Securities Fraud and Mismanagement

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Jim Geake investment fraud

Jim Geake inappropriately sold investors illiquid investments. These include Real Estate Investment Trusts (REITs) and Business Development companies (BDCs). Please contact us if you lost funds or cannot access your savings. We have represented investors for inappropriate BDC and REIT sales for over 20 years. Call us toll-free at 1-844-253-5858.

Geake is a financial advisor with Madison Avenue Securities in Skokie, Illinois. He or his employer has been sued, or threatened with suit, fifteen times concerning Geake’s inappropriate investment recommendations.

Fifteen legal suits is excessive under any measurement. A brokerage firm is required to give heightened supervision when a financial advisor has excessive complaints. Generally, the level considered excessive is anything above four complaints.

One such suit concerning a REIT that Geake sold an investor settled in 2021. The investor received $450,000 in the settlement.

There are many reasons that these investments are inappropriate for many investors. Regulators have highlighted the problems with non-traded REITs for years. These include the high commissions paid to advisors, inability to trade or sell the investment, lack of guarantee as to distributions, an inability to value the investment, an inability to determine the health of the investment,

The individual investments sold by Geake include NorthStar Healthcare REIT, Hospitality, Investors Trust (HIT), and other non-traded REITs. Complaints also include inappropriate sale of variable annuities. Like REITs and BDCs, these investments pay the broker an unreasonably high commission for selling investments that meet the needs of very few investors.

Investors allege Jim Geake did not make complete disclosures in the sale of alternative investments.
Jim Geake received a lot of incentive to sell REITs and BDCs. He did not disclose these commissions or the problems with the investments.

KBS REIT III Loss

On December 25, 2023, KBS REIT III trustees cautioned that the REIT could experience sweeping defaults in 2024. We have represented REIT and other investors for over 20 years. Call to learn your options in recovering REIT loss.

The ominous warning, released on a holiday to hopefully downplay the issue, is dire news for investors. KBS states, “Considering the current commercial real estate lending environment, this raises substantial doubt as to KBS REIT III’s ability to continue.”

The REIT lost approximately $350 million in property value since September 2022. In January 2023, KBS III defaulted on a loan for a Portland office building. By July, this building was in foreclosure. While higher interest rates and changing work habits are given as reasons, these are not unforeseen issues. Further, REITs have always been highly risky investments.

In February 2024, KBS announced that it needed to raise $100 million in five months to retain a $643 office portfolio. This would allow it to extend a loan for a fourth time and prevent it from going into default.

In 2011, the Financial Industry Regulatory Authority (FINRA), the primary regulator overseeing securities brokerages, issued an investor alert concerning REITs. FINRA alerted attempted to alert investors that sales pitches for REITs as alternatives to stock market volatility hid the truth. Such a pitch glosses over the “lack of liquidity, fees and other risks” of non-traded real estate investment trusts.

The assertion that REITs, particularly non-traded REITs, have stable value can also be an illusion. While brokerages are required to list a value for the REIT, there is very little requiring the brokerage to list more than the net asset value of the REIT. Important factors, such as liabilities and market conditions are ignored in the valuation. This has always been known, and the Wall Street Journal recently highlighted this problem with non-traded REITs. This can leave investors unaware of a REIT’s pending collapse.

While traded REITs are down more than 35% since February 2022, non-traded REITs investing in similar properties have not changed their valuation. REITs avoid assigning accurate valuations because cutting the value to accurate levels angers advisors and investors.

As further evidence that REIT collapse, and the volatile nature of REITs, was known can be seen in January, 2024. Cantor Fitzgerald CEO, Howard Lutnick, predicted that $700 billion in non-traded REITs could default.

Despite these issues, brokerages love REITs. The heightened fees and costs pads the profits of brokerages and is rarely disclosed to the investor. Industry professionals should know that the REIT market is not stable, but are boom-and-bust investments.

The SEC has warned advisors and the investing public about REITs for years. Up front costs can be approximately 15%. Most of this is commission to the Advisor. Consequently, advisors have inappropriate motivation to recommend the investments. Once purchased, the ability to liquidate is nearly impossible.

We help investors recover losses from such inappropriate investments. Call for a free and confidential initial consultation concerning KBS REIT III or any other questionable investment.

KBS REIT III is an expensive investment sensitive to real estate fluctuations.
KBS REIT III is an expensive and risky investment.

