December 31, 2012, Icon Leasing Fund 12 had suffered a 53 percent loss in value from the original offering price. For the same time period, Icon Leasing Fund Eleven suffered a staggering 84 percent decline in value.

Published on: December 26, 2013

Unsuitable Sales of Managed-futures Funds

by InvestorLawyers

Investment fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses as a result of investing in managed-futures funds offered by Morgan Stanley Smith Barney (MSSB). MSSB subsidiaries Merrill Lynch Alternative Investments LLC and Ceres Managed Futures also are being investigated, among others.

Unsuitable Sales of Managed-futures Funds

According to a recent Bloomberg article, U.S. Securities and Exchange Commission data indicate that in dozens of managed-futures funds, 89 percent of the gains were used to pay commissions, fees and expenses instead of being returned to investors. Furthermore, securities arbitration lawyers say that in light of the fees, stcckbrokers and financial advisors who recommended such funds may have and made that recommendation despite the investment’s unsuitability.

According to investment fraud lawyers, 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 firm fails to make suitable recommendations, investors may be able to recover losses through FINRA arbitration.

Published on: December 16, 2013

CRL Management, Charles R. Langston III Investors Could Recover Losses

by InvestorLawyers

Investment fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses as a result of doing business with CRL Management LLC and Charles R. Langston III. Langston, a hedge fund manager, conducts business with Miami-based CRL Management. In October, a lawsuit was filed against both he and the firm, alleging fraudulent solicitation of more than $14 million in investor funds.

CRL Management Charles R. Langston III Investors Could Recover Losses

Allegedly, Langston made material misrepresentations about the nature of the fees, commissions and/or investments. Furthermore, he allegedly claimed that he would invest several million dollars of personal funds in an investment vehicle. According to the claim, CRL Management and Langston misrepresented an investment vehicle they were promoting. In addition, it was allegedly not registered with the Securities and Exchange Commission.

Securities arbitration lawyers say that as a result of the actions of CRL Management and Langston, one investor lost more than $3.5 million. In addition, it cost the investor more than $1 million in commissions and fees. Furthermore, a recent arbitration award from the Financial Industry Regulatory Authority ordered CRL Management to pay $1,312,949.31 for breach of contract.

Published on: December 10, 2013

SEC Investigates Two Firms for Failure to Disclose or Obtain Permission for Principal Transactions

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of investors who have suffered significant losses because their broker, adviser or firm did not notify or obtain their permission before executing trades on their account. According to the Securities and Exchange Commission, Parallax Investments LLC and Tri-Star Advisors allegedly executed thousands of transactions through their affiliated broker-dealer without disclosing their actions to clients.

SEC Investigates Two Firms for Failure to Disclose or Obtain Permission for Principal Transactions

According to stock fraud lawyers, principal transactions usually involve an investment adviser who uses affiliate brokerage firms to act on behalf of its account. However, conflicts of interest frequently arise between adviser and client. Therefore, securities fraud attorneys say that advisers must disclose any monetary interest or conflicted role in written form when advising the client and obtaining permission.

Parallax Investments LLC, Tri-Star Advisors and three executives — John P. Bott II, Jon C. Vaughan and William T. Payne — all based in Houston, Texas, face securities charges regarding the unauthorized transactions. According to the SEC’s orders of administrative proceedings, Bott made at least 2,000 principal transactions without disclosing or receiving permission from clients from 2009 to 2011. Furthermore, for each transaction, the broker-dealer affiliate bought mortgage-backed bonds with its inventory account and placed them in the client accounts. Bott gained almost half the $1.9 million in sales credits the firm received on the transactions. Vaughan and Payne executed similar trades and received similar benefits.

Published on: December 3, 2013

Elderly Seniors Targeted for Financial Fraud

by InvestorLawyers

Investment fraud lawyers are currently investigating claims on behalf of elderly seniors who have been the victim of affinity fraud or other investment scams. Affinity fraud is an investment scam that targets an identifiable group such as seniors, ethnic communities, professional groups, religions groups, etc. In one recent claim, Gary C. Snisky reportedly targeted and defrauded more than 40 seniors in a scam that cost these individuals $3.8 million. According to the allegations, Snisky mostly targeted retired annuity holders, many of whom lived in Colorado.

Elderly Seniors Targeted for Financial Fraud

The charges were filed by the Securities and Exchange Commission and claim that Snisky used insurance agents to sell Arete LLC interests, which he claimed were safer and more profitable than annuities. Furthermore, the SEC’s claims allege that Snisky told investors that their funds would be used to purchase government-backed agency bonds at a discount by eliminating middlemen fees, which would then be used for overnight banking sweeps. However, he allegedly misappropriated around $2.8 million, using these funds to pay commissions and mortgage payments. According to securities arbitration lawyers, scams like this are far too common and, unfortunately, many investors are either unaware or too embarrassed to come forward.

Reportedly, Snisky described Arete LLC as an “annuity plus” with up to 7 percent in guaranteed annual returns. Furthermore, he allegedly claimed that investors could earn interest and take principal from the investment without penalty, even after 10 years. According to the SEC’s allegations, Snisky stated that the investments were safe, exhibited falsified investor account statements that showed earnings to staff and drafted documents to be used as offering materials by salespeople.