Michael Oppenheim of JPMorgan Fraud

Stock handcuffsIf you are a fraud or theft victm of Michael Oppenheim of JPMorgan please call 1-866-817-0201.  Oppenheim, a former JPMorgan Chase & Co. broker, faces federal charges he stole $20 million from customers over four years to make investments and pay personal bills that included a home loan.

Oppenheim induced investors to withdraw millions of dollars from their accounts by promising he’d invest the money in low-risk municipal bonds to be held at the bank, FBI Special Agent Matthew Taylor said in a criminal complaint in Manhattan federal court. Instead, he pocketed the funds.

“In other instances, Oppenheim simply withdrew hundreds of thousands of dollars from clients’ accounts without their knowledge,” Mr. Taylor said.

Oppenheim at one point had about 500 clients and almost $90 million under his management, according to the complaint. He was arrested Thursday on fraud and embezzlement charges at his home in Livingston, N.J.

“We are angry that this person violated the trust our customers place in us and are working with the affected customers,” Michael Fusco, a spokesman for the New York-based bank, said in an e-mailed statement.

The alleged theft started in March 2011 and ended in March 2015, the Federal Bureau of Investigation said.

Content for this article came from Investmentnews.com.

 

Commonwealth Capital Losses

As reported in Investmentnews.com on April 14, 2015, Finra has barred Kimberly Springsteen-Abbott, owner of a broker-dealer that packages and distributes illiquid equipment-leasing funds, from the securities industry for misusing investor funds by improperly allocating expenses to the funds that were not related to the funds’ business.

Ms. Springsteen-Abbott is the CEO, chief compliance officer and chairman of Commonwealth Capital Corp., parent of the wholesaling broker-dealer, Commonwealth Capital Securities Corp.

“The practice of charging personal expenses to the funds was a way of life for [Ms.] Springsteen-Abbott and her husband, Hank Abbott,” according to the Financial Industry Regulatory Authority Inc. panel’s decision.

Mr. Abbott is a director at the broker-dealer, Commonwealth Capital Securities Corp., and president of the parent company, Commonwealth Capital Corp.

The two “regularly charged thousands of dollars of personal expenses on the same American Express credit card they used for business expenses, and then, when she received the monthly American Express bills, [Ms.] Springsteen-Abbott allocated to the funds many of those personal expenses,” according to the Finra panel’s decision.

The personal expenses charged to the funds included those related to a birthday cruise in Alaska; Mother’s Day, Thanksgiving and post-Christmas holiday family meals; and a Disney family vacation, according to the decision.

She also improperly allocated to the funds expenses for holiday decorations for her home, car rentals her husband used for personal purposes, clothes, accessories, and pharmacy and grocery expenses.

“In the hope of concealing her misconduct and avoiding regulatory action, [Ms. Springsteen-Abbott] then lied to Finra staff investigating the matter and later lied to the hearing panel regarding the purposes for which she spent the money,” according to the panel’s decision.

Ms. Springsteen-Abbott’s conduct was in violation of Finra rule 2010, which requires a Finra broker-dealer and rep to “observe high standards of commercial honor and just and equitable principals of trade” when conducting business, according to the Finra panel’s order, which was released on March 30.

She “abused her authority by improperly allocating to the funds two types of expenses that were not related to the funds’ business: personal expenses and broker-dealer expenses,” according to the Finra panel’s decision. “It was a misuse of money belonging to investors in the funds,” according to the panel’s decision.

Finra’s investigation covered three years, from early 2009 to early 2012. Finra enforcement filed its original complaint in May 2013 and later filed an amended complaint.

Finra’s department of enforcement “alleged — and proved — that [Ms.] Springsteen-Abbott purposefully used investor monies as though they were her own, to her personal benefit and to the investors’ detriment, and in violation of limitations imposed by the offering documents for the investments,” according to the Finra panel’s decision. She also was ordered to pay $209,000 in disgorgement, plus interest, and was fined $100,000.

