FAQ
How do I know if I’ve been the victim of investment fraud?
Several red flags can signal fraud or negligence by an investment professional, including:
- Large purchases or exchanges of annuity or insurance products
- Investments in companies you have never heard of, or in alternative investments not suited for unsophisticated investors
- Losses significantly greater than those of your peers with similar risk tolerance and objectives
- Receiving trade notices for unfamiliar or unauthorized transactions
- Communication with your advisor via text message
- Inability to sell your investments
These are the most common signs, but others can exist.
What should I do if my financial advisor made overly risky or unauthorized trades?
- Review the paperwork completed when you opened your account, particularly the section outlining your risk tolerance and whether your advisor had discretionary trading authority.
- Gather your trade confirmations to check if trades are marked as “solicited” or “unsolicited.”
- Contact a lawyer.
How long does it take to recover lost funds?
Recovery time depends on who is responsible.
Most disputes in the financial services industry are resolved through arbitration, which is typically faster than court proceedings. Most arbitration cases are resolved within approximately nine months.
Can I recover money lost in a Ponzi scheme?
Yes. Investment firms are generally required to have procedures in place to prevent Ponzi-type investments. Proper policies detect almost all such schemes.
Why would an advisor intentionally invest me in something inappropriate?
Advisors can earn commissions up to 30 times greater from illiquid or high-risk investments than from traditional investments.
For example:
- Blue-chip stocks or commercial-grade bonds often generate commissions of less than 0.5%.
- Life insurance, annuities, alternative investments, or thinly traded stocks can generate commissions as high as 15%.
You may also incur higher costs if margin loans or securities-backed lines of credit are recommended, even when your advisor is already earning a management fee.
What is the difference between advisor misconduct and poor investment performance?
Advisors must understand your financial goals and risk tolerance and recommend investments consistent with them.
If you are retired, rely on your portfolio for income, or cannot tolerate major fluctuations, your investments should reflect that stability.
Is an alternative investment appropriate if I told my advisor I could not tolerate market volatility?
No.
Alternative investments—such as non-traded REITs, business development companies, hedge funds, and private equity funds—can be as risky or riskier than the stock market.
They often lack transparency, have limited liquidity, and pay high commissions to advisors, creating conflicts of interest.
Why is switching or exchanging life insurance or annuities bad?
Exchanging policies typically harms investors because:
- Upfront charges are lost
- New charges and liquidity periods are incurred
- Advisors collect new, often substantial commissions
While some states have rules to protect against this, exchanging policies rarely benefits investors compared to the costs involved.
An experienced attorney can help determine if you were improperly advised.
How much does it cost to hire you?
Most cases are handled on a contingency basis, meaning attorney fees are a percentage of the amount recovered.
How long do I have to file a claim after discovering fraud or negligence?
It depends on the nature of the claim and whether arbitration is required.
To preserve your rights, contact an attorney as soon as you suspect wrongdoing.
What kinds of investments are most often involved in fraud cases?
While fraud can occur in many types of investments, it most commonly involves:
- Indexed life insurance
- Annuities
- Non-traded REITs
- Margin accounts
- Alternative investments
Will you personally handle my case?
Yes. Jeff Pederson is personally involved in every step of every case we accept.
What should I bring to my free consultation?
Please bring:
- All documents received from your advisor when opening your account
- A current account statement showing your holdings in the investments in question
Isaiah Williams Misdeeds
Isaiah Thomas William is accused of misappropriating funds from his investors and engaging in other forms of negligence and fraud. Please call us toll-free at 844-253-5858. We are a firm that focuses on investor protection.
Regulators have barred Isaiah Williams from the securities industry. He was most recently a broker with Merrill Lynch.
On January 3, 2025, Merrill Lynch filed a termination notice with regulators concerning Williams. The notice states that Williams voluntarily resigned while under internal review into “allegations of misappropriation, unsuitable asset allocation, misrepresentations, and an improper business activity.”
Improper outside business activity means that Williams conducted work that he did not disclose to his employer. The most common reason for an advisor to not take the simple step of disclosing outside business activity is because such activity is fraudulent and is focused on the clients of the employing firm.
The termination comes shortly after investor allegations of inappropriate conduct. Investors filed suit against Merrill Lynch concerning Williams in May and December of 2024.
