Investors with Bonanza Creek Losses

Bonanza Creek has suffered deep declines lately but investors purchasing Bonanza Creek as part of their moderate to conservative portfolio may have recourse.  Please call 1-866-817-0201 for more information.

Shares of Bonanza Creek Energy were battered Wednesday, July 13, after the Colorado oil and gas producer disclosed it had hired a financial specialist to help it explore alternatives, including a restructuring.

Bonanza Creek, said it had retained Perella Weinberg Partners, a New York firm known for working with financially troubled companies to avoid bankruptcy or planning for bankruptcy.

The market didn’t react well to the news. Shares of Bonanza Creek, which closed at $2.28 on Tuesday, plunged to as low as $1.14 before crawling back to end trading Wednesday at $1.44 a share, a 36.8 percent decline.

Shares of the company had traded above $60 in August 2014, a few months before Saudi Arabia said it would no longer limit its production to support prices. That set off a steep descent in oil prices from above $100 a barrel to briefly under $30 when Iranian producers re-entered the market, forcing prices down even further.

Oil is now back around $45 a barrel. But lenders are reducing the credit they are willing to extend to producers given the lower value of their oil and gas reserves.

Bonanza Creek said in late May that the amount it could borrow under its credit agreement was cut from $475 million to $200 million. That was a problem because the company had borrowed $288 million, leaving it with a deficit of $88 million.

Bonanza Creek, like many petroleum producers, initially turned to the equity markets to help it stay afloat. The company raised more than $200 million in a secondary offering back in February 2015 to investors willing to pay $26 a share.

The Denver Post of July 14, 2016 provided information for this post.

Churchville Ponzi Scheme, Investment Fraud

If you were a victim of the Ponzi scheme or other investment fraud of Rhode Island investment adviser Patrick Churchville please call 1-866-817-0201.

Churchville has agreed to plead guilty to criminal charges for orchestrating a $21 million Ponzi scheme, according to a statement from the U.S. Attorney’s Office.

Stock handcuffsAside from that scheme, Churchville, 47, also committed investment fraud when he used $2.5 million of investor funds to help purchase his home and failed to pay more than $820,000 in personal federal income taxes, according to the statement.

Churchville, the owner and president of ClearPath Wealth Management, will plead guilty to five counts of wire fraud and one count of tax fraud.

Churchville is also a party in a civil case brought by the Securities and Exchange Commission (“SEC”) in May 2015.

Between 2008 and 2011, Mr. Churchville invested approximately $18 million of client money in JER Receivables, although by June 2010 he had become aware that ClearPath had been defrauded by that company, according to the statement.

Instead of notifying his clients of the losses, Churchville,  paid them with money obtained from new investors, misappropriating around $21 million of investor funds in the process, the statement alleges. To help carry out his scheme, he told investors JER Receivables was producing high rates of return, according to the statement.

Fraud by David Tysk with Ameriprise

If you have suffered losses or invested in a variable annuity with Ameriprise financial advisor David B. Tysk please call 1-866-817- 0201 (toll free) for a free consultation.  Allegations have arisen that Mr. Tysk has committed fraud in his sale of securities.

FINRA has levied a $50,000 fine against an Ameriprise general securities broker who altered his software notes to document his recommendations, for a 78-year-old client, to invest $2 million in Ameriprise variable annuities, the regulator’s decision shows.  The tampering was done to make the annuity investment appear suitable for this elderly investor.

Brokers such as Mr. Tysk can only sell investments, such as variable annuities if those investments are suitable for the investor.  The sale of an unsuitable investment is a form of fraud.  Variable annuities are suitable only a relatively small number of investors and are generally never suitable for older investors.

Brokers have incentive to sell variable annuities because they can pay a commission that is seven to ten times greater than the sale of individual stocks or bonds.

Tampering allegations against Mr. Tysk are for adding and backdating 54 new entries and changing 13 previous entries in his client-relationship management system, to support recommendations that were claimed to be unsuitable for his client.

