Tag Archives: class action

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.   

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.

 

Adam Michael Lopez Loss Recovery

If you were an investor of Adam Michael Lopez, formerly of Country Capital Management, please call 1-866-817-0201 to discuss your options for loss recovery.

Invest photo 2Mr. Lopez has recently received a bar from the securities industry.  He refused to respond to allegations made against him by the Financial Industry Regulatory Authority (FINRA).  These allegations included claims that he stole funds  that clients had given to him for investment, namely funds for insurance policies.

FINRA is a self-regulatory organization that polices securities brokerages under the oversight of the SEC.  This entity is charged with policing securities brokers in their interactions with investors both with their firm and away from their investment firm.

The State of Illinois is also investigating since Mr. Lopez operated out of the Springfield area.  The allegations consist of theft of funds given to Lopez for the placement in certain insurance policies and securities.

Country Capital Management had a duty to oversee the activities of Lopez.  A securities broker-dealer has obligations to oversee outside business activities of its representatives.  Consequently, civil liability may exist on the part of Country Capital to compensate the clients of Lopez.

If you have suffered such losses, Jeffrey Pederson may be able to assist you.  Jeffrey Pederson handles FINRA arbitration cases across the country and is licensed with the United States District Court for the Central District of Illinois.

Douglas Simanski Fraud

Investors of Douglas Simanski should call 1-866-817-0201 for a free and confidential consultation with a private attorney.

FBIFederal regulators allege that Douglas Simanski raised more than $3.9 million from approximately 27 of his brokerage customers and investment advisory clients by telling them that he would invest their money in either a “tax-free” fixed rate investment, a rental car company, or one of two coal mining companies in which Simanski claimed to have an ownership interest.

The investors were largely in the Altoona, PA area.  Most of the investors were elderly.

The Securities and Exchange Commission (SEC) filed a civil action in the United States District Court for Western Pennsylvania on November 2, 2018.  The complaint describes the fraudulent scheme of Simanski and seeks civil penalties and disgorgement.

As stated in the SEC  complaint, “Simanski convinced some of his most trusting and vulnerable clients, many of them retired or elderly, to invest their money while knowing the investments were not legitimate, that he would make virtually no securities investments on their behalf, and would instead use their money for personal expenses or to repay other investors.”

Simanski placed investor funds in brokerage and bank accounts that Simanski opened in his wife’s name.  He would then use the life savings of his investors for his own personal needs.

The record of Simanski shows that his employers ultimately discovered the wrongdoing after investors brought the matter to the attention of regulators.

Sean Kelly Theft

If you were an investor of Sean Kelly, previously of Center Street Securities, Capital Financial Services, and Lion’s Share Financial, please call 1-866-817-0201.  We are currently investigating his theft of investor funds.

Kelly, a Georgia stock broker, is facing criminal and SEC charges alleging that he stole at least $1 million from a dozen clients.  These clients include elderly widows and military veterans.  Kelly stole their savings and used the money for luxuries including Super Bowl tickets and vacations.

Sean Kelly, 49, of Marietta, Ga., and a stockbroker for Center Street Securities Inc., also is accused of falsely presenting himself to clients as both a brokerage firm and an investment advisor, according to the U.S. Securities and Exchange Administration.

Investors have recourse when investment professionals turn bad.

Investors have recourse when investment professionals turn bad.

The financial fraud of Kelly should have been foreseen by his employers.  The record of Kelly shows a broker with significant financial problems.  He has a history of multiple tax liens, a bankruptcy, and what is described as a “continuation of a prior bankruptcy.”

The U.S. Attorney’s Office for the Northern District of Georgia has filed criminal charges against Kelly and placed him under arrest, according to the SEC.

The SEC Complaint indicates that the fraud was fairly simple.  Kelly would have his clients make checks out to Lion’s Share.  The Complaint goes on state that Kelly used Lion’s Share as “his personal piggy bank.”

There has also been a temporary restraining order entered.  Such an order freezes the assets of Kelly.

Kelly, who has been a stockbroker for about 18 years, has been stealing money from clients since at least 2014, using recruiting techniques such as offering free tax preparation services for veterans and holding free retirement planning seminars in assisted living facilities, according to the SEC.

The theft could be well-above the $1 million currently estimated.   The number is reliant upon the documents the SEC has been able to obtain from the investigation of Kelly.  There are likely many more investors who will need to bring actions on their own to obtain recovery of their losses.