Scott Norvell Annuity Sanction

Scott Norvell is accused of misrepresenting aspects of annuity products. Norvell, operating in Omaha, Nebraska, is and advisor with Brokers Financial, and previously with LPL and Cetera. Advisors commonly engage in the high-cost practice of variable annuity fraud, and variable annuity switching in particular, due to the high commissions at stake. We have represented annuity victims for over 20 years and know how the high commissions of variable annuities can lead an advisor to misrepresent the investment.

On November 22, 2023, the regulator overseeing securities brokers, FINRA, suspended Norvell from the securities industry for a period of two months. Norvell entered into an agreement for this sanction. While he did not admit to the findings, he also did not deny the findings. The settlement allowed Norvell to avoid a greater sanction if the matter went to trial.

Norvell negligently misrepresented the death benefits that customers would receive following exchanging their existing variable annuity products for a different variable annuity product.  Annuity switching is a form of fraud. There are very few reasons to switch from one annuity to another, other than the high commission that the advisor receives.

States and federal regulators take annuity switching seriously. A broker can receive, and the investor can pay in costs, around 15% of the sale. FINRA has special rules to prevent annuity switching. States can have strict rules that sometimes can entail an investor not only receiving a written warning but requires the advisor to read the warning out loud.

The findings stated that Norvell negligently misrepresented to his investors that the new product had a guaranteed death benefit that was equal to the greater of the account value or the customer’s contributions, less adjusted withdrawals. However, the guaranteed death benefit was only available by selecting an optional rider on the application. Norvell failed to select the rider on the applications for these transactions or collect the additional fee. As a result, the customers did not receive a guaranteed death benefit and switched annuities for no reason.

A majority of the transactions took place after Norvell’s supervisor had notified him that he had failed to select the optional death benefit rider in connection with a different transaction. The findings also stated that Norvell caused his advisory firm to maintain inaccurate books by falsifying signatures of senior customers by electronically signing documents on their behalf. Although Norvell had prior permission from the customers, the firm prohibited signing a customer’s name or initials regardless of the customer’s knowledge or consent.

In addition, Norvell falsely attested in a compliance questionnaire that he had not signed or affixed another person’s signature on a document.

This is not the first time Norvell has found himself in legal trouble. Investors previously sued him three times for false or incomplete information in the sale of investment products. At least two of these prior complaints involved annuities. Norvell has also previously faced criminal charges for providing false information. While it appears that none of these prior allegations resulted in a verdict against Norvell, the allegations should have put his employers on notice of the need to heighted the supervision of Norvell.

Scott Norvell took advantage of the fine pint.
Scott Norvell took advantage of investors not knowing the costs of their annuities.

Bovee Marijuana Investment Ponzi

We are investigating Alexandra Bovee, aka Alexandria Montgomery and Aia Montgomery, who participated in a marijuana investment Ponzi. The former Edward Jones broker in Sumter, South Carolina accepted a securities industry bar rather than participate in the Financial Industry Regulatory Authority (FINRA) investigation into her alleged work for a cannabis growing company. 

We are a firm representing investors and pursuing cases against securities brokerages.

Bovee declined to provide testimony when given the opportunity in FINRA’s investigation of whether she had “violated FINRA rules or federal securities laws” in connection with sales of securities issued by Integrated National Resources (INR), according to a FINRA Advice Waiver and Consent filing of settlement finalized on Wednesday. In that position she received inappropriate commissions totaling $715,000. Her refusal triggered the automatic bar under FINRA Rule 8210, according to the FINRA AWC filing. 

Bovee resigned from Edward Jones in December 2022, according to the regulatory AWC. She had initially worked as a financial advisor (stockbroker) but was serving as a branch office administrator at the time of her resignation, according to a person familiar with the matter. 

We allege that Edward Jones failed to appropriately supervise Bovee. Securities broker-dealers, like Edward Jones, has a duty to supervise inexperienced advisors, and investment actions advisors make away from the firm. Bovee had been a student and managed a Mexican restaurant in Las Vegas prior to starting at Edward Jones in 2019, according to BrokerCheck. Shortly thereafter, in 2022, Bovee started her inappropriate relationship of investing clients in INR.

