Tag Archives: Ponzi

Attention Matthew Eckstein investors

Investors of Matthew Eckstein please call 1-866-817-0201.  Mr. Eckstein was previously employed by Sisk Investment Services and Gould, Ambroson & Associates.   Initial consultations are free and confidential.

The Financial Industry Regulatory Authority (FINRA) recently expelled Eckstein when he failed to appear at a regulatory hearing to contest allegations of severe misdeeds in his handling of securities portfolios.

Stock handcuffsEckstein engaged in a practice referred to as “selling away.”  A form of fraud, this is a practice where a securities broker sells a private security without the approval of a licensed securities firm.  This prevents the firm from vetting the investment to determine legitimacy and that the funds received actually are used to purchase the investment.

In a selling away situation, the investment is commonly of a company that the broker either owns, has an interest or that a friend or relative owns.  This is a common form of fraud and one in which his employing firm should have had supervisory mechanisms in place to detect and prevent.

The investments at issue in the present matter were investments in Conmac Capital and Conmac Funding.

In recommending that his customers make the Conmac investment, Eckstein knowingly, or at a minimum, recklessly, made false and misleading statements regarding the investment—saying, for example, that it was “fully guaranteed,” when it was not, and describing it as comparable to a certificate of deposit with a bank (“CD”), when it was not.

Eckstein, the Respondent in the FINRA suit, also persuaded one of his customers to liquidate close to $300,000 in mutual fund holdings in order to invest in the Issuer, representing that the investment would be sufficient to fund her retirement while the mutual fund investments would not. He had no basis, however, for urging the customer to replace her mutual funds with an investment in the Issuer. He had conducted no due diligence on the investment. Moreover, he never disclosed to his customers his lack of a basis for his representations and recommendations, and his lack of due diligence—material information to any reasonable investor.

“Respondent also failed to disclose financial connections to investors that would have caused a reasonable investor to question Respondent’s objectivity and the safety of his or her money.” He did not disclose that nearly all of the money that his customers gave him to invest in the Issuer was deposited into a bank account in the name of an affiliate of the Issuer, and that Respondent had access to those investor funds as a signatory on the bank account. “Respondent also did not disclose that KB had given him over $100,000.”

Eckstein and his employer are currently defendants in multiple suits concerning the his fraud.  These suits are largely being handled through the FINRA arbitration process.  Investors waive certain rights to bring claims in court when signing account opening documents with FINRA-licensed securities brokerages.

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.

Eric Sampson Loss Recovery

We have filed suit and we are actively pursuing actions to recover losses incurred by victims of Eric Sampson.  Victims are primarily investors of Sampson’s My Investment Advisor (“My IA”).  If you are a victim, please call 1-866-817-0201 for a free and confidential initial consultation.

Sampson operated at different times out of St. George, UT, Washington, UT, Greenwood Village, CO and Colorado Springs, CO.  Investments sold by Sampson that are considered fraudulent include Golden Assets, LLC, Shooks Run, LLC, The Hills at Santa Clara, and Wright Indoor Comfort.

At all relevant times, Sampson was a licensed securities broker, working first for Girard Stock handcuffsSecurties and subsequently World Choice Securities.  The practice of Sampson was a hybrid brokerage investment advisory practice that he controlled and that was made aware to his employers.  In such a situation, the investment advisory is required by pay the brokerage for supervision.  The brokerage, in turn, is charged with ensuring that the advisory is not selling investments fraudulently.

Federal criminal charges are currently pending against Sampson.  There is also currently a case against Sampson and My IA by Utah regulators.

As stated in the Federal criminal action, “It was the object of [Sampson's] scheme and artifice to defraud for defendant Sampson to fraudulently obtain money from his MY IA clients through false statements, misrepresentations, deception, fraudulent conduct, and omissions of material facts, and thereafter cause the money to be diverted for defendant SAMPSON’s personal use and benefit.”