Brokerage firms have a duty to investigate and monitor outside business activities such as the activities of Kelly.  Further, FINRA requires securities brokerages to carry fidelity insurance.

Kelly’s use of Lion’s Share was well known to his employers.  Insufficient safeguard’s existed to protect the investors.

Ami Forte Investigation

If you suffered losses with Ami Forte, please call 1-866-817-0201 for a free and confidential consultation.  Jeffrey Pederson, PC handles claims against securities brokerages nationwide for unsuitable securities and unauthorized trading violations.

The Financial Industry Regulatory Authority (FINRA) announced on October 3, 2018 that it was widening the investigation of Ami Forte.  FINRA is the national regulatory agency that oversees securities brokerages.  It does so with the oversight of the SEC.

The October 3 notice advises Forte that the regulator will include additional potential violations of rules tied to conflicts of interest and fraud. Other violations included in the October 3 notice relates to rules tied to suitability, municipal securities advisory activities and books and records.

Forte, once Morgan Stanley’s most celebrated and prominent financial advisor with $2 billion in assets under management, lost her job at Morgan Stanley when an FINRA arbitration panel entered a substantial judgment against her.  The panel ordered her, her branch manager and Morgan Stanley to pay $34 million to the estate of Home Shopping Network co-founder Roy Speer in 2016. Lynnda Speer, Roy Speer’s widow, argued that the estate had been harmed by unauthorized trading, churning and elder abuse.

The initial investigation began in January 2018.  FINRA had made a preliminary determination concerning violations of multiple FINRA rules.  These rules concerning inappropriate exercises of discretion in an account and inappropriate recommendation of direct participation investments.

Forte had recently begun a career resurrection of sorts. In March 2018, Pinnacle Investments announced Forte as its chief business development officer.

This was short-lived.  BrokerCheck records indicate that the employment with Pinnacle ended Oct. 17,

Jeffrey Pederson has represented hundreds of investors over the past 15 years in FINRA arbitrations nationwide.  Time limitations may exist.  Investors suspecting wrongdoing should call at their earliest convenience

John Simoncic Investment Fraud

The Financial Industry Regulatory Authority (“FINRA”) barred John Scott Simoncic from the securities industry.  Mr. Simoncic had most recently been a broker for Financial West Group.  Please call 1-866-817-0201 for a free consultation if you were an investor of Mr. Simoncic.

There are multiple allegations concerning multiple investors against Mr. Simoncic.  They include the unauthorized and excessive trading in client accounts.  Allegations also include the sale of unsuitable investments.  This is the sale investments to an investor that are inconsistent with the risk an investor was willing to assume.

Between August 2014 and March 2016, Simoncic executed 54 of the 97 trades in a single customer account in inverse and/or leveraged Exchange Traded Funds (ETFs), an investment vehicle somewhat similar to a mutual fund.  The investor did not have an understanding of the ETFs Simoncic traded in her account; she did not understand how inverse and leveraged ETFs worked, the risks associated with the extended time Simoncic held the ETF positions in her account, or that her account was concentrated in one particular volatility ETF, the ProShares Ultra VIX Short-Term Futures ETF (UVXY), for over nine months.

Such ETFs are especially dangerous.  Although leveraged and/or inverse ETFs seek daily investment results, Simoncic held the ETF positions in the investor’s account for multiple trading sessions. For example, Simoncic executed 37 transactions in shares of the ProShares UltraShort S&P 500 (SDS), an inverse double-leveraged ETF, with holding periods generally ranging from four to 97 days. These transactions in the SDS resulted in an overall loss of more than $15,000. Simoncic also concentrated 93 percent of the investor’s portfolio in shares of UVWY, the ProShares Ultra VIX Short-Term Futures—a risky, double-leveraged and speculative ETF—for 295 days, that resulted in losses that exceeded $20,000. Thus, approximately $35,000 of the investor’s total losses of approximately $60,000 related to ETF trading.

Mr. Simoncic has previous regulatory actions and customer complaints that should have alerted his employer.  We believe that the former employers of Mr. Simoncic are responsible for investors losses.

 

GPB Capital Loss Recovery

Investors of GPB or any GPB Capital investments, please call 1-866-817-0201 about potential loss recovery.  Initial consultations are free and confidential.  Jeffrey Pederson is a private attorney who is currently investigating and handling GPB cases.  He has successfully represented investors nationwide in obtaining settlements or judgments for investment losses.

