Tag Archives: Florida

Investors of Paul Vincent Blum

If you suffered losses with Paul Vincent Blum, most recently a financial advisor with RBC, please call 1-866-817-0201.

In 2017, FINRA was conducting an investigation of Blum in connection with customer complaints and arbitration claims alleging, among other things, unsuitable trading. To date, Blum has approximately 23 customer complaints.  Many of the complaints concern his recommendation of energy sector investments to investors not wishing to speculate or unwilling to high levels of risk known to exist in the energy sector.  Many of these complaints were settled by Blum’s employers, including RBC.  He has also been accused of making misrepresentations concerning bonds, including the taxable nature of certain bonds.

On July 21,2017, FINRA staff sent Blum’s counsel a written request for on-the-record testimony pursuant to FINRA Rule 8210. As stated in Blum’s counsel’s email to FINRA of July 25,2017, Blum aclmowledges that he received FINRA’s request and will not appear for on-the-record testimony in front of FINRA. FINRA requires that persons subject to FINRA’s jurisdiction provide information, documents and testimony as part of a FINRA investigation.

As a result of the failure to cooperate in the regulatory investigation of FINRA, Blum has been barred from association with any FINRA member, which would include any and all securities brokerages in the United States.

Losses with Larry Charles Wolfe

Jeffrey Pederson PC assists investors in recovering losses such as those incurred as the result of the misdeeds of brokers, such as the alleged misdeeds of Larry Charles Wolfe.  Currently with Stoever, Glass & Co., Wolfe was previously with Aegis Capital Corp., and Herbert J. Sims & Co. Those suffering losses with this broker are likely entitled to recovery from either Wolfe or his employer.  Call 1-866-817-0201 for a free and confidential consultation.

Invest photo 2FINRA has announced that it has entered into a settlement with Larry Charles Wolfe for making unauthorized transactions in his clients’ accounts.  The allegations are that between November 10, 2015 and November 16,2015, Wolfe inappropriately exercised discretion in the accounts of 39 investors without obtaining prior written authorization from the customers or written approval of the accounts as discretionary from his employing member firm, in violation of numerous state and federal securities laws.

A securities broker must obtain authorization from an investor prior to making a securities transaction in the investor’s account unless that broker has written authorization to make such a trade.

Additionally, MSRB Rule G-17 and FINRA rules require that each broker or dealer in municipal securities to deal fairly with customers and prohibits registered representatives from engaging “in any deceptive, dishonest, or unfair practice.”

The trades are believed to involve municipal bonds and other securities.

In addition to this regulatory action, Wolfe has been sued by investors at least ten (10) times, primarily for allegations of unauthorized, excessive, or unsuitable trades.  Additionally, at least two (2) other investors have threatened suit.  Despite Mr. Wolfe being accused of wide-scale fraud he has not yet lost his license and is still working in the securities industry.

 

Binary options recovery scams

The Financial Industry Regulatory Authority (FINRA), in a press release on March 16, 2017 warned investors against companies or persons that approach victims of binary options fraud claiming that, for an up-front fee, they can help them recover the sums invested or the losses incurred on unlawfully operating trading platforms.  Investors should verify that they are dealing with a licensed attorney or regulator prior to engaging in such recovery efforts.

As stated in the release by FINRA, binary options are inherently risky all-or-nothing propositions. When a binary option expires, it either makes a pre-specified amount of money, or nothing at all, in which case the investor loses his or her entire investment.  These options may be fraudulent and sold on illegitimate securities boards, but participation in such options may open an investor to further victimization.

FINRAAfter an individual has participated in such investment activity, fraudulent individuals obtain investor information from the illegitimate boards selling the options and then calls the investors, and can further be spotted with the following hallmarks during the call:

  • urgent correspondence and high-pressure calls that specifically refer to your binary options accounts;
  • claims that the caller is with, or acting at the behest of, U.S. government agencies; and
  • subsequent correspondence with official-looking documents that make it look as if money is available, and can be recovered for a fee.

FINRA cautions investors that some of these offers may be fraudulent because it is often very difficult to track down the person or group that has scammed them.

“Following a significant loss, investors may be anxious to get back at least some of their money. This can leave them vulnerable to follow-up frauds that add to existing losses with devastating financial consequences,” said Gerri Walsh, FINRA’s Senior Vice President of Investor Education.

The FINRA release can be found at the following link.

Platinum Partners

We are currently investigating losses suffered by investors in Platinum Partners.  If you have suffered losses please call 1-866-817-0201 for a free consultation with an attorney.

As reported on December 19, 2016 in the Wall Street Journal, top executives of hedge fund Platinum Partners were arrested Monday morning and will be charged with defrauding investors in one of the biggest such cases since Bernard L. Madoff’s Ponzi scheme.  The level of fraud is anticipated to approach or top $1 billion.

guy in handcuffsPlatinum previously reported more than $1 billion in assets under management.  This includes holdings scattered in eclectic investments like loans to bankrupt companies and thinly-traded pharmaceutical stocks. In form of a true Ponzi-type operation, Platinum boasted a performance track record with no down years for its funds.