Mark Holt Loss Recovery

Mark Holt is a former stock broker currently serving a prison sentence for stealing the funds of his investors and sending false account documents.  The scheme victimized investors in Minnesota and likely elsewhere.  Due to the incarceration, investors seeking recovery will likely need to pursue Holt’s former employers by means of FINRA arbitration for loss recovery.

From August 2005 to February 2007, Holt was a registered representative of Geneos Wealth Management, Inc., which is both a securities brokerage and investment adviser. From February 2007 to November 2013, Holt was a registered representative of Harbour Investments, Inc., which is also a dually registered entity. Holt, 47 years old, is currently incarcerated at the Federal Correctional Institution in Oxford, Wisconsin.

guy in handcuffsDetails of the SEC action can be found in its release.

On August 14, 2014, Holt was sentenced to a prison term of 120 months followed by three years of supervised release and ordered to make restitution in the amount of $2,940,982.75.  The chances of these payments being made is not great considering Holt could be incarcerated for much of the next ten years.

The allegations are that from about September 2005 through Jan. 12, 2014, Holt “knowingly caused an email communication to be transmitted in interstate commerce via servers in Texas to a client in Minnesota that would give the client access to false account statements.”

The SEC and the criminal documents state that Holt “misappropriated [investor] funds by depositing client checks into a bank account he controlled and using these funds to pay for personal and business expenses. In furtherance of his scheme, Holt lulled his clients into believing that he had purchased various investments for them by sending fraudulent Morningstar client summaries and [...] a web-based portal, that displayed fraudulent account balances.”

“Holt made monthly payments to his clients that were intended to appear as interest or annuity payments,” in a classic Ponzi-type scheme.

Kris Etter of IMS Securities

If you have suffered investment losses with Kris Etter of IMS Securities, particularly if you suffered losses in UDF, please call 1-866-817-0201 for a free consultation with an attorney.  We have suit filed against IMS and are currently investigating whether other claims may exist.

It is believed that Etter had an undisclosed conflict of interest in his recommendations of UDF.  Upon information and belief, Mr. Kris Etter sold a substantial amount of UDF to his clients and is the son of Todd Etter.  Todd Etter is the Chairman of UDF IV, one of the top officers of the company.  Mr. Todd Etter also serves as Chairman of the general partner of UDF I and UDF II and Executive Vice President of the general partner of UDF III.  This creates a substantial conflict of interest in UDF recommendations by Kris Etter.

Kris Etter and IMS also failed to properly investigate UDF before recommending it, likely because of the Etter conflict and the heightened commission paid by UDF.  IMS is one of the top four leading sellers of UDF IV in the United States.

The bottom fell out for UDF when it was revealed in December 2015 to be a Ponzi scheme. The offices were raided by the FBI, received a Wells notice, unable to release quarterly reports and was ultimately delisted for a time. Reasonable investigation into the investment of other financial firms revealed that the illegitimacy of the investment. Had IMS done sufficient due diligence it would have likewise discovered that the investment was not suitable for any investor. Instead, IMS and Etter turned a blind eye to the problems of UDF and instead focused on the profits that it was receiving from this high commission product.

The individual ultimately in charge of all IMS offices is the CEO of IMS, Jackie Wadsworth.  Ms. Wadsworth has seven customer complaints naming her for insufficient supervision of representatives under her oversight. These complaints largely concern the inappropriate recommendation by her representatives of unsuitable variable annuity and REIT investments, just like the investments sold clients of Kris Etter and IMS.

As reported in Investmentnews.com in August 2016, the balance sheet of IMS is tilted heavily toward high-commission products like variable annuities and non-traded REITs. Approximately 86% of its revenue of IMS in 2015 came from commissions from such products.

Tobin Joseph Senefeld

FINRA  has announced that  Tobin Joseph Senefeld, formerly of PIN Financial, a Carmel, Indiana brokerage firm owned by Veros Partners, has been barred from associating with any FINRA member institution, according to its monthly disciplinary report released last week. The sanction is related to a Securities and Exchange Commission suit that claimed Senefeld and two others operated a multimillion-dollar Ponzi scheme involving farm loans.