Isaiah Williams refused to cooperate with regulators investigating the accusations. This failure to defend his actions led to the regulators barring Williams.
Williams’ office was in Florida, but he is believed to have had investors across the country.
We have assisted investors in recovering their assets for over 20 years. Please call for a free and confidential initial consultation to discuss if you are entitled to recover your losses.
Recover Market Loss
You have recourse to recover market loss if you were invested inappropriately. Fraud and mismanagement is often revealed during periods of market corrections. Like the tide receding and content of the ocean floor being revealed, an advisor’s misdeeds are no longer concealed by a strong market during such corrections.
Your financial professional is required to only recommend investments in your best interests. This includes investing you in a manner that is consistent with your tolerance for risk and investment objectives and not putting their financial interests ahead of yours.
The failure of advisors to adhere to these obligations often leads to large losses that should have been avoided.
Advisors often stray from these responsibilities because of financial incentives. Investment strategies utilizing margin or options are highly risky but often pay an advisor handsomely. Complex exchange traded funds usually pay higher commissions. Stocks pay higher commissions than bonds. Annuities, insurance and REITs pay higher commissions than stocks. While a share of stock can pay a broker 1%, annuities, REITs and insurance investments can pay a broker 7% to 15%.
If you are approaching retirement, an appropriate portfolio will often have less than 50% of the holdings in stocks, and few if any REITs, annuities or insurance investments.
Being too heavily invested in risky market sectors, such as artificial intelligence or information technology, can be inappropriate or fraudulent. Advisors have a duty to research and understand the risks of these investments. Often, advisors receive undisclosed compensation to ignore these risks.
We have helped investors recover market loss for over 20 years. Please contact us for a free initial consultation to see if you have been the victim of fraud or mismanagement.
Indexed Universal Life
Indexed Universal Life policies (IULs) are highly complex and an inappropriate part of a retirement plan. These policies are expensive, illiquid and often sold for the benefit of the salesperson rather than the investor.
IULs are relatively new to the market. The inexperience of salespeople and the investing public lead many to entrust their life savings to an IUL that is not adequately understood. Many insurance salespeople do not understand how these policies work despite their legal obligation to do so. What is understood by salespeople is that the sale of IULs pay a substantially higher commission than other retirement investments.
Insurance companies pay salespeople high commissions for IUL sales. Commissions equaling 15% of the premiums received is not uncommon. Compare this to a financial advisor who generally gets paid less than 1% commission for the sale of a stock share, and the incentive becomes apparent.
The large commission has other impacts on your IUL purchase. Like a new car, as soon as a IUL is purchased, the cash value of the IUL drops substantially. This is due to the costs that the insurer must pay, such as the commission, cost of insurance, mortality expense, and other costs.
IULs have also had a history of having misleading illustrations and inaccurate information on rates of return.
These policies were never designed to be an investment product. Many are confused by the “index” function of these policies to believe that they are purchasing a product that is similar to a mutual fund. But an indexed mutual fund largely succeeds because of the lack of costs which serve as a drag on earnings. That lack of cost is not true in the IUL setting.
Further, retirees generally need liquidity during retirement. Liquidity from loans against the policy incur interest that depletes the cash value of the policy. Surrendering the policy for cash value often means the investor receives substantially less than the premiums paid. The death benefit of these policies also do little to help an individual in retirement since such benefits cannot be accessed until after the death of the retiree.
Justin Deiter
Justin Deiter is a financial advisor with Spartan Capital. Please contact us if you believe Mr. Deiter mishandled your investments. We are a firm that represents investors to recover losses sustained due to financial advisor fraud or negligence.
In February 2025, Justin Deiter came under regulatory scrutiny for making excessive trades. Excessive trades benefit the advisor at the expense of the investor. FINRA, the financial industry regulatory authority, suspended Deiter for six months. FINRA is the regulator that oversees securities brokerages.
Between February 2020 and March 2022, Deiter recommended to two of his investors a series of trades that were excessive. As a result, Deiter willfully violated the Best Interest Obligation under the Securities Exchange Act of 1934 (Regulation BI) and various FINRA Rules.
