Category Archives: Uncategorized

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.

Bill Kielczewski Fraud Victims

If you invested in Mariemont Capital through Bill Kielczewski or otherwise suffered losses due to his recommendations, please call 1-866-817-0201.

Securities firms have a duty to monitor and supervise outside business activity of their brokers.  When brokers sell investments that are not approved by their brokerage, the brokerage is responsible for the resulting losses.

While associated with Huntington Investment Company (“Huntington”) Bill Kielczewski falsely and repeatedly represented to the Firm, and upon information and belief his investors, that he was merely a passive investor in a hedge fund called Mariemont Capital Partners L.P.

in fact, he was actively involved with Mariemont, promoting it to potential investors. Kielczewski participated in multiple private securities transactions through which four Firm customers invested over $10 million in Mariemont, without providing prior written notice to Huntington. Kielczewski willfully caused the Firm to make five false regulatory filings in which he described himself as a “passive investor” in Mariemont when he was not.

During the hiring process in late December 2013, Kielczewski submitted to Huntington a Pre-Registration Request Form, disclosing that he was engaged in an outside business activity with an entity called “Mariemont Capital.” In making his disclosure, Kielczewski did not provide the full name of the Mariemont entity and did not distinguish between the Fund and the investment manager.

Huntington terminated Kielczewski in April 2017.  The regulator FINRA started an investigation in April 2019 and filed a regulatory complaint in May 2019.

Attention Dean Grant Investors

If you are an investors of Dean Harrison Grant, formerly of M Holdings and NY Life, please call 1-866-817-0201 for a confidential and free consultation with an attorney.  Grant is the found and owner of GFG Strategic Advisors.

Authorities in Georgia have issued warrants for arrest for Grant.  He has been charged with the following:  1) insurance fraud; 2) forgery; 3) theft by a fiduciary; and 4) trafficking of an elder person.

Grant duped victims out of more than $1.3 million.  After arraignment, he was released on bail of $750,000 from Baldwin County Law Enforcement Center.  He currently lives in Fulton County, Georgia, but previously resided in Milledgeville, which is also the location of GFG Strategic Advisors.

About three years ago, he moved to a home in Roswell with an appraised property value of nearly $2 million, according to Fulton County records.

Investors have recourse when investment professionals turn bad.

Investors have recourse when investment professionals turn bad.

This warrant follows grants extended history of financial problems.   Grant was the subject of tax liens in October 2017, October 2018, and December 2018.  These financial issues were required to be disclosed to warn potential investors, but were not.

Regulators brought charges against Grant in February 2019.  has not contested the regulatory charges.  Failing to contest the charges, Grant ultimately agreed to a lifetime ban from the securities industry.

Georgia insurance Commissioner is urging investors with insurance products from Grant to verify the validity of their account or coverage.

 

DC Solar Ponzi – Loss Recovery

DC Solar is accused of operating a large Ponzi-type scheme concerning  a number of tax equity investment funds from 2015-2018.  The company, whose products include solar generators as well as light towers that can be used at sports events, filed for Chapter 11 bankruptcy protection in February 2019 in Reno, Nevada.  This Ponzi scheme, as with most Ponzi schemes, is about a failure of investigation as much as the underlying fraud.

In a February 8, 2019 affidavit related to those bankruptcy proceedings, an FBI agent said the manner in which the Benecia, California-based company appeared to have operated reflected “evidence of a Ponzi-type investment fraud scheme.”

The U.S. Securities and Exchange Commission accused DC Solar’s owners by name of engaging in a Ponzi scheme, according to a separate court filing.

As late as December 20, 2018, DC Solar had been seen in the business media as an “Energy Powerhouse.”  The company was well known and sponsored a NASCAR team.  Those fortunes reversed quickly.

Sufficient investigation by advisors would have revealed insufficient lease revenue and that the funds coming in to compensate the lack of lease revenue was simply investor money.  As such, payments of profits was simply earlier investors receiving the investment funds of newer investors.  Detecting such arrangements is the charge of brokers, advisors and their firms as part of their due diligence obligations.

Civil action has been commenced against the property of DC Solar, which is considered the defendant in the case. Because it is a civil action, no criminal charges need be placed against the property’s owner, according to the U.S. Department of Justice.

However, 87 defendant items are traceable to an investment fraud and money laundering scheme run by companies described in other court documents as those associated with DC Solar.

The defendant properties listed are $62,546110.43 in multiple domestic and foreign bank accounts; $1,944,091.07 in cash seized at the Carpoffs’ Martinez home and Benicia offices; an estimated $500,000 worth of jewelry and other personal items; and a $782,949 money transfer for that luxury box at the Raiders NFL football team’s future stadium in Las Vegas, Nev.

Most of the bank accounts had been opened with China Bank and Trust, which is based in Taiwan with multiple international subsidiaries, according to its website. Other accounts were opened with E-trade, J.P. Morgan, BBVA Compass and Bank of America, the attorneys wrote.

Once of the largest victims is Berkshire Hathaway.  Warren Buffett’s Berkshire Hathaway Inc on Wednesday said a $377 million charge it incurred recently was tied to a solar generation company that U.S. authorities have linked to fraud.

