Tag Archives: FINRA Arbitration

Recovery of Woodbridge Loss

LandmarkInvestors of Woodbridge may have the ability to the recovery of losses sustain.  Please call 1-866-817-0201 for a free consultation with a private attorney.  There were glaring issues in these investments for an extended perior of time.  These issues should have been discovered during reasonable due diligence of the brokers and agents selling the investments.  These investments were not suitable for any investor.

The U.S. Securities and Exchange Commission has been investigating Sherman Oaks, California-based Woodbridge, which calls itself a leading developer of high-end real estate, since 2016 for possible fraudulent sales of securities, according to court documents.

Woodbridge has additionally stated that it has also received inquiries from about 25 state securities regulators concerning the alleged offer and sale of unregistered securities by unregistered agents.

The Woodbridge Group of Companies missed payments on notes sold to investors the week of November 26, 2017, and December 5, 2017 filed chapter 11 bankruptcy.  The company blamed rising legal and compliance costs for its problems.

Woodbridge said it had settled three of the state inquiries and was in advanced talks with authorities in Arizona, Colorado, Idaho and Michigan when it filed for Chapter 11 protection.

The company’s CEO, Robert Shapiro, resigned on December 2  but will continue to be paid a monthly fee of $175,000 for work as a consultant to the firm.

Rueters is the source of some of the information contained herein.

Attention Investors of Michael Oromaner

If you have suffered losses investing with Michael  “Mike” Oromaner please call 1-866-817-0201 to speak to an attorney about your rights.  Oromaner has a long history of suits and regulatory actions concerning the unauthorized trading in the accounts of his investors.   If you have suffered losses you may be entitled to recovery from Oromaner’s former employers.

Regulatory rules provide that brokers may not exercise discretionary power in an investor’s account unless the investor has given prior written authorization and the account has been accepted by the member firm in writing as a discretionary account.

These rules also provide that a brokerage firm, in the conduct of his business, shall observe high standards of commercial honor and just and equitable principles of trade.  Oromaner exercised inappropriate discretion in the account of a single customer during a single year 41 times.

Respondent failed to obtain prior written authorization from this investor to exercise discretion in the account and employer did not approve the account for discretionary trading.

Because of this and other misdeeds, Oromaner is currently undergoing a two-year suspension from the securities industry.

Over the course of the career of Oromaner, he has been the subject of over 16 “disclosure events.”  A disclosure event is any lawsuit, bankruptcy, regulatory action, written investor complaint or other matter negatively reflecting on an advisor’s ability to handle the funds or recommend investments.  The 16 disclosure events of Oromaner is extremely high and raises the question of whether his employers were negligent in hiring him.

Please call if you wish to discuss potential recovery of your losses.

Network 1 Financial ETF Losses

From August 2010 to September 2015 Network 1 Financial failed to establish and enforce a supervisory system reasonably designed to supervise advisor sales of complex investments such as leveraged, inverse, and inverse-leveraged exchange-traded funds (ETFs).  These are the regulatory findings that Network 1 neither denies or admits.  This issue has impacted over one hundreds securities accounts at Network 1.  If you are a Network 1 investor please call 1-866-817-0201 for a free and confidential consultation.

Non-Traditional ETFs are complicated investment vehicles suitable for only a small section of the investing public.  Such ETFs are designed to return a multiple of an underlying index, Such as the Russell 2000, S&P 500 or VIX, the inverse of that benchmark, or both, over the course of a day.

The performance of such ETFs over periods of time longer than a single trading session be very volatile and be substantially risky.  The results, as FINRA states, “can differ significantly from the performance . . . of their underlying index or benchmark during the same period of time.”

FINRA, the regulator of securities brokerages in the United States, has warn brokerages and their advisors that NonTraditional ETFs “are typically not suitable for retail investors who plan to hold them for more than one trading session, particularly in volatile markets.”

Approximately 29 Network 1 financial advisors/brokers traded such ETFs in 167 customer accounts. These representatives executed 645 ETF transactions totaling approximately $48 million in possibly unsuitable trades.

Transactions in Non-Traditional ETFs during the referenced period, Network 1 Financial had inadequate supervisory procedures regarding the suitability and supervision of Non-Traditional ETFs transactions.

 

Diones LaCerte Investment Fraud Investigation

We are currently investigating the actions of Colorado Springs broker Diones LaCerte.  Ms. LaCerte was most recently a financial advisor for Morgan Stanley.  If you information or would like to discuss a potential claim that you have concerning Ms. LaCerte, please call 303-300-5022 in Colorado or 1-866-817-0201 outside of Colorado to speak to a Colorado licensed attorney.

Ms. LaCerte has recently been alleged by FINRA regultators to have committed significant fraud. Between July 1,2012 and December 31,2014, LaCerte engaged in an unsuitable pattern of short-term trading of Unit Investment Trusts (“UITs”) in 107 of her customers’ accounts.  This is a significant type of fraud perpetrated on a large number of investors.   Diones LaCerte settled the charges without admitting or denying fault.

The actions of LaCerte constitute an unsuitable pattern of short term trading of UITs in 107 customer accounts. This is similar to churning an account.  Short term trades of a high commission and high cost investment puts the advisor’s financial gain ahead of that advisor’s investors.

UITs typically carry significant upfront charges, such as costs and commissions, and as with mutual funds, short-term trading of UITs is generally improper. During the Relevant Period, in connection with these 107 customer accounts, LaCerte repeatedly recommended that the customers purchase UITs and then sell these products well before their maturity dates.