 

New Charges for Inappropriate REIT Sales at LPL

LPLWe are interested in speaking to any investor invested sold REITs by LPL.  Please call  toll-free 1-866-817-0201.  New Hampshire regulators want to pay $3.6 million in fines and repayments to investors for allegedly unsuitable sales of real estate investments to elderly clients.

In a new action filed April 6, 2015, the New Hampshire Bureau of Securities Regulation said it is seeking $2.4 million from LPL in buybacks and restitution for clients in 48 sales of nontraded real estate investment trusts that date back to 2007. It also is imposing a $1 million fine and asking LPL to pay $200,000 in investigative costs.

The New Hampshire Regulator alleges the sales were “unsuitable and unlawful” and that LPL failed to supervise its agents.  LPL has a duty to review all trades an verify that each trade is suitable for the objectives, sophistication and risk tolerance of the investor.

LPL has seen similar action taken against it recently by Massachusetts regulators concerning inappropriate sales of REITs, in particular non-traded REITS.

Issues with such investments include a lack of transparency, a lack of liquidity, high levels of risk, and an extremely high level of commissions, 10 to 15 times greater than most other investments, that influence advisors to sell such investments though the investments might not be suitable or are of low quality.

 

Raymond Daniel Schmidt of LPL Fraud Investigation

Please call 1-866-817-0201 if you were invested with Raymond Schmidt, formerly of LPL.  As first reported by Suzanne Barlyn of Reuters, A former LPL Financial LLC broker who borrowed nearly $2.3 million from clients to build a vacation rental property in Hawaii has been permanently barred from the securities industry in a settlement reached with Wall Street regulators after an investigation.

Raymond Daniel Schmidt, who was affiliated with the unit of LPL Financial Holdings Inc in Oceanside, California, borrowed the money from seven clients between 2009 and 2012, a violation of industry rules, according to a settlement with the Financial Industry Regulatory Authority (FINRA), a regulator that oversees the actions of licensed stockbrokers.

Schmidt neither admitted nor denied FINRA’s findings, according to the settlement.

In a 2013 regulatory filing, Schmidt disclosed his involvement in the “Pakalana Sanctuary” in Waimea, also known as Kamuela, on Hawaii’s Big Island. He described the property as a “retreat center” and vacation rental where he spent 10 percent of his time.

Schmidt bought the Hawaiian real estate in 2009 and opened it for business in 2012 as its only owner and operator, according to the settlement.

Securities industry rules generally prohibit brokers from borrowing clients’ money. Brokers are also not allowed to engage in business activities outside of their firms without first notifying the firm. Even then, firms typically require their brokers to get approval for such ventures.

Schmidt initially did not tell LPL about the Hawaiian property or customers’ loans in answers to several annual questionnaires that LPL requires its brokers to complete. He later disclosed the property to LPL, but denied owning an interest, FINRA said.

He resigned from LPL in August 2014 “while under internal review,” FINRA said.

In February, Schmidt told FINRA’s enforcement unit that he would not provide its staff with documents nor cooperate with its investigation, FINRA said.

It is unclear whether Schmidt repaid his clients’ $2.3 million. Schmidt is the subject of a $375,000 lawsuit in a California state court, alleging elder abuse and negligence related to the plaintiff’s Hawaiian real estate investment, according to Schmidt’s public disclosure report.

The Hawaiian property, which includes six bedrooms and seven bathrooms, is listed for sale at $2.4 million, according to Zillow, the real estate website.

 

Richard Rupp Barred

The commissioner for the Colorado Division of Securities, a part of the Department of Regulatory Agencies (“DORA”), announced today, March 16, 2015, that a settlement has been reached in the case of Gerald Rome v. Richard Roop and Bottom Line Results, Inc. The settlement was reached following successful litigation by the Colorado Attorney General’s office in both contempt proceedings and a motion for partial summary judgment against the defendants. The latter resulted in an order of the court that permanently bars Roop individually and his company, Bottom Line Results, Inc., from recommending or selling securities in Colorado.

