securities fraud attorney

Published on: March 26, 2013

TNP Non-traded REIT Loss Recovery

Securities fraud attorneys are currently investigating claims on behalf of TNP Strategic Retail Trust Inc. investors. TNP Strategic Retail Trust is a non-traded REIT, or real estate investment trust, which has filed a Securities and Exchange Commission Form 8-K March 19, 2013 that announced its dividend payments are suspended. No dividend payments will be paid for the first quarter of this year. Furthermore, TNP Strategic Retail Trust customers were told that they should not assume that they will receive dividends for the rest of 2013, either.

TNP Non-traded REIT Loss Recovery

The reason for the suspension of dividends stated by TNP Strategic Retail Trust is that it is unable to access short-term cash because it is in negotiation with lenders regarding whether it is in loan default. Declared effective on August 7, 2009, by the SEC, TNP Strategic Retail Trust is a non-traded REIT that, according to REIT Wrecks, raised $21 million through the end of Q3 2010. Additionally, TNP Strategic Retail Trust reportedly suffered a net loss and had a negative operating cash flow throughout the first nine months of 2010.

Stock fraud lawyers are investigating the possibility that brokerage firms may be held liable for the recommendation of TNP investments. 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 those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance. Furthermore, brokerage firms must, before approving an investment’s sale to a customer, conduct a reasonable investigation of the securities and issuer. The firms that recommended this investment to clients may have done so improperly, in which case investors may be able to recover losses.

Published on: March 19, 2013

Dividend Capital REIT Investors Could Recover Losses

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of investors who suffered significant losses in the non-traded Dividend Capital Total Realty Trust Inc. Potential claims related to the Dividend Capital REIT include unsuitable recommendations, misrepresentation and overconcentration of investment funds. Dividend Capital REIT invests in diverse real estate-related securities and debt as well as real properties.

Dividend Capital REIT Investors Could Recover Losses
The 8-K form filed by Dividend Capital Diversified Property Fund on February 1, 2013 stated that its current NAV, or net asset value, is $6.72 per share. However, this “book value” may not reflect what investors can actually get for their shares. Because the Dividend Capital REIT is non-traded, investors are forced to sell through a relatively illiquid secondary market, in which there may be no buyers of Dividend Capital shares at prices at or near the REIT’s book value.

Securities fraud attorneys say new investor concerns are being raised about Dividend Capital REIT’s redemption plan. According to the company’s 10-Q form, during the quarter ending September 30, 2012, the REIT has not redeemed any Class I, Class W or Class A shares. Furthermore, at any time, Dividend Capital can terminate, suspend or modify the share redemption program.

Published on: March 12, 2013

Hines REIT Investors Could Recover Losses

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of investors who suffered significant losses in the non-traded Hines REIT. Potential claims related to the Hines REIT include unsuitable recommendations, misrepresentation and overconcentration of investment funds. The Hines REIT was launched in 2004; as of September 20, 2012, it comprised 55 properties in 24 geographic markets. As of December 2009, Hines suspended its share redemption plan except when in connection to the disability or death of a stockholder.

Hines REIT Investors Could Recover Losses

Unfortunately, Hines REIT investors have found themselves in a tight spot when they want to sell their investment. Because the Hines REIT is non-traded, investors are forced to sell through a secondary market, through an auction or privately. Investors who sell through a secondary marketmay be forced to accept a price far below their purchase price. Investors also may choose to hold onto their shares in the hopes that the real estate investment trust will decide to make a public offering and register with the Securities and Exchange Commission or pursue another liquidity event such as a merger with a publicly traded company.

Investment fraud lawyers are investigating the possibility that full-service brokerage firms may be held liable for the recommendation of the Hines REIT. 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 those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance. Non-traded REITs like this one are illiquid and inherently risky and, therefore, not suitable for many investors.

Published on: March 7, 2013

Fromer Merrill Lynch and LPL Financial Advisor Greg Campbell Charged With Fraud

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of the customers of Gregory John Campbell, a former advisor for Merrill Lynch and LPL Financial. A Petition for Order to Cease and Desist, which was related to Greg Campbell of Ladue, Missouri, was recently issued by the State of Missouri.

Merrill Lynch, LPL Financial Could be Held Responsible for Advisor’s Investor Fraud

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.”

Published on: February 26, 2013

Paulson Hedge Fund, Full-service Brokerage Firm Feeder Fund Investors Could Recover Losses

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of investors with full-service brokerage firms who suffered significant losses as a result of their investment in Paulson & Co.’s Advantage and Advantage Plus hedge funds. Reportedly, the Advantage Fund’s value declined 51 percent in 2011 and 19 percent in 2012. According to Securities and Exchange Commission filings, many major brokerage firms including Citigroup, Morgan Stanley, Merrill Lynch and UBS Financial Services used proprietary “feeder” funds to invest in the Paulson funds.

Paulson Hedge Fund and Full-Service Brokerage Firm Feeder Fund Investors Could Recover Losses

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

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

Published on: February 21, 2013

Hartford Floating Rate Fund Investors Could Recover Losses

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of investors who suffered significant losses in the Hartford Floating Rate Fund. Hartford Investment Financial Services and Hartford Life Distributions LLC, now known as Forethought Distributions LLC, entered into a Letter of Acceptance, Waiver and Consent earlier this year regarding several violations connected with the fund and must pay a fine of $100,000.

