On July 27, 2018, two affiliated small business lenders — 1 Global Capital (a/k/a 1^st Global Capital, and 1 West Capital (collectively, “1GC”) — filed for Chapter 11 protection in Bankruptcy Court in the Southern District of Florida. Based in Hallandale Beach, FL, the two affiliated lenders are under the same common ownership and are in the business of purportedly providing small business loans known as “direct merchant cash advances,” to various clientele. In connection with the bankruptcy filing, 1GC’s two primary executives, Messrs. Carl Ruderman and Steven A. Schwartz, relinquished their control over the company and tendered their resignations.

As reported, 1GC had around 1,000 individual unsecured creditors prior to filing for bankruptcy. These creditors had loaned 1GC money with the understanding that these funds would then be invested in direct merchant cash advances. Creditors received monthly statements which demonstrated how their investments had supposedly been allocated, in addition to being provided with an online portal to track their investments.

In total, 1GC has reported more than $283 million in unsecured lender claims. Of the 20 largest creditors, all of them are individuals or retirement accounts. Prior to the bankruptcy filing, the SEC had opened an investigation into whether 1GC was engaging in “[p]ossible securities laws violations, including the alleged offer and sale of unregistered securities by unregistered brokers, and by the alleged commission of fraud in connection with the offer, purchase and sale of securities.” At this stage, both the SEC and the U.S. Attorney’s Office for the Southern District of Florida, which recently commenced a parallel criminal investigation, are investigating allegations of possible wrongdoing or malfeasance at 1GC.

In light of these allegations and 1GC’s recent bankruptcy filing, some recent commentary has drawn a comparison to the events surrounding the Woodbridge Group of Companies’ bankruptcy filing and the SEC’s December 2017 charges against Woodbridge, alleging that the firm’s founder and former CEO, Robert Shapiro, had orchestrated a $1.2 billion Ponzi Scheme. While the investigation into 1^st Global Capital continues, investors are encouraged to actively monitor the situation as it unfolds.

Creditors who invested in any 1^st Global Capital direct merchant cash advances upon the recommendation of a stockbroker or financial advisor may have viable FINRA arbitration claims if the brokerage firm or Registered Investment Advisor (“RIA”) did not perform adequate due diligence before recommending the investment.

As members and associated persons of FINRA, brokerage firms and their financial advisors must ensure that adequate due diligence is performed on any investment that is recommended to investors, particularly on esoteric and more opaque investments that are not registered with the SEC, and as such, are typically offered via private placement. Further, firms and their brokers must ensure that investors are informed of the risks associated with an investment, and additionally must conduct a suitability analysis to determine if an investment meets an investor’s stated investment objectives and risk profile. Either an unsuitable recommendation to purchase an investment or a misrepresentation concerning the nature and characteristics of the investment may give rise to a claim against a stockbroker or financial advisor.

Investors who wish to discuss a possible claim may contact a securities arbitration attorney at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

Investors who suffered losses due to the alleged misconduct of Rockland County financial advisor Hector A. May (CRD# 323779) may be able to recover their losses in arbitration before FINRA. A resident of Orangeburg, NY, Mr. May was most recently affiliated with the independent broker-dealer Securities America, Inc. (CRD# 10205) from 1998 until March 2018. As recently reported, on June 6, 2018, the United States Attorney for the Southern District of New York implemented an asset freeze pursuant to a Restraining Order against Mr. May and his wife, Sonia May, with their consent. According to publicly available information through FINRA, the Justice Department is “conducting an official criminal investigation of a suspected felony.”

Among the assets frozen under the terms of the government’s Restraining Order are those assets held by Executive Compensation Planners Inc. (“ECP Inc.”), the Registered Investment Advisory (“RIA”) firm owned and controlled by Hector May. In addition to freezing ECP Inc. assets, the government is also restraining numerous bank and brokerage accounts owned by the Mays, as well as monthly proceeds payable to Hector May through an Equitable Life Pension payment and social security. Finally, the government has frozen Mays’ real assets, including a house in Orangeburg, NY, a condominium in Vernon Township, NJ, as well as “all jewelry, fur products, antiques, and silver owned by Hector May or Sonia May.”

According to FINRA BrokerCheck, Mr. May was discharged from his employment with Securities America due to his alleged “misappropriation of client assets.” Acting through his RIA, Mr. May’s business as a financial advisor was supposedly predicated on selling certain wrap fee advisory programs through Securities America.

