Recover Blue Owl Losses
Investors looking to recover Blue Owl losses have recourse.
At the end of 2025, the market turned against private funding and business development investments as risks became apparent. In response, Blue Owl has increased redemptions. While liquidity is generally good, the investor rush signals a lack of confidence in the investment. Even with the redemptions, Blue Owl is only allowing tenders of 19%. The offer expired before the end of 2025.
But the heightened risks of such investments have been known by brokers and advisors. These financial professionals made many inappropriate recommendations into investments like Blue Owl.
Your licensed broker or advisor is required to recommend investments in your best interests. Business development companies like Blue Owl often pay brokers and advisors heightened commissions. As a result, investment professionals often omit risk disclosures for such investments. Regulators consider these investments to be high risk and unsuitable for moderate investors.
Business Development Companies
Business Development Companies or “BDCs” are much riskier that many advisors represent. High commissions push the recommendation to purchase BDCs, but illiquidity prevents the liquidation when things turn bad.
A BDC is a special type of investment that combines attributes of publicly traded companies and private, illiquid investment vehicles. These investments are high-risk. A BDC can provide exposure to investments similar to those associated with risky investments such as private equity or venture capital.
Some BDCs have a redemption process. Late 2025 saw a surge in redemptions in light of a number of bankruptcies. Many investors who could not redeem their shares saw the value of the investments drop significantly. This despite their advisors initially characterizing the investments as “safe.”
Blackstone is a significant entity in the BDC world. It serves as a leading manager. The Blackstone Private Credit Fund, or BCRED, is a “blind pool,” illiquid investment that invests in securities it refers to as “junk.” But the investment touts that an annualized distribution of 9.7%. Advisors rarely disclose that this high rate of return comes with a high risk of loss.
Jeffrey Pederson helps investors recover losses when advisors and broker inappropriately recommend BDCs and other illiquid investments.
Crypto Fraud of Morocoin, Berge Blockchain and Cirkor
On December 22, 2025, the Securities and Exchange Commission today filed suit against purported crypto asset trading platforms Morocoin, Berge Blockchain and Cirkor. The SEC filed the suit in the US District Court for the District of Colorado. The suit also included investment clubs AI Wealth Inc., Lane Wealth Inc., AI Investment Education Foundation Ltd., and Zenith Asset Tech Foundation. The SEC alleges they defrauded retail investors out of more than $14 million in an elaborate investment confidence scam.
The SEC press release states, “This matter [the SEC complaint] highlights an all-too-common form of investment scam that is being used to target U.S. retail investors with devastating consequences.” The complaint alleges a multi-step fraud that attracted victims with social media ads. The perpetrators then built victims’ trust in group chats where fraudsters posed as financial professionals and promised investment tips. The perpetrators then convinced victims to put their money into fake crypto asset trading platforms where it was misappropriated.
Laura D’Allaird, Chief of the Cyber and Emerging Technologies Unit, heads the prosecution. She states, “Fraud is fraud, and we will vigorously pursue securities fraud that harms retail investors.”
The alleged fraud highlights the risks investors take by investing with firms found through social media. The SEC warns investors of these perils based upon the Morocoin allegations.
Matthew Melton Ponzi Scam
The Department of Justice extradited Matthew Melton from the United Kingdom on December 23, 2025. Authorities accuse Melton, of Boulder, Colorado, of wire fraud in connection with a Ponzi-type securities scheme.
The DOJ states, “As alleged, Matthew Melton told investors he was using groundbreaking technology and cutting-edge trading techniques to generate record returns.” Investigators and officials assert otherwise. Prosecutors state, “In reality, Melton was allegedly […] taking new investors’ money to pay old investors and pocketing funds for himself along the way.” This is the definition of a Ponzi-type scheme.
Wire fraud requires the government to prove that Melton intended to defraud investors by means of interstate wire communication. This intent to defraud also violates federal securities laws.
According to Fortune, Melton promised investors 10% gains. Now, he’s accused of using investor money for sailing excursions in an alleged Ponzi scheme. The misappropriated funds are approximately $3.4 million.
The Department of Justice release reiterates that Melton has not yet been convicted. Melton also violated Colorado state law if allegations are true. Prosecutors seek to imprison Melton for a term of up to 20 years.
Jeffrey Pederson represents Colorado investors and has been doing so for over 20 years.
KEITH MICHAEL D’AGOSTINO
If you were a victim of Keith Michael D’Agostino, also known by the last name “Dagostino,” please contact us for a free initial consultation. Regulators recently suspended Dagostino from the securities industry. D’Agostino is also the focus of an excessively large number of investor lawsuits.
The employers of D’Agostino faced 24 separate investor suits concerning securities fraud. Investors filed most of these suits in 2022-25 time period. These investors sustained millions of dollars in losses and his employers, Aegis Capital and EF Hutton, paid millions in settlement.
D’Agostino’s most common form of fraud is the recommendation of unsuitable securities. The sale of unsuitable securities is in violation of federal and state laws. When a securities broker recommends an investment that is not in the best interests of an investor it is a suitability violation.
Jeffrey Pederson is a nationally recognized securities lawyer and helps investors suffering suitability losses.
Spartan Capital Churning
Victims of Spartan Capital churning should seek legal representation. Churning is an action where a broker recommends trades, often frequent trades, that serve the broker’s interest over the broker’s client.
Churning is a violation of Financial Industry Regulatory Authority (FINRA) rules and considered fraud. FINRA asserts that Spartan engaged in widespread churning. It alleges that the brokers at Spartan Capital churned its investors from 2018 to 2022. The fraud impacted more than 1,200 accounts at Spartan. Additionally, churning generated more than $46 million in revenue for Spartan.