 

Buckman, Buckman & Reid Loss Recovery

If you suffered investment losses with Buckman, Buckman & Reid (BBR) please call 1-866-817-0201 about potential loss recovery.  BBR has been censured and officer, Chip Buckman, suspended for a culture of insufficient supervision leading brokers to make excessive trades and recommend overly aggressive securities

From January 2013 through April 2017, BBR failed to maintain a supervisory system and enforce written supervisory procedures. In addition, BBR and Chip Buckman—who was the Firm’s designated supervisory principal responsible for conducting suitability reviews failed to reasonably supervise two former registered representatives, who the regulatory documents identify only by initials GK and RI, recommended excessive and unsuitable trades in dozens of investor accounts.

Regulatory rules require securities firms and their brokers to have a reasonable basis to believe that a recommended securities transaction or investment strategy is “suitable” for the customer, based on the information obtained through the reasonable diligence of the firm or associated person to ascertain the customer’s investment profile. A customer’s investment profile includes, but is not limited to, the customer’s age, other investments, financial situation and needs, investment objectives, investment experience, investment time horizon, liquidity needs, and risk tolerance.  Failure to do so is a “suitability” violation.

Unsuitable investment recommendations and excessive trading are forms of fraud.  Both enable a broker to make commissions that significantly above those that would be earned if the broker handled the account in a manner consistent with regulatory obligations.  Both also create unnecessary risks in the portfolios of their investors.

 

BBR was required to maintain procedures to make sure that investment recommendations were suitable BBR’s system failed to monitor its brokers in such a fashion.  No one at BBR reviewed the monthly reports and alerts that could have helped the Firm detect excessive trading and unsuitable concentration levels in customer accounts.

The supervisory failures allowed the fraud to occur.  At least one of the brokers involved had a history of misdeeds when he was first hired by BBR including many complaints for unsuitable securities sales.  Despite this history of fraud, BBR failed to supervise this broker.  Not surprisingly, the broker continued to commit fraud in the accounts of his investors.

We assist investors who lose value in their portfolio when brokers commit misdeeds and brokerages fail to supervise.  Please call for a free and confidential consultation.

 

 

Merrill Fined over ADRs

The SEC on March 22, 2019 announced that Merrill Lynch, Pierce, Fenner & Smith Incorporated will be fined over $8 million to settle charges of improper handling of “pre-released” American Depositary Receipts, also known as ADRs.

ADRs, which are U.S. securities that represent foreign shares of a foreign company, require a corresponding number of foreign shares to be held in custody at a depository bank.  The practice of “pre-release” allows ADRs to be issued without the deposit of foreign shares, provided brokers receiving them have an agreement with a depository bank and the broker or its customer owns the number of foreign shares that corresponds to the number of shares the ADR represents.

NYSE pic 1The SEC’s order found that Merrill Lynch improperly borrowed pre-released ADRs from other brokers when Merrill Lynch should have known that those brokers – middlemen who obtained pre-released ADRs from depositaries – did not own the foreign shares needed to support those ADRs.  Such practices resulted in inflating the total number of a foreign issuer’s trade-able securities, which resulted in abusive practices like inappropriate short selling and dividend arbitrage that should not have been occurring.

The SEC’s order against Merrill Lynch found that its policies, procedures, and supervision failed to prevent and detect securities laws violations concerning borrowing pre-released ADRs from these middlemen.

This is the SEC’s ninth enforcement action against a bank or broker resulting from its ongoing investigation into abusive ADR pre-release practices, which has thus far resulted in monetary settlements exceeding $370 million.

“We are continuing to hold accountable financial institutions that engaged in abusive ADR practices,” said Sanjay Wadhwa of the SEC’s New York Regional Office.  “Our action conveys the message that an entity like Merrill may not avoid liability by using another broker to obtain fraudulently issued ADRs on its behalf.”

Without admitting or denying the SEC’s findings, Merrill Lynch agreed to pay more than $4.4 million in disgorgement of ill-gotten gains plus over $724,000 in prejudgment interest and a $2.89 million penalty for total monetary relief of over $8 million.

The SEC’s continuing investigation is being conducted by Andrew Dean, Elzbieta Wraga, Philip Fortino, Joseph P. Ceglio, Richard Hong, and Adam Grace of the New York Regional Office, and is being supervised by Mr. Wadhwa.

Floyd E. Powell Victims

On February 13, 2019, a regulatory settlement was issued in which Floyd E. Powell was permanently barred from association with any stockbrokerage firm in any and all capacities.  If you are a victim of Mr. Powell, purchasing Woodbridge notes through him, call 1-866-817-0201 for a free and confidential consultation.

Without admitting or denying the findings, Powell consented to the sanction by FINRA, the Financial Industry Regulatory Authority, and to the entry of findings that he engaged in private securitiestransactions without providing notice to or obtaining approval from his member firms prior to participating in them.

The findings stated that Mr. Powell solicited investors to purchase promissory notes relating to a purported real estate investment fund. Ultimately, Powell sold $3,491,707 in the notes to investors, many of whom were customers of the securities firms for which Mr. Powell worked. Powell received a total of $103,598 in commissions in connection with these transactions. Later, the fund filed a voluntary Chapter 11 bankruptcy petition.

