According to reports by Bloomberg, Astenbeck II posted large losses through the first half of 2017. In fact, in June 2017 alone, the hedge fund plummeted nearly 30% as reported by Bloomberg. Consequently, Astenbeck Capital Management decided to pull the plug and shut down Astenbeck II, the main hedge fund vehicle under the Astenbeck Capital Management umbrella.

Astenbeck II appears to have suffered losses part due to a heavy “long” position in crude oil. Unfortunately for investors, crude oil has not recovered from the prices of over $100 per barrel of crude as seen in 2014. In fact, as of early October 2017, the price of a barrel of West Texas Intermediate (“WTI”) crude oil continues to hover around $50.

Non-conventional investments and private placements such as hedge funds present substantial risks that render them unsuitable for many investors. In particular, hedge funds investing in oil and gas and energy markets are very high-risk in nature, and therefore, require any broker to conduct reasonable due diligence before recommending such an investment in the first instance to a client. Moreover, pursuant to applicable securities laws and FINRA rules and regulations, a broker is required to conduct an appropriate suitability analysis before recommending a risky investment vehicle to his or her client, an analysis which involves reviewing the investor’s stated investment objectives and corresponding risk profile.

The attorneys at Law Office of Christopher J. Gray possess significant experience in handling disputes, including FINRA arbitration claims, on behalf of investors in energy products, hedge funds and private placements. Investors who invested in Astenbeck II or a similar oil and gas investment vehicle may contact our office at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

In June, the New York-based hedge fund manager reportedly began liquidating its funds, after the firm’s longtime associate Murray Huberfeld (Huberfeld) was accused of arranging for a $60,000 bribe and kickback, in a Salvatore Ferragamo bag, to Norman Seabrook, President of the New York correctional officers’ union. Seabrook allegedly directed $20 million in union investments into the Platinum Partners Value Arbitrage Fund. Seabrook has denied that he is guilty of any charges.

Later, Cayman Islands Judge ­Andrew Jones reportedly ordered that a new advisor take control of the international arm of Platinum’s flagship fund, which is based in the Caymans, after an investor claimed he has not been able to gain access to his money since 2015.

If improper activity by Platinum Partners is proven, brokers and advisors who sold and recommended the Platinum Funds to investors may possibly be liable. If you were advised to invest in Platinum Partners funds by broker or investment adviser, and suffered significant losses are a result, you may be able to recover your losses in FINRA arbitration or in a lawsuit. To find out more about your 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.

Alternative investments can include a variety of products, including oil and gas partnerships, hedge funds, non-traded real estate investment trusts (REITs), business development companies (BDCs) and other related categories. Though LPL Financial set forth guidelines to manage investment concentration, FINRA reports that from January 2008 until July 2012, there was no internal effort to enforce these guidelines. As a result, some clients may have received investment advice that resulted in levels of concentration that were excessive.

If you suffered significant losses as a result of an unsuitable recommendation to purchase or over-concentrate your portfolio in non-conventional investments (whether from LPL or another stockbroker or financial advisor), you may be able to recover your losses through securities arbitration. To find out more about your 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.

These investments included:

• Non-traded real estate investment trusts, or REITs
• Oil and gas partnerships
• Business development companies, or BDCs
• Hedge funds
• Managed futures
• Other illiquid pass-through investments

For many alternative investments, offering documents, state regulations and the firms themselves impose concentration limits. FINRA’s investigation found that LPL did not adequately supervise alternative investment sales from January 1, 2008 to July 1, 2012 and, as a result, these concentration limits were allegedly violated. In addition, LPL’s supervisory staff allegedly was not adequately trained in analyzing suitability standards.

According to stock fraud lawyers, firms have an obligation to properly supervise their brokers and fully disclose all the risks of a given investment when making recommendations. In addition, those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance. Securities fraud attorneys believe that many LPL customers may be able to recover losses for unsuitable alternative investments.

“In order to sell alternative investments, a broker-dealer must tailor its supervisory system to these products,” FINRA Executive Vice President and Chief of Enforcement Brad Bennett stated. “LPL exposed customers to unacceptable risks by not having an adequate system in place that could accurately review whether a transaction complies with suitability requirements imposed by the states, the product issuers and the firm itself — and it failed to train its registered representatives to apply all the suitability guidelines appropriately.”