While the incentive to commit fraud in the sale of variable annuities is great, the falsification of notes makes the offense even more egregious.  Evidence tampering is a serious issue and tampering with information concerning suitability is evidence that Tysk knew that he was committing fraud and was willing to commit additional acts of fraud to conceal his actions.

David Tysk, who has been working for Ameriprise in the Twin Cities since 1988 according to his LinkedIn page, was fined $50,000 and suspended for one year.

Recovery for Jean Walsh-Josephson Losses

If you were an investor of Jean Walsh-Josephson, please call 1-866-877-0201 for a free consultation concerning potential recovery for your losses.

broker in handcuffsJean A. Walsh-Josephson was a financial advisor for Thrivent, formerly Thrivent Financial for Lutherans.  A Winnebago County judge has ordered a two-week trial for this former Oshkosh, Wisconsin financial adviser who accused of stealing $4 million from her mostly elderly investment clients.

The trial for Walsh-Josephson is set for Feb. 20 through March 3, 2017. Judge Thomas Gritton ordered the trial this week, days after victims and their families gathered in court May 13 for what they were led to believe would be a plea and sentencing hearing.

Walsh-Josephson faces 28 counts of theft in a business setting of more than $10,000 each after authorities say she stole more than one million dollars from at least seven clients in Winnebago and Outagamie counties. She also faces felony forgery misdemeanor theft and obstructing an officer charges after authorities say she stole $400 from a client while acting as a third-party intermediary in a property dispute.

If convicted on all charges, she could face a maximum sentence of 287 ½ years in prison.

The question for investors is the question of why Thrivent did not detect this level of theft.  All firms have a duty to take reasonable steps to detect and prevent broker theft.

Jeffrey Pederson has handled numerous cases concerning the theft and outside activity of brokers and have helped investors obtain favorable judgments and settlements.  Please call for a free consultation.

SandRidge Energy (SDOC) Losses


The Law Offices of Jeffrey Pederson PC is investigating investor losses sustain in SandRidge Energy (OTC Pink: SDOC).  If you have suffered such losses please call 1-866-817-0201 for a free and confidential consultation.

blog_gulf_mexico_oil_rigSandRidge Energy Inc, an Oklahoma City-based oil and gas exploration and production company, declared bankruptcy on May 16, 2016.

This Chapter 11 bankruptcy ads SandRidge to the waive of energy companies filing for bankruptcy in 2016.

This bankruptcy by SandRidge will likely leave thousands of investors in Sandridge with substantial losses.  While Sandridge was always a highly speculative investment, our investigation reveals that the investment was commonly and inappropriately sold to those seeking or needing a stable, moderate risk investment.  As such, many investors purchased Sandridge as part of a moderate to low risk or retirement planning portfolio.  These people have recourse for their losses.

Such sale of unsuitable investments can be either negligence or fraud.  Speculative investments like SandRidge can pay a higher commission to brokers, giving brokers an inappropriate incentive to place investors in higher risk investments than is suitable.  Brokers can also recklessly put investors in high-risk investments to tout higher returns while failing to notify of the higher risk.  Recourse is generally obtained through the filing for arbitration with FINRA, the regulator overseeing brokers.

Jeffrey Pederson has successfully handled such suitability cases for a large numbers of investors in FINRA arbitrations and is looking to help SandRidge investors.  Please call.  Representations handled largely on a contingent fee basis where attorney fees are only paid upon the recovery of losses.

LINN Energy (“LINE”) Loss Recovery

If you suffered losses in LINN Energy (LINE or LNCO) you may be entitled to recovery of those losses.  Please call 1-866-817-0201 for a free consultation with a lawyer about loss recovery.  Most representations handled on a contingency basis where attorney fees are not due unless a recovery is received.

