A recent article in Forbes examined why elderly parents are susceptible to scams that seem obvious to younger individuals. According to the article, there are three main reasons for this: isolation and loneliness, diminished cognition and feelings of financial insecurity. Fraudsters know how to talk to lonely elders in a way that garners trust and makes them feel engaged. In addition, Alzheimer’s Disease research indicates that the first kind of judgment to be impaired is financial judgment, which may go undetected in the beginning stages of Alzheimer’s.

In one example, Gary H. Lane, a former Bank of America financial advisor, pleaded guilty to five counts of tax evasion and 12 counts of fraud on September 3, 2013 and was sentenced to a 10-year prison sentence on February 10, 2014. Allegedly, Lane defrauded six investors of more than $2 million from January 2010 until March 2011. During that time, Lane was reportedly employed by Bank of America Investment Services. Allegedly, Lane convinced these clients to invest their money through an E-trade account instead of following normal bank procedures.

According to the allegations, Lane sought out elderly or unsophisticated investors who were risk-averse and desired high returns. Fortunately, Lane was caught and ordered to pay restitution to his elderly victims. But securities arbitration lawyers say that many elderly investors are not so lucky. The best way to avoid and detect affinity fraud is for the loved ones of elderly investors to be alert for potential fraud and contact an investment fraud lawyer immediately if they believe fraud has occurred.

If your loved ones have suffered significant losses as a result of affinity fraud, they may be able to recover their losses through securities arbitration. To find out more about their legal rights and options, contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

In May 2012, a statement of claim was filed with the Financial Industry Regulatory Authority by Saddlebag LLC. The claim alleges that the firm wrongfully invested the client’s assets in illiquid auction-rate securities (ARS). According to securities lawyers, many financial firms sold auction-rate securities as short-term instruments with a highly-liquid nature, much like money market funds.

However, in 2008, the credit crunch resulted in a failure of the ARS market and investors with a piece of the $330 billion market were stuck holding securities that they were unable to sell. Other firms, including Morgan Keegan, have been accused of misleading investors regarding the liquidity risk of auction-rate securities.

Auction-rate securities are tax-exempt, long-term and taxable bonds and their interest rates are connected to the short-term market. Through ARS, issuers can acquire lower short-term rates on long-term financing. Auction-rate securities were marketed as liquid cash alternatives and considered safe before the global credit crunch.

Firms and their registered representatives 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. According to Thompson Reuters, leading auction-rate securities underwriters included Bank of America, Citigroup, Goldman Sachs, UBS, Lehman Brothers, Morgan Stanley, JPMorgan, Merrill, RBC and Wachovia.

If illiquid investments were unsuitable for you given your age, investment objectives and risk tolerance and you suffered significant losses in the auction-rate securities market, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a stock fraud lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or by e-mail at newcases@investorlawyers.net for a no-cost, confidential consultation.

Wells Fargo Advisors LLC was ordered to pay a $1.25 million fine and restitution of approximately $2 million for losses sustained by 239 customers. As Banc of America’s successor, Merrill Lynch, Pierce, Fenner & Smith was ordered to pay a $900,000 fine and restitution of approximately $1.1 million for losses sustained by 214 customers.

Floating-rate bank loan funds can be illiquid and carry significant risks because they invest in loans to entities with below-investment-grade ratings. According to FINRA’s findings, Banc of America and Wells Fargo made recommendations of concentrated purchases of these investments to customers for whom the recommendation was unsuitable. Stock fraud lawyers say that most investors with conservative risk tolerances or who want to conserve principal should not have received a recommendation to invest in a floating-rate bank loan fund.

Vice President and Chief of Enforcement for FINRA, Brad Bennett, said, “As investors continue to look for yield in a low-interest-rate environment, these actions should serve as a reminder that brokers and their firms need to ensure that investment recommendations are consistent with customers’ investment objectives and risk tolerances. Wells Fargo and Banc of America allowed their brokers to sell floating-rate bank loan funds to investors for whom the positions were unsuitable, resulting in significant losses to many customers.”

Furthermore, securities fraud attorneys say FINRA’s findings indicated that the firms did not properly train their sales force on the funds’ unique characteristics and risks.

