Tag Archives: fraud

Attention Investors of John Maccoll

John C. Maccoll, who was a registered representative of UBS Financial Services and an investment advisor, is charged both criminally and civilly with defrauding at least 15 of his brokerage clients, most of them elderly and retired, in a scheme that lasted for at least a decade.  If you were an investor with Maccoll please call 1-866-817-0201 for a free and confidential consultation.  Representation will be on a contingency fee basis.

Maccoll’s career goes back 40 years.  Prior to being with UBS he spent years working as a brokerguy in handcuffs for Morgan Stanley.  We believe that he used his scheme not only at UBS but also at Morgan Stanley.

According to the SEC, he used high-pressure sales tactics to convince his brokerage customers to invest in what he described as a “highly sought after” private fund investment. The victims were convinced to sell their retirement accounts or borrow against them and make out checks to Maccoll.

The actions of Macoll are commonly referred to as “selling away.”  This is common.  A broker will either try to sell an investment of a confidant who will pay him a premium, or sometimes make up the investment completely.  Brokerage firms are required to have mechanisms in place to detect and stop such trading practices.

One customer’ defrauded invested her life savings and money from her deceased husband’s life insurance payout, which she intended to use to pay for college expenses for her three children, adding that Maccoll knew that the funds invested in his customers’ accounts were for retirement or college expenses.

Attention Investors of Mark Solomon

If you were one of the investors of Mark Solomon please call 1-866-817-0201 for a free and confidential consultation.   We believe that Mr. Solomon, whose office is in Wynnewood, Pennsylvania, inappropriately sold real estate investments and that his employer, M Holdings, inappropriately supervised Solomon and allowed the sales to occur.

Invest photo 2From December 16, 2014 through December 29, 2014, on behalf of a commercial real estate limited partnership, Solomon solicited and sold limited partnership interests (the “offering”) to seven investors for a total of $1,400,000.  However, before soliciting and selling interests in the offering on behalf of the commercial real estate limited partnership, Solomon did not provide to M Holdings the notice required. Solomon first provided written notice of his sales activity to M Holdings on August 31, 2015 after responding to inquiries made by a regulator during an examination of M Holdings.

The financial industry regulator, FINRA, brought an action against Solomon for the sales of the investments.  Solomon entered into a settlement where he agreed to a one year suspension from the securities industry.

M Holdings ultimately is responsible for the sale of the investments.  Brokerage firms are responsible for the supervision of the private securities sales of their brokers even when the sales are away from the firm.  FINRA brought action for the inadequate supervision of Solomon by M Holdings.    M Holdings was censured and agreed to pay a $135,000 fine.

 

Christopher Wendel Investors

If you are an investor suffering losses with Christopher Wendel, please 1-866-817-0201 for a free consultation.  Mr. Wendel has been implicated in the improper sale of Woodbridge  notes and other securities violations.  Jeffrey Pederson has represented investors nationwide in cases concerning Woodbridge and other similar securities actions.

Wendel solicited investors to purchase promissory notes in Woodbridge Mortgage Investment Funds, a purported real-estate investment fund.  Wendel did not provide notice to SA Stone Wealth Management, his employer, prior to participating in these private securities transactions, nor did he obtain approval from SA Stone.  Despite the lack of notice, SA Stone had a duty to investigate and approve securities sales to prevent its representatives from “selling away.”

Invest photo 2Investment firms are liable for not following FINRA’s strict guidelines concerning the monitoring of representatives to ensure the representatives do not sell unapproved investments, such as Woodbridge.  Common knowledge within the securities industry is the fact that representatives often seeks to sell investments that are unapproved for either the higher commissions or illegal kickbacks that the investments provide.  The problem is that the increased compensation is because the investments either are financially unsound or, in some cases, based upon fraud.

Additionally, there were glaring issues  in these Woodbridge investments for an extended period of time.    These issues should have been discovered during reasonable due diligence by the brokers and agents selling the Woodbridge investments.  These investments should have been recognized as not being suitable for any investor.

The U.S. Securities and Exchange Commission SEC had been investigating Woodbridge since 2016.  Woodbridge, the Sherman Oaks, California-based Woodbridge, which calls itself a leading developer of high-end real estate, had been under the microscope of state regulators even longer.   The focus of these regulators was the possible fraudulent sale of securities.

