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Articles Posted in Fraud

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Investors who believe they were defrauded or had they accounts mishandled by Anthony Liddle of Wausau, Wisconsin, may have legal claims, including possible claims for unsuitable recommendations or for misrepresentations, if the nature of the investments recommended by Liddle was misrepresented or if Liddle solicited money under false pretenses.

In January, 2023, the Securities and Exchange Commission (“SEC”) charged Liddle with allegedly defrauding at least 13 investment advisory clients of approximately $1.9 million.  The SEC’s complaint alleges that Liddle, while acting as an investment advisor, made misrepresentations to clients, many of whom were seniors.  Liddle purportedly directed some investment advisory clients to send money directly to his investment advisory company, where Liddle allegedly misappropriated client funds and never invested the money on his clients’ behalf.  The SEC’s complaint is accessible here. LiddleSECComplaint

Earlier, in June 2022, the Financial Industry Regulatory Authority (FINRA) barred Liddle (CRD#: 5478479) from associating with any FINRA member at any time after Liddle reportedly refused to provided information in its investigation to reports that Liddle allegedly borrowed more than $1.8 million from at least 13 of his customers while he was associated with his member firm, according to FINRA.  The FINRA bar is accessible here. LiddleAWC

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broker misappropriating client moneyOn May 30, 2018, the Securities and Exchange Commission (“SEC”) filed a civil complaint against Mr. Steven Pagartanis, alleging that the East Setauket, NY stockbroker purportedly “[d]efrauded at least nine retail investors of approximately $8 million by soliciting and selling them securities using false and misleading statements from 2013 to at least February 2018 (the ‘Relevant Period’).”  During the Relevant Period, Mr. Pagartanis was affiliated with Cadaret, Grant & Co., Inc. (“Cadaret”) (CRD# 10641) from 2012 – 2017 and, thereafter, with Lombard Securities Incorporated (CRD# 27954) (“Lombard”).

As alleged by the SEC in its Complaint filed in federal court in the Eastern District of New York (SEC v Pagartanis Complaint), Mr. Pagartanis purportedly solicited certain of his customers — many of them retirees who relied upon his advice and investment recommendations — to invest in what was touted as a safe and conservative investment “[w]ith a fixed percentage return, generally between 4.5 and 8 percent annually.”  Specifically, the SEC alleged that Mr. Pagartanis informed at least five investors that they were investing in the common stock of Genesis Land Development Co. (“GDC”), a Canadian real estate firm listed on the Toronto Stock Exchange.  According to the SEC’s Complaint, in actuality the investment capital raised by Mr. Pagartanis was allegedly funneled to an LLC sharing the name Genesis, for which Pagartanis was the sole member and owner of the LLC.

The SEC has alleged that Mr. Pagartanis conducted a fraudulent scheme, under which he purportedly “[t]ransferred the money raised to his personal bank account, to other entities he controlled, and used around $1.8 million to make monthly interest payments to his customers.”  In typical Ponzi-like fashion, the scheme reportedly collapsed in early 2018 when Mr. Pagartanis failed to pay investors their monthly interest payments.

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investing in real estate and hard money loansOn 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”) and its related unregistered investment funds, as well against Woodbridge’s owner and former CEO, Robert Shapiro.  Through initiating litigation (the “Complaint”) in Florida federal court, the SEC is alleging, in sum and substance, 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.”  As further alleged in the Complaint, “Despite receiving over one billion dollars in investor funds, Shapiro and his companies only generated approximately $13.7 million in interest income from truly unaffiliated third-party borrowers.  Without real revenue to pay the monies due to investors, Shapiro resorted to fraud, using new investor money to pay the returns owed to exiting investors.”

According to Mr. Steven Peikin, Co-Director of the SEC’s Enforcement Division, “Our complaint alleges that Woodbridge’s business model was a sham.  The only way Woodbridge was able to pay investors their dividends and interest payments was through the constant infusion of new investor money.”

If you are have invested in Woodbridge Wealth or in any of the Woodbridge Mortgage Funds, you may have questions concerning your rights in light of Woodbridge’s recent bankruptcy filing and the SEC’s recent Complaint alleging that Woodbridge is, in fact, a Ponzi Scheme.

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Stealing MoneyOn April 12, 2016, former LPL Financial LLC (“LPL”) broker Charles C. Fackrell (CRD# 5369665) appeared before U.S. Magistrate Judge David Cayer in order to plead guilty to one count of securities fraud for operating a $1.4 million Ponzi scheme.  Based on documents filed with the federal court for the Western District of North Carolina, beginning around May 2012, Mr. Fackrell perpetrated a Ponzi scheme by misappropriating investor funds solicited from at least 20 victims in Wilke County, NC, and elsewhere.  According to court documents, Mr. Fackrell abused his position of trust with his clients, steering them away from legitimate investments to purported investments with “Robin Hood, LLC,” “Robinhood LLC,” Robin Hood Holdings, LLC,” and “Robinhood Holdings, LLC,” as well as related entities (collectively, “Robin Hood”).  These entities allegedly were controlled by Mr. Fackrell and provided him with a conduit through which to cover his own personal expenses, including hotel expenses, groceries, purchases at various retail shops, and to make large cash withdrawals.

