According to the indictment, accessible here u.s._v._james_booth_indictment, Booth, 74, solicited money from over 40 clients of his wealth management business known as Booth Financial and falsely promised to invest their money in securities offered outside of their ordinary advisory and brokerage accounts. The indictment alleges that, rather than investing the funds as represented, Booth instead misappropriated nearly $5 million to pay his own personal and business expenses. According to the indictment, from 2013 through 2019, Booth purportedly directed some of his clients to write checks or wire money to an entity named “Insurance Trends, Inc.” Booth then allegedly used the funds to pay personal and business expenses.

Under the federal indictment, Booth, of Norwalk, Connecticut, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison, one count of securities fraud, which carries a maximum sentence of 20 years in prison, and one count of investment adviser fraud, which carries a maximum sentence of five years in prison, according to the Department of Justice press announcement.

According to his FINRA broker report, Booth was a registered representative with LPL Financial in Norwalk, CT from February 2018 until June 2019 he was reportedly dismissed after he “admitted to course of conduct beginning while associated with previous member firm involving the misappropriation of client funds for his personal and business use.” Prior to his registration with LPL, Booth was reportedly affiliated with the now-defunct brokerage firm Invest Financial Corp. in Norwalk, Connecticut for thirteen years.

In May 2019, FINRA reportedly began an investigation after receiving information from LPL following an internal investigation of Booth. FINRA later barred Booth from working in the securities industry. Specifically, the FINRA sanction stated that James Booth “consented to the sanction and to the entry of findings that he converted funds, totaling at least approximately $1,000,000 that multiple customers of his gave him to invest on their behalf, he however deposited the funds into an account he controlled and, used them for his own personal use.”

NASD Rule 3010 and FINRA Rule 3110 also require brokerage firms to have a system in place to supervise the sales activities of their Registered Representatives. These industry rules require that each member ensure that transactions with customers are reviewed and in certain instances approved by a Supervisor/Principal of the member. Brokerage firms may be held liable by customers for failures to supervise that result in customer losses due to broker misconduct.

The attorneys at Law Office of Christopher J. Gray, P.C. have significant experience representing investors in connection with claims against brokerage firms and investment advisors, including fraud cases and matters involving Ponzi schemes. Investors may contact us via the contact form on this website, by telephone at (866) 966-9598, or by e-mail at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

Hoffman was a registered representative and an investment advisory representative associated with LPL. GT Media hired Hoffman as an adviser in March 2015. Hoffman then recommended that GT Media hire his friend Thomas Conwell (“Conwell”), who had been previously enjoined and criminally convicted for stealing money from investors, to sell its stock.

As alleged in a complaint filed by the Securities and Exchange Commission (“SEC”), from July 2015 through July 2018, Conwell offered and sold approximately $2.5 million of GT Media stock to approximately 41 investors. The SEC further alleged that exchange for selling GT Media stock to investors, Conwell received $221,900 in commissions from the company. The SEC complaint is accessible below.

SEC Complaint

The SEC also alleged that throughout the offering, Conwell made numerous misrepresentations to investors about GT Media. Among other things, Conwell allegedly told investors that two Fortune 500 companies were seeking to acquire GT Media, that GT Media would soon conduct an initial public offering, and that he was not being compensated by GT Media but was merely a co-investor. The SEC alleges that in addition, between 2016 and 2017, Conwell misappropriated $161,500 from approximately 16 investors who he solicited to invest in GT Media stock and used the investors’ money to pay his personal expenses.

The SEC alleges that in soliciting his advisory clients to invest in GT Media, Hoffman failed to inform them of his significant conflicts of interest, including his receipt of warrants and commissions from GT Media and his loans to GT Media which were repaid with investor money.

Hoffman (CRD No. 1061740), formerly of LPL and most recently with Union Capital Company, and Conwell, who was barred by the SEC in 2006 for stealing money from investors, engaged in a scheme whereby they allegedly made false representations to investors to acquire $3.3 million through the sale of GT Media Inc. securities.

Selling away occurs when a broker or investment adviser sells an investment to a client that is not included in the client’s account or in the investment products that are offered by the firm. These private securities often include investments in private placements (as here), private non-traded REITs, privately-held companies, limited partnerships, real estate and promissory notes.