In 2018, FINRA found that Wendel violated FINRA Rules by providing a false written response and testimony concerning one of the private securities transactions.

This is not the first time Mr. Wendel has been accused of handling the funds of others improperly.  The record of Mr. Wendel shows the six private lawsuits have been initiated concerning his actions.  He has also previously been investigated by SA Stone for the sale of unapproved securities, a common form of fraud.  He was also terminated for the sale of securities that were unapproved by SA Stone.   We believe those securities were Woodbridge securities.  SA Stone apparently allowed several months to elapse before taking action concerning the sale of Woodbridge.

Attention Investors of Western International

If you lost money investing with Western International, please call 1-866-817-0201.  The initial consultation with an attorney is free.  Jeffrey Pederson represents investors nationwide in securities brokerage disputes.

NYSE pic 2Western recently entered into a regulatory settlement where it neither admitted not denied the following facts.  Those facts are that from January 1, 2011 to November 5, 2015 (the “Relevant Period”), Western failed to establish, maintain and enforce a supervisory system to ensure that representatives’ recommendations regarding certain ETFs (exchange traded funds) and also failed to comply with certain securities laws in the sale of these ETFs.

In addition, Western allowed its representatives to (1) recommend Non-Traditional ETFs without performing reasonable diligence, the required level of investigation into the investments, to understand the risks and features associated with the investments, and (2) recommend NonTraditional ETFs that were unsuitable, either due to the known high level of risk in the investments or inherent complexity, for certain customers based on their ages, investment objectives and financial situations.

Non-Traditional ETF’s, such as the ETFs that were sold by Western, are designed to return a multiple of an underlying index or benchmark, such as the VIX or S&P, the inverse of that index or benchmark, or both, over the course of a day. As a result, the performance of Non-Traditional ETFs over periods of time longer than u single trading session “can differ significantly from the performance of their underlying index or benchmark during the same period or time.” Because of these risks and the inherent complexity of these products, FINRA has advised broker-dealers and their representatives that Non-Traditional ETIls “are typically not suitable for retail investors who plan to hold them for more than one trading session, particularly in volatile markets.”

We have spoken to a number of investors who have suffered similar losses and believe that such investments were intended for highly sophisticated investors only, such as hedge fund managers, and could not be legitimately sold to retail investors.  So if your were investing for retirement and were sold such investments, you likely have grounds for recovery.

Recovery of Woodbridge Loss

Landmark

Woodbridge investors believed real estate ensured the safety of their investments.

Investors of Woodbridge may have the ability to recover the losses they sustained.  Please call 1-866-817-0201 or 303-300-5022 for a free consultation with a private attorney concerning potential loss recovery.

Regulators have charged the Woodbridge Group of Companies with operating a Ponzi scam.  This creates liability on the part of those advisors selling Woodbridge.

There were glaring issues in these Woodbridge investments for an extended period of time.    These issues should have been discovered during reasonable due diligence by the brokers and agents selling the Woodbridge investments.  These investments should have been recognized as not being suitable for any investor.

The U.S. Securities and Exchange Commission (SEC) had been investigating Woodbridge since 2016.  Woodbridge, the Sherman Oaks, California-based Woodbridge, which calls itself a leading developer of high-end real estate, had been under the microscope of state regulators even longer.   The focus of these regulators was the possible fraudulent sale of securities.

On December 21, 2017,  the SEC charged the Woodbridge Group of Companies with operating a $1.2 billion Ponzi scheme that targeted thousands of investors nationwide.  “The only way Woodbridge was able to pay investors their dividends and interest payments was through the constant infusion of new investor money,” per Steven Peikin of the SEC.

Prior to the charge, in January 2017, the SEC served a subpoena on Woodbridge for relevant electronic communications.  Woodbridge failed to respond to this subpoena.  This left the SEC to seek court intervention to compel Woodbridge to produce potentially damaging documentation the SEC believes existed.  The SEC filed its allegation that Woodbridge is a Ponzi scheme within weeks of its access to Woodbridge’s documents.

Through court filings, the SEC states that Woodbridge “has raised more than $1 billion from several thousand investors nationwide” and it “may have been or may be, among other things, making false statements of material fact or failing to disclose material facts to investors and others, concerning, among other things, the use of investor funds, the safety of the investments, the profitability of the investments, the sales fees or other costs associated with the purchase of the investments.”