LINN Energy, which changed its name to LINCO, stated on March 16, 2016 that bankruptcy protection through the courts may be unavoidable.  This prediction came true on May 11, 2016 when LINN filed for bankruptcy per Rueters.  This will leave many investors who have invested their life savings in LINN looking to change their retirement plans and their financial outlook. For many of these investors LINN Energy was never a suitable investment, and this fact may give the individuals the right to recover their losses.

While some investors may call it “LINN” and others refer to it as “LINE,” all investors can agree that investors should not be responsible for the losses in LINN Energy to the extent that the investment was procured by fraud or negligence. Brokerages that allow the sale of unsuitable investments are responsible for the ultimate losses sustained by their investors.  Brokers and financial advisors have a duty to only sell suitable investments to investors. To be suitable, the investment must be consistent with the wants and needs of the investor.

LINN Energy is, and has always been, a speculative investment.  Unless you are a speculative investor and could afford to gamble on high risk investments LINN Energy was unsuitable for you. The list of people for whom LINN would be unsuitable and entitled to reimbursement includes, but is not limited to, any one of the following:  conservative to moderate investors; investors reliant upon investments for income; individuals reliant upon their savings; unsophisticated investors; individuals not understanding the risks of limited partnerships; individuals who could not afford to risk the amounts invested in LINN: and individuals who would have difficulty re-earning the funds invested in LINN if the investment were completely lost.

The recommendation to invest in LINN can be the result of either negligence or fraud.  Speculative investments often pay a higher commission and give brokers incentive to recommend investments that are not in the best interest of their investors.  Irrespective, the broker’s or financial advisor’s employer is responsible for losses as the result of unsuitable recommendations.

379335_544495705568117_1587447150_nThe risk surrounding LINN are many and not just from the falling oil market.  The potential tax consequences for its investors if LINN were to restructure some of its debt will also impact the value of the investment. When debt is restructured, debt that is forgiven is, for tax purpose, treated as income. Since LINN is an LLC, the tax liability belongs to the investors holding Linn shares.  This will further increase the losses of those holding LINN shares if they must pay tax on the income of LINN.

LLCs are popular because income is only taxed once, unlike regular corporations where the income of the corporation is taxed and the resulting dividends are also taxed.  While the single taxation is popular because it means less taxation of income when things are good, the downside is that investors are responsible for the tax the LLC cannot pay when things are bad.  That can accelerate the decline of an LLC when industry challenges, such as a decrease in the price of oil, occur.

By some estimates, investors will be responsible for paying approximately $24 per share in tax liability to the IRS even if they no longer hold the shares.  Even though the shares may be worthless.  So say an investor purchase $40,000 worth of the investment when Linn was trading at $40 per share, that individual may have to pay the IRS $24,000 for the tax liability of Linn.

Further, Linn offered investors the opportunity to trade in their shares for shares that protected investors from such liability, but Linn gave investors very little notice to make the transition.  Forbes estimates that only 35% of the Linn investors successfully made this switch to avoid payment to the IRS.  The other 65% will have to pay for Linn’s mismanagement beyond the extent they invested in Linn.

This is all in addition to the likely losses that shareholders would feel from that restructuring and oil prices that may not rise above $40 per barrel in the near future. LINN and LINCO investments likely became worthless on May 11, 2016.  On that date, LINN filed for Chapter 11 bankruptcy protection per Rueters.

Please call for more information. The Law Offices of Jeffrey Pederson has represented investors with suitability claims in FINRA arbitrations across the country.  Most representations done on a contingency basis.

For a detailed description on the rise and fall of Linn:


For a great article on the mess investors will be facing, along with an estimate of tax liability Linn investors will face: .


If you have suffered losses with Aequitas please call 1-866-817-0201 to speak to a lawyer for a free consultation.

The sudden and stunning collapse of Aequitas Capital Management continues to unfold. The alternative investment’s platform is under investigation by both the SEC and Consumer Financial Protection Bureau. Nearly $600 million was bet on a diverse array of subprime lending strategies.