Brokerage firms Securities America have a duty to ensure that their registered representatives and investment advisors are adequately supervised, a duty which includes monitoring their advisors to ensure that no misconduct or fraudulent activity is permitted. Unfortunately, in some instances, independent advisors who work remotely under the supervision of firms like Securities America are able to engage in a pattern and practice of misconduct. Nevertheless, firms like Securities America must take reasonable steps to ensure that their advisors follow all applicable securities rules and regulations, in addition to internal policies and procedures. In those instances where firms fail to adequately supervise their financial advisors, they may be held liable for losses sustained by investors.

Attorneys at Law Office of Christopher J. Gray, P.C. have successfully resolved a number of disputes on behalf of investors concerning misconduct by stockbrokers and financial advisors. Investors may contact a securities arbitration attorney by telephone at (866) 966-9598, or by e-mail at newcases@investorlawyers.net for a no-cost, confidential consultation.

Investors who suffered losses due to misconduct by financial advisor Ralph Savoie (CRD# 411660) may be able to recover their losses in arbitration before the Financial Industry Regulatory Authority (“FINRA”). On March 26, 2018, Mr. Savoie plead guilty in Louisiana federal court to stealing up to $1.5 million from clients, using their monies for personal expenses including jewelry, hotels, and credit card bills, as well as to pay off previous clients in Ponzi-fashion in connection with prior purported investment opportunities. Mr. Savoie allegedly guaranteed his clients high rates of returns on various investments in securities and insurance products, describing the investments as a “sure thing.” In actuality, however, Mr. Savoie allegedly engaged in misconduct by using these funds on personal expenses, to pay prior clients and to funnel money into a “risky real estate venture.”

According to public records, Mr. Savoie of Mandeville, LA, was formerly associated with Cambridge Investment Research Advisors, Inc. (CRD# 134139) (“Cambridge”) in their Metairie, LA, branch office, until on or about August 11, 2015, at which time Mr. Savoie was discharged from his employment with Cambridge as a registered representative. Mr. Savoie’s career in the securities industry is lengthy and dates back to the early 1970’s, including his most recent stint at Cambridge from 2013 until August 2015.

According to publicly available information through FINRA, Mr. Savoie was discharged from his employment with Cambridge due to his alleged failure to “[d]isclose and receive approval for an outside business activity.” Further, FINRA reports that Mr. Savoie has been subject to six customer disputes, including three that remain pending and three that have resulted in settlement. A number of these disputes center on allegations concerning Mr. Savoie’s purported sales of “unsuitable, illiquid, expensive, private placements.”

As our office has discussed in previous blog posts, private placements are, in general, a risky investment proposition. To begin, private placements carry considerable risk (investors should be prepared to lose their entire investment), often are complex in nature, and typically are opaque insofar as investors only have limited information off which to make an ultimate decision as to whether an investment is warranted (as unregistered securities, private placements do not provide the same scope and depth of information as with other investments, such as publicly traded, registered stocks or mutual funds). The majority of private placements are offered pursuant to Regulation D (“Reg D”), an SEC regulation that allows private companies to raise capital without conducting a public offering.

Brokerage firms like Cambridge have a duty to ensure that their registered representatives are adequately supervised, a duty which includes monitoring their brokers in connection with outside business activities and/or sales of private placements. Brokerage firms must also take reasonable steps to ensure that their financial advisors follow all applicable securities rules and regulations, in addition to internal policies and procedures. In instances when brokerage firms fail to adequately supervise their registered representatives, they may be held liable for losses sustained by investors.

The attorneys at Law Office of Christopher J. Gray, P.C. have successfully resolved a number of disputes on behalf of investors, including losses sustained due to instances of fraudulent conduct such as Ponzi schemes, and related broker misconduct. Investors may contact a securities arbitration attorney by telephone at (866) 966-9598, or by e-mail at newcases@investorlawyers.net for a no-cost, confidential consultation.

As highlighted in our most recent blog posts concerning the Woodbridge Group of Companies (“Woodbridge”) of Sherman Oaks, CA, Woodbridge filed for Chapter 11 bankruptcy on December 4, 2017, in Delaware Bankruptcy Court (Case No. 17-12560-KJC). Thereafter, on December 21^st, the SEC formally filed charges against Woodbridge and its owner and former CEO, Robert Shapiro, alleging that “[D]efendant… used his web of more than 275 Limited Liability Companies to conduct a massive Ponzi scheme raising more than $1.22 billion from over 8,400 unsuspecting investors nationwide through fraudulent unregistered securities offerings.”

