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.

On October 16, 2017, NYSE Regulation — the regulatory enforcement subsidiary of NYSE Arca, Inc. (“NYSE”) — filed a Complaint against Wedbush Securities Inc. (“Wedbush”) (CRD# 877), and its founder, Mr. Edward Wedbush. The Complaint centers on Wedbush’s alleged systemic failure to supervise certain trading purportedly conducted by its owner and founder, Mr. Wedbush, who allegedly devoted “several hours each trading day actively managing and trading in more than 70 accounts.”

As alleged by NYSE Regulation, “Despite Mr. Wedbush’s active trading in dozens of customer, personal, and proprietary accounts, Respondents failed to implement any process to monitor or supervise Mr. Wedbush’s order entry, trade executions, or trade allocations…” in certain accounts controlled by Edward Wedbush (“Controlled Accounts”). Further, NYSE Regulation has alleged that Mr. Wedbush utilized a separate trading platform only accessible to him and, moreover, “regularly instructed a Firm employee to enter orders under a general account, waiting until the end of the trading day to allocate executed trades…” among the various Controlled Accounts. In this manner, as has been alleged by NYSE Regulation, Respondents’ practice of allocated trades in the Controlled Accounts at the conclusion of the trading day violated Wedbush’s own written supervisory procedures (“WSPs”).

By purportedly failing to properly designate the Controlled Accounts for which orders were being entered (and “[i]nstead allocating trades to accounts after the fact based on Mr. Wedbush’s discretion”), NYSE Regulation has asserted that such activity exposed numerous customers to a host of conflicts of interest, as well as “opportunities for fraud, manipulation and customer harm” in contravention of NYSE Arca Rule 9.14-E (Account Designation). Additionally, NYSE Regulation has alleged violations of various NYSE Arca and Exchange Act Rules, including NYSE Arca Rule 2.28 (Books and Records), as well as Exchange Act Rules 17a-3 and 17a-4. Among other things, these rules are designed to prevent against practices such as “cherry picking,” whereby traders choose to allocate the best performing and most profitable trades to certain accounts, to the detriment of non-favored accounts.

According to the Complaint, “Mr. Wedbush had the unchecked ability to grant the preferential treatment, including to himself and his family, with no effective mechanism at the firm to ensure that the allocations were made fairly.” As characterized by NYSE Regulation, Wedbush’s “abject failure” as a broker-dealer to properly supervise its owner’s trading continued unchecked for years, citing as one of the key reasons Mr. Wedbush’s own “refusal to devote the resources required to do so.”

Founded in 1955, Wedbush is headquartered in Los Angeles, CA. As of June 2017, Wedbush’s Wealth Management Group provides various wealth management services through approximately 400 financial advisors located in roughly 100 offices nationwide. Brokerage firms like Wedbush have a duty to establish and maintain a supervisory system, including WSPs, reasonably designed to achieve compliance with applicable laws, regulations and securities industry rules. In instances where firms fail to ensure that an adequate supervisory structure is established and maintained, and such failure leads to investor losses, firms like Wedbush may be held liable for such losses.

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, market manipulation, and related misconduct. Investors may contact an attorney by telephone at (866) 966-9598, or by e-mail at newcases@investorlawyers.net for a no-cost, confidential consultation.

If you invested in Woodbridge Units or Notes, as further defined below — based upon a recommendation by financial advisor Frank Capuano — you may be able to recover your losses through securities arbitration before the Financial Industry Regulatory Authority (“FINRA”). Publicly available information through FINRA BrokerCheck indicates that Frank Capuano was formerly affiliated with broker-dealer Royal Alliance Associates, Inc. (“Royal Alliance”) (CRD# 23131) in Mount Holyoke, MA, from 1989 – July 2015.