If you received an unsuitable recommendation to invest in floating-rate bank loan funds from any full-service brokerage firm, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a stock fraud lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 for a no-cost, confidential consultation.

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, securities arbitration lawyers say that brokerage firms must, before approving an investment’s sale to a customer, conduct a reasonable investigation of the securities and issuer.

According to securities arbitration lawyers, some of the Bank of America structured products currently being investigated are Bank of America Return Linked Notes, Bank of America Equity Appreciation Growth Linked Securities (Basket EAGLES), Bank of America Strategic Equity Exposure Performance Linked Securities, Bank of America Capital Protection Equity Performance Linked Securities (CYCLES) and Bank of America Columbia Strategic Cash Portfolio.

If you were unsuitably recommended a Bank of America Structured Product and suffered significant losses as a result, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a securities fraud attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

Bank of America held commercial loans from small banks amounting to around $400 million in 2006. In 2007, securities packages were put together from these loans and then sold to investors. The subpoena arrives only one day after Bank of America, JP Morgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc. settled allegations of engaging in abusive mortgage practices. These abusive practices included engaging in deceptive practices in the offering of loan modifications, a failure to offer other options before closing on borrowers with federally insured mortgages, submitting improper documents to the bankruptcy court and robo-signing foreclosure documents without proper review of the paperwork.

The settlement amounted to $25 billion and involved federal agencies plus authorities in 49 states. This settlement is designed to give $2,000 to around 750 borrowers whose homes were foreclosed upon after the home values dropped 33 percent from their 2006 worth, and to provide mortgage relief. In addition, all five banks will pay $766.5 million in penalties to the Federal Reserve. This is considered to be the biggest federal-state settlement ever. Bank of America will also pay $1 billion to settle allegations that it, together with its Countrywide Financial unit, engaged in fraudulent and wrongful conduct.

Needless to say, between the recent settlement, the subpoena regarding two of its CLOs, and numerous potential securities arbitration claims related to its CDOs, Bank of America is not off to a good start in 2012. If suspicions about the Bank of America CLOs turn out to be correct, investors who suffered losses as a result may have a valid securities arbitration claim. Investors are advised to stay informed on this issue as it holds potential for loss recovery.

A Financial Industry Regulatory Authority Arbitration Panel last week awarded $1.38 million to a Lyon Capital CLO investor. The award includes attorney’s fees, hearing session fees, interest and the entirety of the claimant’s investment losses. Allegations heard by the panel stated that Lyon Capital was worthless at the time of purchase. Only one month after closing the allegedly worthless deal, the disclosures about potential losses in similar loan pools was changed by Banc of America. August 2007’s prospectus stated that, because of the declining market values of loans, it was likely that “on the closing date [the value of the portfolio] will be substantially less than the principal amount.” The claimant further alleged that the investment was sold as a low-risk investment and Lyon Capital CLO was, in actuality, artificially inflated at the time of closing.

In light of the conduct of Banc of America in the sales of Lyon Capital and the recent related FINRA award, investment attorneys believe there may be other Lyon Capital investors who can seek to recover losses through securities arbitration. To find out more about your legal rights and options, contact an investment attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

The case was filed in 2011, and Hayes’ allegations included consumer fraud and breach of contract, among other misdeeds. The collateralized debt obligations, or CDOs, were purchased in 2008 from former Bank of America Securities LLC, which is now part of Merrill Lynch. The Financial Industry Regulatory Authority’s (FINRA) ruling, dated for January 31, 2012, was in favor of the claimant.

CDOs are securities that are backed by underlying pools of loans or bonds. While these investments are inherently risky, they are relatively common among qualified investors.” However, Hayes was unaware of the fact that at the time of purchase, the securities were already under water. The loans backing the securities were purchased by Merrill between November 2006 and June 2007. According to Hayes’ allegations, while in the company’s inventory, the securities lost a significant amount of their value. Regardless, Merrill sold the loans to investors like Hayes for the purchase price rather than what they were worth.

The FINRA panel awarded Hayes rescessionary damages; this allows for the return of the securities in exchange for the investor’s money per state securities laws. The rescessionary damages totaled $883,122. Hayes also received interest totaling $251,668, legal feels totaling $218,344 and costs totaling $23,500.