By January 2, 2018, the SEC further alleged, among other things, that the timing of the Chapter 11 proceeding called into question whether Mr. Shapiro had preemptively sought bankruptcy protection, in the first instance, in order to shield himself from impending charges of misconduct. Through its Motion to Direct the Appointment of a Chapter 11 Trustee, the SEC alleged that cause existed for the appointment of an independent trustee to help manage the bankruptcy process and protect the interests of numerous Woodbridge investors: “[i]nstead of allowing a District Court to appoint an independent fiduciary, Robert Shapiro decided that he would select the victims’ fiduciaries when he started hiring the team of managers and professionals who are representing the Debtors’ estates today.”

On January 19, 2018, turnaround specialist Mr. Lawrence Perkins of SierraConstellation Partners LLC, resigned as Chief Restructuring Officer of Woodbridge. As recently reported, Mr. Perkins’ resignation will be effective once a replacement is hired, according to attorney Sam Beach of Young, Conaway, Stargatt & Taylor, counsel for Woodbridge. Further, the Bankruptcy Court scheduled closing arguments related to the request for an independent trustee for Tuesday, January 23, 2018.

Investors who purchased Woodbridge First Position Commercial Mortgages (“FPCMs”) or a five-year private placement security (“Fund Offerings” or “Units”) through a stockbroker or financial advisor may have viable litigation or FINRA arbitration claims if the brokerage firm or Registered Investment Advisor (“RIA”) did not perform adequate due diligence before recommending the Woodbridge investment.

Some of the issuers of Woodbridge securities include the following entities:

• WMF Management, LLC (“WMF”);
• Woodbridge Group of Companies, LLC (d/b/a Woodbridge Wealth);
• Woodbridge Mortgage Investment Fund 1, LLC;
• Woodbridge Mortgage Investment Fund 2, LLC;
• Woodbridge Mortgage Investment Fund 3, LLC;
• Woodbridge Mortgage Investment Fund 3A, LLC;
• Woodbridge Mortgage Investment Fund 4, LLC;
• Woodbridge Commercial Bridge Loan Fund 1, LLC;
• Woodbridge Commercial Bridge Loan Fund 2, LLC.

As members and associated persons of FINRA, brokerage firms and their financial advisors must ensure that investors are informed of the risks associated with an investment, and must conduct a suitability analysis to determine if an investment meets an investor’s stated investment objectives and risk profile. Either an unsuitable recommendation to purchase an investment or a misrepresentation concerning the nature and characteristics of the investment may give rise to a claim against a stockbroker or financial advisor.

If you have invested in any of the Woodbridge Funds, or otherwise purchased a First Position Commercial Mortgage or Woodbridge Fund Offering or Unit, you may be able to recover investment losses in FINRA arbitration, or in some instances, litigation. Investors may contact a securities arbitration attorney at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

As we have discussed in previous blog posts, on December 21, 2017, the Securities and Exchange Commission (“SEC”) formally announced charges against the Woodbridge Group of Companies (“Woodbridge”) of Sherman Oaks, CA, as well as Woodbridge’s related unregistered investment funds and the firm’s owner and former CEO, Robert Shapiro. Essentially, the SEC has alleged that “[D]efendant Robert H. Shapiro used his web of more than 275 Limited Liability Companies to conduct a massive Ponzi scheme raising more than $1.22 billion from over 8,400 unsuspecting investors nationwide through fraudulent unregistered securities offerings.”

The SEC’s recent charges come on the heels of Woodbridge filing for Chapter 11 bankruptcy protection on December 4, 2017 in Delaware Bankruptcy Court (Case No. 17-12560-KJC). Through filings with the Bankruptcy Court, the SEC has alleged that Mr. Shapiro sought Chapter 11 protection in order to shield himself from charges of allegedly orchestrating a Ponzi scheme: “[h]e needed to create the appearance of a bankruptcy that resembled a bona fide Chapter 11, complete with legal and restructuring professionals of the type normally seen in a real organization. So instead of allowing a District Court to appoint an independent fiduciary, Robert Shapiro decided that he would select the victims’ fiduciaries when he started hiring the team of managers and professionals who are representing the Debtors’ estates today.”