Shortly after the issuance of the order sought by the SEC Woodbridge declared bankruptcy.  This filing does not extinguish the rights of investors.  These investors have claims against the brokers and advisors selling the investments.

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.

Those at Woodbridge are not the only ones responsible for investor losses.  The Colorado Division of Securities is considering sanctions against investment advisor Ronald Caskey of Firestone, Colorado.  Caskey is the host of the Ron Caskey Radio Show.  James Campbell of Campbell Financial Group in Woodland Park, Colorado and Timothy McGuire of Highlands Ranch, Colorado are also the subject of regulatory investigations by the state regulator.  The Colorado Division of Securities has also begun investigating Jerry Kagarise of Security 1st Financial of Colorado Springs.  Another seller of Woodbridge in the Springs area is Carrier Financial.

These and other Colorado investment advisors have raised approximately $57 million from 450 Colorado investors.  Woodbridge continued to solicit investors through these advisors, in addition to radio and online ads, through October 2017, just prior to the bankruptcy filing.

While the regulatory actions will do little to compensate the damaged investors, these actions support private civil actions for recovery by investors.  We are investigating and in the process of bringing suit against Colorado investment advisors selling Woodbridge investments, and would like to share what we have learned with other investors in Colorado and nationwide.

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

Rights for Lisa Lowi Investors

Lisa Lowi has been sued 35 times  over the past three years for recommending unsuitable investments to her investors at Janney Montgomery Scott and RBC Capital Markets.  Unsuitable investments are investments that carry more risk than an investor is willing to take, such moderate to high risk investments for a retired investor.  Lowi has recently been barred from the securities industry from failing to comply with a regulatory investigation into her offering unsuitable investments.  If you are an investor of Lowi’s please call toll-free at 1-866-817-0201 for a free consultation with an attorney

In 2017, FINRA, the regulator that oversees securities brokers, was conducting an investigation of Lowi in connection with customer complaints and arbitration claims alleging, among other things, unsuitable trading.

On September 7, 2017, FINRA staff sent Lowi’s attorney a written request for testimony concerning the unsuitable securities allegations. As stated in Lowi’s attorney’s email to FINRA staff on October 11, 2017, and by this agreement, Lowi acknowledges that she received FINRA’s request and simply decided not appear for on-the-record testimony.  This is viewed as conceding the violation.

FINRA Rules require that brokers subject to FINRA’s jurisdiction provide information, documents and testimony as part of a FINRA investigation. FINRA rules provide that “[a broker] in the conduct of its business shall observe high standards of commercial honor and just and equitable principles of trade.” By refusing to appear for on-the-record testimony as requested pursuant to FINRA Rule 8210, Lowi violates FINRA Rules 8210 and 2010.

Jeffrey Pederson PC is a private attorney protecting the rights of investors and recovering investment losses nationwide.

Todd Jones of J.P. Morgan investment fraud

If you have suffered investment losses while investing with J.P. Morgan financial advisor Todd Jones, you may be entitled to a recovery.  Mr. Jones has recently been accused of committing fraud in a large number of his investors’ accounts.  Call 1-866-817-0201 for a free and confidential consultation.

Invest photo 2The regulatory action was initiated by FINRA concerning unauthorized trades by Jones in certain high risk investments.  The FINRA regulatory settlement identifies that in July 2015, while registered with J.P. Morgan, Jones made trades in his investors’ accounts without permission in the accounts of 12 firm customers and mismarked most of the trades as “unsolicited,” which means that the trade was made at the request of the investor.

While many investors believe that their financial advisor or stock broker can make trades as he/she sees fit, regulations require that there must actually be verbal authority from the account owner contemporaneous to the trade.  Absent such verbal authorization, there must written authority.

On July 6 and 7, 2015, Jones exercised discretion to purchase a total of $208,714 of VelocityShares 3x Long Crude Oil (UWTI) in the accounts of 12 firm clients. This investment was not only unauthorized, the investment was also a very risky investment that is designed to multiply the gains or losses of the underlying holdings by three.

None of the 12 clients, had provided Jones with written permission to exercise such trades in their brokerage accounts.  Regulatory rules provides in relevant part that, “No… registered representative shall exercise any discretionary power in a customer’s account unless such customer has given prior written authorization to a stated individual or individuals and the account has been accepted by the member . . .” .