William Haldin, a Merrill Lynch spokesman, denied the securities’ worthlessness at the time of sale and stated that “Following the purchase of this investment, the market experienced extreme volatility.” Merrill Lynch disagrees with the FINRA panel’s decision.

If you believe you have been the victim of stock broker fraud connected with collateralized debt obligations, find out more about your legal rights and options by contacting an investment attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

Allegedly, despite the risk management strategies available to them — such as stop loss orders, exchange funds, a collar and/or protective put options —Merrill Lynch failed to protect some or all of the concentrated Weyerhaeuser stock positions under its advisement. Protective Puts allow the investor to create, at the put’s strike price, a price floor. This allows the investor to participate in the stock’s appreciation, customize the maturity of the put and stripe price, while providing downside protection. A collar, on the other hand, simultaneously Sells a call and purchases a put so that the proceeds and cost of the call and the put offset one another, which allows for hedging without requiring out-of-pocket expenses.

In addition to the company’s failure to utilize risk management strategies, Merrill Lynch failed to explain the risks associated with the holding of a concentrated stock position to clients. Merrill Lynch had a duty to protect the investment but failed to do so. This arbitration claim is still pending, but others who sustained losses as a result of the same mishandling of funds also are encouraged to seek the recovery of their losses through securities arbitration.

Other Weyerhaeuser shareholders, both current and former, who have sustained losses as a result of their holdings may have a valid securities arbitration claim. Methods for acquiring Weyerhaeuser stock include compensation and inheritance. To find out more about your legal rights and options, contact an investment attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

The FHFA is seeking civil penalties as well as damages. Allegedly, the financial institutions violated fiduciary duty by providing misleading loan descriptions as a part of their sales and marketing materials. The marketing materials did not reveal the true risk factors associated with the loans. According to the FHFA’s press release, “Based on our review, FHFA alleges that the loans had different and more risky characteristics than the descriptions contained in the marketing and sales materials provided to the Enterprises for those securities.”

Congress and regulators have put forth a continuing effort to deal with the practices of institutions that led to the financial crisis of 2008 and this lawsuit is part of that goal. It is similar to the one filed on July 27, 2011 against UBS Americas Inc. The Housing and Economic Recovery Act of 2008 gives the FHFA the authority to file complaints such as this one.

As conservator of Freddie Mac and Fannie Mae, the FHFA is responsible for preserving the assets of these companies, but if — as an individual investor — you have suffered investment losses that you believe to be the result of misleading marketing materials or a breach of fiduciary duty, find out more about your legal rights and options by contacting an investment attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

Though it is unsure when and how much MF Global noteholders will receive from the firm’s bankruptcy, Fitch Ratings stated in early November that the amount received by owners of MF Global’s senior unsecured debt could be as low as 10 percent of their investment. Fitch Ratings estimates the maximum investors will receive at only 30 percent. Investors who purchased MF Global 1.875 percent Convertible Senior Notes due in 2016, MF Global 3.375 percent Convertible Senior Notes due in 2018 and Global 6.250 percent Senior Notes due in 2016 may have a valid claim against the underwriters of these Notes. Jefferies, Bank of America, Merrill Lynch, Lebenthal & Col, Sandler O’Neill + Panthers, BMO Capital Markets, US Bancorp, Commerzbank and Natixis are some of the underwriters of MF Global Notes.

It is possible that the underwriters of MF Global Notes knew or should have known more about MF Global’s financial problems and may not have adequately disclosed material information in the Notes’ prospectuses. Reports that the prospectuses may have been misleading have led to an investigation.

It is the obligation of the underwriters of a securities offering to put forth adequate due diligence concerning the issuer during the process. Underwriters must also ensure the accuracy of prospectuses and securities registration statements. Full and fair disclosure must also be provided to investors regarding material information concerning the issuing company and securities. Any omissions or misrepresentations regarding material information in a prospectus or registration statement subjects underwriters to potential liability under the Securities Act of 1933.

MF Global noteholders should consider the possibility of recovering their losses in securities arbitration and should not wait until the bankruptcy process is complete before contacting an investment attorney. To find out more about your legal rights and options, contact an investment attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.