On January 2, 2018 — in light of these allegations and concerns related to ensuring adequate representation of the numerous Woodbridge investors nationwide — the SEC filed a Motion to Direct the Appointment of a Chapter 11 Trustee. Pursuant to 11 U.S.C. §1104(a), the SEC has sought to appoint an independent Chapter 11 trustee for cause, in order to ensure Woodbridge investors are best protected. In seeking the appointment of a Chapter 11 trustee, the SEC has argued that cause exists, given allegations that “[M]r. Shapiro engaged in widespread fraud, dishonesty, incompetence and gross mismanagement in operating the Debtors prior to bankruptcy. This conduct is sufficient cause for a trustee under Section 1104(a)(1). In re Vaughan, 429 B.R. 14 (Bankr. D. N.M. 2010) (conduct relating to operation of Ponzi scheme falls squarely within Section 1104(a)).”

Investors who purchased Woodbridge First Position Commercial Mortgages (“FPCMs”) or a five-year private placement security (“Fund Offerings” or “Units”) through a stockbroker or financial advisor may have viable litigation or FINRA arbitration claims if the brokerage firm or Registered Investment Advisor (“RIA”) did not perform adequate due diligence before recommending the Woodbridge investment.

Some of the issuers of Woodbridge securities include the following entities:

• WMF Management, LLC (“WMF”);
• Woodbridge Group of Companies, LLC (d/b/a Woodbridge Wealth);
• Woodbridge Mortgage Investment Fund 1, LLC;
• Woodbridge Mortgage Investment Fund 2, LLC;
• Woodbridge Mortgage Investment Fund 3, LLC;
• Woodbridge Mortgage Investment Fund 3A, LLC;
• Woodbridge Mortgage Investment Fund 4, LLC;
• Woodbridge Commercial Bridge Loan Fund 1, LLC;
• Woodbridge Commercial Bridge Loan Fund 2, LLC.

As members and associated persons of FINRA, brokerage firms and their financial advisors must ensure that investors are informed of the risks associated with an investment, and must conduct a suitability analysis to determine if an investment meets an investor’s stated investment objectives and risk profile. Either an unsuitable recommendation to purchase an investment or a misrepresentation concerning the nature and characteristics of the investment may give rise to a claim against a stockbroker or financial advisor.

If you have invested in any of the Woodbridge Funds, or otherwise purchased a First Position Commercial Mortgage or Woodbridge Fund Offering or Unit, you may be able to recover investment losses in FINRA arbitration, or in some instances, litigation. Investors may contact a securities arbitration attorney at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

As we recently discussed in detail in a previous blog post, on December 21, 2017, the Securities and Exchange Commission (“SEC”) formally announced charges, as well as an asset freeze, against the Woodbridge Group of Companies (“Woodbridge”) of Sherman Oaks, CA, as well as Woodbridge’s related unregistered investment funds, and the firm’s owner and former CEO, Robert Shapiro. Among other things, the SEC has alleged in its Complaint – filed in Florida federal court – that “[D]efendant Robert H. Shapiro used his web of more than 275 Limited Liability Companies to conduct a massive Ponzi scheme raising more than $1.22 billion from over 8,400 unsuspecting investors nationwide through fraudulent unregistered securities offerings.”

According to the SEC’s Complaint, Woodbridge utilized a large and coordinated sales force to sell its Woodbridge Notes, sometimes referred to as First Position Commercial Mortgages (“FPCMs”). As further alleged by the SEC, “Woodbridge employed a sales team of approximately 30 in-house employees that operated within Woodbridge’s offices.” Moreover, the SEC’s Complaint alleges that “Woodbridge also utilized a network of hundreds of external sales agents to solicit investments from the general public by way of television, radio, and newspaper advertisements, cold calling campaigns, social media, websites, seminars and in-person presentations.”

As detailed in the SEC’s Complaint, the Woodbridge business model relied upon borrowing money from investors in exchange for promissory notes, typically maturing in 12 – 18 months. These notes carried an annual interest rate of 5 – 8%, payable monthly. The investors’ money was supposed to be issued to lenders in the form of securitized mortgages. However, according to the SEC, this rarely occurred.

As recently reported and covered in several of our prior blog posts, Woodbridge declared Chapter 11 bankruptcy in Delaware in early December. The timing of the filing came on the heels of Woodbridge discontinuing its interest payments to investors. In its bankruptcy filings, Woodbridge cited “increased operating and development costs” that “were exacerbated by the unforeseen costs associated with ongoing litigation and regulatory compliance.”