If you were an LPL customer who received an unsuitable recommendation of non-traded REITs, oil and gas partnerships, managed futures, BDCs or other illiquid investments, 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 newcases@investorlawyers.net for a no-cost, confidential consultation.

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.

According to investment fraud lawyers, the SEC announced on December 4, 2013 that it had filed a civil injunctive action for conducting illegal short sales in the securities of three companies — as well as insider trading in a different company — against Langston and his business entities. Allegations in the lawsuit include engaging in illegal short sales of equity securities prior to a public offering during a restricted period, the purchase of those same securities during the public offering and acquiring illegal profits of almost $200,000 gained by trading on inside information.

If you’ve suffered significant losses as a result of doing business with CRL Management LLC and/or Charles R. Langston III, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 for a no-cost, confidential consultation.

The following firms have reportedly been subpoenaed: Merrill Lynch, Morgan Stanley, UBS Securities LLC, Charles Schwab & Co. Inc., Fidelity Brokerage Services LLC, Wells Fargo Advisors, ING Financial Partners Inc., TD Ameritrade Inc., LPL Financial LLC, MML Investor Services LLC, Commonwealth Financial Network, Investors Capital Corp., WFG Investments Inc. and Signator Investors Inc.

According to securities arbitration lawyers, the state sent subpoenas to the firms on July 10, 2013, requesting information regarding the sale of certain products to Massachusetts residents 65 or older over the last year. Nontraditional investments include private placements, hedge funds, oil and gas partnerships, tenant-in-common offerings, and structured products.

The subpoenas reportedly requested the following information related to these investments: The method of review of the sale, commissions generated, training materials, marketing materials and any relevant compliance. The firms have been instructed to respond no later than July 24.

In some cases, the recommendation of alternative investments to seniors with low risk tolerances may be unsuitable. 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.

This investigation follows the recent Massachusetts crackdown on improper sales of non-traded REITs, which resulted in over $8 million in restitution to Massachusetts investors paid by six different brokerage firms. According to William F. Galvin, the Massachusetts Secretary of the Commonwealth, the recent investigations into non-traded REIT sales “heightened my concern that the senior marketplace is being targeted for the sales of these high-risk esoteric products.” The fifteen firms that were recently subpoenaed were not parties to the previous restitution payments, and the firms have not been found guilty of any wrongdoing.

About the alternative investments, Galvin stated, “While these products are not unsuitable in and of themselves, they are accidents waiting to happen when they are sold to inexperienced investors by untrained agents who push the products to score… large commissions.”

If you received an unsuitable recommendation to invest in alternative investments, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 for a no-cost, confidential consultation.

In one case, the investors’ trust interviewed multiple money managers and investment firms including Credit Sussie, CitiGroup, Deutsche Bank, LaSalle Bank and Goldman Sachs. All of these firms recommended diversification across traditional asset classes, such as bonds and equities, as well as selective investments in alternative products for special situations.

However, the claim asserts that GenSpring stood out because of its unique approach which would provide better downside protection and better returns through the use of Multi-Strategy Hedge Funds, such as Silver Creek Funds, instead of the bond or fixed income portion of client portfolios. Allegedly, GenSpring officials claimed that their approach, which had been tested thoroughly, would behave like traditional bonds in terms of asset class correlation and volatility while providing returns across all market cycles that were superior to traditional bonds. The trust invested approximately $10 million and stated its primary goal as capital preservation.

In another case, trustees stated that they would need access to the funds within 6 to 18 months for business opportunities and, thus, needed safe, liquid investments. They invested $25 million with GenSpring, using primarily Multi-Strategy Hedge Funds.

In both cases, the Multi-Strategy Hedge Fund investments plummeted with the stock market in late 2008 and early 2009. Traditional bonds, however, rose more than 5 percent. According to stock fraud lawyers, the firm’s clients are at a continued risk of liquidity damage because they are unable to liquidate their very large investments.