Information exists to support that GPB Capital was inappropriately sold by independent brokerage firms across the country.  These investments, often promoted as investments in car dealerships and waste management, are now illiquid and essentially worthless.  These brokerages are liable for the losses of their investors.

The investments were sold by a number of independent brokerages across the country.  That list of brokerages includes, but is not limited to, Royal Alliance Associates, Sagepoint Financial, FSC Securities, and Woodbury Financial.

Investors led to believe GPB was a viable investment

Many investors trusted the recommendation to invest in GPB.

Brokerages have duties to investors in the sale of investments such as GPB.  These investments were high-risk, and brokerage were only allowed to recommend the investments to individuals who can withstand the high level of risk and illiquidity that these investments pose.

Despite the fact that these investments are only suitable for a small fraction of the investing public brokers sold large quantities of GPB to a broad portion of their clientele.  The motivation appears to be the heightened commission paid on this investment.

These broad selling practices has resulted in $1.8 billion of GPB investment sales to investors who bought the high-commission private placements.  The GPB investment, which is considered a private placement, had a transaction cost of 12%.  Approximately 10% of the cost was commission to the broker and broker-dealer and 2% was in offering and organization costs.

On August 17, 2018, GPB halted sales to review accounting.  The purported reason given by GPB was to “integrate the high volume of recent acquisitions.”

On August 24, 2018, GPB announced that the fund will restate its 2015 and 2016 financial statements.  The adjustments were due to errors in income and the source of such income that came to light in audits done on the investments.

The fund also missed  2 required filings to the SEC in 2018.  The SEC requires a private company like GPB with more than $10 million in assets and 2,000 individual investors to file financial statements with the SEC.

Invest photo 2

Many GPB investors thought they were getting a safe investment.

On September 12, 2018, Massachusetts top securities regulator William Galvin started an investigation into the sales practices of independent stock brokerage firms in connection with the recommending of investments in GPB Capital Holdings.

GPB investments were always known to be very high risk.  As such, the investments were not suitable for a large portion of the investing public.  Brokers have a legal obligation to only recommend suitable investments.   The motivation for selling such risky investments to moderate investors is likely the result of the excessive commissions that were paid the brokers for such sales – commissions much higher than would be paid for the sale of suitable investments.

Commissions may be seen as one of the motivators to sell this risky investment without conducting reasonable research into the investment.  These investments were known to pay a very high commission.  Brokers on average made commissions that approached 10%.  Compare this to stock sales where the commissions are usually less than 1%.

The Massachusetts Securities Division has information about one independent stock brokerage firm’s sales practices in connection with GPB sales, coming in the wake of GPB’s announcement that GPB has temporarily stopped bringing in new funds.  It has also suspended redemption while it concentrates on accounting and financial reporting.

GPB’s Armada Waste Management is particularly bad. According to GPB, investors bought $163.4 million of the securities, but the current estimated NAV, net asset value, is $53.4 million. That Armada Waste Management has declined in value 67.4%.

Other big losers include GPB Holdings II and GPB Automotive Portfolio.

In addition, there is an issue with the failure to file financials.  Such a failure should have been discovered by any brokerage firm selling the investments and should have been a red flag of the extreme risk in the recommendation of the investments.  Two private GBP investments that are required because of their size to file financial statements with the Securities and Exchange Commission failed to meet filing deadlines.

These matters have led to a sweep by regulators of 63 securities brokerages that sell GPB, with the regulators requesting data on the extent of sales activity in Massachusetts, disclosure and marketing documents that the firms provide to investors on the solicitations and data on investor suitability.

“While my Securities Division’s investigation is in the very nascent stages,” stated Massachusetts Securities Division head William Galvin, “Recent activity within GPB raises red flags of potential problems. These red flags, coupled with the fact that sales of private placements [a particularly risky type of investment that is not traded on a public market] by independent broker-dealers have been an ongoing source of investor harm, have led to this investigation.”

Brokerages with questionable GPB sales include, but are not limited to the following; Geneos; FSC; Woodbury; Triad; Sagepoint; Royal Alliance; Madison Avenue Securities; National Securities Corp. (NSC); Moloney Securities; Sandlapper; DFPG; Dawson James; Colorado Financial Service Corp.; Stephen A. Kohn; Orchard Securities; Kalos Capital; Center Street Securities; Avere Financial; and Coastal Equities.