At this stage, it appears that while Woodbridge was marketed nationwide to a number of investors, South Florida was a particular hotbed of activity. This makes sense, given the large number of retirees and pensioners residing in Florida who seek stable fixed income investments. In fact, as recently reported, one insurance salesman and former broker supposedly sent invitations to potential Woodbridge investors, encouraging potential attendees to “learn how to earn 6% fixed interest” a year, while also highlighting “monthly income checks” and “no market risk.”

It appears that many investors in Woodbridge succumbed to the promise of earning above-market yields on safe, conservative, “risk-free” or “secured” investments in mortgages. Of course, such representations often prove to be a red flag, or indicator of some wrongdoing. When an advisor or promoter makes the claim that an investment product has no risk or is somehow crash proof, it should serve as an immediate warning or red flag to an investor of potential fraud.

Investors who purchased Woodbridge First Position Commercial Mortgages (“FPCMs”) through a stockbroker or financial advisor may have viable FINRA arbitration claims if the brokerage firm or Registered Investment Advisor (“RIA”) did not perform adequate due diligence before recommending the Woodbridge investment.

Some of the issuers of Woodbridge securities include the following entities:

• WMF Management, LLC (“WMF”);
• Woodbridge Group of Companies, LLC (d/b/a Woodbridge Wealth);
• Woodbridge Mortgage Investment Fund 1, LLC;
• Woodbridge Mortgage Investment Fund 2, LLC;
• Woodbridge Mortgage Investment Fund 3, LLC;
• Woodbridge Mortgage Investment Fund 3A, LLC;
• Woodbridge Mortgage Investment Fund 4, LLC;
• Woodbridge Commercial Bridge Loan Fund 1, LLC;
• Woodbridge Commercial Bridge Loan Fund 2, LLC.

As members and associated persons of FINRA, brokerage firms and their financial advisors must ensure that adequate due diligence is performed on any investment that is recommended to investors – including private placements under Regulation D. Further, firms and their brokers must ensure that investors are informed of the risks associated with an investment, and must conduct a suitability analysis to determine if an investment meets an investor’s stated investment objectives and risk profile. Either an unsuitable recommendation to purchase an investment or a misrepresentation concerning the nature and characteristics of the investment may give rise to a claim against a stockbroker or financial advisor.

If you have invested in any of the Woodbridge Funds, or otherwise purchased a First Position Commercial Mortgage through investing in a Woodbridge promissory note, from a registered representative of a broker-dealer, you may be able to recover investment losses in FINRA arbitration. Investors may contact a securities arbitration attorney at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

On June 30, 2017, the former CFO of American Capital Properties Inc. (“ARCP”), Brian Block, was found guilty of securities fraud and related crimes in connection with reporting false numbers in quarterly filings with the Securities and Exchange Commission (“SEC”). The verdict was handed down following a nearly three-week trial held in the U.S. District Court for the Southern District of New York. A jury returned the verdict less than a day after closing arguments. Mr. Block was convicted of one count of securities fraud, two counts of filing false reports with the SEC, two counts of filing false certifications, and one count of conspiracy.

In 2014, ARCP was set to file its financial statement for the second quarter, when an employee informed Block and Chief Accounting Officer Lisa McAlister that there was a methodological error in some of the firm’s calculations and that its average funds from operations (or AFFO, a key financial metric for real estate investment trusts) was overstated by roughly $0.03 per share. Despite this guidance, no corrective action was taken to address the issue of overstated AFFO. On October 29, 2014, ARCP shares plunged as much as 37% — effectively wiping out roughly $4 billion in market value — after the company publicly stated that certain of its employees had concealed accounting errors.

Following the $23 million accounting scandal, ARCP, a non-traded REIT sponsor, changed its name to VEREIT (from the Latin word “veritas” for truth).

Despite the promises of some industry professionals including financial advisors selling non-traded REITs as a safe, income-oriented investment vehicle, the facts do not align with the optimistic sales pitch. In actuality, non-traded REITs are very risky investments. One of the primary risks associated with non-traded REITs is their high cost, including significant up-front commissions (typically a 7% payout to the adviser and a 3% commission to the broker-dealer employing the financial advisor), as well as other due diligence and administrative costs. Another key risk associated with investing in non-traded REITs has to do with their illiquid nature. As a non-traded security, uninformed investors find out too late that they either cannot sell out of the investment (before a significant time horizon elapses), or if they do sell, it will be at a substantial loss through redemption to the issuer, or through an inefficient sale on a limited and fragmented secondary market.

