Together with Scott Hollenbeck, Bartko’s fraud took place through the sale of unregistered securities. Hollenbeck, a Kernersville, North Carolina resident, was a member of Gospel Light Baptist Church and used his religions connection to target church members. Hollenbeck made false promises of 12 to 14 percent guaranteed interest rates through a fund that was owned by Bartko, the Caledonia Fund.

In April 2004, North Carolina’s secretary of state’s office issued a cease and desist order. Despite the order, Hollenbeck and Bartko continued to raise money for another fund developed by Bartko, the Capstone Fund. According to stock fraud lawyers, the money raised from investors was used for Hollenbeck’s and Bartko’s personal use.

In some cases, a financial firm can still be liable for investor losses if it was negligent in its supervision of a broker, even if the broker or financial adviser is conducting business without the firm’s knowledge. As a result, investment fraud lawyers are investigating what liability Bartko’s employers might have for his actions. If it can be proven that the FINRA broker-dealers Bartko worked for did not have adequate supervisory policies and procedures in place, Bartko’s victims could recover losses from his employer.

If you were a victim of the fraud committed by Bartko or Hollenbeck, 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.

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.