If a broker wants to complete a private securities transaction, he or she must provide the firm with written notice that details the transaction, and the transaction must be approved by the firm. If the transaction is not approved by the firm, the broker cannot participate in any way with the transaction. If the broker does not comply with the firm’s order, or does not attempt to gain approval, “selling away” has occurred. Selling away cases often involve both the actions of the broker and the supervisory practices of the firm. Often, selling away could have been prevented if the firm’s supervisors had paid attention to certain red flags that should have alerted them to the broker misconduct.

Among the many duties and responsibilities that brokers and brokerage firms owe to their clients are the duties to “conduct business with high standards of commercial honor” and “maintain just and equitable principles of trade” (FINRA Rule 2010). In addition, FINRA’s often discussed ‘suitability rule’ (FINRA Rule 2111) mandates, in part, that a broker and his or her employer must seek to ensure that the purchase of a recommended security is in keeping with the customer’s risk profile and stated investment objectives.

NASD Rule 3010 and FINRA Rule 3110 also require brokerage firms such as LPL to have a system in place to supervise the sales activities of their Registered Representatives. These industry rules require that each member ensure that transactions with customers are reviewed and in certain instances approved by a Supervisor/Principal of the member. Brokerage firms may be held liable by customers for failures to supervise that result in customer losses due to broker misconduct.

If you have invested with Thomas Conwell or Kerry Hoffman and have suffered losses, you may be able to recover your losses in FINRA arbitration. Investors may contact a 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 a news release, the Colorado Securities Division stated that an LPL Securities internal investigation concluded that Ms. Camaro had caused checks to be drawn on customer accounts and deposited in an account she controlled, and that she was using the funds for personal expenditures.

In August 23, 2017, the Securities and Exchange Commission (“SEC”) filed a civil complaint (the “Complaint”) against Ms. Camarco (“Camarco”) in federal court in Colorado. As alleged in the Complaint, Ms. Camarco’s fraudulent scheme involving misappropriation of client funds dates back to approximately 2004 and continued through at least August 2017.

According to publicly available information through FINRA’s BrokerCheck, Sonya Camarco (a/k/a Sonia D. Fatchett, Sonya D. Fatchett, Sonya D. Fatchett-Camarco) (CRD# 2427529) entered the securities industry in 1993. Since then, she has been affiliated with the following firms: Merrill Lynch (CRD# 7691) (1993-2000), Morgan Stanley (CRD# 7556) (2000-2004), and most recently – LPL (CRD# 6413) (2004-2017). Recent news reports indicate that LPL terminated Ms. Camarco’s employment on August 9, 2017, after uncovering a series of suspicious transfers.

The allegations in the Complaint suggest that Ms. Camarco, an LPL registered representative who operated her own affiliated advisory firm, Camarco Investments, cashed out clients’ investments without their consent. Further, as alleged in the Complaint, Ms. Camarco proceeded to funnel these client funds into ‘C Investments,’ an entity owned and controlled by Camarco. The Complaint alleges that misappropriated funds were used by Camarco for such unauthorized purposes as making personal mortgage payments, paying off credit cards (in an amount in excess of $462,000), and to fund the purchase of a home held in a trust Camarco created.

According to the SEC’s Complaint, LPL (a Boston, MA based brokerage firm dually registered with the SEC as a broker-dealer and investment adviser) commenced an investigation into Camarco’s dealings on or about July 27, 2017. The investigation was initiated after one of Camarco’s clients requested that LPL look into the matter of a check drawn on the client’s account and made payable to ‘C Investments.’ During the course of its investigation, LPL discovered several similar types of suspicious transactions involving Camarco’s clients occurring from 2004-2017.

The Complaint alleges that Camarco’s scheme affected approximately 15 clients and involves in excess of $2 million. Further, the Complaint alleges that when clients asked about withdrawals from their accounts, Ms. Camarco informed these clients that C Investments was a type of outside investment made on their behalf.

Ms. Camarco was suspended by FINRA on October 10, 2017 from associating with any FINRA member firm in any capacity, pursuant to FINRA Rule 9952, and in accordance with FINRA’s Notice of Suspension letter dated September 13, 2017. In the event that Ms. Camarco fails to request termination of the suspension within three months from the date of the Notice of Suspension, she will then automatically be barred from the securities industry on December 18, 2017.

The attorneys at Law Office of Christopher J. Gray, P.C. have significant experience in recovering funds on behalf of investors who have fallen victim to perpetrators of financial frauds, including Ponzi schemes. Investors with questions about a possible legal claim may contact our office at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

LPL’s failure to supervise sales of nontraditional ETFs continued into 2015, according to FINRA. FINRA also alleged that LPL failed to have adequate supervisory systems and guidelines for sales of nontraded REITs from January 2007 to August 2014. LPL consented to the fine without admitting or denying the charges.