The attorneys at Law Office of Christopher J. Gray, P.C. have significant experience in representing investors who have sustained losses on non-conventional investments, including non-traded REITs, private placements, and direct participation programs. Investors may contact a securities arbitration lawyer at (866) 966-9598 or via email at 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.

VGTel has been the subject of a recent SEC Complaint in the Southern District of New York (as of January 2016). Specifically, the SEC has alleged that, from 2012-2014, Mr. Edward Durante defrauded at least fifty unsophisticated investors in New England, Ohio and California of at least $11 million through the sale of VGTel securities. The Complaint alleges that Durante essentially controlled VGTel (which was little more than a shell company), and in furtherance of a fraudulent scheme, sold approximately six million shares of VGTel stock using several false names, including ‘Efran Eisenberg’ and ‘Ted Wise.’ Further, the SEC Complaint alleges that Mr. Durante bribed certain financial advisors in order to encourage these brokers to steer their clients into purchasing VGTel stock.

FINRA rules mandate that member firms implement and act upon reasonable safeguards and compliance programs designed to ensure proper supervision of a broker’s activities during the time a broker is associated with that particular brokerage firm. Accordingly, a brokerage firm that fails to properly supervise its registered representatives may well be liable for investment losses sustained due to the malfeasance or misconduct of certain brokers.

Further, a stockbroker or financial advisor must have a reasonable basis for any investment recommendation that he or she makes to a customer. FINRA Rule 2111 states that to make a recommendation, a stockbroker must “have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the [firm] or associated person to ascertain the customer’s investment profile.” Factors that affect a customer’s investment profile for purposes of determining suitability could include the customer’s age, investment portfolio, age, income and liquidity needs and risk tolerance.

The attorneys at Law Office of Christopher J. Gray, P.C. have significant experience in recovering funds on behalf of investors who have suffered losses as a result of broker misconduct. Investors in VGTel stock or another similar investment may contact our office at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

A review of FINRA’s BrokerCheck indicates that Leon (or Lee) William Vaccarelli (CRD# 3227636) entered the securities industry in 1999. Since that time, Mr. Vaccarelli has been affiliated with the following firms: Ameriprise Financial Services, Inc. (CRD# 6363) (1999-2007), QA3 Financial Corp. (CRD# 14754) (2007-2011), and most recently — The Investment Center (CRD# 17839) (2011-2017).

The SEC Complaint alleges that Vaccarelli used investor money to pay for various personal expenses, and further alleges that he stole money from a trust fund while serving as trustee. The SEC Complaint alleges that at least nine clients, many of whom were elderly, were defrauded by Vaccarelli, who was recently discharged by his employer, the broker-dealer The Investment Center, in July of this year.

The Investment Center’s CEO, Ralph DeVito recently made the following statement concerning the allegations against Mr. Vaccarelli: “Since being made aware of the situation with Mr. Vaccarelli we have been cooperating fully with the SEC’s investigation. We are outraged by Mr. Vaccarelli’s behavior and continue to investigate this matter internally in order to aid ongoing investigations.”

Mr. Vaccarelli’s regulatory history in the securities industry is checkered. FINRA reports a total of ten (10) disclosures, including the following disclosures:

• FINRA Enforcement Proceeding – in November 2015, FINRA resolved a regulatory proceeding concerning Mr. Vaccarelli through an Acceptance, Waiver & Consent (“AWC”). Specifically, Mr. Vaccarelli, without admitting or denying FINRA’s findings, consented to a penalty of $7,500.00 in connection with the impermissible exercise of discretion in client accounts without the proper written authorization to do so. In addition, Mr. Vaccarelli was suspended for one month;
• Customer Complaint (Pending) – a pending dispute initiated in August 2017 concerns allegations of misappropriation of funds in the amount of $300,000;
• Customer Complaint (Pending) – a pending dispute initiated in August 2017 concerns allegations of conversion and civil theft in the amount of $79,874;
• Customer Complaint (Pending) – a pending dispute was initiated in September 2017 against Mr. Vaccarelli concerning allegations of losses sustained through an investment in a REIT.

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. If you or a loved one have invested in what you believe may be a Ponzi scheme or some other fraudulent enterprise, you may contact our office at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

FINRA is the agency that licenses and regulates stockbrokers and brokerage firms. In response to FINRA charges, Simanski, without admitting or denying the findings, consented to a permanent bar from the securities industry and entry of findings that he failed to provide documents and information related to an investigation into allegations related to the conversion of funds.