Pursuant to an Acceptance, Waiver & Consent (AWC) entered into by Mr. Capuano and FINRA on or about May 2, 2016, the former Royal Alliance stock broker, without admitting or denying any wrongdoing, consented to a one year industry suspension. In connection with the AWC, FINRA alleged that Mr. Capuano:

“engaged in undisclosed and unapproved private securities transactions. The findings stated that he offered and sold approximately $1.1 million in notes to nine of his firm’s customers … The findings also stated that he received over $34,000 in commissions in connection with these transactions. The findings further stated that he did not seek or obtain approval from his firm before participating in these private securities transactions, nor did he disclose them to his firm.” (emphasis added)

As recently reported, the Woodbridge Group of Companies, LLC (“Woodbridge”) and certain of its affiliated entities filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware (Case No. 17-12560-KJC) on December 4, 2017. Beginning as early as 2012, Woodbridge and its affiliates offered securities nationwide to numerous retail investors through a network of in-house promoters, as well as various licensed and unlicensed financial advisors. These investments came in at least two forms: (1) so-called “Units” that consisted of subscriptions agreements for the purchase of an equity interest in one of Woodbridge’s Delaware limited liability companies, and (2) “Notes” or what have commonly been referred to as “First Position Commercial Mortgages” or “FPCMs” that consisted of lending agreements underlying purported hard money loans on real estate deals.

As has been alleged by the SEC, Woodbridge and its owner and former CEO, Mr. Robert Shapiro, purportedly “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 Steven Peiken, Co-Director of the SEC’s Enforcement Division, the Woodbridge “[b]usiness model was a sham. The only way that Woodbridge was able to pay investors their dividends and interest payments was through the constant infusion of new investor money.”

Brokerage firms like Royal Alliance have a duty to ensure that their registered representatives are adequately supervised. Consequently, brokerage firms must take reasonable steps to ensure that their brokers follow all applicable securities rules and regulations, as well as adhere to the firm’s internal policies and procedures. In those instances when brokerage firms fail to adequately supervise their registered representatives, they may be held liable for losses sustained by investors.

In the event that a financial advisor wishes to consummate a private securities transaction, then he or she must first provide the firm with prior written notice, detailing the contemplated transaction. Such a transaction must first be approved by the firm. In the event that the transaction is not approved by the firm, then the broker cannot participate in the transaction. If the broker fails to notify the firm, in the first instance, or proceeds with an unauthorized transaction in derogation of the firm’s order, then selling away has occurred, in direct violation of FINRA Rule 3280.

The attorneys at Law Office of Christopher J. Gray, P.C. have significant experience representing investors in disputes involving broker misconduct, including selling away claims, in addition to claims against brokerage firms for their failure to supervise. Investors may contact a securities arbitration attorney 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.

On December 29, 2017, Life Settlements Absolute Return I, LLC (“LSAR”) – a special purpose vehicle investing in life insurance policies – filed for Chapter 11 bankruptcy relief in the Bankruptcy Court for the District of Delaware (Lead Case No. 17-13030). The Debtors, LSAR I and its wholly owned subsidiary, estimate their assets to be worth between $10,000,001 and $50 million, and their liabilities to be between $100,000,001 and $500 million. According to the Debtors’ First Day Declaration, the Chapter 11 proceeding was necessitated because “[t]he Insureds have outlived their actuarial life expectancy, thereby prolonging LSAR’s receipt of cash from the death benefits of the Policies…” LSAR is wholly-owned by Attilanus, a Delaware limited partnership formed on January 29, 2004.

The primary risk associated with investing in life settlements (or viaticals) concerns the possibility that the insured (who has sold his or her life insurance policy to the investment sponsor) will outlive the money set aside by the sponsor to pay for continued life insurance premiums. In such a scenario, the investors in the life settlements may then be called upon to pay future premiums in order to ensure that the policy remains in force until maturity. When some investors refuse to pay, the remaining investors are left to cover higher premium payments, or else allow the policy to lapse.