Securities fraud attorneys say that there was no reasonable basis for GenSpring to believe that the Multi-Strategy Hedge Funds would provide adequate diversification or perform like bonds.

If you are an ultra-high-net-worth investor who suffered significant losses because of GenSpring’s recommendation of Multi-Strategy Hedge Funds, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact a securities arbitration lawyer at Law Office of Christopher J. Gray., P.C. at (866) 966-9598 for a no-cost, confidential consultation.

Reportedly, the Financial Industry Regulatory Authority accepted a Letter of Acceptance, Waiver and Consent on May 15, 2013 from VSR Financial Services. In the letter, the firm agreed to pay a fine of $550,000 which will settle allegations that the firm failed to adequately supervise the sales of alternative investments to customers. In particular, the firm allegedly failed to supervise the concentration of these investments in customer portfolios.

In addition, securities arbitration lawyers say that in October 2011, a trader calling himself Michael Daniel Shaw submitted a Letter of Acceptance, Waiver and Consent. In this letter he consented to the findings that he had recommended the sale of private placements, which were high-risk, to customers for whom he did not have a reasonable basis to believe they were suitable transactions. Furthermore, Shaw allegedly made material omissions or misrepresentations regarding the purchase or sales of the private placements.

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

If you suffered significant losses as a result of your investments with Michael David Shaw, Michael Daniel Shaw or VSR Financial Services, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 for a no-cost, confidential consultation.

The feeder funds used by full-service brokerage firms to invest in Paulson’s Advantage and Advantage Plus Funds went by a variety of names, such as LionHedge Paulson, UBS Paulson Advantage Fund, Morgan Stanley HedgePremier Paulson, Paulson Advantage Access Fund and CAIS Paulson. Stock fraud lawyers say that all of the aforementioned funds invest in Paulson’s funds and that in some cases they may not have provided oversight or due diligence in the funds, despite representations made to investors.

Following the Advantage Fund’s decline, in May 2012 the fund was put on Morgan Stanley Wealth Management’s “watch list” and investors are now being advised to redeem. Three months later, Citigroup reportedly made a similar decision, pulling $410 million from Paulson’s funds. In light of the fact that the Paulson funds were sued by an investor in February 2012, many investors are contacting securities fraud attorneys about their losses. In the 2012 lawsuit, both Paulson & Co. and its funds were charged with deeply investing into SinoForest without conducting adequate due diligence and accused of breach of fiduciary duty.

If you invested in one of the Citigroup, Morgan Stanley, Merrill Lynch or UBS Financial Services feeder funds listed above, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact a stock fraud lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

Allegedly, UBS may have offered and sold the UBS Willow fund to investors — particularly customers with low risk tolerance seeking stable income, such as retirees — while marketing it as a safe, reliable investment. However, the fund has suffered a decline of around 80 percent. Investigations are also underway to determine if UBS Financial Services adequately disclosed or misrepresented the material risks of this investment to clients.

In some cases, securities fraud attorneys say that investors’ portfolios may have been over-concentrated in the UBS Willow Fund. If so, these portfolios may have been mismanaged, given that risk management strategies were available that would have offered investors protection for the value of their portfolio.

Prior to recommending an investment to a client, brokers and firms are required to perform the necessary due diligence to establish whether the investment is suitable for the client, given their age, investment objectives, and risk tolerance. If you suffered significant losses as a result of your investment in the UBS Willow Fund and it was an unsuitable investment for you and/or you were not made aware of the risks associated with the investment, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact a stock fraud lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

According to the complaint, which was filed in Manhattan federal court, John Picket, the CSO’s founder, leveraged the assets of the fund in order to purchase debt in the German firm’s offering worth around 558 million Euros, or $730 million. Allegedly, following Pickett’s actions, the CSO fund suffered significant losses. Reportedly, in December 2007, Pickett resigned.

Beach’s investment fraud lawyers stated in the complaint that, “investors were not informed that his departure was the result of his breaches of the fund’s investment restrictions.” Citigroup spokeswoman Danielle Romero-Apsilos declined to comment in relation to the suit.