FINRAThe SEC case claimed the three raised $15 million from 80 investors in 2013 and 2014 to fund farm loans. New investor funds were used to pay older investors when the loans went bad.

Senefeld has a long history of misconduct.  The FINRA and SEC actions are just the latest of his legal problems.  The record of Senefeld contained on FINRA’s BrockerCheck indicates that Senefeld has 27 disclosure events dating back to 1997.

The prior misconduct of Senefeld, also known as “disclosure events,” include a substantial number of state regulatory actions, including the revocation of his license by Michigan in 2000 and other regulatory punishment by 16 other jurisdictions around the same time.  Senefeld also had a long history of tax liens, terminations, and civil suits initiated against him by other investors.

Co-defendants in the present SEC matter, Matthew D. Haab and Jeffrey B. Risinger, both have settled the civil suit for about $184,000 and $100,000, respectively. Senefeld and the SEC failed to reach a settlement at an in-person meeting Oct. 28, according to court filings, so Senefeld’s case remains on course for trial.

Senefeld, PIN and Risinger have all received lifetime bans from the securities industry by FINRA.

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.

Charles Fackrell Fraud

If you were an investor with Charles Fackrell and believe you may be a victim of his fraud, or simply wish to know your rights, please call 1-866-817-0201 for a free consultation with an attorney.

LPLFackrell,  a former LPL adviser based in North Carolina, was sentenced by a federal court to more than five-years in prison for running a $1.4 million Ponzi scheme that operated under the name “Robin Hood.”

The former adviser pleaded guilty to one count of securities fraud in April and was sentenced last week to 63 months in jail.

From May 2012 to December 2014, Fackrell ran his Ponzi fraud, misusing funds from at least 20 investors. He was a registered broker with LPL during that time.

Fackrell “used his position of trust to solicit victim investors and steer them away from legitimate investments to purported investments with” various “Robin Hood” named entities, according to the U.S. Attorney’s office. “These were entities [Mr.] Fackrell controlled and through which he could access the victim’s funds.”

Promising guaranteed annual returns of 5% to 7%, Mr. Fackrell “solicited his victim investors by making false and fraudulent representations, including that the investors’ money would be invested in, or secured by, gold and other precious metals,” according to the U.S. attorney. In fact, Mr. Fackrell spent only a fraction of investor money on such assets, the government claims, and diverted over $700,000 back to his investors in the fashion of a Ponzi scheme.

He used the balance of the money to cover personal expenditures, including hotel expenses, groceries and medical bills, and to make purchases at various retail shops and to make large cash withdrawals.

Information for this post was found at investmentnews.com.

Levi David Lindemann Ponzi Victims

Stock handcuffsAs reported in Investmentnews.com, Levi David Lindemann, a Minnesota-based investment adviser has received a six-plus-year prison sentence for stealing from clients and perpetuating a Ponzi scheme.

The 40-year-old adviser, Lindemann, was sentenced to 74 months in prison by a Minnesota federal court, after having pled guilty earlier this year to federal mail fraud and money-laundering charges.

Mr. Lindemann owned and operated Gershwin Financial Inc., which did business under the name Alternative Wealth Solutions, between 2009 and 2014.

“Lindemann abused his position of trust as a financial adviser to steal from his clients, including the elderly ” Mike Rothman, Minnesota’s commerce commissioner, said. “Lindemann defrauded his victims by promising to put their money in legitimate, safe investments when he actually used the funds to pay for personal expenses and Ponzi-type payments to other clients to cover up and continue his fraud.”

According to Mr. Lindemann’s guilty plea, he solicited funds from roughly 50 investors and said he would “use the invested funds to buy secured notes or other legitimate investment vehicles.”

If you are a victim of Lindemann or some other Ponzi scheme, please call 1-866-817-0201 to speak to a private attorney on a free and confidential basis to discuss your rights in private litigation.