As of June 30, 2020, securities brokerages and their financial advisors are required to comply with Regulation Bl. Regulation BI requires a brokerage or its financial advisor, when making a recommendation of any securities transaction or investment strategy involving securities (including account recommendations) to a retail investor, act in the best interest of that investor at the time the recommendation is made, without placing the financial or other interest of the brokerage or financial advisor ahead of the interest of the investor. Reg BI’s Care requires brokerages and their associated persons to exercise reasonable diligence, care, and skill to, among other things, have a reasonable basis to believe that a series of recommended transactions is not excessive and is in the investor’s best interest in light of the retail customer’s investment profile.
Between February 2020 and March 2022, Deiter excessively traded the accounts of two investors. One was a senior. Deiter’ s trading resulted in high turnover rates and cost-to-equity ratios that exceeded the traditional guideposts of six and 20 percent, respectively, for even the most aggressive investors, as well as significant losses, as set forth below.
Customer A, then a 49-year-old merchandiser, opened an account at Spartan with Deiter. She was a conservative investor who relied on Deiter’ s advice and always followed his recommendations. As a result, Deiter exercised de facto control over the account. Between February 2020 and December 2021, Deiter recommended 32 transactions in Customer A’s account resulting in an annualized turnover rate of 7 and an annualized cost-to-equity ratio of 34%. Deiter’s trading in Customer A’s account generated $19,792 in commissions and caused $25,291 in realized losses.
Customer B, then an 89-year-old retiree, opened an account at Spartan with Deiter. His investment objective was speculation. Between June 30, 2020, and March 2022, Deiter recommended 28 transactions in Customer B’s account resulting in an annualized turnover rate of 14 and an annualized cost-to equity ratio of 35%. Deiter’s trading in Customer B’s account generated $28,264 in commissions and caused $33,363 in realized losses.
Smith, Brown & Groover ETN Strategy
Smith Brown & Groover, a brokerage firm headquartered in Macon, Georgia, settled allegations by FINRA, the Financial Industry Regulatory Authority, the regulator overseeing brokerages, that the firm recommended a trading strategy that the firm did not understand and that caused near-total losses for 350 clients.
The FINRA states the firm had consented to $2 million payment, with only a portion of this going to pay its investors, to and a censure, and fines. censures and suspensions against key officers and employees participating in this failed investment strategy.
Raymond Hill Smith, president of a Smith Brown & Groover, developed and implemented a trading strategy for their investors of using exchange traded notes (“ETNs”). This was done without fully understanding the features and risks of the strategy or the ETN that the strategy primarily invested in, and without having a reasonable basis to recommend the strategy to any investor despite appetite for risk. FINRA stated that the ETN was high-risk, complex, and designed to manage daily trading risk and not to be help more than a few days, at most.
Despite developing and implementing the trading strategy at the firm, Smith and others at the firm did not fully understand the ETN, and thus, did not understand the strategy. This includes the ETN’s basic features, such as how the issuer maintained its inverse exposure to the underlying volatility index or that the ETN was designed to achieve its stated investment objective on a daily basis. The issuers of these investments designed the investments as intra-day hedges. Holding longer than this created substantial exposure to exponential loss.
Furthermore, contrary to the guidance in the ETN’s disclosure documents, the firm and Smith invested customers in the ETN for extended periods of time, an average of 72 days, including through periods of high volatility.
Please call us for more information on this matter.
Matthew Ian Turner
Please contact us if you were an investor of Matthew Ian Turner of Westpark Capital and suffered losses. Allegations against Turner and his employer include trading without authorization and excessive trading of investments for the purpose of paying Turner a higher commission.
Turner first became a broker in 2000. Since November 2012, Turner has been registered as a GS through WestPark Capital, Inc.
Between September 2018 and December 2020, Turner is alleged to have recommended trading in accounts held by three investors that was excessive, unsuitable, and not in their best interest. By this conduct, Turner willfully violated Rules under the Securities Exchange Act of 1934 (Reg Best interests) and FINRA Rule 2111. Turner exercised discretionary authority to effect 148 trades in four customers’ accounts without obtaining sufficient authorization from the customers.
Securities brokers, like Matthew Ian Turner, are required to have a reasonable basis to believe that a recommendation of a transaction or investment strategy involving a security or securities to any customer is suitable for the customer. This includes persons with actual or de facto control over an investment account having a reasonable basis for believing that a series of
recommended transactions is not excessive in light of the customer’s investment profile. Those in the securities industry commonly refer to such actions as “churning.”
