Attention James T. Booth Investors

If you were an investor of James T. Booth previously of LPL and Invest Financial, please call 1-866-817-0201.  Initial consultations are free and confidential.

The Department of Justice (DOJ) announced an Indictment charging Booth with securities fraud, wire fraud, and investment adviser fraud charges in connection with his years-long scheme to defraud customers of his financial services firm, Booth Financial Associates (“Booth Financial”) which is affiliated with LPL Financial and Invest Financial.  Throughout Booth’s scheme, he solicited money from clients of Booth Financial and falsely promised to invest their money in securities offered outside of their ordinary advisory and brokerage accounts.  Instead, he used nearly all of the money to pay personal and business expenses.  In total, Booth fraudulently obtained approximately $5 million from his investors.

Investors have recourse when investment professionals turn bad.

Investors have recourse when investment professionals turn bad.

“As alleged, James Booth convinced his clients that he would deliver solid and secure returns on their investments.  Instead, as alleged, Booth delivered only lies and deceit, and bilked some 40 clients of nearly $5 million.  Booth is now in federal custody and will have to answer for his alleged crimes,” stated the DOJ.

The DOJ further stated, “In an elaborate scheme of false promises and deception, it is alleged that Booth attained almost $5 million by luring investors to move their assets with the guarantee of safer investments and higher returns.  Instead, Booth allegedly pocketed the money. ”

Booth provided investors fabricated account balances and statements to prevent investors from seeking a return of their money, and to induce additional investments.  He further concealed the truth from investors by using money obtained from new investors to make redemption payments to previous investors, in a Ponzi-like fashion.

When Stockbroker Emails are Hacked

Stockbrokers and brokerage firms have responsibilities to safeguard client information and their funds.  So when information is hacked, information in the possession of the broker or elsewhere, or an identity stolen, there are responsibilities they have to compensate their injured investors.  If you have suffered damages as the result of a hacking please call 1-866-817-0201.

An example of this is the regulatory action against securities broker Lori Thompson.  On December 14, 2018, Thompson received an email from an imposter purporting to be a customer “ML”.   This email was in response to an earlier email chain between Thompson and ML, requesting that UBS, Thompson’s employer, send $68,740.55 from ML’s brokerage account to a third party (“Third Party A”).

That same day, Thompson completed a client contact attestation form that falsely attested that she spoken with ML to confirm the disbursement request, when, in fact, she had not spoken with ML. Thompson received two additional emails from an impostor purporting to be ML on December 28, 2018 and January 10, 2019, requesting that two checks be sent to Third Party A and two checks be sent to another third party (Third Party B”) for a total of $298,646.92.

On each occasion, Thompson issued the checks and completed client contact attestation forms, falsely attesting that she had spoken to ML to confirm the disbursement requests when she had not.

The third parties did not have authorization to make the withdrawals and these funds were lost.  Had appropriate procedures been followed these losses would have never occurred.

Brokers have safeguards that they must take.  There are verifications that must be made, in addition to the attestation described above, and systems that must be put in place to protect against cyber criminals.  Failure to do so is negligence.  If your identity was stolen or your information hacked and lost funds as a result, please call to speak to a licensed attorney.

 

Attention Mediatrix Investors

The SEC on September 18, 2019 announced that it has filed an emergency action in federal court in Denver, Colorado and obtained an asset freeze against three individuals in connection with an alleged fraudulent, ongoing international trading program, Mediatrix Capital, that has placed at risk more than $125 million of investor funds.  Allegations include that Mediatrix, despite assertions that it has not lost investor money in five years, has been operating a Ponzi scam and inducing investors fraudulently.

Mediatrix is an investment manager and trading advisor.  It is not a hedge fund, but a manager of outside funds, and purports that its operations as being conducted in the Bahamas.

An action has been brought by the SEC in Colorado.  Colorado has jurisdiction over Mediatrix due to owner and CEO Michael Young’s home in the Denver, Colorado area.  Despite the fact that Mediatrix operates out of the Bahamas, American investors may have the opportunity to pursue losses in the federal or state court in Colorado.

