Investigation of Jeffrey Risinger

If you were an investor with Jeffrey Risinger at any time or more recently with PIN Financial, please call 1-866-817-0201 (toll-free). 

NYSE pic 1Financial industry regulators have permantly barred Risinger, a Fishers broker alleged to have participated in a Ponzi scheme, from working in the financial brokerage industry thus prohibiting Risinger from ever again working in the securities industry in any capacity. The sanction follows  claims Risinger and two others operated a multimillion-dollar Ponzi scheme.

Risinger is also the subject of a civil suit filed by the U.S. Securities and Exchange Commission (SEC) concerning alleged fraudulent representations made to investors.  He has also recently been terminated from his employment at PIN Financial.

FINRA said its action resulted from Risinger’s refusal to provide on-the-record testimony related to the allegations. The case, which is ongoing, alleges the Risinger and his two accomplices raised $15 million from 80 investors in 2013 and 2014 to fund farm operating loans. When loans soured, the perpetrators repaid old investors with new investor money, the SEC said, creating a classic Ponzi scheme.

Carmel-based Veros Partners principal Matthew D. Haab and former stockbroker Tobin J. Senefeld are the other defendants.

Information for this post has come in part from the Indianapolis Business Journal.

Financial Advisor Liability for Investment Loss

investingstockphoto 1This page tracks some cases of investment financial advisor fraud we are following.  Please call 1-866-817-0201 toll-free for a confidential and free consultation concerning questions of potential liability of a financial advisor or financial advisory firm.

Jeffrey Pederson has represented investors in Alabama, Arizona, Arkansas, California, Colorado, Connecticut , Florida, Hawaii, Massachusetts, Montana, New Jersey, New Mexico, New York, North Carolina, Minnesota, Missouri, North Dakota, Rhode Island, Texas, Utah, and Wyoming, in FINRA arbitration actions against securities brokerage firms for unsuitable investments.

Larry Werbel

Larry Werbel was indicted this week on charges that he participated in a scheme to defraud at least 100 investors of more than $15 million, federal prosecutors said.   If you believe you may have been a victim of Werbel please call toll-free 1-866-817-0201. 

Werbel, owner of Evolution Partners Wealth Management, and formerly of Summit Brokerage and LPL Financial was one of several brokers who recruited investors for shares of a shell company called VgTel Inc., with the false representation of high dividends, according to a news release from the U.S. Attorney’s Office for the Southern District of New York. In reality, the shares were being sold and bought by shell companies that the accused schemers owned in an effort to artificially inflate the price, the release states.

Prosecutors say of the $15 million invested, more than $9 million went into the pockets of Werbel and others involved in the scheme. Werbel found investors and pushed them to buy $3 million in shares for VgTel, prosecutors claim. In return, he received more than $300,000 in illegal payments.

The FBI arrested Werbel, 67, at his home in Solon, Ohio on Wednesday, January 6, 2016. He was released after appearing in front of Magistrate Judge Greg White in Cleveland. His bond is set at $100,000.

He is charged with conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud, wire fraud, investment adviser fraud and making false statements to federal officers.

Colorado LPL REIT Investors

LPLIf you are a Colorado investor with LPL and invested in a Real Estate Investment Trust (REIT)please call 303-300-5022 within the Denver Metro area or 1-866-817-0201 state and nation-wide toll-free for a free consultation concerning your rights.

The Colorado Division of Securities, part of the Department of Regulatory Agencies (DORA), today signed a final Consent Order with LPL Financial LLP in connection with an investigation of LPL’s failure to implement an adequate supervisory system regarding its sale of non-traded REITS and LPL’s failure to enforce its written procedures regarding the sale of non-traded REITS.

Under the terms of the order, LPL agreed to remediate losses for all non-traded REITS sold by the firm from January 1, 2008 through December 31, 2013 in violation of prospectus standards, state concentration limits or LPL’s own guidelines. LPL agreed to retain an independent third party to review and verify its executed sales transactions for violations during this period, believed to be more than 2,000 nationwide. LPL will make offers of remediation to affected investors in Colorado upon completion of the third-party review.  Additionally, LPL may have responsibility for REITs sold outside the defined time period.