Further, as appears to be the case with LSAR, when the sponsor can no longer afford to service the debt on its own credit facilities, then the sponsor may well be forced to seek bankruptcy protection. As outlined in LSAR’s Chapter 11 First Day Declaration, “Beginning in July 2009, in order to fund premium payments on the Policies… LSAR (as the borrower) and the Employees’ Retirement System of the Government of the Virgin Islands (“GERS”) and Attilanus (as lenders) extended a credit facility to LSAR, whereby Attilanus made an initial loan to LSAR in the principal amount of $500,000 and GERS made a loan to LSAR in the principal amount of $1,160,263.”

An additional risk associated with investing in LSAR has to do with the fact that it was offered as a private placement. Generally, investing in a private placement carries with it complexity and considerable risk — including the illiquid nature of the investment — and, therefore, is most typically only available to accredited and/or sophisticated investors. LSAR was offered as a private placement investment under SEC Regulation D (“Reg D”) beginning in 2008; the total offering amount was $64,000,000.

Financial advisors, and by extension their employer brokerage firms, have a duty to perform adequate due diligence on any investment recommended to customers, including private placement offerings pursuant to Reg D. Furthermore, financial advisors have a duty to disclose the risks associated with any investment, as well as conduct a suitability analysis to determine if an investment meets an investor’s stated investment objectives and associated risk profile.

The attorneys at Law Office of Christopher J. Gray, P.C. have significant experience in representing investors who have incurred losses in connection with private placement offerings, including investments in oil and gas drilling funds, hedge funds, and other exempt offerings. Investors may contact a securities arbitration attorney at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation.

When the client expressed his concern about his declining account, he was told “even a skinny cow could give milk.” The arbitration panel wrote that the investor’s portfolio was “clearly unsuitable” and provided a lengthy explanation for their award, which pointed the finger at UBS’s sales practices and alleged that brokers were under pressure to sell the closed-end funds and keep clients in them. The arbitration panel wrote that “Claimant’s lifetime pattern has been one of frugality, saving and employment of resulting capital and his own labor in business opportunities that he understands can earn a good return.”

UBS was ordered to pay $400,000 to buy back the investor’s portfolio and pay $600,000 in compensatory damages. The investor’s request for $1 million in punitive damages was reportedly denied by the arbitration panel. The FINRA award is accessible here ubs puerto rico.

Many investors report that UBS and other brokerage firms in Puerto Rico sold these funds to investors as safe fixed-income investments. Of course, they have proved to be anything but safe, and many investors have lost much or even all of their retirement savings. Adding more danger, many investors who needed to withdraw money from their accounts for personal reasons (such as to purchase a home or fund a child’s education) have reportedly been advised to borrow money from UBS and other brokerage firms instead of selling shares in UBS Puerto Rico funds. This was very dangerous advice, because if the funds lost value, the investor’s losses would be even greater than they otherwise would have been due to the borrowings. Now that the funds have lost value, some investors have lost almost all of their investments, or even ended up owing the brokerage firms money!

Many advisors told investors that the UBS closed-ends were safe because they were invested in safe bonds backed by the government. But Puerto Rico municipal bonds have been anything but secure of late. Since 2000, the Commonwealth has experienced an imbalance between recurring government revenues and total expenditures. In 2009, the deficit reached a record $3.306 billion. Further, as of June 2010, the unfunded public employees’ retirement accounts reportedly had an actuarial shortfall totaling approximately $25 billion. As a result of these poor fundamentals, investors are concerned about the creditworthiness of the Puerto Rico government and as a result the prices of some Puerto Rico government bonds have dropped. UBS closed-end funds have lost significant value due to their leveraged exposure to the underlying municipal bonds as well as selling pressure in the market for the funds. Shares that steadily paid dividends and appeared to maintain their value for several years have suddenly collapsed in value by 50% or more. Some investors who borrowed money from credit lines offered by brokerage firms have reportedly received margin calls and even had their UBS Puerto Rico fund shares liquidated.