According to the SEC’s complaint, beginning in March 2016, Mediatrix Capital Inc. and its three owners, Michael S. Young, Michael S. Stewart, and Bryant E. Sewall, induced investors to invest by falsely representing that their money would be invested using a highly profitable algorithmic trading strategy that had never experienced an unprofitable month and had returned more than 1,600 percent since inception. In truth, the complaint alleges, the defendants’ trading strategy consistently lost money-losing more than $18 million from its trading in 2018 alone. In addition to repeatedly misrepresenting the profitability of the trading, the complaint alleges defendants also misled investors by falsifying account statements and making Ponzi-like payments, all while misappropriating more than $35 million of investor money for defendants’ personal use, including to purchase luxury properties and vehicles.

The SEC’s complaint, filed in federal district court in Colorado on September 12, 2019 and unsealed today, charges all defendants with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933, as well as with violating the registration provisions of Section 5(a) and 5(c) of the Securities Act.

The SEC’s complaint also charges Mediatrix Capital, Young, Stewart, and Sewall with violations of the antifraud provisions of the Investment Advisers Act of 1940. The SEC has also charged 20 relief defendants who allegedly received profits from the fraud.

The SEC’s continuing investigation is being conducted by Jeffrey D. Felder and Tracy W. Bowen of the SEC’s Denver Regional Office and supervised by Kimberly L. Frederick and Jason J. Burt. The litigation is being led by Stephen C. McKenna and Mark D. Williams and supervised by Gregory A. Kasper. The SEC appreciates the assistance of the U.S. Commodity Futures Trading Commission, the U.S. Attorney’s Office for the District of Colorado, the Federal Bureau of Investigation, and the U.S. Marshals Service. The SEC also appreciates the assistance of the UK Financial Conduct Authority, the Czech National Bank, the New Zealand Financial Markets Authority, the Securities Commission of The Bahamas, the Central Bank of Armenia, and the Cayman Islands Monetary Authority.

Jeffrey Pederson is a licensed Colorado attorney.  If you have questions about Mediatrix or the ability to pursue recovery of losses in Colorado, please call 1-866-817-0201.

Attention Stokesbary Investors

If you were one of the investors of Arlyn Roy Stokesbary, formerly of Thrivent Investment Management, please call 1-866-817-0201.   Initial consultations with an attorney are free and confidential.

The Financial Industry Regulatory Authority (FINRA) accused Stokesbary of a large number of unauthorized trades in the accounts of his investors.  FINRA is the regulatory arm of the New York Stock Exchange and the NASDAQ, and is overseen by the SEC.  FINRA alleged that Stokesbary took such fraudulent actions in the accounts of 20 separate investors.   The actual number may be much higher.

In August 2017, Thrivent identified Stokebary trading for two unrelated investors within several minutes of each other, actions which raise a red flag that appropriate authorization was not obtained.  Stokesbary confessed to his employer, Thrivent, that he did not speak to either customer prior to the trades.  Thrivent warned him of the need for contemporaneous authorization of trades, but did not fire him at the time.

Unauthorized trading is a form of fraud.  A broker can enrich himself at the expense of his investor when the broker makes unauthorized trades.  As such, a broker cannot exercise such control over an account absent written authorization.

Unfortunately, the warning from Thrivent was not heeded.  FINRA identifies that shortly thereafter, Stokesbary effected an additional 109 trades without contacting investors on the day of the trade.  Once again, this number may be much higher.

On September 20, 2018, Thrivent disclosed that it  terminated the employment of Stokesbary.  Thrivent stated the termination was for his  “failing to discontinue improper trading practices [in customer accounts] after being educated.”

Thrivent, and its predecessor Lutheran Brotherhood had been the employer of Stokesbary since 1987.

FINRA suspended Stokesbary for 15 days from the industry and imposed a $5000 fine.

Investors holding accounts at Thrivent should contact an attorney if they believe that Stokesbary effectuated trades in their accounts.

 

Attention Investors of Daniel Maughan

If you were an investor of Danial Maughan call 1-866-817-0201 for a free and confidential consultation with an attorney concerning your rights and avenues of recovery.

Daniel G. Maughan, while associated with Financial West Group churned and excessively traded a customer’s trust account. From October 2010 through January 2015 , Maughan executed approximately 1,648 trades, with a principal value of all purchases and sales in excess of $70 million, in the account.

FINRA brought suit concerning these actions in August 2019.

The account owners were unsophisticated.  Both had a high school degree with a small amount of junior college.  The husband had been unemployed as a plumber for approximately two years.  The wife had only part-time employment as a bookkeeper.  When they inherited the funds they advised Maughan to invest conservatively.