According to securities fraud attorneys, this is not the first case against Citigroup in relation to the CSO fund. In April 2008, a hedge fund firm filed a lawsuit against Citigroup. The case is Robeco-Sage Capital v. Citigroup Alternative Investments LLC, 601030/2008, New York Supreme Court (Manhattan). Robeco-Sage Capital alleged that Pickett’s “disastrous” investment had resulted in damages to the firm. According to Manhattan court records, this case is no longer active.

The current case is Beach v. Citigroup Alternative Investments LLC, 12-cv-7717, U.S. District Court for the Southern District of New York (Manhattan).

According to the bank, Citigroup Alternative Investments has, since the alleged misconduct occurred, been restructured. Part of the bank was renamed Citi Capital Advisors.

If you suffered significant losses in the now-defunct Citigroup CSO, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact an investment fraud lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

In particular, these stock fraud lawyers are looking into the sales practices of Merrill Lynch and its brokers in regards to the Coast Access II LLC hedge fund. Coast Access II LLC is a “feeder fund,” investing substantially all of its assets in Coast Diversified Fund LLC, a multi-manager, multi-strategy “fund of funds” which invests through the market neutral or relative value trading of several securities and commodities trading advisors, according to Coast Access’ SEC Form D filing. Coast Access II LLC’s place of principal business operations and executive offices are listed as Merrill Lynch Alternative Investments and the investment was offered through Merrill Lynch. However, securities fraud attorneys now believe that the hedge fund was recommended to certain Merrill Lynch clients, despite its unsuitability for those clients.

A recent FINRA arbitration proceeding concluded with an order for Merrill Lynch to pay two of its investors $1.34 million in connection with their Fannie Mae preferred shares investments. Allegedly, Merrill Lynch misrepresented the risks involved in this investment, marketing them as “safe.” As a result, the investors, clients of broker Miles Pure, suffered significant losses. Their claim included allegations that the firm was negligent in its supervision of Pure and had committed civil fraud. Pure now works for Morgan Keegan.

If you are a customer of Merrill Lynch and purchased the Coast Access II LLC hedge fund or Fannie Mae preferred stock and suffered significant losses as a result of the unsuitability of the investment, or because the risks associated with the investment were misrepresented to you, you may be able to recover your losses. To find out more about your legal rights and options, contact a stock fraud lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

According to securities arbitration lawyers, concern related to the JOBS Act comes from the possibility that a restriction-free lift of the ban could result in some private funds exposing investors to misleading advertisements. Securities laws have previously only allowed firms to solicit non-public securities to “accredited” investors, who were usually wealthy, frequent investors. Furthermore, these investors would have needed an existing relationship with the firm.

While individuals who qualify for the investments will still need to have over $1 million in assets or a minimum income of $200,000 a year, a lack of advertising restrictions would still expose individuals for which these investments are unsuitable to misleading solicitation. Furthermore, those individuals may not have the investment sophistication required to understand the risks of these products. According to stock fraud lawyers, this could be a situation that leaves investors susceptible to securities fraud.

The JOBS Act comes as a follow-up to the changes the Jumpstart Our Business Startups Act implemented.

If you have suffered significant losses as a result of an investment that was unsuitable for you given your age, investment objectives or risk tolerance, you may be able to recover losses through securities arbitration. To find out more about your legal rights and options, contact a securities arbitration lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

In regards to suitability, FINRA Rule 2111 will replace NASD Rule 2310 on July 9, 2012. Factors determining an investment’s suitability for each investor will now include the customer’s age, tax status, financial situation and needs, liquidity needs, investment experience, investment objectives, risk tolerance, investment time horizon and other investments. A broker or adviser must consider these factors before making a recommendation after July 9.

According to securities fraud attorneys, because of an elderly investor’s age, asset allocations that are weighted in investments with a long time horizon or higher risk investments are often considered inappropriate. Potentially unsuitable investment products for elderly investors include:

• Auction rate securities (ARS)
• Hedge funds
• Equity-indexed annuities
• Return optimization securities
• Structured products
• Principal protected notes (PPN)
• Leveraged and inverse exchange-traded funds (ETF)
• Asset back securities
• Reverse convertibles and commodity futures-linked securities
• Unlisted real estate investment trusts (REIT)

If you are an elderly investor who has been improperly recommended one of the above investments, or have noticed any of the other red flags pertaining to your recent investments, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a securities arbitration lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

A statement by Harbinger said the Wells Notices issued by the SEC are related to alleged “violations of the federal securities laws’ anti-fraud provisions in connection with matters previously disclosed and an additional matter regarding the circumstances and disclosure related to agreements with certain fund investors.” The firm also stated that, should an enforcement action be brought by the SEC, they “intend to vigorously defend against it.”