This was not LPL’s first regulatory issue concerning lack of supervision concerning high-commission investments such as non-traded REITs. In March 2014, FINRA fined LPL $950,000 for supervisory deficiencies related to sales of a wide range of alternative investment products. These include nontraded REITs, oil and gas partnerships, business development companies, hedge funds, managed futures and other illiquid investments.

Real estate investment trusts (REITs) are highly risky products that pose a significant risk that the investor will lose some or all of his initial investment. REITs are often better suited for sophisticated and institutional investors, rather than retail investors such as retirees who do not wish to risk losing a significant portion of their investment.

Brokers and financial advisors are required to make investment recommendations that are consistent with their clients’ risk tolerance, net worth, investment objectives and experience in the market. However, due to the high sales commissions brokers typically earn for selling REITs – as high as 15%- brokers can be tempted to make “one size fits all” recommendations to investors in order to reap commissions. Brokerage firms such as LPL are required by FINRA rules to supervise brokers and investment advisors- even those who work in independent branch offices- to ensure that the brokers make only suitable recommendations.

If you have suffered significant losses as a result of unsuitable recommedations of REITs or other non-conventional investments by a stockbroker or financial advisor, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact an investor rights attorney 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.

The alleged misconduct relates to the time period from 2009 to 2012, but Chackman was registered with LPL between 2001 and 2012. In 2012, his registration was terminated by the firm for violating the firm’s policies and procedures regarding alternative investment sales.

According to the letter of acceptance waiver and consent, Chackman “recommended and effected unsuitable transactions in the accounts of at least eight LPL customers, by overconcentrating his customers’ assets in [REITs] and other illiquid securities.” The letter, dated December 12, 2012, also states that by submitting falsified documents, Chackman “was able to increase his customers’ accounts’ concentration in REITs and other alternative investments beyond the allocation limits established by [LPL].”

Typically, non-traded REITs carry a high commission, often as high as 15 percent, which motivates some brokers to make unsuitable recommendations to their clients. Non-traded REITs are attractive to investors because they carry a relatively high distributions of cash representing income and/or return of capital. According to stock fraud lawyers, however, these investments are inherently risky and illiquid because there is a limited market for reselling shares. This illiquidity and volatility makes non-traded REIT shares unsuitable for many individuals with conservative risk tolerances and those who need easy access to funds, especially when their portfolios are over-concentrated in illiquid investments.

Reportedly, one of Chackman’s clients made seven $75,000 purchases of one non-traded REIT over a six month period. After a year, 25 percent of the client’s liquid net worth and 35 percent of her assets were invested in REITs and other alternative investments. Another client, who purchased the same REIT, made seven purchases over seven months totaling $135,000 and had over one-third of his liquid net worth invested in REITs and other alternative investments after about two years.

According to securities fraud attorneys, brokers 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 broker or firm fails to make suitable recommendations, investors may be able to recover losses through FINRA arbitration.

If you suffered significant losses as a result of doing business with Gary Chackman or received an unsuitable recommendation of non-traded REITs from 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 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.

Reportedly, a claim has already been filed on behalf of one investor against Kathleen Tarr, a former representative of Royal Alliance Securities. Allegedly, Tarr recommended taking an early retirement option and then sold the investor unsuitable variable annuities and non-traded REITs. Prior to taking the early retirement option, the investor’s portfolio consisted of diversified retirement investments.

In addition, securities arbitration lawyers are investigating recommendations made by Brian Brunhaver, a former registered representative for LPL Financial. Allegedly, Brunhaver unsuitably recommended the purchase of the non-traded REITs, specifically Inland American and Inland Western, to a client. This client was seeking to make investments that would fund future college expenses. Because of the illiquidity of non-traded REITs, the investments could not be sold in time to meet the client’s needs.

Typically, non-traded REITs carry a high commission, often as high as 15 percent, which sometimes motivates brokers to make unsuitable recommendations to their clients. Non-traded REITs may appear attractive to investors because they carry a relatively high dividend or interest. However, these investments are inherently risky and illiquid, which limits access of funds to investors and makes them unsuitable for many individuals with conservative risk tolerances and those who need easy access to funds.

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 you received a recommendation to purchase non-traded REITs or variable annuities that were unsuitable given your investment objectives and risk tolerance, 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 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.