Powell operated primarily in the Albertville and Birmingham, Alabama areas. He worked for MML Investors, MSI Financial Services, and Metropolitan Life Insurance.  He had been a licensed stockbroker since 1992.

The sale of unapproved securities, such as the notes sold by Mr. Powell, is a significant securities violation.  Not only is the review by a firm to ensure that the prospects of a company are what the company says they are, brokers often try to circumvent a firms review to allow the sale of a fraudulent investment.

Attention Motty Mizrahi Investors

The SEC has halted an ongoing fraud perpetrated by Motty Mizrahi and targeting members of the Los Angeles Jewish community.  If you are a victim, call 1-866-817-0201 to speak to a private attorney about your rights.

FBIThe SEC filed an emergency action in federal court against Mizrahi and MBIG Company, his sole proprietorship, alleging that, since June 2012, they defrauded at least 15 investment advisory clients out of more than $3 million.

According to the SEC’s complaint, Mizrahi falsely claimed that MBIG used sophisticated trading strategies to generate “guaranteed” investment returns of between 2-3% per month risk-free, clients would not lose their money, and could withdraw their funds at any time.

Unbeknownst to his investors, however, MBIG had no bank or brokerage account of its own – rather, clients unwittingly sent money to Mizrahi’s personal bank account. Mizrahi used the money to fund his personal brokerage account, in which he engaged in high-risk options trading producing losses of more than $2.2 million, and to pay personal expenses. The SEC alleges that Mizrahi covered up his fraud by issuing MBIG’s clients fabricated account statements, showing positive account balances and profits from trading. When clients demanded proof of MBIG’s securities holdings, Mizrahi showed them brokerage statements reflecting a multi-million dollar balance for a fictitious MBIG brokerage account.

On March 27, 2019, the Honorable Judge Percy Anderson of the U.S. District Court for the Central District of California granted emergency relief, including a temporary restraining order against the defendants and an order freezing their assets.

In a parallel action, the United States Attorney’s Office for the Central District of California announced on March 29, 2019 it filed wire fraud charges against Motty Mizrahi and another individual.

Investors of Judith Johnston, NY Life

Investors of Judith Johnston of Frisco, formerly employed by NY Life, may have recourse for investment products sold to them.  Ms. Johnston was recently barred from the securities industry for failing to comply with an investigation into her annuity and insurance sales.  Please call 1-866-817-0201 for a free consultation with an attorney.

Ms. Johnston came to the attention of the regulator, FINRA, the Financial Industry Regulatory Invest photo 2Authority, due to the high number of customer complaints.  Eight different investors have submitted written complaints and have either sued NY Life concerning Johnston’s sales activities or threatened to sue.

The complaints by investors included Johnston’s solicitation and sale of variable universal life and variable annuities.  These complaints asserted that Johnston mislead them concerning various aspects of the financial products, such as the fees, the costs and the feasibility of taking .  They also assert that the husband of Johnston engaged in deception during the sale of these products and that Johnston was complicit.

On November 6. 2018, FINRA Enforcement sent a request to her address, requesting that she appear to provide testimony on December 4, 2018. On November 20, 2018, Johnston hired an attorney and testimony was rescheduled for January 24, 2019.

On January 24. 2019. Johnston appeared to start her testimony.  At the conclusion of one day of testimony on January 24th, FINRA staff determined that it needed additional testimony from her and requested that she appear to continue her recorded hearing.

By email dated February 11, 2019. Counsel for Johnston stated that Johnston would not comply with FINRA’s request to provide any additional testimony, and no longer wished to cooperate with the investigation. As stated in the email to FINRA staff on February 11, 2019, and by this agreement. Johnston acknowledges that she received FINRA’s request to provide testimony. and will not comply with that request.

Attention Investors of Richard Niemann, UBS

Investors of Richard Niemann, a securities broker with UBS in Sugar Land, Texas, may have recourse for unauthorized transactions in their accounts.  Please call 1-866-817-0201 to speak to an attorney.

UBSFrom June 2010 through November 2017, while registered through UBS, the Financial Industry Regulatory Authority alleged that Niemann effected approximately 400 discretionary transactions, purchase or sale of stocks without the owner’s approval.  This was done in 13 accounts belonging to 11 customers without UBS having accepted the accounts as discretionary.

Although the customers had given Niemann express or implied authority to exercise discretion in their accounts, none of the customers had provided written authorization for Niemann to exercise discretion. Furthermore, Niemann did not obtain written authorization from UBS to make trades in the accounts on a discretionary basis; indeed, UBS’s written supervisory procedures prohibited representatives from doing so.

Mr. Niemann has been the subject of four prior customer disputes.  This includes a $575,000 settlement to a customer concerning the sale of auction rate securities – though Niemann asserts he was not at fault for this loss and was not name in the ultimate suit.  This level of complaint history likely means that UBS was required to give Niemann heightened supervision in his operations as a UBS broker.  UBS should have detected the unauthorized transactions.