Which Funds Are Affected?: Clients who invested in the following funds may wish to consider attempting to recover their losses through the FINRA arbitration process: Tax-Free Puerto Rico Fund, Tax-Free Puerto Rico Fund II, Tax-Free Puerto Rico Target Maturity Fund, Puerto Rico AAA Portfolio Target Maturity Fund, Inc., Puerto Rico AAA Portfolio Bond Fund, Puerto Rico AAA Portfolio Bond Fund II, Puerto Rico GNMA & U.S. Government Target Maturity Fund, Puerto Rico Mortgage-Backed & U.S. Government Securities Fund, Puerto Rico Fixed Income Fund, Puerto Rico Fixed Income Fund II, Puerto Rico Fixed Income Fund III, Puerto Rico Fixed Income Fund IV, Puerto Rico Fixed Income Fund V, Puerto Rico Fixed Income Fund VI, Puerto Rico Short Term Investment Fund, Multi-Select Securities Puerto Rico Fund, UBS IRA Select Growth & Income Puerto Rico Fund, Puerto Rico Investors Family of Funds, Puerto Rico Investors Tax-Free Fund, Puerto Rico Investors Tax-Free Fund II, Puerto Rico Investors Tax-Free Fund III, Puerto Rico Investors Tax-Free Fund IV, Puerto Rico Investors Tax-Free Fund V, Puerto Rico Investors Tax-Free Fund VI, Puerto Rico Tax-Free Target Maturity Fund, Puerto Rico Tax-Free Target Maturity Fund II, Inc., Puerto Rico Investors Bond Fund I.

Attorneys are available to review possible cases involving UBS Puerto Rico closed-end funds. Investors who were not told the truth about these funds may have a claim against UBS or the firm that sold them the funds. In addition, investors who could not afford to take the risk of losing money in these funds may also have claims. Investors may fill out the form on this page to arrange to discuss their possible case. Investors may also contact the Christopher Gray firm in New York at (866) 966-9598 or newcases@investorlawyers.net for a confidential, no-obligation consultation.

Created as a private hedge fund in 2000, the UBS Willow Fund was sold by UBS Financial Services. Reportedly, an announcement in October 2012 stated that the UBS Willow Fund would be liquidated. On September 6, 2013, the fund’s shareholder report stated, “The fund does not hold investments as of June 30, 2013.”

It’s possible that UBS did not adequately disclose the risks of the fund when making recommendations. Furthermore, many of the investors who received recommendations to invest in the fund reportedly had low risk tolerances and were seeking stable income. According to stock 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.

In addition, securities arbitration lawyers say that the portfolios of some investors may have been over-concentrated in the UBS Willow Fund. Finally, the fund may have strayed from its disclosed strategy, which was to invest in distressed debt, making speculations about foreign sovereign debt credit default swaps instead.

If you suffered significant losses in the UBS Willow Fund because of an unsuitable recommendation, you may be able to recover your losses through Financial Industry Regulatory Authority 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.

A private placement, as defined by FINRA, is “an offering of a company’s securities that is not registered with the Securities and Exchange Commission (SEC) and is not offered to the public at large.” According to stock fraud lawyers, private placements are generally only suitable for accredited investors. Accredited investors have a net worth exceeding $1,000,000 and an income of at least $200,000 (individually) or $300,000 (jointly with spouse).

“Investors should understand that many private placement securities are issued by companies that are not required to file financial reports, and investors may have problems finding out how the company is doing,” FINRA officials note. “Given the risks and liquidity issues, investors should carefully assess how private placements fit in with other investments they hold before investing.”

However, according to securities fraud attorneys, firms and their registered representatives 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. Private placements are typically not suitable for individuals with conservative portfolios, low risk tolerances or who need easy access to funds. An investment or recommendation clearly may be unsuitable even if the customer is an accredited investor.

If you suffered significant losses in private placements because of the unsuitable recommendation of your broker or adviser, 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 by e-mail at newcases@investorlawyers.net for a no-cost, confidential consultation.

In May 2012, a statement of claim was filed with the Financial Industry Regulatory Authority by Saddlebag LLC. The claim alleges that the firm wrongfully invested the client’s assets in illiquid auction-rate securities (ARS). According to securities lawyers, many financial firms sold auction-rate securities as short-term instruments with a highly-liquid nature, much like money market funds.