“This is an important decision for the Division of Securities, as Mr. Roop and his company have consistently balked at and side-stepped the common sense regulations in place to protect consumers against unscrupulous securities professionals,” the commissioner said of the summary judgment order. “The court’s ruling prohibits Mr. Roop’s further participation in the securities industry in Colorado, and this is a good outcome for investors in our state.”
The permanent injunction resulting from the motion for partial summary judgment addresses multiple violations of the Colorado Securities Act by Roop and his company dating back to 2008.

In 2012, both Roop and the company—in the business of selling third party investments for a real estate “private lending program”—were placed under a temporary restraining order, which barred them from engaging in securities-related business.

Despite the restraining order, in 2013 Roop acquired financing to purchase a property using three separate investments. Once the Division of Securities was made aware of these sales, Commissioner Rome pursued a motion for contempt. On Feb. 5, 2015, Denver District Court Judge Michael Martinez ordered the defendants to rescind the transactions and pay the Division’s attorney’s fees incurred in litigation of the contempt motion. Following the contempt order, the Court issued a subsequent order on March 5, 2015, granting the Division’s motion for partial summary judgment, imposing a permanent injunction, and concluding that the defendants offered and sold unregistered securities in Colorado and acted as an unlicensed broker-dealer and sales representative.

Losses with Brookville Capital

Please call 866-817-0201 if you suffered losses with Brookville Capital.  FINRA has barred from the securities industry Anthony Lodati, president of the wealth management firm Brookville Capital Partners.  The regulator has also fined the firm $500,000 for fraud and ordered it to make full restitution of more than $1 million to customers that the agency said were defrauded in connection with sales of a private placement offering.  Investors should contact an attorney to maximize their recovery of losses.

The investment leading to the enforcement action was the private placement offering was Wilshire Capital Partners Group LLC, one through which investors were told they would have an indirect interest in pre-initial public offering shares of Fisker Automotive. The conduct took place from January 2011 to October 2011.

During the time Brookville solicited customers to invest in the offering, Lodati learned that Wilshire’s CEO and managing director, John Mattera, had a significant criminal and regulatory background. Instead of disclosing such history, which included, among other things, Mattera had been sanctioned by the SEC in 2010 for securities fraud and convicted of a felony in Florida in 2003, Lodati and Brookville purposely hid both Mattera’s background and his involvement with Wilshire, and continued to solicit its customers to invest

Joshua Ray Abernathy Investment Losses

Please call 866-817-0201 if you suffered investment losses or invested money with Joshua Ray Abernathy.  Conversations will be confidential and those seeking representation will be represented on a contingency fee basis.

As first reported in the Virginian-Pilot, Joshua Ray Abernathy, 37, of Norfolk was charged Monday in U.S. District Court with mail fraud and conducting an unlawful monetary transaction.  According to court documents, Abernathy stole almost $1.3 million from at least 14 victims living in Virginia and Texas.

The allegations in the charge are that Abernathy did not invest his clients’ money and simply stole the funds, placing some money in his personal securities account, which lost money.

Abernathy prepared fraudulent quarterly statements to conceal the fraud from his clients and hide his “unsuccessful trading strategy.”

Abernathy, formerly of Texas, is no longer licensed by the Financial Industry Regulatory Authority Inc., a self-regulatory organization based in Washington, D.C. He was permanently barred from working in the industry last month after failing to respond to a FINRA request for information and then failing to respond to a suspension letter.

Abernathy – who also sold life insurance – previously worked for The O.N. Equity Sales Company and Next Financial Group Inc. while working in Norfolk, FINRA reported.

Municipal Bond Investors Victimized

Investors have recourse for losses in municipal bonds.  Please call toll-free 1-866-817-0201 for a free consultation.

As first reported by Ted Knuteson of FA.com, the SEC has found that many investors are victims of costs and fees for which they are not aware.  sec-commissioner-aguilar–retail-investors-victimized-by-lack-of-muni-bond-oversight-20818.

