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

 

 

William H. Murphy & Co. Investment Losses

On November 7, 2014, the Financial Industry Regulatory Authority (“FINRA”) brought suit against William H. Murphy for violations of Regulation D requirements concerning the solicitation and sale of certain private placement investments.  Though not specifically stated, the complaint also alludes that the investments were sold to investors to whom the investments were not suitable and were not appropriately accredited.  We are currently investigating the matter and we are interested in speaking to investors of William H. Murphy.  If you are such an investor interested in learning more and receiving a free evaluation of your potential case, please call us toll-free at 1-866-817-0201.

GL Capital Losses, Multiple Avenues for Recovery

As published in Investmentnews.com on Dec. 16, 2014, a prominent alternative fund manager in Waltham, Mass., was arrested on securities fraud charges last week after the FBI accused him of a fraudulent scheme to divert some $12.6 million from a fund he was overseeing.

Daniel Thibeault, chief executive of asset manager GL Capital Partners, was released after posting $700,000 in bail secured by the equity in his house. A court date is scheduled for Jan. 2.

Since March 2012, Mr. Thibeault took out fictitious loans to gain access to money in a closed-end interval mutual fund, known as the Beyond Income Fund, according to the testimony of Federal Bureau of Investigation special agent Jennifer Hale Keenan in U.S. District Court for Massachusetts. Mr. Thibeault co-managed the fund, which invested in consumer debt.

Around $36.6 million worth of loans had been issued from the fund, of which some $12.6 million was taken out through an intermediary that Mr. Thibeault had created purportedly for borrowing money in the name of friends and associates. The money from the loans made through the intermediary, Taft Financial Services, did not go to individual borrowers, however, but to a GL-controlled bank account, according to Ms. Keenan’s testimony.

“[Mr.] Thibeault caused the fund to issue or acquire fictitious loans to individuals who never requested or did not, in fact, receive such loans, falsified or cause to be falsified the documentation related to those loans and used the fictitious loans to divert a portion of the fund’s assets into the operating accounts of GL,” Ms. Keenan said.

http://www.investmentnews.com/article/20141216/FREE/141219931/alts-fund-manager-daniel-thibeault-arrested-in-securities-fraud

 

 

James Maloney, MetLife Losses in Equity-Indexed Annuities

If you have invested in an annuity with James Maloney, formerly with MetLife in Colorado Springs, Colorado, we are interested in speaking to you irrespective of the type of annuity.  Please call 303-300-5022 in Colorado or nationally 1-866-817-0201.

On November 28, 2014, Mr. Maloney and regulators agreed to a sanction where he would be suspended from the securities industry for ten months and pay a $10,000 fine.  The allegations against Mr. Maloney are that from 2004 to March 2013, while he was registered with FINRA as a MetLife broker, Mr. Maloney sold 65 equity-indexed annuities (“EIAs”),  totaling over $8 million in sales, without providing his supervisors or compliance with notice of the sale.  Such an action is commonly referred to as “trading away.” Mr. Maloney neither admitted nor denied the allegation in agreeing to the sanction.  The sanction stipulation settled the regulatory case against Maloney.

The reason trading away violations are punished by regulators is because trading away can be done to mask significant fraud.  There are certain legal limitations on individuals to whom a broker can sell certain securities and insurance products.  Securities and insurance products falling in such a class will often pay significantly higher commissions to a broker.  The ability to sell insurance or securities without the approval of a supervisor or compliance officer means that a broker can sell products that are in violation of the law to earn a significantly higher commission.

While neither the agreement with the regulators nor the underlying charge Identify any fraud committed by Mr. Maloney, the matter does involve the sale of products that generally pay brokers a very high commission.  The matter also involves a relatively large number of sales of a product that is generally legally suitable for only certain investors.

Posted 12/9/2014

Bradley Claus formerly of Transamerica

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.

Investment Losses with David Escarcega

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.

 

SEC: Firms Selling Microcap Investments Lack Sufficient Supervision

NYSE pic 2We 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.