Currently investigating Bradley Claus formerly of Transamerica Financial Advisors (Nov. 17, 2014)
We are investigating both Clause and his employer, Transamerica, for potential liability. Claus for material misstatements as to restaurant and oil and gas investments that he was selling and his employer for potentially failing to supervise Claus.
FINRA regulators allege that Mr. Claus participated in private securities transactions with two investors of Transamerica, of his brokerage firm, and one non-firm customer, in a limited-liability oil and gas company, without providing notice to and receiving approval from his member firm. The complaint alleges that the firm did not offer or authorize Claus to solicit or sell investments in the private securities transaction of the limited-liability company. FINRA also alleges that Claus made material misstatements of fact to an investor in emails regarding a potential investment. Claus knew or was reckless in not knowing that his statements were false or misleading.
Claus also solicited investments in Southern Hospitality, a restaurant chain he fraudulently claimed was owned by Justin Timberlake and Ryan Tedder, according to the FINRA complaint.
Claus used the firm’s name, firm address and firm phone number in emails from his outside email account. While Claus never notified the firm of this email account it appears that he did give contact information concerning the firm and the that firm possibly knew or should have known of the activity. As such, we believe the firm would be responsible for monitoring such activity and that failure to do so contributed to investor losses.
If you have suffered investment losses with David Escarcega please call 303-300-5022. Mr. Escarcega has been charged by FINRA, as stated in a release on October 15, 2014, of making false and misleading oral and written statements to customers in connection with their purchases of investments, most notable being renewable secured debentures, which are an illiquid and high-risk alternative investment, intentionally violating federal securities laws and FINRA Rule 2020. FINRA alleges, “Escarcega falsely told the customers that the debentures were safe, low-risk, liquid or guaranteed.” FINRA also alleges that, “Escarcega made unsuitable recommendations to 12 customers to purchase a total of almost $1.5 million of the debentures. Escarcega’s recommendations to purchase the debentures were inconsistent with his elderly and retired customers’ investment objectives and risk tolerances, and resulted in either an excessive concentration of the customers’ total investable assets or net worth in a speculative and risky investment.” Escarcega is also alleged as not did not having a reasonable basis to believe that his recommendations were suitable. The complaint further alleges that Escarcega distributed a misleading sales brochure regarding the debentures.
We are a firm that helps investors nationwide recover losses in unsuitable microcap investments. If you have suffered such losses please call 303-300-5022. We are experienced in pursuing and recovering losses from firms selling microcap investments.
Microcap stocks generally pay higher commissions to brokers so brokers have incentive to sell such investments to those they are not legally allowed and taking shortcuts into research on the companies.
To make matters worse, on October 9, 2014, the SEC announced the results of an investigation into the supervision of brokers selling microcap investments and issued a risk alert. The SEC found that the vast majority of the brokerages that it investigated were severely lacking in supervision. www.sec.gov/about/offices/ocie/broker-dealer-controls-microcap-securities.pdf
The SEC stated, “Of the 22 firms examined, more than 80% were issued letters of deficiency for material control weaknesses and/or potential violations of law. The overwhelming majority of the firms examined were also referred to the Division of Enforcement or another regulatory agency for further consideration of whether violations of law occurred.”
Concerns were based not only with violations of federal securities law violations, such as potential securities fraud, but also potential money laundering. The SEC found instances of failure to perform reasonable inquiry into the sale of unregistered securities and failures to file suspicious activities reports in response to “red flags” of which the firms became aware.
We are interested in speaking to individuals who invested with Jo Ellen Fisher irrespective of whether the investments were handled through Raymond James or Peoples Bancorp. Please contact us at 303-300-5022.
Investmentnews.com – FINRA’s has barred an independent financial adviser with Raymond James Financial Services Inc. who allegedly stole nearly $1 million in client funds last year, according to a settlement offer posted on FINRA’s website.