This bet was done with the funds of the Aequitas investors.  It’s unclear how much, if anything, they’ll recover.

Complicit in this matter are the financial advisors recommending this investment.  The investment was reliant upon such financial advisors for funding the investment.  It appears that the due diligence in the investment by some financial advisors, required to be completed by financial advisors, was substantially insufficient.   The financials of Aequitas evidence existing and ongoing financial weakness.

Aequitas suffered a debilitating cash shortage that has forced it to terminate 80 of its 125 workers. It has defaulted on payments due to investors. It has confirmed in letters to customers it is considering bankruptcy filings.

The SEC and the Consumer Financial Protection Bureau have launched separate investigations of the company. Brian Rice and Scott Gillis, two of the company’s six senior partners, resigned in recent weeks. The company’s general counsel just quit. As did Gillis, the CFO.  Gillis was the second Aequitas chief financial officer to depart in less than a year.

UDF Losses

The FBI on Thursday, February 18, 2016 raided the Grapevine, TX, in suburban Dallas, offices of large real estate investment trust, United Development Funding IV (“UDF”).  Allegations have circulated that investors have suffered losses at UDF as the result of Ponzi activity.  Shares of UDF on that day toppled 54% before trading was stopped.

If you invested in UDF, you have rights and should call 1-866-817-0201 for a free consultation with a lawyer.

FBIUDF has seen its stock price fall 81% in the past two months after a hedge fund alleged it was operating for years like a Ponzi scheme.

“The FBI is lawfully present and conducting law enforcement activity” at the UDF offices, said FBI spokeswoman Allison Mahan.

UDF has previously defended itself saying that the Ponzi charges are untrue and that it is the victim of individuals spreading rumors in hopes of shorting the REIT.   Claiming in a filing with the Securities and Exchange Commission that the REIT was the victim of this type of securities trading scheme known as a “short and distort.”  However, UDF also disclosed in December that it had been the subject of a fact-finding investigation by the SEC since April 2014.

The FBI’s presence at UDF headquarters further decimated the company’s share price, which fell  Thursday, February 18, to $3.20 per share after the FBI activity at company headquarters was reported. As recently as two months ago, UDF shares were trading at $17.20.

UDF IV had total assets of $684 million, the vast majority of which, $513.2 million, were notes receivable, according to its quarterly report from November. Notes receivable for related parties was $69.6 million, according to the report.

Earlier this month, hedge fund manager Kyle Bass revealed that he was shorting UDF. “UDF is using new investor money to pay existing investors,” he wrote. “UDF Management is misleading investors and is preying on ‘Mom and Pop’ retail investors.”

UDF investors should speak with an attorney to know their rights.


Sources for this report include and


Caldwell International Securities

If you suffered losses at Caldwell International Securities, please call 1-866-817-0201 and request to speak to an attorney concerning this investigation.

Caldwell International Securities and a variety of its representatives were named respondents in a FINRA complaint alleging that the firm, by and through one or more of its registered representatives and principals, put profits before customers, growth before compliance and subterfuge before transparency. The complaint alleges that the firm’s culture of non-compliance led to serious sales practice, supervisory and reporting violations at its home office and multiple branches.

The representatives alleged to be involved are Greg Allen Caldwell (CRD #2816295, Austin, Texas), Alex Evan Etter (CRD #2981742, Old Tappan, New Jersey), Alain J. Florestan (CRD #2818942, Queens Village, New York), Lennie Simmons Freiman (CRD #1007506, Fischer, Texas), Paul Joseph Jacobs (CRD #4658235, Austin, Texas), Richard Andrew Lee (CRD #2768039, West Nyack, New York), Lucas Dylan Lichtman (CRD #5542092, Fort Lee, New Jersey) and Richard Lim (CRD #4949289, Clark, New Jersey).