Securities and Exchange Commissioner Luis Aguilar claimed Friday, February 13, 2015, retail investors in  municipal bonds are victimized by a lack of transparency, higher markups than for institutional investors and the SEC’s inability to regulate public offerings by issuers.  The result of this was $10 billion in excessive costs between 2005 and 20013

Pointing out consumers paid an average of double the spread of institutional investors, Mr. Aguilar said, “Retail investors lack access to reliable price information about the municipal securities they may want to buy or sell. As a result, it is exceedingly difficult for retail investors to determine if the prices they are offered and the fees they are charged by their brokers are reasonable.”

Aguilar urged the Financial Industry Regulatory Authority (Finra) and the Municipal Securities Rulemaking Board to impose a more transparent markup/markdown disclosure requirement and to require dealers to disclose their proposed markups before a trade is executed.

Losses with John Carris Investments

FINRA Hearing Panel Expels John Carris Investments and Bars CEO George Carris for Fraud

If you suffered losses with John Carris Investments, please contact us at 1-866-817-0201 for a free consultation.  The Financial Industry Regulatory Authority (FINRA) announced January 14, 2015 that a FINRA hearing panel has expelled John Carris Investments, LLC (JCI) and barred CEO George Carris from the securities industry for securities fraud and investment suitability violations. The panel found that JCI and George Carris recklessly sold stock and promissory notes issued by its parent company using misleading statements and by omitting material facts.  Andrey Tkatchenko, a broker for John Carris, was suspended for two years and fined $10,000 for recommending the stock and promissory notes without a reasonable basis. JCI and Carris were also barred from the industry for manipulating the price of Fibrocell stock. The panel found that JCI and Carris manipulated the price of Fibrocell stock through unfunded purchases and pre-arranged trading . Head Trader Jason Barter (“Barter”) was suspended for 18 months, fined $5,000  The ruling resolves charges brought by the FINRA Department of Enforcement in September 2013. The FINRA panel found that JCI and Carris fraudulently sold stock and notes in its parent company by not disclosing its poor financial condition. According to the decision, the JCI and Carris omitted material facts in the documents, including omissions in the Bridge Offering documents that JCI was out of net capital compliance.  Carris failed to inform investors that proceeds would be used to cure JCI’s net cap deficiencies. Carris also omitted other material information from the Offering documents regarding how proceeds would be used. For example, Carris used proceeds of the Offerings to pay for personal costs such as liquor purchases, clothing and dry cleaning. Carris also failed to pay hundreds of thousands of dollars in employee payroll taxes to the United States Treasury. The FINRA panel noted in its decision that it did not find Carris credible. For example, Carris asserted he never received his emails, claiming that a friend set up a personal email account for him so that Carris could “get on the PlayStation and also some other games that I was playing at the time,” when in fact Carris used an iPhone to send emails. We have represented hundreds of investors and would be interested in speaking to you if you have invested with JCI.

Oppenheimer Violations from “Failed Compliance Culture”

If you have lost funds investing in penny stocks with Oppenheimer, please call 1-866-817-0201 for a free consultation.  Oppenheimer & Co. Inc. has agreed to pay fines equally $20 million and, in a rare move for any financial firm paying such a fine, admit guilt as part of settlements with the SEC.  The allegations concern the improper trading of penny stocks.

Oppenheimer failed to properly detect and report suspicious penny stocks trades, which are thinly traded securities that can be vulnerable to manipulation by stock promoters. The  matter involves at least 16 customers in five states who engaged in “patterns of suspicious activity.”

This sanction is the latest in a list of regulatory sanctions against Oppenheimer.  SEC Commissioners Aguilar and Stein argued such a history indicated that Oppenheimer has a “wholly failed compliance culture.”

“Broker–dealers face the same money laundering risks as other types of financial institutions,” said  Jennifer Shasky Calvery, in a release. “And by failing to comply with their regulatory responsibilities, our financial system became vulnerable to criminal abuse.

More information can be found at the following:  http://www.investmentnews.com/article/20150127/FREE/150129925/oppenheimer-to-pay-20m-for-penny-stock-violations