The order also requires LPL to pay to Colorado a fine of $40,183.94, representing Colorado’sColorado pro-rata share of a $1.425 million settlement resulting from a multistate investigation of the firm by a task force of state securities regulators formed by the North American Securities Administrators Association (NASAA), of which the Colorado Division of Securities is a member.

“This investigation is representative of the important investor protection role the Division of Securities serves in safeguarding investors throughout Colorado,” said Securities Commissioner Gerald Rome.

The investigation concluded that LPL, through its agents, sold non-traded REITS in excess of the REIT’s prospectus standards, various state concentration limits or LPL’s Alternative Investment Guidelines. The investigation also found that LPL failed to implement a supervisory system that was reasonably designed to achieve compliance with state law.

For more on Colorado stockbroker fraud and negligence see the following: http://www.jpedersonlaw.com/blog/colorado-stockbroker-fraud-and-negligence-blog/

 

Barclays Capital Mutual Fund Violations

NYSE pic 2The Financial Industry Regulatory Authority (FINRA) announced on December 29, 2015 that it has ordered Barclays Capital, Inc. to pay more than $10 million in restitution, including interest, to customers for mutual fund-related suitability violations. These suitability violations relate to an array of mutual fund transactions including mutual fund “switches.”  This is the exchanging of one mutual fund for another, cause a new commission to be incurred and for usually little added benefit for the investor.  Additionally, the firm failed to provide applicable breakpoint discounts to certain customers. Breakpoint discounts are the discounts that mutual fund investors should receive for buying a certain quantity of mutual funds.  Barclays was also censured and fined $3.75 million.

NASD, the predecessor to FINRA, in its Notices to Members 94-16 and 95-80 remind broker-dealers of their obligation to ensure that any recommendation to switch mutual funds be evaluated with regard to the net investment advantage to the investor. FINRA noted that “switching among certain fund types may be difficult to justify if the financial gain or investment objective to be achieved by the switch is undermined by the transaction fees associated with the switch.”

If you have encountered such conduct by Barclays please call 1-866-817-0201.

Frederick Monroe of Voya and Capital Financial

Stock handcuffsIf you invested with stockbroker Frederick Monroe, formerly of Voyal and Capital Financial, please call 1-866-817-0201 for a free consultation.

Frederick Monroe of Queensbury, NY, and senior vice president financial advisor while formerly employed with Voya Financial and Capital Financial Planning, pleaded guilty to a multiple of financial offenses in state court Albany, NY.  His sentencing will be February 16, 2016.

Monroe is accused of running a Ponzi scheme where he would have investors draft checks to him personally purportedly for a series of retirement investments.  The funds would then be used to pay other investors and personal expenses of Monroe such as mortgage payments.

The criminal activity stretched from 2002 until May 2015.  He stole approximately $1 million from investors seeking to save money for their retirement.

The criminal complaint stated that Monroe “admitted that he did not reinvest the monies as promised, but instead used investor monies to return principal to earlier investors, to pay personal expenses and to maintain the social and professional lifestyle to which he became accustomed.”

The sentence for Monroe is anticipated to be between 3 and 16 years.

Our firm has help investors victimized by similar crimes obtain financial recovery.   Please call the number above for a free consultation.

 

 

Halcyon Cabot Partners and Craig Josephberg

If you invested with  Halcyon Cabot Partners or Craig Josephberg please call 1-866-817-0201 for a free consultation.

The Financial Industry Regulatory Authority announced that it has expelled Halcyon and Josephberg, along with other officers of the Halcyon, from the securities industry.  FINRA’s investigation found that Halcyon, Morris and Heineman, along with a previously barred registered representative, Craig Josephberg, agreed to conceal the discount the issuer provided to a venture capital firm when it purchased a private placement in a cancer drug development company. The scheme was effected through a bogus placement fee agreement that was entered into after the venture capital firm had already agreed to purchase the entirety of the offerings. Halcyon did not perform any work, as there was already a buyer in place, but rather returned almost all of its $1.75 million placement fee to the investor through sham consulting agreements. This fraudulent scheme allowed the drug company to conceal that it was selling its shares at a discount.