INR, also known as WeedGenics, was shut down and all assets were frozen in mid-2023 following the initiation of the SEC’s legal action against the company. The company, which launched in 2019, purported to raise investor funds to develop and expand cannabis cultivation facilities in California and Nevada and had raised approximately $61.7 million from approximately 350 investors, according to the SEC’s complaint in a federal court in Santa Ana, California. 

We represent investors in suits such as the Bovee Marijuana investment Ponzi.

Some investors of the INR marijuana investment Ponzi have recourse.

Matthew Stucke Investors

Matthew Stucke, currently with Cetera, and previously with Cambridge and Raymond James, is alleged to have inappropriately invested his investors. Please contact us if you were a Stucke investor. We have represented investors for 20 years. We can provide a free and confidential consultation as to whether you were sold inappropriate stock or other investments.

There are currently two suits filed against the employers of Stucke. Details of the allegations reveal that he is accused of mishandling the investments in a discretionary account in a suit filed in July 2023. This suit sought $370,000 in damages and settled for $275,000.

A second suit filed in October 2023 alleges that Stucke recommended unsuitable and overly risky stock investments. The suit seeks damages of approximately $100,000.

Raymond James also, according to Stucke, also forced him out of their employment for investment practices. A FINRA panel found that Raymond James appropriately terminated Stucke in 2020 because of “email communications with clients that violated firm policies, including emails providing clients with limited-distribution investment material without firm approval.”

Stucke had asserted that he was the victim of a conspiracy and sued Raymond James to have the terminations removed. He stated that others at Raymond James conspired against him to take his business.

FINRA denied the attempt by Stucke to have the termination removed from his record. Not only that, FINRA ordered to Stucke to pay back a $1 million loan he had taken with his former employer.

Matthew Stucke is alleged to have inappropriately engaged in investment sales.
The record for Matthew Stucke indicates that he is accused of inappropriate stock sales.

Stewart Ginn Fraud

Stewart Ginn is affiliated with Independent Financial Group and Crosby Investment Group with offices located in California and Colorado. Regulators accuse Ginn of churning accounts, of mostly elderly investors, and creating millions of dollars in losses and unnecessary commissions.

A regulatory complaint asserts that Ginn, a licensed securities broker, exercised control over the accounts of at least five investors. These investors were mostly elderly and retired. Ginn then proceeded to trade the accounts excessively. This was in the best interests of Ginn and not his investors. As a result, the investors incurred losses and commissions of over $4.5 million.

Securities regulations currently require that a broker act in the best interests of an investor. A broker fails to act in the best interests of a client when the broker puts commissions ahead of the investment objectives of a client. As the percentage of the portfolio consumed by commissions increases the ability for the portfolio sustain value decreases. Even before this best interests standard was the rule, brokers were required to only recommend suitable trades and abstain from excessive trading.

Ginn and his employer are currently facing three investor lawsuits in addition to the regulatory suit. All assert allegations of excessive trading and excessive commissions.

We have handled investor suits such as these for over 20 years. Please contact us to discuss your options. Initial consultations and free and confidential.

The inappropriate actions of Stewart Ginn cost investors considerable losses.
Stewart Ginn is accused of fraudulently mishandling investor accounts.

First Republic Investment Management Fraud

First Republic Investment Management and First Republic Securities representatives allegedly gave false and misleading information about First Republic stock in the days leading to the bank’s collapse.

On March 10, 2023, First Republic Investment Management and First Republic Securities representatives sent their investors a notice about First Republic Bank. The notice stated that the bank was still in a “very strong position.” The body of the notice states that the deposits are “strong” and “diversified” and the “liquidity and capital remain strong.” The notice goes on to state that stock was undervalued because “the stock market has tended to have a spill-over effect on our share price, as well as those of a lost of other banks.”

The notice was strange because First Republic Bank and the First Republic securities arms were separate corporate entities. Unlike the bank, the securities entities were not experiencing a run on their assets. Unlike the bank, the securities arms were not facing an issue with deposits.

The rosy picture of the bank was not accurate and did not disclose relevant information in its possession. First Republic Investment Management is a registered investment adviser and has the duty to make full disclosure and to act in the best interests of its investors. It violated this duty by failing to give the investors a true warning.

The notice seems strange until you realize that the representatives were paid largely in bank stock. All areas of the organization were given discounts and encouraged to purchase the stock.

Also undisclosed in the plea to purchase First Republic stock was that bank and Asset Management insiders were selling shares. The Wall Street Journal published an article a few days after the communications disclosing how the top executives unloaded $11 million in First Republic shares in the time just prior to the collapse of the bank’s stock.