According to the SEC, at least two of Richards’ victims are elderly and most of the allegedly misappropriated funds were life insurance proceeds and/or retirement savings.

“Since at least 2008, on occasions when investors informed Richards that they had funds available to invest (such as from an IRA rollover or proceeds from a life insurance policy), Richards instructed the investors to write out checks to an entity called ‘Blake Richards Investments,’ a d/b/a entity, or another d/b/a used by Richards, ‘BMO Investments,'” the SEC’s complaint states. “Richards represented to the investors that he would invest their funds through his investment vehicle in life insurance, fixed income assets, variable annuities, or household-name stocks. Richards misappropriated much of the funds.”

Sadly, securities arbitration lawyers say it is not uncommon for brokers and advisors to take advantage of elderly investors. Furthermore, issues of suitability often arise because retired investors or investors who are preparing for retirement usually do not have the same investment objectives and risk tolerances as investors who will have a steady income for many years.

Richards was registered from February 2007 to May 2009 with Ameriprise Advisor Services, which is now part of Ameriprise Financial. From May 2009 until May 2013, Richards was registered with LPL Financial. According to investment fraud lawyers, both of these firms were under an obligation to adequately supervise Richards while he was registered with them and, therefore, may be held liable for customer losses that could have been prevented with adequate supervision.

If you suffered significant losses as a result of your dealings with Blake B. Richards, 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 The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

According to a statement made by Mr. Galvin, “Our investigation into the sales of REITs, triggered by investor complaints, showed a pattern of impropriety on the sales of these popular but risky investments on the part of independent brokerage firms where supervision has historically been difficult to monitor.”

According to stock fraud lawyers, this settlement follows the February decision in which LPL Financial LLC was required to pay restitution to investors of $2 million and fines totaling $500,000 regarding non-traded REIT sales.

Some non-traded REITs may have carried a high commission which motivated brokers to recommend the product to investors, despite the investment’s unsuitability. The commission on a non-traded REIT is sometimes as high as 15 percent. Many non-traded REITs carry a relatively high distributions, making them attractive to investors. However, non-traded REITs are not traded on any national securities exchange, which limits access of funds to investors. 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.

If you received an unsuitable recommendation of a non-traded REIT and/or were not made aware of the risks associated with these 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 for a no-cost, confidential consultation.

The way in which investors receive dividends, or distributions, is one matter that is of concern to securities arbitration lawyers. One of the most attractive reasons for many investors to purchase non-traded REITs is the fact that they begin paying distributions immediately after sale. According to the FINRA notice, however, communications from broker-dealers to investors “have emphasized the distributions paid by a real estate program and failed to adequately explain that some of the distribution constitutes return of principal.”

FINRA also stated that “some communications have not provided sufficient discussions of the risks associated with investing in the products in order to balance the presentation of benefits.” Numerous claims have, in fact, been made alleging independent broker-dealers such as Ameriprise Financial Services Inc. and LPL Financial LLC did not adequately disclose the risks of non-traded REITs to investors prior to purchase. According to stock fraud lawyers, some investors are also not made aware that distribution payments can stop at any time.

This notice is part of an effort to protect investors from losses resulting from misinformation about non-traded REITs. Last month, FINRA indicated that it would be making recommendations to the SEC regarding more stringent rules about the valuation of non-traded REITs. Numerous suitability claims have been filed claiming that brokers and full-service brokerage firms recommended non-traded REITs to investors for whom the products were unsuitable, given their age, investment objectives and/or risk tolerances.

If you received misleading statements regarding non-traded REITs, were not made aware of the risks associated with non-traded REITs or your financial professional recommended the investment despite the fact that it was unsuitable for you, 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.

Because these investments are unregistered securities, they do not have to follow the same rules that regulated investments must follow. As a result, investors may be subject to high fees both to get in and get out of the investment. Furthermore, non-traded REITs are inherently risky and illiquid, causing them to be difficult to value. Stock fraud lawyers say the nature of these investments makes them difficult to sell, which can cause problems for investors who need access to cash (such as retirees), making REITs clearly unsuitable for such investors.