As such, one financial publication described Spartan Capital as having a “Business Model Hinged on Churning Client Accounts.” FINRA alleges that many Spartan brokers participated in the unsuitable business model. The offending brokers include Kim M. Monchik, Frederick Joseph Cammarano III, James Pecoraro, John Stapleton and Michael Darvish.
Regulators prohibit churning or excessive trading. The number of times an account is traded, or “turned-over” is a common way regulators measure churning. Trading can be excessive if the account is turned over a single time if the investor was seeking a moderate return. This is because the cost of the trades deteriorates the return and increase risk in the account.
Jeffrey Pederson represents victims of churning. Call to see if you were a victim.
The information concerning Spartan is from regulator allegations. The case is ongoing.
INVEST Act Hurts Investors
The House of Representatives passed the INVEST Act on December 11, 2025. The Act purports to protect investors but may increase investor vulnerability.
The Act weakens the accredited investor standard. A large portion of private investments require that investors be “accredited.” Currently, to be an accredited investor, an investor must have a certain level of income or net worth. This is to protect individuals with limited worth from these speculative investments. Private investments typically provide little financial transparency and cannot be easily sold if the investment underperforms.
In the place of the economic standard, the Act authorizes the creation of a competency-based exam. The Act directs FINRA, the Financial Industry Regulatory Authority, to create such an exam. Under this framework, brokers will now be able to recommend such speculative investments regardless of an investor’s financial ability to sustain losses.
A foreseeable problem is broker participation in the completion of the exams. Private investments generally pay brokers higher commissions than publicly traded securities. Brokers have, in prior cases, commonly completed, or falsified, account opening documents to allow trading in more lucrative investments. Investors could lose substantial portions of their savings if a broker assists in taking the exam or improperly advises an investor regarding the exam responses.
Kyle Ray Critcher Bond Allegations
Kyle Ray Critcher is accused of misrepresenting bonds as being FDIC-insured. First registered in 2021, Critcher is a former broker LPL Financial.
Regulators allege that in July 2024, Critcher negligently misrepresented that corporate bonds he recommended to two senior customers were FDIC-insured certificates of deposit. He recommended the senior customers purchase more than $500,000 in corporate bonds based upon this assurance. This is false. As such, the recommendation violated
If true, the alleged facts would violate federal securities laws. Section 17(a)(2) of the Securities and Exchange Act prohibits “in the offer or sale of any securities […] by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements […] not misleading[.]”
The recommendations would also violate Critcher’s obligations under the Financial Industry Regulatory Authority (FINRA) rules. FINRA Rule 2010 requires securities brokers to “observe high standards of commercial honor and just and equitable principles of trade.”
Jeffrey Pederson represents investors misled by brokers. Call for a free initial consultation.
Advisors Using AI
Advisors using AI must comply with regulatory obligations to protect their investors. Investors have recourse when advisors use artificial intelligence in a manner that put their holdings at risk.
FINRA, the Financial Industry Regulatory Authority, published its 2026 regulatory oversight report concerning AI in December 2025. Continuing and emerging trends FINRA identifies concerning generative artificial intelligence (GenAI) are many.
Advisors have obligations addition to acting in the best interests of investors. FINRA RN 24-09 reminds advisors of their additional obligations when using GenAI. They also have duties to protect their investors from GenAI fraud. Advisors also cannot blame others for the failing of AI programs since FINRA requires the oversight of such third-party vendors.
The report identified many risks to investors from advisor use of artificial intelligence:
- Autonomy: AI agents acting autonomously without human validation and approval.
- Scope and Authority: Agents may act beyond the user’s actual or intended scope and authority.
- Auditability and Transparency: Complicated, multi-step agent reasoning tasks can make outcomes difficult to trace or explain, complicating auditability.
- Data Sensitivity: Agents operating on sensitive data may unintentionally store, explore, disclose or misuse sensitive or proprietary information.
- Domain Knowledge: General-purpose AI agents may lack the necessary domain knowledge to effectively and consistently carry out complex and industry-specific tasks.
- Rewards and Reinforcement: Misaligned or poorly designed reward functions could result in the agent optimizing decisions that could negatively impact investors, firms or markets.
- Unique Risks of GenAI: Keep in mind that the unique risks of GenAI—bias, hallucinations, privacy—also remain present and applicable for GenAI agents and their outputs.
Securities America Mutual Fund Switching
The Financial Industry Regulatory Authority (FINRA) charged Securities America with allegations of mutual fund switching. Securities America is currently owned by Osaic. Osaic paid $3 million to settle these charges.
Fund switching occurs when a fund is exchanged for another such fund. Regulators consider this fraudulent because the sales charges, or load, are so great. The charge is so great that taking on a new load by exchanging the fund rarely makes economic sense. Any recommendation that a mutual fund with a front load be liquidated in the short term raises a red flag.
From at least January 2018 to June 14, 2024, Securities America failed to have a supervisory system designed to achieve compliance with FINRA Rule 2111. This rule requires that brokerage firms offer only strategies that are suitable for their investors. Securities laws also require firms to offer only strategies in the investor’s best interests, which SA lacked.
Class A mutual funds are generally suitable only as long-term investments and not for short-term trading. Class A share funds carry significant sales charges. An investor usually must hold the Class A share for a long enough period of time to recoup the costs associated with the front-end sales charge.
Between January 1, 2018, and June 14, 2024, Securities America effected the purchase of approximately $3.8 billion in Class A mutual funds, which comprised a substantial portion of the firm’s revenue. However, from at least January 2018 to June 14, 2024, Securities America failed to establish, maintain, and enforce a supervisory system.
Jeffrey Pederson represents victims of fund switching. Call for a consultation.