Court records indicate that Mr. Fackrell successfully solicited victimized investors by making false and fraudulent representations, including that the investors’ money would be invested in, or secured by, gold and other precious metals.  Further, Mr. Fackrell allegedly told investors that Robin Hood was a safe investment, paying annualized guaranteed returns of 5-7%.  In actuality, however, Mr. Fackrell allegedly spent only a fraction of the investor money on such assets.  Contrary to the representations made to investors, Mr. Fackrell allegedly used a great deal of the money to cover personal expenses, in addition to diverting approximately $700,000 of his victims’ money, back to other investors in classic Ponzi-style payments designed to continue the fraudulent scheme.

Mr. Fackrell entered the securities industry in 2007, when he was under the employ of Morgan Stanley.  From 2010-2014, Mr. Fackrell was employed by LPL in Yadkinville, NC.  Currently, FINRA BrokerCheck indicates that Mr. Fackrell has been the subject of several customer complaints, including the following four pending complaints:

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House in HandsOn October 11, 2017, Michael Giokas, the founder of Giokas Wealth Advisors, was reportedly arrested on fraud charges.  Mr. Giokas’ arrest was the result of an investigation by the FBI Buffalo Office concerning allegations that the Williamsville broker misappropriated $200,000 from one of his clients.  At Mr. Giokas’ arraignment before Magistrate Judge Michael J. Roemer, Assistant U.S. Attorney Paul E. Bonanno informed the Judge that the investigation suggests Giokas led his client to believe that the $200,000 would be placed in an investment that would yield 8-9% interest.  Instead, according to Attorney Bonanno “… the money was not placed in any investment and was instead spent by the defendant on personal expenses.”

According to publicly-available information as disclosed by the Financial Industry Regulatory Authority (“FINRA”), Michael Giokas (CRD# 1398674) has worked in the securities industry for over three decades.  Since 1986, he has been affiliated with the following brokerage firms: Cigna Securities, Inc. (CRD# 145) (1986-1987), FSC Securities Corporation (CRD# 7461) (1987-1991), Guardian Investor Services Corporation (CRD# 6635) (1991-1992), Linsco/Private Ledger Corp. (CRD# 6413) (1992-1999), Securities Service Network, Inc. (CRD# 13318) (1999-2001), Comprehensive Asset Management and Servicing, Inc. (CRD# 43814) (2002-2013), and Fortune Financial Services, Inc. (“Fortune Financial”) (CRD# 42150) (2013-2017).

FINRA BrokerCheck indicates that Mr. Giokas is no longer registered as a broker.  Further, in May 1991 he was permitted to resign from his employment with FSC Securities following violation of firm policy concerning an insurance related bank account.  Mr. Giokas has been the subject of several customer complaints, including two complaints in 2000 and 2001 that were settled.

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According to the Financial Industry Regulatory Authority (FINRA), Cambria Capital, LLC. (Cambria Capital) broker Robert Potter (Potter) was barred from the securities industry over failure to respond to regulatory requests concerning his alleged comingling of funds. FINRA sent Potter a letter requesting him to send documents and information regarding the comingling allegations by August 17, 2015. Potter allegedly requested an extension to provide the documents but his counsel later informed FINRA that Potter would not be providing any documentation.

15.10.21 fraud under microscopePotter 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.

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South Florida financial advisor Ariel Hernandez, was reportedly arrested and accused of stealing hundreds of thousands of dollars from customers. Hernandez allegedly transferred funds out of customer accounts and into accounts in his name, in the process allegedly forging a customer’s signature. Authorities in the South Florida community of Pembroke Pines have charged Hernandez with two counts of theft.

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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 for a no-cost, confidential consultation.

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Investment attorneys are interested in speaking with clients of William Tatro in connection with investment losses they suffered under his advisement. Complaints have been registered against Tatro stating that he recommended to his clients unsuitable, illiquid, high commission investments. These investments had a higher degree of risk than many clients would have accepted, and in some cases resulted in massive losses. Many clients lost a significant amount of their life savings. These recommendations were in violation of Financial Industry Regulatory Authority regulations which state that recommendations must be suitable for the client and in keeping with their investment goals. A broker may not, for example, recommend very risky investments to an individual who can’t afford to sustain the losses, such as a retiree.

A Notice to the Clients of William Tatro

Another type of investment that is usually unsuitable for retirement accounts are annuities investments. Annuities restrict the availability of funds and are high commission investments. Complaints against Tatro allege that he repeatedly sold leveraged inverse Exchange Traded Funds (ETFs) and Real Estate Investment Trusts (REITs) to clients for whom the investments were unsuitable. REITs are high-commission variable annuities. FINRA issued a warning which stated that leveraged inverse ETFs are unsuitable for ordinary investors and that these investments should be held for a short time period only. Despite FINRA’s warning, Tatro allegedly recommended these investments and held the investments long-term. Many investors have stated that this was the case for their accounts and that they sustained substantial losses as a result.

In the claim of Mid-Lakes Management Corp. vs. Eagle Steward Wealth Management LLC, one arbitrator stated that, “There was no evidence that Mr. Tatro properly investigated leveraged inverse funds. In fact, it is highly unlikely that Mr. Tatro could have done so, for such research would have demonstrated that holding leveraged inverse funds for a lengthy period of time dramatically increased risk of the claimant.” In resolving the claim, $530,449 in damages was awarded to the claimant.

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