Hartford Floating Rate Fund Investors Could Recover Losses

According to the Financial Industry Regulatory Authority, Hartford Life Distributors distributed a brochure which made statements that were “unwarranted and misleading in light of changing conditions in the bank loan market.” FINRA went on to say that “in particular, the brochure contained misleading statements that the fund was appropriate for bond investors concerned about the price stability of their investments, provided the potential for greater price stability compared with other fixed income investments, and was appropriate for investors seeking some degree of capital preservations.”

Launched in 2005, Hartford’s Floating Rate Fund had at least 80 percent of its assets invested in senior secured floating rate bank loans which were extended to companies and fixed income securities that were rated below investment grade. According to stock fraud lawyers, floating rate loans are subject to credit risks. Because of these significant risks, the credit crisis caused the fund’s NAV to suffer significant fluctuations and many of its holdings had to be sold at a discount to support fund outflows. Hartford’s Floating Rate Fund suffered a 40 percent decline by the end of 2008.

Published on: February 14, 2013

LPL to Pay Up to $2.5 Million to Settle Claims; Customers Continue to Explore Options

by InvestorLawyers

On February 6, 2013, securities fraud attorneys announced that LPL Financial has settled claims brought by the State of Massachusetts by agreeing to pay up to $2.5 million. The claims against LPL alleged that it failed to supervise registered representatives related to the sales of non-traded REITs, or real estate investment trusts.

LPL to Pay Up to $2.5 Million to Settle Claims, LPL Customers Continue to Explore Options

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.

Published on: February 5, 2013

More Trouble for TNP Strategic Retail Trust Inc. REIT, TNP 12% Notes Program

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of investors who suffered losses in the TNP Strategic Retail Trust Inc., a non-traded REIT, and the TNP 12% Notes Program. Both of these products come from Tony Thompson’s company, Thompson National Properties LLC. Reportedly, Thompson National Properties’ January Securities and Exchange Commission filings stated that TNP Strategic Retail Trust Inc. has two loans on which it is in danger of defaulting.

In addition to the difficulty with the non-traded REIT, stock fraud lawyers say that a new lawsuit has been filed in the U.S. District Court for the District of Colorado relating to the TNP 12% Notes Program LLC. According to the allegations, TNP “has failed to make required interest payments on the note.” In 2008, the plaintiffs purchased a $100,000 note, the principal of which TNP was obligated to repay by 2011. A guarantee signed by Thompson is an attachment to the lawsuit and states that TNP “hereby unconditionally guarantees the performance of all the company’s obligations under the notes, including, without limitation, the payment of principal and interest.” However, TNP allegedly missed the 2011 deadline to repay the principal and then ceased making interest payments the following year. A similar suit was filed in September, 2012.

According to an InvestmentNews article, Thompson downplayed the financial difficulties at his companies in e-mail messages to InvestmentNews. When asked specifically about TNP’s growing financial problems, Thompson reportedly wrote, “You are wrong.” For more information on securities fraud attorneys’ investigations into TNP investments, see the previous blog posts, “TNP Strategic Retail Trust Investors Could Recover Losses” and “Thompson National Properties 12 Percent Note Investors Could Recover Losses.

Published on: January 31, 2013

Bambi Holzer Still Trading Despite Numerous Customer Complaints

by InvestorLawyers

Stock fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses as a result of doing business with Bambi Holzer. According to a Forbes article, Holzer’s investment advice has resulted in securities settlements amounting to more than $12 million. Despite this article, which appeared three years ago, her trades are still being cleared by brokerage firms.

Bambi Holzer Still Trading Despite Numerous Customer Complaints

Currently a broker at Newport Coast Securities, Holzer has also worked with a number of other firms, including UBS, Brookstreet Securities Corporation, AG Edwards, Wedbush Morgan Securities Inc. and Sequoia Equities Securities. Holzer and UBS have already been compelled to pay to settle securities claims amounting to $11.4 million. These claims alleged that Holzer misrepresented variable annuities through misrepresentation of guaranteed returns. Holzer was fired from AG Edwards in 2003 for allegedly engaging in business practices that did not coincide with the firm’s policies. Further allegations against Holzer include misrepresentations while at Brookstreet. These misrepresentations allegedly occurred in 2005 at a Beverly Hills presentation at which Holzer allegedly stated that a fictional couple was able to make $9 million by deferring $732,000 in taxes through the use of trusts. In another claim, a customer of Wedbush Morgan Securities alleged breach of fiduciary duty, account mishandling, and breach of contract that allegedly resulted in damages of $824,000.

According to securities fraud attorneys, allegations against Holzer include fraud, churning, unsuitable investments, misrepresentations of fees, Securities Act violations, private placement-related fraud, negligent representations related to variable annuities, inadequate supervision, variable annuity-related fraud, negligent recommendation and sale of Provident Royalties LLC, negligent sale and recommendation of Behringer Harvard Security trust and other unsafe products as well as elder abuse.

Published on: January 24, 2013

UBS Willow Fund Declines 80%, Investors Could Recover Losses

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of investors who suffered significant losses in the UBS Willow Fund, sold by UBS Financial Services. Formed in 2000, the UBS Willow Fund is a private hedge fund. Reportedly, investors were notified in October 2012 that the Willow Fund had sustained substantial losses and would be liquidated.

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

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