The FINRA release stated that in less than six months last year, from July to December 2013, Jo Ellen Fisher stole $924,750 from the trust of a 95-year-old customer by transferring — without authorization — securities and funds into a brokerage account under the name of Ms. Fisher’s daughter.
Ms. Fisher liquidated securities and used the funds for lavish personal expenses, including three cars, a 2-carat diamond solitaire ring, a pearl necklace, two Rolexes, a mortgage and home repairs, Finra said.
Ms. Fisher was operating in Gallipolis, Ohio, as an employee of Peoples Bancorp, a bank with around 56 branches in Ohio, West Virginia and Kentucky.
Content for this article was found on investmentnews.com and was published on Oct. 6, 2014.
We are interested in speaking to investors of Donna Tucker. The SEC has charged her with fraud and theft in the accounts of several of her elderly UBS clients, including a blind couple, as part of a Ponzi scheme she allegedly ran over a five-year period. Donna Tucker allegedly misappropriated more than $730,000 from her UBS clients from January 2008 until April 2013 to lead a lavish lifestyle while misleading clients about the status of their funds, the SEC said. “[Ms.] Tucker engaged in unauthorized trading and other financial transactions, made misrepresentations to such customers about their investment accounts, and forged brokerage banking and other documents,” the SEC’s complaint said.
In the case of one blind couple, Ms. Tucker allegedly concealed the theft of nearly $350,000 by convincing them to conduct their banking online and receive electronic statements, according to the SEC. “[Ms.] Tucker knew that they could neither access nor receive their statements,” the SEC said.
We are currently investigating variable annuity losses of investors at SWS Financial. Finra on September 29, 2014 charged SWS with approving numerous variable annuity applications with no principal review for suitability. This is a significant lapse in supervision. Variable annuities are known to pay some of the highest commissions of all investment products and these commissions give brokers increased incentive to sell variable annuities to those who such investment products would not be unsuitable. Review of variable annuity sales is necessary to protect the public. If your were sold a variable annuity from SWS, please contact us at 303-300-5022.
In FINRA’s September 29 complaint, FINRA alleged that from September 2009 to May 2011, SWS failed to have appropriate supervision in place in the sale of variable annuities in that SWS violated rules that require brokerage firms to have supervisory systems and written procedures to supervise variable annuity sales.
Specifically, as reported in Investmentnews.com on October 3, 2014, the charges facing SWS include an allegation of inadequate supervisory systems and written supervisory procedures to supervise variable annuity transactions as required by FINRA, inadequate supervisory review of variable annuity deals, failure to have registered principal review of variable annuities before submitting the application to the insurer, failure to have surveillance procedures to detect inappropriate variable annuitie exchanges, and failure to develop and document a specific training plan for supervisory review of VA deals.
If true, the failure on behalf of SWS is egregious. We hope the help investors recover these unnecessary losses.
More information on this issue can be found at the following link: http://www.investmentnews.com/article/20141002/FREE/141009975/finra-charges-sws-with-improper-supervision-of-va-transactions
The Securities and Exchange Commission (“SEC”) has charged a former AXA broker/advisor, Dennis Wright of Lewistown, Pa., with running Ponzi scheme over a 14-year period. The Ponzi scheme misappropriated $1.5 million from his customers.
Wright allegedly induced at least 28 customers to withdraw funds from their investments, Axa variable annuity accounts, telling them he would transfer the funds to managed account of mutual funds where the investors would realize higher returns than the annuities. Wright instead deposited the funds into a bank account he controlled and used to pay personal expenses.
The SEC’s allegations state, “In fact, the alleged Axa managed account was a function created by Wright to lure customers into transferring funds in a manner that would allow Wright to steal their savings [...] Wright never invested his customers’ money as promised.”
The alleged targets of this scheme were unsophisticated investors and childhood friends.
Mr. Wright was at Axa Advisors, from 1983 until 2012. The alleged scheme ran from 1998 until 2012.
Wright was barred from the securities industry by FINRA in June 2013
If you have suffered a loss from the actions of Wright please contact us at 303-300-5022.