However, in 2008, the credit crunch resulted in a failure of the ARS market and investors with a piece of the $330 billion market were stuck holding securities that they were unable to sell. Other firms, including Morgan Keegan, have been accused of misleading investors regarding the liquidity risk of auction-rate securities.

Auction-rate securities are tax-exempt, long-term and taxable bonds and their interest rates are connected to the short-term market. Through ARS, issuers can acquire lower short-term rates on long-term financing. Auction-rate securities were marketed as liquid cash alternatives and considered safe before the global credit crunch.

Firms and their registered representatives 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. According to Thompson Reuters, leading auction-rate securities underwriters included Bank of America, Citigroup, Goldman Sachs, UBS, Lehman Brothers, Morgan Stanley, JPMorgan, Merrill, RBC and Wachovia.

If illiquid investments were unsuitable for you given your age, investment objectives and risk tolerance and you suffered significant losses in the auction-rate securities market, 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 by e-mail at newcases@investorlawyers.net for a no-cost, confidential consultation.

The Financial Industry Regulatory Authority (FINRA) issued an Order Accepting Offer of Settlement which stated, “Mikolasko was an investment banker at HFP who engaged in activity to facilitate the firm’s sale of $3 million in ‘Senior Secured Zero Coupon Notes’ sold to 58 customers of HFP for an entity known as Metals Millings and Mining LLC (‘MMM’). The notes defaulted and investors were not repaid either principal or a promised 100 percent return. Mikolasko allegedly caused material misrepresentations and omissions of material facts to be made in connection with the firm’s sales of the offering. Mikolasko also allegedly participated in various roles to facilitate the offering even though he knew or should have known that HFP had conducted inadequate due diligence concerning the offering and that the due diligence the firm had conducted identified significant ‘red flags’ as to the facts and circumstances of the offering.”

Mikolasko was suspended for 18 months from associating in any capacity with any FINRA member firm and fined $75,000 for his alleged conduct. However, stock fraud lawyers say that clients of Mikolasko may be able to recover losses through securities arbitration.

According to securities fraud attorneys, FINRA rules have established that firms must properly supervise brokers’ activities while they are registered with the firm. Because Mikolasko was registered with HFP Capital Markets at the time of his alleged misconduct — from November 2008 until September 2011 — HFP Capital Markets could be held responsible for his activities and, thus, could be ordered to compensate his clients for losses sustained for the period he was registered with the firm.

If you suffered significant losses as a result of your dealings with Mikolasko, 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.

Recently, Citigroup was found liable for $3.1 million in a FINRA claim filed by a Florida couple. The couple had filed a case in 2010 against Citigroup, alleging negligence and fraud involving more than $1 million in investments. The real estate investments were reportedly made from 2004 to 2007 in condominium developments and real estate projects. The couple’s adviser, Scott Andrew King, was registered with Citigroup from 2002 until 2005. King reportedly referred the claimants to Lawton “Bud” Chiles III without Citigroup’s knowledge. Currently, King works as a broker for Wells Fargo Advisors.

In addition, the claimants were reportedly included in a group of investors who signed personal loan guarantees connected to a $12 million loan to one of the real estate projects. When the loan entered into default, a $10 million judgment was entered against the group. Reportedly, each investor named in the judgment could potentially have to pay the entire amount of the bad loan. The $3.1 million award includes $2.1 million to cover the plaintiffs’ share of the judgment and $1 million in losses. In addition, in the event that the couple is required to pay the entire $10 million judgment, Citigroup will be required to reimburse them the entire amount.

If you were a client of King, or any other full-service brokerage firm-registered representative, who engaged in the practice of “selling away,” 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.

According to a FINRA news release, on August 22, 2013, the Financial Industry Regulatory Authority fined Morgan Stanley & Co. LLC and Morgan Stanley Smith Barney LLC for failure to provide reasonable prices in certain municipal bond customer transactions and failure to provide best execution in certain corporate and agency bond customer transactions. The firms were fined $1 million and ordered to pay restitution and interest in the amount of $188,000, above and beyond what Morgan Stanley has already paid. Stock fraud lawyers say Morgan Stanley did not admit or deny the FINRA charges.