 

The annualized cost-to-equity ratio—the percentage the account had to appreciate to break even—was 21.06. Maughan’s churning and excessive trading was quantitatively unsuitable and generated commissions and costs totaling approximately $841,000 while causing the account to incur realized and unrealized losses of approximately $812,000.

During the Relevant Period, Maughan also recommended overly aggressive and unsuitable trades in the IFT Account involving: (a) options and (b) non-traditional Exchange-Traded Funds (“ETFs”) and an Exchange Traded Note (“ETN”).

By churning the IFT Account, Maughan willfully violated the Securities Exchange Act of 1934, and a multitude of FINRA Rules.

This is not the first time Maughan has been accused of fraud.  In 2015, his employer paid $550,000 to settle a suit alleging that he fraudulently sold his investors options and penny stocks.

In 2009, Wedbush Morgan was sued, via arbitration, for Maughan’s recommendation of overly aggressive ETFs and aggressive stocks to an investor.  This matter settled for the payment of $10,000.

Merrill Lynch, a previous employer, was sued in 2002 over allegations that Maughan churned the portfolio of an investor, along with making other investments in overly aggressive investments without authorization.  Merrill Lynch settled this matter for $46,000.

In 2001, an arbitration suit was filed against Merrill Lynch.  The suit alleged that Maughan made unauthorized purchases in the account of a mentally incompetent adult, and that the client could not comprehend any conversation concerning the investments in question.  This matter settled for $51,321.

Merrill Lynch terminated Maughan in 2001 for this sale.  Maughan has stated that he made “several errors” in the sale of the investment.

Michael Lee Origin Fund Fraud

If you invested with the Origin Fund through Michael Lee or others you may be a victim of fraud.  Please call 1-866-817-0201 for a free and confidential consultation with a lawyer concerning your rights.

Invest photo 2Michael Lee is a former Kestra Investment Services broker.  From December 2015 through December 2016 (the “Relevant Period”), Lee engaged in the sale of the “Origin Fund.”  Lee was an employee of Kestra during this time.  His office was located in Darien, CT.

The Origin Fund is a prospective ETF fund. Lee solicited potential investors and distributing written materials prepared by Lee’s business partner.  The written materials distributed by Lee falsely represented that the Origin Fund was an investment advisory with $20 million in assets under management, and that Kestra’s was sponsoring and providing certain administrative services to the Origin Fund.

FINRA, the Financial Industry Regulatory Authority, suspended Lee for one year and fined him $12,500 for his actions associated with the Origin Fun.  At the time of suspension, Lee was still in the industry as a representative of Altium Wealth Management.

The inappropriate investments were done under Kestra’s watch.  Kestra, like all brokerages, had a duty to conduct audits and take other reasonable steps to prevent the “selling away” of its brokers.

Selling away is a common form of fraud where a broker uses his status as a broker to persuade investors into purchasing investments that have not been approved by the brokerage.  These investments often pay the broker an excessive commission but the investment itself often lacks substance and is often a fraud.

Securities Fraud of Kerry Lee Hoffman

The SEC charged Kerry Lee Hoffman, former LPL advisor from Chicago, with securities fraud.  If you invested with Hoffman call 1-866-817-0201 to discuss your rights and potential for recovery.  The fraud concerned sales of GT Media in which he partnered with childhood friend and convicted thief Thomas Conwell.

Between July 2015 and July 2018, Conwell and Hoffman raised over $3.3 million from approximately 46 investors through the sale of unregistered GT Media, Inc. securities.

According to the SEC Complaint, Conwell, who was previously enjoined by the SEC and criminally convicted for stealing money from investors, made numerous false representations to investors, including that two Fortune 500 companies were seeking to acquire GT Media and that GT Media would soon conduct an initial public offering.

The prior conviction of Conwell was from January 2006, when Conwell pleaded guilty to charges of wire fraud, bank fraud and obstructing an SEC investigation and he was sentenced to 48 months in prison.  He was barred from the securities industry by the SEC in 2000.

 

The complaint filed by the SEC also alleges that Conwell, in the present matter concerning GT Media, misappropriated $161,500 from investors, which he used to pay his personal expenses. According to the complaint, Hoffman, a registered representative and investment advisory representative at LPL, solicited certain of his advisory clients to invest in GT Media securities without disclosing his financial conflicts of interest, including his compensation from GT Media and his short-term loans to GT Media that were repaid using investor funds.

The failure to disclose such conflicts is fraud, but a greater fraud is the failure to disclose the lack of due diligence investigation, along with other material financial information that Hoffman would have possessed.