The scheme targeted members of the Jewish community in New York, New Jersey, Florida and Texas.

The indictment unsealed Monday in federal court in Brooklyn charges Platinum founder and Chief Investment Officer Mark Nordlicht, co-chief investment officer David Levy, and former president Uri Landesman with counts of securities fraud, investment adviser fraud and conspiracy.

Authorities in New York said these Platinum executives and others falsely inflated the value of Platinum’s assets, allowing Platinum Partnersthe firm to collect a hefty cut of all investment gains and project a veneer of financial stability. In actuality, the firm’s investments were worth far less, and Platinum’s executives knowingly faked the performance figures, authorities said.

Paul Lebel of LPL

Paul Lebel, a broker formerly registered with LPL Financial, was barred on Tuesday, October 18, 2016, by the Securities and Exchange Commission for churning and excessively trading mutual funds in customer accounts and generating excess fees.  If you suffered losses with Mr. Lebel please call 1-866-817-0201 to speak to an attorney and receive a free consultation.

Mutual funds carry large loads which can be costly to investors if trading in and out of the funds.  These same loads can lead to substantial fees for a broker.  Brokers can defraud investors with only a few mutual fund trades.

Invest photo 2Lebel, who was with LPL broker from 2008 to 2014, “during his employment with LPL, [Lebel] defrauded four customers by churning several of their accounts,” according to the SEC which entered into a settlement with Mr. Lebel. “In particular, Lebel exercised de facto control over these customers’ accounts and excessively traded mutual fund shares which carry large front-end load fees.”

Mr. Lebel bought and sold mutual fund A shares, which are meant to be long-term, buy-and-hold investments, generating $50,000 in commissions, according to the SEC. Mr. Lebel will pay $56,500 as part of the settlement.

The SEC stated, “Lebel’s excessive trading was inconsistent with the customers’ investmentLPL objectives, and willfully disregarded the customers’ interest,”

We suspect that there are other investors who who have suffered loss as the result of fraud by Mr. Lebel.  We have help many investors recover their losses due to such action.  The amounts that we are seeking are separate and possibly in addition to the recovery by the SEC.

Steepener Note Losses, Investors Capital or Trident Partners

FINRAInvestors Capital Corp., a Cetera subsidiary, agreed to pay $1.1 million to settle Finra charges that it recommended unsuitable short-term trades in complex products to clients including steepener notes.  Trident has agreed to pay a $50,000 fine.  We currently have suit filed against ICI for Steepener note sales and other actions of James “Jim” Ignatowich.

For more information, call 1-866-817-0201.  Initial consultation with an attorney is free and confidential.

Letters are currently being sent to investors asking them to settle for a small amount of money.  Investors should speak to an attorney before doing this action because the amount may be too small and the accepting of the settlement may waive rights for additional funds.

Financial advisers are required to sell only suitable investments to their investors.  A suitable investment is not only one that is consistent with the objectives and risk tolerance of an investor, but is also investments that are not so complex that the investor cannot appreciate the risk.

Finra’s complaint against Investors Capital revolved around recommendations for unsuitable investment trusts and steepener notes in the accounts of 74 clients.

Two Investors Capital representatives recommended short-term unit investment trust transactions with upfront sales charges ranging from 250 to 350 basis points in the customers’ accounts, according to a Finra letter of acceptance released on Monday.

Finra also charged that Investors Capital lacked adequate supervisory policies.  Brokerage firms are required to have supervisory procedures to ensure the sale of only suitable investments.  However, at Investors Capital the representatives’ behavior as to the recommendation of only suitable investments went unchecked from June 2010 to September 2015.

The clients involved in unsuitable UIT trading lost more than $240,000, according to Finra.

Finra notes that one 58-year-old client with a long-term growth account objective purchased and sold nearly 65 of the unit investment trusts, almost all of which had two-year maturity dates, in a 2.5 year period with an average holding period of three months. On at least 58 occasions, proceeds of the sale of one unit investment trust in this client’s account were used to purchase another, resulting in a loss of $50,728 in that client’s account.

Between April 2011 and December 2012, FINRA alleges that Investors Capital representatives also recommended short-term trades of “steepener” notes, which are long-term bets on the shape of the yield curve, in an unsuitable manner. The recommendations led to 63 customers suffering about $126,000 in losses.

Details of this settlement were described in the October 6, 2016 edition of Financial Adviser Magazine.

Many of the investments were sold by .  He has recently come under regulatory scrutiny, and was banned from the industry, for securities law violations whereby he was attempting to sell investments with disregard suitability, misleading investors, and violations of the “do not call” list.

Jeffrey Pederson is a private attorney who represents investors in suits concerning securities brokers and securities brokerage firms.

UBS Investor Loss Recovery

UBSIf you are an investor with UBS suffering losses in investments made between 2011 and 2014 you may be entitled to a recovery.  Please call 1-866-817-0201 for a free consultation.

As reported by Rueters, UBS Group AG has agreed to pay more than $15 million to settle U.S. Securities and Exchange Commission (SEC) charges that its failure to properly train brokers led to customers buying hundreds of millions of dollars of unsuitable securities.