Four customers of NEXT Financial have also filed arbitration claims involving Simanski, alleging sales of high risk investments, loans to customers, sale of unregistered securities and sale of fictitious investments as part of a scheme to steal money from a customer.

Simanski was registered with NEXT Financial Group from August 1999 through June 2016.

If you believe you may have been the victim of misconduct by Simanski or another stockbroker or financial advisor, 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 (toll free call) or newcases@investorlawyers.net for a no-cost, confidential consultation.

Potter has been registered with the Securities Industry for 31 years. He has previously been registered with Wells Fargo Advisors in Salt Lake City from 2005-2011; Eagle Gate Securities in Salt Lake City from 1999-2005; Financial West Group in Westlake Village, California in 1999; Salomon Smith Barney in New York, New York from 1992-1998; Lehman Brothers in New York from 1988-1992; E.F. Hutton & Company from 1987-1988; and Merrill Lynch from 1983-1987. Potter was most recently registered with Cambria Capital in Salt Lake City from 2011-2015.

In August of 2015 the National Future Association (NFA) began an investigation on Potter based on allegations that Potter solicited a customer to trade in futures, and then instructed the customer to wire funds to Potter’s personal bank account. The NFA alleges that Potter violated NFA requirements by having the customer wire funds to Potter’s personal account, converting the customer’s funds, and that Potter lied to the customer about the customer’s investment.

If you believe you have been the victim of stockbroker misconduct, you may wish to consult an attorney to find out more about your legal rights and options. Investors may contact a securities arbitration attorney at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

FINRA BrokerCheck, an online resource for researching the background of stockbrokers and financial advisors, indicated that Hernandez has worked in Florida since 2007 and has been associated with various brokerage firms, including MetLife Securities (2007), Wachovia Securities (2007-08), J.B. Hanauer & Co. (2008), Summit Brokerage Services (2009 -10) and Liberty Partners Financial Services (2010-13).

Brokerage firms have an obligation to supervise all associated persons to prevent actions such as misappropriation and forgery. If you suffered significant losses are a result of misappropriation, forgery, or other misconduct by a stockbroker or financial advisor, you may be able to recover your losses in FINRA 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.

Prior to starting with Merrill Lynch in 2009, Zeng worked for UBS Financial Services and before that for Morgan Stanley.

If you suffered significant losses as a result of doing business with David Zeng or received an unsuitable recommendation in any of the mentioned investment categories 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, the New York State Department of Financial Services (“DFS”) launched an investigation in 2011 concerning alleged omissions on the part of AXA Equitable regarding its applications for approval to alter the Equi-Vest and Accumulator variable annuities. The change would substitute ATM-managed funds for previous managers. According to DFS’ allegations, AXA Equitable misled DFS regarding the change’s impact and failed to disclose the underperformance of the ATM funds under the previous managers. Allegedly, these actions resulted in a reduced return for investors, especially for those who paid fees to receive guaranteed minimum benefits and those who wanted to be more aggressive in their investment strategy. In order to settle the investigation, AXA Equitable agreed to pay $20 million on March 17, 2014.

Some AXA Equitable investors may have been misled about the variable annuity contract changes. In addition, certain characteristics of variable annuities, including high penalties for early withdrawal, long surrender periods and low rate of return, make these products unsuitable for many investors. Many brokers are motivated to make unsuitable recommendations because of the large commissions associated with variable annuities.

Variable annuities are a type of insurance product. With this product, the investor pays into an account now in exchange for the guarantee of a future payout. The investment is tied to a stock index return, making it variable. According to attorneys, 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 believe you were misled regarding Equi-Vest or Accumulator variable annuity contracts, or that you received an unsuitable recommendation to invest in variable annuities, you may have a valid securities arbitration claim. To find out more about your legal rights and options, 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.

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

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

In 2013, Florida’s Attorney General, Pam Bondi, sought an injunction against Vitale and two Broward County companies (The Cambridge Land Trust Company and The Hartford Land Trust Company) when they were accused of misleading consumers by charging upfront fees and promising better mortgage deals in exchange for consumers handing over the titles to their homes to the land trusts. In that case, Vitale and his alleged accomplices received an order from Broward Circuit Judge Michael Gates to stop doing business.