FINRA also found that Morris falsified Halcyon’s books and records to conceal Josephberg’s sales of securities in states where he was not registered, including Florida, Texas and Colorado. Halcyon also failed to supervise Josephberg, who churned retail customer accounts and effected unauthorized trades

For more information of Colorado stockbroker fraud, see the following: http://www.jpedersonlaw.com/blog/colorado-stockbroker-fraud-and-negligence-blog/

Geneos Wealth Management

The brokerage based in Centennial, Colorado entered into an Acceptance, Waiver and Consent agreement, a settlement agreement for alleged wrongdoing, with FINRA on October 30, 2015 concerning the sale of limited partnership investments by its brokers.

If you lost funds dealing with Geneos representatives and believe the losses were due to wrongdoing please call 1-866-817-0201 for a free consultation.

Geneos consented to the sanctions and to the entry of findings that it failed to supervise representatives at a branch office in Draper, Utah who were participating in the execution of securities transactions, namely investments in the form of limited partnership interests, as part of their disclosed outside advisory activities.

The findings stated that the Geneos Invest photo 2representatives’ participation included, but was not limited to, meeting with and recommending the underlying securities to customers, providing customers with copies of the private placement memorandum and related paperwork, assisting customers with completing the investment paperwork, accepting the completed paperwork and investment funds, and receiving compensation. The firm also failed to record the transactions on its books and records.

One issue with the recommendation of such investments is the fact that such investments are highly aggressive and only suitable for limited numbers of investors who are willing to take such high risks with their savings.  Representatives have a compelling reason to sell such high risk investments due to the significantly higher commissions that such investments pay.  A firm selling such investments has a duty to verify the suitability of such investments and may have legal liability when such investments are sold to investors who were only willing to take moderate risks.

A link to the AWC can be found at the following: http://disciplinaryactions.finra.org/Search/ViewDocument/63683

 

United Development Funding

investingstockphoto 1If you have suffered losses in United Development Funding please call 1866-817-0201 for a free consultation.

As identified in Investmentnews.com, shares of United Development Funding IV have plummeted after an investor website published a report that alleged the real estate investment trust has operated for years like a Ponzi scheme.

On Thursday, Harvest Exchange, an online professional network for investors, published an anonymous post about UDF titled: “A Texas-Sized Scheme: Exposing the Darkest Corner of the REIT Business, United Development Funding,” which has $1.3 billion of assets on the books of various REITs, including UDF IV.

After the post was published, the REIT’s share price dropped to $10.10 from $17.53, a decrease of 42.4%. Shares fell further on Friday, closing at $8.55, down 51% for the week.

Based in the Dallas area, UDF IV was a nontraded REIT that listed on the Nasdaq in June 2014. It was sold to investors from 2009 to 2013 at $20 per share.

Realty Capital Securities, a wholesaling brokerage started by Nicholas Schorsch as part of RCS Capital Corp., or RCAP, was the marketing and wholesaling broker-dealer for UDF IV. That firm is closing down after it agreed to pay a $3 million fine to the Massachusetts securities division to settle charges it fabricated shareholder proxy votes.

 

Third Avenue Focused Credit Fund

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If you have suffered losses in the Third Avenue Focused Credit Fund please call 1-866-817-0201 for a free consultation.

As reported in CNN.com on December 14, 2015,  The Third Avenue Focused Credit Fund recently imploded and the drop in value has led to the ousting of its CEO.

The fund focused on investing in distressed debt of companies that were close to defaulting on their loans and companies that already had defaulted.  This made the investment inherently risky.  Last week the fund announced it is liquidating and blocked investors from getting their money back.

The implosion of a mutual fund is rare.   While foreseeable, the down-fall of Third Avenue also evidences the turmoil rippling through the riskiest parts of the bond market.

The event also raises questions about whether Third Avenue’s focus on extremely risky and difficult to trade assets was really appropriate given the fact that mutual funds promise investors the ability to take their money out whenever they wish.

There is also an issue concerning brokers who sold these investments to those needing liquidity or investments with only moderate or conservative risk.

“It is irresponsible to run the fund in such a way that they can’t meet redemptions,” said Leo Acheson, an analyst at Morningstar.

Third Avenue responded to the criticism on Monday by announcing longtime CEO David Barse had left. The firm said it will now be led by a team of executives.

The Third Avenue liquidation also spooked

“Is this just the tip of the iceberg? Are there more funds having similar distress? These things tend to snowball,” said Michael Block, chief market strategist at Rhino Trading.