Reportedly, the violations affected 116 corporate and agency bond customer transactions and 165 municipal bond customer transactions.

“FINRA found that Morgan Stanley failed to use reasonable diligence to ensure that the purchase or sale price to the customer was as favorable as possible under current market conditions,” the FINRA statement reads. “Morgan Stanley failed to purchase or sell bonds at prices reasonably related to the fair market value of the subject security.”

According to securities fraud attorneys, there may be many other customers of Morgan Stanley or other full-service brokerage firms that did not receive fair pricing or best execution in bonds or other securities.

“Firms must ensure that customers who buy and sell securities — including corporate, agency and municipal bonds — receive execution prices that are consistent with prices available in the marketplace,” notes FINRA’s Executive Vice President of Market Regulation Thomas Gira.

If your full-service brokerage firm has a history of best execution and fair pricing violations and your investments were affected, you may be eligible for reimbursement. 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.

ELKs are sometimes called reverse convertibles and can carry high risks. As a hybrid debt security, the return on this type of investment is linked to an underlying equity, most commonly a stock. Usually, ELKs mature in a year and, if the value of the ELK falls below a pre-set price, the investor will not receive cash but, instead, the investment is converted into shares in the underlying security. The value of these shares can be worth less than the investor’s initial investment. According to stock fraud lawyers, ELKs are structured products that are, in some cases, part of a speculative investment strategy that is unsuitable for many investors. According to the Statement of Claim in this case, the 91-year-old female investor was allegedly sold an investment strategy that involved asset allocation that was unsuitable and materially flawed for an investor seeking conservation of principle. The claim is seeking $200,000 in damages for the investor and alleges fraud, breach of fiduciary duty and unsuitable sales. 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 his or her age, investment objectives and risk tolerance. If you received an unsuitable recommendation of an investment strategy involving risky ELKs from Citigroup, or any other full-service brokerage firm, 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.

Despite the name change which, according to the REIT’S president Scott Fordham was supposed to symbolize “how the company reflects the goals and objectives of its tenants and stockholders in everything it does,” investors continue to be trapped in an investment they can’t sell except at a significant discount on the secondary market. Furthermore, according to stock fraud lawyers, the REIT continues to pay zero distributions.

To make matters worse, the REIT’s latest SEC quarterly report disclosed some disturbing information for investors. Reportedly, notes payable amounting to approximately $221.8 million will come due in 2013 and this amount may increase significantly because of several of the REIT’s loans, which are in default. As a result, the REIT may have to pay over $300 million before the end of 2013 because of its outstanding loans. In addition, the REIT had cash and cash equivalents of only $40.7 million and $71.3 million in restricted cash as of March 31, 2013.

Currently, securities fraud attorneys say that the TIER REIT, which is currently valued at $4.01 per share, has lost nearly 56 percent of its value. Furthermore, it is the only major non-traded REIT that does not allow any kind of redemption. Non-traded REITs in general are also inherently risky, which may make them unsuitable for many individuals with conservative risk tolerances and those who need easy access to funds.

If you purchased the Behringer Harvard REIT I, now known as TIER REIT, as a result of your broker or advisor’s recommendation and this investment was unsuitable for you given your age, investment objectives, or risk tolerance, 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.

According to stock fraud lawyers, $50 million in TNP-sponsored high-yield promissory notes were sold to investors, claiming guaranteed principal and interest. A summary of the allegations b7y FINRA in Mr. Thompson and TNP Securities’ BrokerCheck profile states that they “engaged in transactions, practices or courses of business which operated as a fraud or deceit upon the purchaser.” Furthermore, FINRA’s allegations against TNP Securities and Mr. Thompson include the use of deceptive, manipulative or other fraudulent devices, which allege4dly puts them in violation of FINRA Rule 2020 and the Exchange Act of 1934.