Given these issues, we are currently investigating the matter and wish to speak to those who invested in First Republic Bank. The existing class action suits do not seek recovery from First Republic Investment Management or First Republic Securities.

We have represented investors for over 20 years. Please call us toll-free at the number above and we can discuss options you may have to recover your losses.

First Republic Investment Management likely committed investment fraud and negligence have ruined the savings of many investors by pushing shares of sister company stock.
First Republic Investment Management victims have recourse.

Michael Kirwan inappropriate annuity sales

We are currently investigating Michael Kirwan and his potentially inappropriate annuity sales. These actions include misrepresenting important aspects of annuities and failing to manage the annuities in an appropriate manner. Please email us or call us at the toll-free number above.

Investor allegations are many. Kirwan stating that he was not receiving a commission, which would conceal that he was selling a high commissioned product in violation of the investor’s best interests, is one allegation. Misrepresenting surrender charges to make the investment appear liquid is another. As such, Investors allege that Kirwan committed fraud in the sale of the annuities.

Mismanagement is another allegation. The value of annuities is often dictated by the performance of the annuity subaccounts. These are accounts that resemble mutual funds. The subaccounts are required to be invested in a manner that is in the best interests of the investor and suitable for the investor’s objectives and risk tolerance. As such, aggressive subaccounts can be a violation of securities laws. Investors allege that Kirwan invested the subaccounts inappropriately and excessively traded the accounts in a manner that inappropriately increased the risk.

Kirwan also made the representations by inappropriately using his private and non-brokerage email. This has the effect of hiding the communications from supervisors. Supervisors, however, have a duty to audit advisors and this includes learning all email addresses that the advisor may be using. An advisor failing to use only the brokerage’s email, here the American Portfolios domain, violates multiple FINRA and SEC regulations to prevent fraud and protect records. This creates liability for both the advisor and the advisor’s firm.

The employment history of Kirwan reveals a history of investors accusing him of fraud. He previously settled claims concerning racketeering and falsifying the signatures of investors to initiate wire transfers. Advisors with this type of history should be under heightened supervision by their employers.

Jeffrey Pederson PC has a long history of representing investors in cases concerning fraudulent retirement investments. Lawsuits of this kind are required to be handled through FINRA arbitration. We have represented investors in FINRA arbitrations, and its NYSE and NASD predecessor arbitrations, for over 20 years.

Seniors distressed over investment fraud and negligence of Michael Kirwan.
Investors allege Michael Kirwan made false representations in annuity sales and mismanaged annuity subaccounts.

Christopher Booth Kennedy Churning

Please call if you were an investor with Christopher Booth Kennedy. Western International Securities employed Kennedy for most of the period between 2017 through September of 2021, while briefly working for Spartan Capital

A FINRA regulatory action identified the wrongdoing of Kennedy. Between July 2020 and July 2021, Respondent Christopher Kennedy churned and excessively traded four accounts of six customers as a broker for Western International Securities.

There may be a considerable number of additional victims. The regulatory complaint does not preclude the fact that many more victims may exist.

Churning is the act of a broker making excessive or unsuitable trades. A broker churns an accounts more for the broker’s personal benefit than for the benefit of the investor or recklessly disregards the interests of the investor.

Control over an account can indicate that excessive trades are the result of a broker’s inappropriate intent. Kennedy used his control over these accounts to direct an excessive series of trades in each account that generated commissions for his own benefit at the customers’ expense.

Between July 2020 and July 2021, Kennedy directed over 5,300 trades representing net trading of more than $350 million in the four accounts of six accounts . Once again, this is just for the accounts in the regulatory complaint. Many more inappropriate trades may exist. Each month, Kennedy made an average of 102 trades per account identified in the regulatory action representing net trading of more than $6.9 million per account or approximately 13 times the average account value.

Kennedy’s trading in just the six accounts resulted in annualized cost-to-equity ratios ranging from 27% to 39% for an average cost-to-equity ratio of more than 31% across all their accounts. This means that the accounts needed to achieve a return of up to 31% each year just to make a profit due to commissions and costs.

As the result of Kennedy’s excessive trading, the six accounts identified collectively lost over $2.3 million in value and paid more than $715,000 in trading costs, including over $595,000 in commissions to Kennedy and his employer.