The SEC action is currently pending in federal district court in Chicago.

Hoffman’s record indicates that he was a broker with LPL until September 2018.  At that time he was allowed to voluntarily resign after allegations were made against him concerning a failure to disclose certain outside business activity.  He had been a broker with LPL since February 2010.

Hoffman had previously been fired by UBS when a co-worker accused him of making securities trades without the authorization of the investor.  This fraud was public record when he was hired by LPL.

 

Jimmy Booth Investment Fraud

If you were with James “Jimmy” Booth, and question whether you are a victim of investment fraud, please call 1-866-817-0201.  Booth has previously been a broker for LPL, Invest Financial, and Cadaret, Grant & Co.  He did business for these firms under the name “Booth Financial Associates.”

In May 2019, FINRA, the regulator overseeing securities brokers, began an investigation into the Booth matter after receiving information from Booth’s former employer, LPL, following an internal investigation. During the Relevant Period, multiple customers of Booth gave him their savings totaling at least approximately $1,000,000 to invest on their behalf.

Booth, however, deposited the funds into an account he controlled and, instead of using the funds for investment purposes, used them for his own personal use. FINRA rules provides that “[n]o member or person associated with a member shall make improper use of a customer’s securities or funds” and that “[a] member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade. ”

FINRA barred Booth from ever serving as a securities broker as part of the settlement of the regulatory matter.

LPL has sent letters to some of the impacted investors to ask them if they authorized the withdrawals in their accounts.  For full recovery, investors should speak to an attorney.

Booth primarily worked in the Norwalk, CT area but it is believed that he had investors nationwide.

Booth has a history of customer disputes going back to 2004.

Paul Andrews Rinfret Victims

If you were an investor of Paul Andrews Rinfret please call 1-866-817-0201 for a free and confidential consultation with a private attorney. 

Rinfret orchestrated a years-long scheme to defraud investors.  He sold limited partnership interests in an entity purported to trade in futures relating to the S&P 500, utilizing a purported algorithm he had developed.  Rinfret touted unreasonably high returns on his trading.  In truth, Rinfret simply stole most of the investors’ money in order to fund his lavish lifestyle.  Rinfret was arrested the morning of June 28, 2019 at his home in Manhasset, New York,

Investors have recourse when investment professionals turn bad.

Investors have recourse when investment professionals turn bad.

As stated by the SEC, Paul Rinfret deceived investors at every step:  Lying about his past returns in his solicitations.  Lying about having invested all of their entrusted funds, when he was actually spending much of it on things like jewelry, cars, and a Hamptons vacation home.  After receiving the funds he lied about how their money was growing. 

Rinfret obtained more than $19 million on the false representation that he would utilize their investment funds for trading. 

Rinfret’s lies were varied and many but that does not mean that portions of investors funds cannot be recovered.   If you are a victim, please call to discuss your options.   

Recover Nina Jessee Investment Losses

Nina S. Jesse, formerly of National Capital Corp. and Cetera Advisors, has been sued over 20 times for her improper recommendation of unsuitable investments.  Her former employers are responsible for failing to supervise Jessee.  Please call 1-866-817-0201 for a free and confidential consultation with an attorney if you have suffered losses you believe were too aggressive or not appropriately investigated by Jessee or her employers.

Ms. Jesse is permanently barred from the securities industry.  FINRA, the regulatory body that oversees securities brokerage firms, investigated Jessee.  The focus of the investigation was the large number of complaints that Nina Jesse sold unsuitable investments.  The sale of unsuitable investments is a form of fraud.  A broker motivated by commission or other payment recommends investments that are overly risky or otherwise inconsistent with an investor’s objectives or tolerance for risk.  The investors then suffers losses as the result of the broker’s greed.

The bar of Nina Jessee was issued when Jessee failed to provide documents or otherwise contest the regulator’s allegations.  Her attorney acknowledged that she received the regulatory action but declined to participate.

Another subject of the investigation was undisclosed outside business activity of Jessee.  The reason that disclosure of such activity is important is that brokers will commonly use their access to investors to direct investment toward their own business or the business of a friend.  This is done despite the lack of oversight by the broker’s employer or verification that the business is worthy of anyone’s investment.

Suits concerning losses with investors such as Nina Jessee are largely handled through an arbitration process.  Investors suffering losses should speak to an attorney knowledgeable with the investment arbitration process.  Please call the number above to discuss Nina Jesse and the recovery process.