Specifically, the complaint discusses the TNP 2008 Participating Notes Program LLC, the TNP Profit Participation Program LLC and the TNP 12% Notes Program LLC.

“During the offering periods for 12% Notes and 2008 Participating Notes, losses in 2009 of [$25.6 million] took the company’s equity to [-$13.6 million],” but none of the PPMs or supplements for the three offerings “disclosed the increasing likelihood that [TNP] would not be able to meet the proffered guarantees of principal and interest,” the FINRA complaint reads. The FINRA complaint elaborates as follows: “Potential investors, however, saw only the PPM balance sheets that reflected total equity of either $8.5 million or $5 million, respectively.

TNP investors have suffered recently, since two of the note programs ceased making payments and one entered into default.

If you suffered significant losses in the TNP 2008 Participating Notes Program LLC, the TNP Profit Participation Program LLC or the TNP 12% Notes Program LLC, 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.

Stock fraud lawyers expect the commission, which consists of five members, will be split on this controversial issue. A cost-benefit analysis is being conducted by the SEC regarding a potential rule. In an interview, SEC Commissioner Daniel Gallagher said the potential rule hasn’t been a “front burner issue,” but it soon will be.

“We really need to decide, based on what we’ve seen, whether it makes sense to move forward,” Gallagher stated.

Currently, brokers must only adhere to a “suitability standard” in which they only have to make “suitable” recommendations. They 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.

On the other hand, financial advisers are bound by fiduciary duty. According to securities fraud attorneys, this is a much more rigid standard than the suitability standard. In order to act within fiduciary duty, the financial advisor must, by law, act in the best interest of his or her client. It is not enough that the investment be suitable, but they must also be in the client’s best interest.

Stock fraud lawyers say that the Dodd-Frank financial reform law authorized a rule imposing a uniform fiduciary standard, but did not require it. However, the SEC will be focusing on a crowdfunding rule first. Reportedly, it is possible that the crowdfunding rule will come this fall.

In one case, the investors’ trust interviewed multiple money managers and investment firms including Credit Sussie, CitiGroup, Deutsche Bank, LaSalle Bank and Goldman Sachs. All of these firms recommended diversification across traditional asset classes, such as bonds and equities, as well as selective investments in alternative products for special situations.

However, the claim asserts that GenSpring stood out because of its unique approach which would provide better downside protection and better returns through the use of Multi-Strategy Hedge Funds, such as Silver Creek Funds, instead of the bond or fixed income portion of client portfolios. Allegedly, GenSpring officials claimed that their approach, which had been tested thoroughly, would behave like traditional bonds in terms of asset class correlation and volatility while providing returns across all market cycles that were superior to traditional bonds. The trust invested approximately $10 million and stated its primary goal as capital preservation.

In another case, trustees stated that they would need access to the funds within 6 to 18 months for business opportunities and, thus, needed safe, liquid investments. They invested $25 million with GenSpring, using primarily Multi-Strategy Hedge Funds.

In both cases, the Multi-Strategy Hedge Fund investments plummeted with the stock market in late 2008 and early 2009. Traditional bonds, however, rose more than 5 percent. According to stock fraud lawyers, the firm’s clients are at a continued risk of liquidity damage because they are unable to liquidate their very large investments.

Securities fraud attorneys say that there was no reasonable basis for GenSpring to believe that the Multi-Strategy Hedge Funds would provide adequate diversification or perform like bonds.

If you are an ultra-high-net-worth investor who suffered significant losses because of GenSpring’s recommendation of Multi-Strategy Hedge Funds, 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.

Reportedly, a class action lawsuit was filed on May 24, 2013, on behalf of investors who acquired ATP Notes that can be traced to the company’s exchange of $1.6 billion in notes that occurred on December 16, 2010. According to the complaint, the company allegedly concealed two moratoriums while issuing the ATP Notes. These moratoriums were issued by the U.S. Department of Interior and regarded deep water drilling. Reportedly, the drilling devastated the revenues of the company, which filed for bankruptcy on August 17, 2012.