The SEC and the U.S. Attorney’s Office are investigating Harbinger over a loan that was paid to Falcone from one of his funds. The loan amounted to over $113 million and was allegedly used to pay personal taxes. The kicker? The transaction was completed without notifying investors. In addition, the SEC is investigating whether preferential treatment was given to some investors over others. According to a statement made by Harbinger, withdrawals from its main hedge fund are anticipated to be suspended December 30, 2011.

In April, Harbinger announced to its clients that the government was looking into its conduct when trading an undisclosed firm’s debt securities from 2006 to 2008 to determine if it had engaged in market manipulation.

If you made investments with Harbinger Capital Partners LLC, you may have a valid securities arbitration claim. 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 conflict of interest occurred when O’Rourke and the firm urged their clients to invest in a security on which they would earn a 10 percent commission. In addition, they did not register as a broker, did not provide written disclosure, did not properly redeem the interest of one hedge fund investor before another, and omitted and misstated aspects of the hedge fund’s liquidity. The security in question was stock offered by Ameranth Inc. and sales took place in 2005 and 2006. Investments made by Western Pacific clients earned the firm $450,495 in “success fees.” In addition, from 2005 to 2008, O’Rourke and Western Pacific stated that their hedge fund, The Lighthouse Fund LP, consisted of only 25 percent illiquid assets when, in truth, it consisted of 90 percent illiquid securities.

One investor, who did not want the $800,000 of Ameranth stock he currently owned, was given his interest in cash by O’Rourke after Western Pacific used the Lighthouse Fund to resolve the dispute. This took place ahead of a different client that had requested a full redemption previously, thus the redemption of interest did not take place in the proper order.

According to the SEC’s press release, Assistant Director in the SEC Enforcement Division’s Asset Management Unit, Marshall S. Sprung, said, “Investment advisers have a fiduciary duty to act in the best interests of their clients and be forthcoming with them. Western Pacific and O’Rourke fraudulently breached that duty by failing to disclose the commissions they would receive for the recommended investments and lying to clients about the liquidity of the fund they managed.”

If you believe you are one of the many investors who unknowingly contributed to the $450,495 of undisclosed fees, or have been the victim of other hedge fund fraud, you may have a valid securities arbitration claim. 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.

According to Investopedia, an asset-backed security is “a financial security backed by a loan, lease or receivables against assets other than real estate and mortgage-backed securities. For investors, asset-backed securities are an alternate to investing in corporate debt.” While an alternate to corporate debt investment can be appealing to investors, asset-backed securities are not without their risks.

On September 19, a 4-0 vote by SEC commissioners passed the decision to seek comment on a Dodd-Frank Act-required rule. The clarification of this rule would “restrict those who package or sponsor asset-backed securities from engaging in deals that put their interests in conflict with buyers for a year after the first closing of a sale,” according to Bloomberg Businessweek.

Last year, Goldman Sachs paid $550 million to settle SEC claims having to do with how it marketed collateralized debt obligations related to subprime mortgages. After being accused of failing to disclose that the securities Goldman Sachs had created and sold were also picked by hedge fund Paulson & Co. — who had then bet against the ABS — Goldman Sachs acknowledged that it provided “incomplete information” and made a mistake with its marketing materials.

The rule will undergo a 90-day comment period and its final adoption is scheduled for between January and June of 2012.

If you believe you may have invested in an asset-backed security that was subject to a bet that caused a conflict of interest, contact an investment attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

Drimal personally profited $6.5 million from trades in 3Com Corp. and Axcan Pharma Inc., $4.3 million from trades related to Hilton Hotels Corp. and just over $950,000 from trades related to Kronos Inc., totaling more than $10 million in personal net profit as a result of his broker misconduct.