On September 29, 2014, Colorado Securities Commissioner Gerald Rome announced the filing of a civil complaint in Denver District Court against two John Koral, Lee Weinstein, both of Boulder, Colorado, and their company, U.S. Capital, alleging that they have violated the anti-fraud provisions of the Colorado Securities Act in connection with raising funds for their hard money-mortgage lending company.
We are interested in speaking to individuals who may have suffered losses by investing with either Koral, Weinstein or U.S. Capital. You can contact us for a free evaluation at 303-300-5022.
In the Colorado Securities Commissioner’s complaint, the Commissioner alleges that US Capital operated as a so-called “hard money lender” that specialized in making loans to commercial borrowers who may not qualify for traditional bank financing to purchase real estate. Hard money loans are similar to bridge loans with one of the primary differences being that the source of funds for hard money loans usually come from investors. In order to fund these hard money loans, Koral and Weinstein obtained funding in excess of $7.8 million from investors. The complaint alleges that investors believed their investments were secured by the underlying real estate.
In stead of securing the investor funds with the real estate, the complaint alleges that the real estate was fraudulently used to secure bank loans, satisfy Koral’s own personal debt, and to secure loans to Koral and Weinstein’s other companies, all to the detriment of the investors.
FINRA, the Financial Industry Regulatory Authority, is charging WFG Investments Inc., an independent brokerage headquartered in Texas, a $650,000 “global fine” according to recent regulatory filings.
A global fine is usually reserved for systemic or wide-spread problems within a brokerage. No indication in the regulatory filings submitted by WFG as to the reason for such a fine or the underlying violations.
This is WFG’s second six-figure Finra fine in the past two years. In March 2013, WFG a $200,000 fine to Finra over alleged lapses that led it to miss a stock-fraud scheme. The source of this information is InvestmentNews.com, www.investmentnews.com/article/20140924/FREE/140929960/wfg-investments-facing-650000-finra-global-fine.
We would be happy to speak to you if you trusted your savings to WFG and believe that the funds were mismanaged. Please call 303-300-5022.
They say that everything old at some point becomes new again. That seems to be especially true with cases concerning churning and excessive trading by stock brokers. A form of fraud that seemed to reach its pinnacle in the 1970s and 1980s has made a resurgence and we have helped investors with many of such claims over the past year.
Excessive trading is a violation of many different rules, but is primarily in violation of the FINRA suitability rule. FINRA Rule 2111 states that trades must be quantitatively suitable. Section .05 of Rule 2111 requires that a series of recommendations “even if suitable in isolation, are not excessive and unsuitable for the customer when taken together in light of the customer’s investment profile” and that to define excessive trading factors such as turnover rate and in-and-out trading may provide a basis for finding a violation of quantitative suitability. Active trading greatly increases the risk of a portfolio and is considered by FINRA to be a high risk activity. See NTM 00-62 (describing active trading as extremely high risk even when cost per trade is low)
Excessive trading can be presumed by a high annualized turnover rate. Annualized turnover rate of six or more is generally presumed to reflect excessive trading. In re Rizek, SEC Admin. Proc. File 3-9041, pgs. 20-21, ( The courts which have addressed this issue have indicated that an annual turnover rate in excess of six reflects excessive trading and citing cases where a turnover of three was excessive. ). The level of trading can be excessive and unsuitable for even speculative investors. In re Murphy, SEC admin. Proc. File 3-14609, pg. 21 (level of trading deemed excessive depends on objectives and tolerance, turnover of 6 presumed excessive, and turnover rate of 22 is definitely inconsistent level of risk for even high-risk investors seeking speculation).
Another indication of excessive trading is multiple round-trip transactions for the same option series, meaning that Murphy sold and bought back the same option series repeatedly. Murphy at 21. This is supported by fact that the use of in-and-out trading also support excessive trading under FINRA Rule 2111. Rule 2111 .05(c).
Please contact us if you believe that you have been a victim of excessive trading.