Unfortunately, even diligent investors who carefully review their financial statements can’t depend on this information to reflect the true value of their non-traded REIT investment. Instead, investors will have to do some research to determine their investment’s value. Securities fraud attorneys are currently investigating many non-traded REITs sold by LPL Financial, Ameriprise Financial and other full-service brokerage firms, including KBS REIT, Inland American, Dividend Capital Total Realty, Cole Credit Property Trust II and III, Wells Real Estate Investment Trust II, Cole Credit Property 1031 Exchange and W.P. Carey Corporate Property Associates 17. For more information on these investigations, see the previous blog posts, “Ameriprise REIT Sales Under Investigation” and “LPL Financial Faces New Complaint Regarding Non-traded REIT Sales.”

If you have suffered significant losses as a result of your investment in a non-traded REIT, or the recommendation to purchase a non-traded REIT was unsuitable given your age, risk tolerance or investment objectives, 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.

A spokesman for the Montana Auditor’s Department would not make comments regarding any investigation into LPL Financial but did confirm that the state has more complaints about LPL Financial’s advisers than other firms.

Stock fraud lawyers say this case follows a complaint filed against LPL Financial by the Massachusetts Securities Division, which alleged shortcomings in the firm’s compliance practices with respect to the sales of non-traded REITs, or real estate investment trusts. That complaint, which was filed in December of 2012, alleged that the firm did not adequately supervise its registered representatives in the sales of non-traded REITs, which violated the company’s rules and state limitations. In February, Massachusetts ordered LPL Financial to pay a fine of $500,000 and restitution to clients of up to $2 million.

With over 13,000 advisers and contractor representatives, LPL Financial is the United States’ biggest independent broker-dealer. Together with Ameriprise Financial Inc., LPL Financial accounts for around 20 percent of non-traded REIT sales, making it one of the two biggest sellers of non-traded real estate investment trusts. Meanwhile, securities fraud attorneys say that alternative investment commission revenue increased 25 percent in 2012, making these investments a significant revenue generator.

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 that those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance. In many cases, the recommendations of non-traded REITs to unsophisticated investors were unsuitable.

If you suffered significant losses in non-traded REITs sold by LPL Financial, 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.

Missouri stated that “from 2008 to 2012, Respondent Greg John Campbell made unauthorized transfers in excess of $1,500,000 from at least five client accounts. A majority of the transferred funds from these client accounts were used for Campbell’s benefit.” According to Missouri, a portion of the funds went to payments on a BMW lease and two of Campbell’s properties.

Campbell’s activity reportedly went undetected because clients stopped receiving account statements from LPL Financial and Merrill Lynch. The addresses used by the firms for mailing account statements were changed without authorization from the clients. When questioned about the changes in address, Campbell reportedly stated that “they were the result of administrative errors.”

Campbell was registered with Merrill Lynch from June 2006 through October 2011. Following his employment with Merrill Lynch, from November 2011 through November 2012, Campbell was registered with LPL Financial. LPL Financial and Merrill Lynch were obligated to adequately supervise Campbell’s activities under Financial Industry Regulatory Authority Rules while he was registered with them.

If you suffered significant losses as a result of the actions of Gregory Campbell or have another reason to believe you were the victim of securities fraud, you may have a valid securities arbitration claim. 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.

The following non-traded REITs were the focus of this complaint: Dividend Capital Total Realty, Inland American, Wells REIT II, Cole Credit Property Trust II, Cole Credit Property Trust III, Cole Credit Property 1031 Exchange and W.P. Carey Corporate Property Associates 17. Investment fraud lawyers encourage investors who suffered significant losses as a result of their investment in these non-traded REITs to explore all of their legal rights and options.

LPL was charged in December 2012 with unethical and dishonest business practices related to the sale of REITs. These charges are in connection with the sales of $28 million in non-traded REITs between 2006 and 2009, which were sold to nearly 600 clients. According to the Securities Division, 569 of those transactions had regulatory violations. According to Massachusetts’ findings, LPL’s REIT sales included violations of the State’s 10 percent concentration limits, prospectus requirements and LPL compliance practices. Furthermore, Massachusetts alleged that representatives of LPL received limited REIT training.

As non-traded REITs, these investments may have carried a high commission which may have motivated LPL representatives and brokers with other full-service brokerage firms to make the recommendation to investors despite the investment’s unsuitability. The commission on a non-traded REIT is often as high as 15 percent. Securities fraud attorneys say that if these investments were misrepresented by their brokers as safe, clients may be able to recover losses through securities arbitration.