According to stock fraud lawyers, ATP Oil and Gas 11.875 Percent Senior Second Lien Exchange Notes were speculative investments that carried a very high risk. As a result, they were not suitable for investors with conservative portfolios, low risk tolerances or those seeking fixed income.

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. Furthermore, securities fraud attorneys say brokerage firms must, before approving an investment’s sale to a customer, conduct a reasonable investigation of the securities and issuer.

If you suffered significant losses as a result of the unsuitable recommendation of ATP Oil and Gas 11.875 Percent Senior Second Lien Exchange Notes, you may be able to recover your losses through FINRA 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 for a no-cost, confidential consultation.

The case was filed by a family limited partnership, College Health and Investment Ltd., in 2010. According to stock fraud lawyers, many wealthy families use family limited partnerships as an estate planning tool to minimize certain tax liabilities and preserve assets.

Reportedly, College Health filed a lawsuit in 2010 against Esther Spero. Spero allegedly forged the signatures of the family limited partnership’s employees who had authorization to transfer funds so that she could make transfers out of the accounts for her personal use. A $21 million judgement was entered in October, 2010, against Spero. Allegedly, Spero operated the scheme through multiple entities, including Wells Fargo.

Reportedly, the unauthorized transactions and theft occurred between 2006 and early 2008. The $2.8 million FINRA award includes damages of $2.3 million and interest. In addition, Wells Fargo must pay margin interest of $419,000 and costs totaling $35,000.

According to securities fraud attorneys, firms have a responsibility to properly supervise and monitor customer accounts for fraud and theft. If they fail to do so, they may be held liable for customer losses. Investors should carefully review their account statements for unauthorized transactions and other signs of fraud and theft.

If you are a customer of Wells Fargo or another full service brokerage firm and have reason to believe that fraudulent or unauthorized transactions have caused you significant losses, 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.

According to stock fraud lawyers, some non-traded REITs may have carried a high commission, which in the past has motivated brokers to recommend the product to investors despite the investment’s unsuitability. The commission on a non-traded REIT is often as high as 15 percent. Many non-traded REITs carry a relatively high dividend or high interest, making them attractive to investors. However, non-traded REITs are inherently risky and illiquid, which causes them to be unsuitable for many 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 his or her age, investment objectives and risk tolerance. Furthermore, securities fraud attorneys say brokerage firms must, before approving an investment’s sale to a customer, conduct a reasonable investigation of the securities and issuer.

Hartman is an FSC Securities Corporation-registered representative, but does business under the company name of Rocky Mountain Financial. During his financial services career, he has reportedly been involved in multiple customer complaints and a regulatory investigation.

If you suffered significant losses as a result of doing business with a stockbroker or financial advisor and have reason to believe that the broker or advisor made unsuitable recommendations or improperly handled your account, 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.

According to stock fraud lawyers, the investigation began when one of Becker’s clients filed a complaint with the bureau. The complaint alleged unsuitable and excessive trading by Becker in the client’s account. Reportedly, it wasn’t until five months after the complaint was received by Merrill Lynch, in September 2010, that Merril Lynch required heightened supervision of Becker.

“After a thorough investigation and review by Bureau auditor William Masuck, we determined that there was a basis for the client’s complaint of excessive trading, especially with regard to mutual funds and structured products,” says Deputy Director of Enforcement Jeff Spill. “These kinds of investments are not suitable for frequent, short-term trading.”

Becker was ordered to pay a $10,000 fine and Merrill Lynch was ordered to pay $80,000 in fines and investigation costs. Furthermore, Becker received a cease and desist order for the improper conduct and Merrill Lynch was censured. Securities fraud attorneys say the client was reportedly able to recover his losses from the unsuitable trading through an arbitration settlement.

Neither Merrill Lynch nor Matthew Becker admitted or denied the bureau’s allegations.

If you are a client of a Merrill Lynch agent and suffered significant losses as the result of unsuitable short-term trading in investments such as mutual funds and structured products, 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.