The SEC said on Wednesday that UBS from 2011 to 2014 sold about $548 million of “reverse convertible notes,” derivatives tied to individual stocks, to more than 8,700 retail customers who were relatively inexperienced and unsophisticated.

These notes, with mouthfuls of names as Trigger Phoenix Autocall Optimization Securities and Airbag Yield Optimization Securities, were sold to people of modest means, often with low risk tolerances, and included some retirees, the SEC said.

“UBS dropped the ball,” SEC enforcement chief Andrew Ceresney said in a statement.

Gregg Rosenberg, a UBS spokesman, in a statement said the Swiss bank was pleased to settle. It did not admit wrongdoing.

UBS’s payout includes a $6 million civil fine, $8.23 million of improper gains and about $798,000 of interest.

The case is part of a years-long crackdown by the SEC, the Financial Industry Regulatory Authority (FINRA) and other regulators to stop banks and brokerages from selling products that retail and even professional customers may not want, need or understand.

According to the SEC, UBS’s notes were designed to offer attractive yields with a lessened risk of loss.

But Ceresney said on a conference call that UBS’s training focused on describing the “potential upside” from the various products, not their volatility.

Kenneth J. Daley of Merrill Lynch Improper Conduct

Kenneth James Daley with Merrill Lynch in Glenwood Landing, NY entered into a settlement agreement with FINRA in August 2016.  Pursuant to the terms of this agreement, he was barred from association with any FINRA member, which is any brokerage firm, in any capacity. Without
admitting or denying the findings, Daley consented to the sanction and to the entry of
findings that he concealed his improper receipt of funds from a customer.  The funds were paid
in connection with purported profits in an account of his member firm. The findings stated
that the customer contacted Daley about providing him with money to allow him to benefit
by sharing in the profits in her account with Daley’s firm. The customer wrote Daley a check
for $2,500 drawn from her cash management account with the firm. Daley immediately
contacted the customer because he was concerned that his firm would learn of the deposit,
which he knew to be prohibited. In order to avoid detection by the firm, Daley instead
provided the customer with his personal banking account details for an account he held at another financial institution and informed her that she could directly deposit funds related
to purported profits in her account with the firm to his personal checking account. As a
result, the customer deposited to Daley’s personal bank account eight additional checks,
each of which was drawn off of her non-firm bank account. In total, the customer gave
Daley $29,000 in connection with purported profits in her account, all of which Daley used
for personal expenses. Throughout this time period, Daley knew he was prohibited from
accepting such payments.

The findings also stated that Daley used his personal cell phone to text message customers.
Daley was prohibited from text messaging with customers unless done through an
approved firm platform. The findings also included that Daley submitted an annual firm
attestation falsely attesting that in the prior 12 months he had not used text messaging
with any customer. As a result, Daley prevented the firm from discharging its supervisory
responsibilities with respect to the review of his electronic communications and caused the
firm to fail to maintain such communications as required under FINRA and Securities and
Exchange Commission (SEC) rules.

FINRA found that Daley recommended that the customer purchase units of a non-traditional, leveraged crude oil exchange-traded fund (ETF) without having a reasonable basis to do so. On Daley’s recommendation, the customer purchased 5,000 units for a principal amount of $41,850. Daley did not liquidate the position until after the customer had experienced losses.

The AWC can be found at the following link.

LINN Energy (“LINE”) Loss Recovery

Invest photo 2If you suffered losses in LINN Energy (LINE or LNCO), including tax obligations, 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.  We have successfully recovered losses for many Linn Energy investors.  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 LinnCo, 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, referred to as CODI, 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 CODI of 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 protected7crude-oil-pumps-power-transmission-elements investors from such liability, but Linn and the brokers selling Linn gave investors very little and we believe insufficient notice to investors concerning the opportunity to make the transition and the severe consequence if the transition was not elected.  The deadline to exchange LINE units expired on August 1, 2016. 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.

On August 2, 2016, Linn issued the following statement concerning the exchange period:

“The subsequent offering period for the Exchange Offer expired at 12:00 midnight (New York City time) on Monday, August 1, 2016 [...] a total of 19,954,774 LINN units were validly tendered during the subsequent offering period and an aggregate of 123,909,317 LINN units (including LINN units accepted for exchange during the initial offering period), representing approximately 35% of LINN’s issued and outstanding units, were validly tendered and not validly withdrawn pursuant to the Exchange Offer and have been accepted by LinnCo for exchange. “

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.

Other liability issues exist as to certain securities brokerages pushing this investment even when it became clear that the investment was troubled.  For example, Raymond James pushed LINE to its brokers to sell to all investors, upon information and belief.  Additionally, Raymond James kept strong ratings on LINE as late as 2016.

For a detailed description on the rise and fall of Linn:  http://www.oilandgas360.com/rise-fall-linn-energy/

For a great article on the mess investors will be facing, along with an estimate of tax liability Linn investors will face:  http://www.forbes.com/sites/christopherhelman/2016/05/19/oil-bankruptcies-continue-linn-energy-reorg-wont-be-pretty/#35f687375edc .