Recently, one of the brokerages selling GPB, Kalos Capital, attempted to contact investors to attempt to not assert their rights of recovery against Kalos.  The Ulmer firm, representing Kalos, focuses on whether GPB is or is not technically a Ponzi scheme.  Regardless of the name attached to the fraudulent scheme, the letter does little to say whether Kalos did anything to meet its legally required duties to conduct a thorough investigation of GPB prior to recommending GPB for the life savings of Kalos’s investors.     Failing to conduct adequate due diligence make Kalos and other brokerage firms responsible for GPB losses.

Subsequent to the action by Galvin, the SEC and FINRA both initiated their own investigations concerning the sale GPB.  The most common GPB fund is GPB Automotive Portfolio, LP.

On July 19, 2019, David Rosenberg, CEO of Prime Automotive Group, a business partner of GPB Capital Holdings, filed a lawsuit accusing the firm of engaging in “serious financial misconduct.”  The Rosenberg complaint also alleges that GPB forced him out after he complained to the Securities and Exchange Commission of the financial irregularities of the company.   These irregularities include using new investor money to make payments to previous investors.

Stephen Hurtuk investors

Please call 1-866-817-0201 if you were an investor of Stephen Hurtuk.  Mr. Hurtuk has recently surrendered his license instead of attempting to defend claims that he inappropriately recommended unsuitable investments to a significant number of his investors.  Hurtuk was previously with both Citigroup and Stifel, Nicolaus.

Invest photo 2On June 27, 2017, FINRA, the regulatory authority that oversees securities brokerages, sent a request to Hurtuk for on-the-record testimony. The request was sent in connection with FINRA’s investigation into potentially unsuitable recommendations by Hurtuk to eight customers, between May 2015 and September 2016. Instead of responding to the request, Hurtuk chose not to defend though the failure to defend would mean the revocation of his license.

An unsuitable investment is any investment that is not consistent with either the objectives, sophistication, or risk tolerance of an investor.  For example, a conservative investor reliant upon his or her savings who loses more than 15% of a portfolio in a year was likely sold an unsuitable investment.  This is because the risk of loss was greater than the investor was willing to assume.

The regulatory action only addressed 16 months during 2015 and 2016.  However, we believe offending investment recommendations extend beyond this period.  We are interested in those recommended unsuitable investments from 2011 onward.

Consistent with this, the employers of Mr Hurtuk, Stifel and Citigroup, have defended six filed or threatened legal suits concerning the unsuitable recommendations of Stephen Thomas Hurtuk.  These suits extend from 2007 through the present.  Five of these suits have settled.

His affiliation with Citigroup was in Canfield, Ohio and lasted from 2001 to 2007.  Stifel was his employer from 2007 until 2017 and he operated out of Boardman, Ohio.

We help investors such as the victims of Mr. Hurtuk.  Cases are generally handled on a contingency basis, where attorney fees are paid by a percentage of the settlement or judgment obtained.  Cases against securities brokerages are subject to binding arbitration through FINRA.  Jeffrey Pederson has handled such arbitration cases across the country.   Please call for a free and confidential consultation and see if your losses are recoverable.

Investors of Charla Kabana

Investors of Charla Kabana, previously of Sagepoint and LPL Financial, and currently of Kabana Financial in California, please call 1-866-817-0201 for a free and confidential consultation.

Wall Street photo 2On August 21, 2018, Charla Kabana finalized a settlement agreement with the Financial Industry Regulatory Authority (FINRA).   Conditions include barring her from serving as a securities broker.  FINRA sought to investigate questionable variable annuity sales and other issues of Kabana.

Kabana refused to cooperate with FINRA, despite licensing requirements to the contrary.  The consequence of the failure to provide information in the investigation was the loss of her securities license.

The FINRA regulatory action came about due to the termination of Kabana by LPL.  LPL investigated Kabana and ultimately  terminated Kabana on July 11, 2016 due to “[c]oncerns regarding [Kabana's] practices in respect to variable annuity business and related responses to Compliance.”

She subsequently was able to serve as a representative of Sagepoint Financial until losing her license in August 2018.

FINRA requested financial documents and testimony on the record.  The focus being the LPLreasons for the LPL termination and the alleged irregularities in the securities sales.  Kabana refused to do so.

The record of Kabana, known as her CRD, also shows other disclosure events which should serve as a “red flag” for employers and other supervisors.  This creates potential liability for those employers and supervisors for the losses incurred by investors.