Though Massachusetts’ claims against LPL have been settled, investors all over the country have suffered losses as a result of the unsuitable recommendation of a non-traded REIT. It is possible that investors from other states may be able to file arbitration claims in connection with alleged misleading sales presentations and/or unsuitable recommendations of non-traded REITs similar to those alleged in the Massachusetts case. If you suffered non-traded REIT losses with LPL or another full-service brokerage firm, you may have a valid securities arbitration claim. 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.

www.lawyersandsettlements.com/articles/securities/interview-securities-fraud-lawsuit-stock-2-18372.html?opt=b&utm_expid=3607522-0&ref=newsletter_pcf#.UPhW5WceeM8

Cole Credit Property Trust II and Dividend Capital Total Realty were named in the list of complaints filed by investors, in addition to REIT giant Inland American Real Estate Trust. Shares of these nontraded REITs were purchased through LPL-affiliated financial advisors. Currently, there are 13,170 financial advisors who are LPL-affiliated advisors. Stock fraud lawyers say Wells Real Estate Investment Trust II, Cole Credit Property III, 1031 Exchange and W.P. Carey Corporate Property Associates 17 were also named.

LPL compliance documents state that the broker-dealer “cannot make exceptions to prospectus suitability requirements or the regulatory imposed limit of 10 percent of net worth in public managed futures.” However, the state regulator alleges that advisors affiliated with LPL “frequently made transactions in violation of product prospectus and Massachusetts requirements.” In addition, the complaint alleges that a LPL supervision employee was “completely unaware of Massachusetts’ requirements concerning the sale of non-traded REITs” for a minimum of two years.

Securities fraud attorneys are also investigating the suitability of these investments for individuals who received recommendations from their broker or advisor. For more information, see the previous blog post, “The Fight Against LPL Financial Nontraded REIT Fraud Continues.”

If you purchased shares of Cole Credit Property Trust II, Dividend Capital Total Realty or another risky nontraded REIT, 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.

These charges are in connection with the sales of $28 million in non-traded REITs between 2006 and 2009, which were sold to nearly 600 clients in Massachusetts. According to the Massachusetts Securities Division, 569 of those transactions had regulatory violations, including violations of prospectus requirements, violations of Massachusetts concentration limits and violations of LPL’s compliance practices.

Inland American Real Estate Trust Inc. accounted for the largest amount of sales of all the REITs listed in the complaint. With real estate assets amounting to $11.2 billion, this REIT was the largest non-traded REIT in the industry.

According to the complaint, the investigation has “revealed significant and widespread problems with LPL’s adherence with the product prospectus and (state) requirements.” However, securities fraud attorneys say that Massachusetts may not be the only state that had its regulatory requirements violated by LPL, though it is the only state listed in this particular complaint. The complaint went on to state that “on paper, LPL set forth stringent requirements for the sale of non-traded REITs. In practice, LPL failed to review properly sales of non-traded REITs. While purporting to conduct a thorough review of offering documents, LPL allegedly overlooked prospectus delivery requirements in numerous sales of non-traded REITs.”

Investors who believe that a financial advisor or stockbroker may have violated their rights in connection with sales of non-traded REITs or other securities may contact Law Office of Christopher J. Gray, P.C. at (866) 966-9598 for a confidential, no-obligation consultation.

According to FINRA’s findings, Cashmore distributed “Power Optimizer” packages during the relevant period, which is at least from January 2006 through December 2010. These packages consisted of documents that contained investment information and portfolio recommendations and typically included a Cash Flow Report, a Power Optimizer Report, a Portfolio Recommendations/Asset Allocation page, a Fee and Asset Summary Report and Morningstar Reports for each recommended mutual fund. These packages were distributed to at least 100 clients and potential clients. However, according to stock fraud lawyers and FINRA, these packages contained misleading information. Specifically, FINRA says the documents provided incomplete and oversimplified information which did not provide a sound basis for investors to be able to evaluate facts about the information provided by the package.

Reportedly, the Cash Flow Report’s cash flow summary was based on only one projected rated of return, rather than including alternate cash flow scenarios, and did not include any possible cash flows that would illustrate a negative rate of return. Furthermore, the Morningstar Reports allegedly included in the package all addressed Class A investments while Cashmore recommended and sold Class C investments almost exclusively. Securities fraud attorneys say that Class A and C investments have differing rates of return, surrender charges and fees, despite being similar investments when in the same mutual fund.

According to FINRA, Cashmore has entered into a Letter of Acceptance, Waiver and Consent. According to the terms of the letter, Cashmore has been fined $5,000 and suspended for one month.

If you suffered significant losses as a result of your investment with Jeffrey A. Cashmore and LPL, 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.