Moreover, in March 2021, Kennedy began making fake Wester International account statements to hide the results of his trading. Over the next six months, Kennedy prepared and sent six fake account statements inflating their account value.

The Law Offices of Jeffrey Pederson has handled churning suits for over 20 years. Experience is essential to appropriately handling such suits. Call for consultation.

Christopher Booth Kennedy is accused of churning and negligence.
We can help victims of Christopher Kennedy.
Recover REIT Loss

Recover REIT Loss

REIT loss can be recoverable. Not every investment is appropriate for every investor. REITs are speculative investments exposing investors to a level of risk investors never intended to take. The level of risk in these investments is often misrepresented by advisors looking for higher commissions. We represent REIT investors and have represented many such investors over the past 20 years who have been inappropriately sold REIT investments. Call toll-free 844-253-5858.

In 2023, non-traded REIT sales fell to historic lows. Consequently, many of these investments reduced redemptions and became insolvent. These investments have always been known to be highly risky investments with the potential to become illiquid.

An advisor’s recommendation of these investments is often fraudulent. Advisors sell these REITs under the guise that they help the investor escape the volatility of the stock market. The truth is that these investments are just as volatile. The only difference is that the non-traded REITs have no public market or transparency of their financials so could quickly be going out of business with little to no warning. It is inexcusable for an industry professional to not know that non-traded REITs are boom-and-bust investments.

Non-traded REITs do not have a market. As such, the market does not assign a value to non-traded REITs. The resulting value assigned is largely artificial. Those giving the valuations largely have conflicted interests. These people valuating non-traded REITs, often employed by the brokerage selling the REITs, inflate valuations to not anger advisors and investors. Investors often do not know the risk of the investment until the day they receive a statement saying that the REIT is in default. This makes these investments high-risk.

The valuation, and thus the price and redemption, is also questionable. Brokerage firms do not use normal accounting in the valuation of non-traded REITs. Non-GAAP measures are often used in determining assets and liabilities. As a result, a non-traded REIT investment is largely a “black box” where there is no true measure of the investment’s financial health.

The heightened commissions make selling these high-risk investments alluring to advisors. The SEC warns that non-traded REIT investments can have up-front costs of approximately 15%. Advisors love selling these investments because the commissions can be 10 to 15 times greater than a mutual fund, fixed income or stock investment. As a result, the commission is the reason for the recommendation as opposed to the best interests of the investor.

Blackstone (BREIT) is the most notable troubled REIT since it is the largest non-traded REIT. This REIT is troubled and has been troubled for years. BREIT has limited yearly redemptions to 5%. As of November 2023, BREIT had limited redemptions for its 12th consecutive month. BREIT reported record losses at the end of 2023. Advisors commonly describe this investment as having moderate risk despite these troubles. Many other similarly troubled non-traded REITs exist.

Likewise, KBS REIT warned investors of a likely default in December 2023. Likewise, NorthStar Healthcare is a REIT troubled for years.

The lack of redemption rights is a problem for those needing liquidity. Those in greatest need of liquidity are retirees. Non-traded REITs are inconsistent with the wants and needs of retirees. Advisors recommend and sell retirees these investments and put their own interests ahead of investors.

Even REITs traded on the major exchanges suffered considerable losses and advisors knew the investments to be speculative. Medical Properties Trust REIT lost 50% of its book value as of March 2023. The REIT is suffering, along with many others in the sector experiencing REIT loss, from investors selling as the banking crisis remains and interest rates rise. Lower expectations for a reduction in interest rates are causing real estate assets to lose their appeal.

Other publicly traded REITs losing substantial value are Ashford Hospitality, Brandywine Realty Trust, Boston Properties, Healthcare Realty Trust, EC World Real Estate Trust, Invitation Homes, Home REIT, Piedmont Office Realty Trust, Prologis and Starwood.

In all, industry insiders believe that REIT losses will top $700 billion before the end of 2025. On March 28, 2024, Kevin O’Leary of Shark Tank announced that a commercial real estate was on the brink of collapse and this would have a ripple effect on the entire economy. REITs and regional banks reliant upon equity in these buildings are known, and have been known since the pandemic, to be in a very risky position.

Please contact us. We can provide you with a free initial consultation.

REIT Loss is on the rise.
Talk to a lawyer to see if your advisor inappropriately recommended REITs.