If you suffered significant losses as a result of securities fraud, you may have a valid claim to recover money with the help of a securities arbitration lawyer. To find out more about your legal rights and options, contact a stockbroker claims lawyer Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

Another claim was filed recently against one broker registered with VSR Financial Services, Dennis Van Patter. This particular claim is regarding the following alternative investments:

• Inland American Real Estate Trust
• Cole Credit Property Trust II
• KBS Real Estate Investment Trust Inc.
• Cypress Equipment Fund 15
• CNL Lifestyle Fund
• Boston Capital Series 44
• Boston Capital Series 47
• United Development Funding III
• MPF Income Fund 25
• Penneco Oil Company 2008-1
• Atlas Energy Public 17-2008B
• Atlas Energy Public 17-2009B

According to securities arbitration lawyers, these investments were unsuitable for the claimant and may have been unsuitable for other VSR customers. The claim, filed on behalf of a Texas widow, is attempting to recover damages of more than $475,000. According to the claim, the widow received around $750,000 in insurance proceeds after the death of her husband. She then opened an account with Van Patter at VSR Financial.

The claim alleges unsuitability and negligent misrepresentation on the part of Van Patter as well as breach of fiduciary duty and negligent supervision on the part of VSR Financial. Under FINRA rules, 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, lawyers say firms have an obligation to properly supervise brokers’ activities while they are registered with the firm.

In addition, VSR Financial was sanctioned and fined, while its CEO and co-founder, Donald Beary, was suspended and fined in May 2013 for failure to adequately supervise non-conventional investment sales to investors.

If you are a VSR Financial Services customer who suffered significant losses as a result of the unsuitable recommendation of alternative 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 Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

On March 27, a complaint was filed with the Financial Industry Regulatory Authority Office of Hearing Officers against Birli and Chapin regarding the State University of New York retirement program. According to the complaint, Birli and Chapin recommended their customers switch MetLife variable Annuities with new ones held outside the retirement plan in MetLife IRA accounts.

Allegedly, Birli and Chapin circumvented their firm’s general prohibition of direct annuities exchange by recommending to their customers that they surrender their annuities to purchase another product available within the retirement program, wait 90 days, and then sell the second product in order to purchase the MetLife IRA annuity.

According to stock fraud lawyers, the new annuities were unsuitable because their liquidity was affected by the seven-year surrender schedules they came with. Furthermore, investors lost accrued death benefits above and beyond their contract value. Allegedly, Birli and Chapin each received commissions of 7.15 percent through the switch.

Variable annuities are a type of insurance product. With this product, the investor pays into an account now in exchange for the guarantee of a future payout. The investment is tied to a stock index return, making it variable. According to securities fraud attorneys, 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 suffered significant losses as a result of an unsuitable recommendation regarding variable annuities, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a stockbroker claims lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

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

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

In addition, the Securities and Exchange Commission recently announced that it will reconsider a 2008 rule proposal regarding ETFs. Reportedly the proposal will address the underlying and direct instrument transparency, differences between active and index funds, creative flexibility and inverse leverage. Reportedly, unauthorized trading and the unsuitable sale of inverse and leveraged ETFs increased following the 2008 economic downturn. As a result, securities arbitration lawyers have filed numerous arbitration claims on behalf of investors who suffered significant losses in inverse and leveraged ETFs.

If you purchased unsuitable ETFs or ETNs from Credit Suisse or another full-service brokerage firm, 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.

The Financial Industry Regulatory Authority (FINRA) recently filed a complaint against two MetLife Securities Inc. brokers, Patrick Chapin and Christopher Birli. According to the complaint, Chapin and Birli focused on advising State University of New York employees on their retirement plan. Both were terminated in 2012 and do not work in the securities industry at this time.

According to the complaint, Chapin and Birli allegedly made recommendations to 45 of their customers to unload their plan’s MetLife variable annuities by cashing in their annuities, purchasing another security within the plan to be held for 90 days, and then selling that security to switch to new variable annuities outside the university plan, held in IRAs. The alleged misconduct took place between 2004 and 2007. According to FINRA, this scheme generated commissions for the brokers amounting to hundreds of thousands of dollars.

According to stock fraud lawyers, the brokers’ actions exposed investors to unnecessary risks. Reportedly, in order to cash in their plan’s annuities, some investors were required to pay fees, and investor funds were tied up in the new annuities for up to seven years. Brokers 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. Securities fraud attorneys say that many investors may have received unsuitable recommendations related to variable annuities.

If you received an unsuitable recommendation regarding variable annuities and suffered significant losses as a result, 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.