Etter, Florestan, Lee, Lichtman, and Lim made unsuitable recommendations of an active trading investment strategy to their customers despite the fact these representatives failed to understand the risks of the investment strategy being recommended, or the impact the staggering commissions and fees generated by this active trading investment strategy would have on their customers’ accounts. These representatives had no reasonable basis to recommend such a strategy to their customers. As a result of the recommendation of an unsuitable active investment trading strategy, customer accounts suffered more than $1.1 million in realized trading losses while paying over $1 million in commissions and fees.

The firm is liable for the unsuitable recommendations of an active trading investment strategy made by Etter, Florestan, Lee, Lichtman and Lim under the doctrine of respondeat superior because each representative was an agent of the firm acting within the scope of his duties when he engaged in this misconduct. The firm, acting by and through its formerly registered representatives, made unsuitable recommendations involving inverse and/or leveraged ETFs without a reasonable basis for believing these investments were suitable for their customers.

The complaint also alleges that the firm, Caldwell, Freiman and Jacobs failed to establish and maintain a system to supervise the activities alleged that was reasonably designed to achieve compliance with applicable securities laws and regulations and NASD/ FINRA rules. The firm, Caldwell, Freiman and Jacobs failed to monitor for, detect and, when detected, investigate multiple instances of potential misconduct by the firm’s brokers involving unsuitable active trading investment strategies, unsuitable ETFs, discretionary trading without written authorization and excessive trading/churning in multiple customer accounts across multiple branches of the firm. In addition, the firm, Caldwell, Freiman and Jacobs failed to implement a reasonable supervisory system to adequately review trades for unsuitable recommendations, such as ETFs, and to adequately monitor whether the firm’s representatives understood the risks and benefits of the active trading investment strategy they were recommending, nor did the firm monitor whether the representatives had done any due diligence on the recommended active trading investment strategy.

This grossly inadequate supervisory system resulted in many firm customers suffering significant losses and paying staggering commissions and fees. The firm, Caldwell, and Freiman failed to establish and maintain a system to supervise the firm’s activities that was reasonably designed to achieve compliance with applicable securities laws and regulations and NASD/FINRA rules and/or the firm’s WSPs in multiple other ways. The firm, Caldwell, and Freiman failed to place representatives on heightened supervision, review all electronic correspondence to and from customers, identify and report customer complaints received, and apply right of reinvestment/right of reinstatement fee waivers, resulting in overcharges of $107,367.08 to customers’ accounts. The complaint further alleges that the firm, Caldwell, Freiman and Jacobs failed to establish, maintain and enforce WSPs to supervise its business that were reasonably designed to achieve compliance with applicable securities laws and regulations and NASD/FINRA rules. The firm did not establish, maintain and enforce written procedures to supervise its representatives’ recommendations of active and aggressive trading investment strategies to many of its customers in multiple branches. The firm failed to establish, maintain and enforce written procedures to ensure that reduced sales charges were applied for mutual funds where applicable in accordance with the fund’s right of reinvestment/right of reinstatement provisions. In addition, the complaint alleges that the firm, Freiman, Jacobs, and Etter failed to identify customer complaints and none of these complaints were reported to FINRA. The firm failed to report to FINRA statistical and summary information regarding written customer complaints from three branches as required. Moreover, the complaint alleges that the firm willfully violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-10 by charging customers misleading and/or discriminatory miscellaneous fees in several transactions.  Furthermore, the complaint alleges that the firm, acting by and through Freiman, failed to log into the FinCEN system and conduct any of the required searches of its accounts and systems to determine whether it maintained any accounts for persons appearing on FinCEN’s 314(a) request list. The complaint also alleges that Florestan and Lim willfully failed to timely update their Forms U4 to disclose judgments against them. The complaint further alleges that Florestan failed to timely respond to requests from FINRA for documents and information during the course of its investigation of the firm’s branch activities.


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.