The trades likely enriched Jones by thousands of dollars while putting his clients in financial jeopardy.

Though Jones appears to be out of the securities industry, FINRA impose a fine and a four-month suspension.  Jones neither confessed or denied the allegations.

 

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.

Walter Marino Annuity Complaints

Walter Marino has come to our attention for issues concerning his variable annuity sales and large number of customer complaints.  Marino most recently worked for Benjamin Securities, Lincoln Investments, Planmember and Legend Equities.  If you wish to discuss your rights with an attorney call 1-866-817-0201 for a free consultation.

The most recent issue with Marino is a regulatory complaint filed against him by the securities regulator FINRA.  This complaint constitutes the 16th “event” in the CRD record of Marino.  An event on a CRD is an occurrence which reflects poorly on a broker’s ability to handle the funds of others.  Events include terminations of employment, being sued by a customer/investor, being the focus of a regulatory action, and other similar black marks.

This most recent regulatory complaint involves the sale of variable annuities.  In May and June 2014, Respondent Walter Marino recommended unsuitable replacements (also known as exchanges) of variable annuities to two customers without having a reasonable basis for recommending the transactions.  An investment is unsuitable when the investment puts the interests of the broker ahead of that broker’s investor.

Marino received substantial commissions, approximately $60,000, from the unsuitable transactions. Marino’s investors, however, received no benefit from the exchanges Marino recommended. Indeed, both customers suffered financial harm due to the costs incurred as a result of the annuity replacements since the liquidation of annuities causes the investor to not only lose the substantial commissions and fees that the investor paid to get into the annuity, but the investor commonly incurs significant charges in liquidating the annuities.

Marino’s recommendation to one such investor resulted in that investor incurring an $82,523.23 surrender charge, a charge commonly assessed upon the liquidation of a variable annuity. In addition, switching annuities can have substantial tax ramifications.   When Marino recommended replacing non-qualified annuities, Marino failed to utilize the tax-free exchange available under Section 1035 of the Internal Revenue Code (“1035 exchange”).

The new annuities that Marino recommended to replace those being surrendered also resulted in an increase costs to the investors.  The increases included increases in annual mortality and expense charges, a new, advisory fees of 1.5%, and new surrender periods which decreased the ability to liquidate the annuities.

By recommending annuity replacements that benefit him but caused substantial financial harm to his customers, Marino violated regulatory rules that require him to sell suitable investments to his investors.

These issues should not be a surprise to those familiar with Marino’s history.  The CRD of Marino indicates that he is an alumni of the Stratton Oakmont brokerage firm, the brokerage firm that was the focus of the film The Wolf of Wall Street.

James Fleming Investment Loss Recovery

Please call 1-866-817-0201 to discuss potential investment loss recovery for investors of James Fleming.  Mr. Flemming previously work for Investors Capital Corp. (“ICC”) and currently works for Questar.  Initial consultation with an attorney is free of charge.

Wall Street photo 2As identified by FINRA regulators, between June 2010 and December 2014 (the ”Relevant Period”), Fleming engaged in a pattern of short-term trading of UITs in two customers’ accounts. UITs are investment companies that offer shares of a fixed portfolio of securities in a one-time public offering, and terminate on a specified date. As such, they are not designed to be used as trading vehicles. In addition, UITs typically carry significant upfront charges, and as with mutual funds that carry front-end sales charges, short-term trading of UITs is presumptively improper.

During the Relevant Period, in connection with two customers’ accounts, Fleming repeatedly recommended that the customers purchase UITs and then sell them well before their maturity dates. The UITs that Fleming recommended had maturity dates of 24 months or longer and carried significant sales charges.

Nevertheless, on 177 occasions, Fleming recommended that his customers sell their UIT positions within eight months oftheir purchase. The holding period for the UITs ranges from between three and 235 days, with an average holding period ofonly 96 days. In addition, on several occasions, Fleming recommended that his customers use the proceeds from the short-term sale of a UIT to purchase another UIT with similar investment objectives. Fleming’s recommendations caused the customers to incur unnecessary sales charges, and were unsuitable in view ofthe frequency and cost ofthe transactions.

Regulators suspended Flemming for a period of four months and imposed a $10,000 fine.