The primary issue brought by FINRA concerns the selling of UITs less than two years after purchase.  The majority of the UlTs that LaCerte recommended had maturity dates of at least 24 months. Nevertheless, LaCerte repeatedly recommended that her customers sell their UIT positions less than one year after purchase. Indeed, the average holding period for the UITs purchased in these customers’ accounts was less than 300 days. In addition, on more than 100 occasions, LaCerte recommended that her customers use the proceeds from the short-term sale of a UIT to purchase another, similar UIT. LaCerte’s recommendations caused the customers to incur unnecessary sales charges, and were unsuitable in view of the frequency and cost of the transactions.

Diones LaCerte has a significant history of customer complaints prior to the current regulatory action.  The CRD of Ms. LaCerte, the record a financial advisor has with FINRA regulators, indicates that she has received many customer complaints concerning the sale of unsuitable investments, and these complaints have led to five investor lawsuits brought or threatened in the past three years.

John Correnti Investment Losses

If you have suffered investment losses with John Correnti, most recently with AXA, please call 1-866-817-0201 for a free and confidential consultation concerning your rights.

Mr. Correnti was terminated by AXA in July 2016 as the result of allegations concerning market manipulation.  The manipulation concern certain low-priced investments that were traded over-the-counter.  This is a serious type of securities fraud.  Such investments are easy to manipulate by a broker because they generally have a low volume of trading.  If a broker can get several of clients in a short time period or have one client make a significantly large purchase he can artificially inflate the price.  The problem from market manipulation generally comes in that the broker trades in his own account ahead of the purchase, sells once the price is artificially inflated and then the investment crashes since no other investors are available to keep the price inflated, though it is unclear if Correnti directly profited from the alleged market manipulation.  Notwithstanding, a violation may exist even if the broker does not directly profit as either a fraud on the market or by the damage the broker causes the investor/customer.

FINRA sought to investigate Correnti for these allegations and allegations that he was intentionally selling investments to his customer/investors beyond the supervision of AXA compliance and managers.   Correnti, at the regulatory hearing, chose to stop his testimony and, as a result, stopped contesting the charges.  He was then expelled from the securities industry by FINRA.

 

Victims of Jay D. Jordan

We are currently investigating Jay D. Jordan, also known as Jay Dee Jordan and J.D. Jordan, of Oklahoma City and previously an advisor of WFG Investments has been found by regulators to have systemic fraud in the accounts of his investors (customers). These victims of Jordan should speak to a private attorney about their rights by calling 1-866-817-0201.  Initial consultations are free and all information is kept confidential.

Between June 1,2012 and March 31, 2016 FINRA, the regulator that oversees securities brokerages and financial advisors, has made the findings that Jordan engaged in a series of significant violations of FlNRA Rules that resulted in substantial customer harm.  These violations resulted from the following misconduct:

He recommended and engaged in unsuitable trading in nontraditional ETFs in 84 of his customers accounts. These trades, which were unsuitable from both a reasonable-basis and a customer-specific perspective, collectively resulted in customer losses exceeding $8 million.

He exercised discretion without having obtained prior written authorization in the accounts of at least six customers.

He mismarked 927 of his customers’ purchases of nontraditional ETFs as “unsolicited” when he had, in fact, solicited those transactions. He failed to report two customer complaints to his Firm, and then surreptitiously attempted to settle one of the claims away from the Firm through the improper use ofhis personal email account.

He failed to produce requested documents and information pursuant to a FiNRA Rule 8210 information request. As a result ofthe foregoing, Jordan violated NASD Rules 2310(a) (before July 9. 2012) and 2510(b),and FiNRA Rules 2010,21 ll (a) (on and after July 9,2012), 45 ll and 8210.

Additionally, over the course of his career, he has been the subject of at least 15 threatened or filed suits.  Such suits are generally handled through the FINRA arbitration process.

Geraldine Gordon Investment Loss

The Law Offices of Jeffrey Pederson, PC represents investors suffering losses as the result of adviser mismanagement, such as the investment losses of investors of Geraldine Gordon of Ameriprise.  Ms. Gordon has been accused by FINRA regulators of inappropriately recommending oil and gas investments.  Concentrating such unorthodox investments in an investor’s portfolio can be unsuitable, which is mismanagement of a portfolio and in some cases fraudulent.  Please call 1-866-817-0201 for a free and confidential consultation.

The regulatory filing highlights the plight of one such investor.  On June 2013, Gordon recommended to one of her investors that she liquidate a number of
diversified investments in her Ameriprise brokerage and IRA accounts, which
comprised approximately half (49.9%) of her liquid net worth. Ms. Gordon recommended that
this investor use those assets to purchase a Master Limited Partnership (“MLP”) focused
on the energy-sector. This investment is believed to be an investment in oil and gas.  The MLP’s prospectus described the investment as speculative.

Following Gordon’s recommendation, the investor invested a total of $334,000.00 in the
MLP investment through her Ameriprise brokerage and IRA accounts. The investor’s investment in the MLP comprised a large portion of the investor’s liquid net worth at the time.

blog_gulf_mexico_oil_rigFINRA Rule 2111, the FINRA suitability rule, provides that when recommending the purchase, sale, or exchange of any security to an investor, a securities broker “must have a
reasonable basis to believe that a recommended transaction [...] is suitable for the
customer, based on the information obtained through the reasonable diligence of
the member or associated person to ascertain the customer’ s investment profile.”

Gordon’ s recommendation that her investor invest half of her liquid net worth in this
single sector-focused, in this case an oil and gas, MLP was not suitable for the investor in light of the investor’s financial condition and the excessively concentrated nature of the investment.

Many state regulators have rule the suitability requirement even more restrictively.  Some have limited the investment in such an investment to 10% of the investor’s liquid net worth.

One of the concerns with MLP investments is that many pay an extremely high commission to the broker, which is usually not disclosed.  This can cause some brokers to recommend MLPs despite the inherent risks in the investment to those who cannot afford to take such risks.