According to prosecutors, Federal Bureau of Investigation agents approached Drimal in 2009, seeking his cooperation. Contrary to the FBI’s instructions, Drimal contacted another Galleon Group trader, informing him of the government’s probe. In addition, Drimal lied to the SEC about his motivations for buying Axcan stock in a July 2008 interview.

Zvi Goffer, the former Galleon Group trader who was informed by Drimal of the FBI’s probe, was convicted in June of the 14 counts against him. Goffer asked to receive less than the 10 years called for by U.S. sentencing guidelines, citing the influence of his two young sons as evidence that he is a changed man. Court filing stated that, “The arrogant swagger of 2007 has been replaced with an honest humility in 2011.” Goffer has not yet been sentenced.

Raj Rajaratnam, Galleon Group co-founder, was convicted in May of insider training. Rajaratnam is still awaiting sentencing. Prosecutors are seeking a sentence of more than 24 years for Rajaratnam. Sentencing is scheduled for September 27.

In addition to the time in prison, Drimal will have to pay $11 million and will serve three years of supervised release following his prison term. For his part, Drimal has accepted the charges and reportedly told Judge Sullivan, “I understand I’ve committed a crime and I deserve to pay the price.”

Selewach was employed with Ameriprise from September 1997 until he was fired in April 2006. In February of 2008, he was permanently barred from acting as a securities broker by the Financial Industry Regulatory Authority. His broker misconduct took place between July 2005 and November 2008, during which time he stole nearly $350,000 from six victims. For the last nine months of this time period, he was barred from being a broker but continued to operate as one regardless. Selewach led investors to believe that he was investing their money in hedge funds, commodities and real estate, but in reality he was using it for personal benefit including travel, mortgage payments and sporting event tickets.

During the trial, Selewach’s defense argued that the monies he received were loans rather than “high-interest-rate investments,” according to the Cape Cod Times. Selewach himself testified to this effect. However, victims of his crimes testified otherwise. One of his victims, Patricia Conti, lost more than $150,000 to Selewach. Conti testified that Selewach did not disclose that his departure from Ameriprise was a result of termination, that he continually pressured her and that he asked her to sign documents which she was unable to read fully because they were largely concealed from view.

Conti further testified that at one point, Selewach came to her home with a $30,000/30-day investment opportunity which he said would yield 19 percent interest. Though she told him no, he appeared at her residence, uninvited, multiple times to pressure her about the investment. She finally relented and upon asking for her returns after 30 days, Selewach replied that he said 30 days but actually meant 60 days. When Conti received a letter from the Massachusetts Securities Division asking her about a “loan,” she contacted Selewach, who then said “to go along with the testimony or your money would be in jeopardy.” Fearing financial ruin, Conti did as Selewach instructed.

Originally arrested in September 2009, Selewach now faces 8-12 years in prison followed by another 10 years of probation, during which he is barred from working as a financial custodian or fiduciary. In addition to his prison sentence and probation, Selewach is required to pay full restitution, totaling $335,000, to his victims.

Official court documents stated that Noel and Klosek’s fraud took place from about January 2003 to around July 2006 and involved over 100 clients, the majority of which were local NC retirees. In this atrocious broker fraud, clients were persuaded to invest large sums with Noel’s business, which were then diverted to another company belonging to Noel, significantly decreasing clients’ investment values. The diversion occurred without his clients’ knowledge or approval. The decrease in investment value was then hidden from clients with falsified quarterly statements and in July 2006, investors were told that their investment had actually grown. Victims of Noel and Klosek’s fraud now believed their assets to be around $16 million when, in fact, they had dwindled to only around $1 million.

According to the NC Securities Division Newsletter, Acting Special Agent in Charge of the Charlotte Division of the FBI, Joseph S. Campbell, said this of the case: “Retirees are often victims of fraud, and to steal their financial security is unconscionable. These men stole millions of dollars from people who don’t have the opportunity to restore the savings they’ve spent their lives building.” Though the $1 million that is now being distributed is only a small portion of the total restitution ordered by the court, it is a start.