This is not the first time Turner has been accused of churning. Turner’s employers settled a suit by an investor claiming similar action for $103,000 in 2018.
We have handled many churning cases of the past 20 years. Please contact us for a free initial consultation if you believe you have been the victim of churning.
Silver Bonds from BMO
Silver Bonds are a type of collateralized mortgage obligation (CMO) sold by BMO Capital Markets. Please contact us if you suffered losses in such investments.
BMO agreed to pay more than $40 million to settle charges by the Securities and Exchange Commission (SEC) concerning these investments. The SEC asserted that BMO misrepresented the Silver Bonds. The time period of the alleged misrepresentation is December 2020 and May 2023, though a larger time period may exist.
Representatives of BMO provided investors with offering sheets that misrepresented, per the SEC, important characteristics of the investment’s underlying collateral. BMO structured the bonds, in a way that caused third-parties to inaccurately portray the investments.
Pools of residential mortgages backed the investments, and BMO structured the bonds using a small sliver of higher-interest mortgages. BMO represented this sliver of mortgages in a way that caused the systems of third-party data providers to generate inaccurate information about the bonds’ overall composition.
In about two and a half years, BMO sold $3 billion worth of these investments. The SEC’s found that BMO’s supervisory policies and procedures did not include guidance concerning the structure and sale of these bonds. BMO also did not have a process for reviewing the type of information firm representatives shared with investors about the investments or a process for reviewing bond structures against marketing communications.
The underlying SEC matter focuses BMO’s failure reasonably to supervise certain BMO agents with a view towards preventing and detecting their violations of the federal securities laws while offering and selling certain Collateralized Mortgage Obligation. The SEC alleges that BMO failed to institute supervisory procedures to prevent its agents from providing misleading information in the sale.
The settlement sought to compensate harmed investors. The SEC is establishing a fair fund to pay some investors.
Jeffrey Pederson represents investors suffering losses from misrepresentations and have over 20 years of experience doing so.
George Herman Snyder Losses
George Herman Snyder IV previously served as an Ameriprise broker in Springfield, Missouri.
On October 11, 2024, FINRA, a regulator overseeing securities brokerages, issued a settlement, an AWC, which assessed Snyder with penalties. The regulator issued a deferred fine of $10,000, suspended from association with any FINRA member in all capacities for five months, and ordered to pay deferred disgorgement of commissions received in the amount of $3,699.03, plus interest.
If you are a Snyder investor, please call to discuss your rights. We have helped investors for over 20 years recover similar losses due to mismanagement or fraud. Either Snyder or Ameriprise may have obligations to compensate you depending on your loss.
Without admitting or denying the findings, George Snyder consented to the AWC sanctions and to the entry of findings that he willfully violated Regulation BI. Reg BI is the obligation that securities brokers have to act in the best interests of their investors. The violation of Reg BI occurred by Snyder recommending that 13 of his investors make purchases of securities without Snyder having a sufficient understanding of the risks and features associated with the products he recommended, and without Snyder analyzing whether the recommendations were in the best interest of his customers.
The findings stated that George Herman Snyder recommended the customers invest in leveraged exchange traded funds, also known as Non-Traditional Exchange-Traded Products. Leveraged funds can fluctuate wildly. This is generally not in the interests of retired individuals or those looking for moderate or conservative investments.
In addition, George Snyder recommended that 11 customers, including almost half of the 13 customers, invest in equity securities of two companies engaged in crypto asset mining. Investment in crypto mining is a highly speculative venture.
Snyder did not have an understanding of the features and risks associated with the investments,
including the holding-period risk of NT-ETPs or the volatility of the commended
stocks, and he was unfamiliar with the strategies or relative costs of the product he
recommended.
Snyder’s investors had minimal or no experience investing in these
products, and he did not consider his customers’ specific investment profiles, this can include proximity to retirement. Six of the customers were senior investors, two of whom had a moderate risk tolerance, and five additional customers had conservative or moderate risk tolerances.
Union Capital and Leveraged Funds
Please contact us if you are or were with Union Capital and suffered losses despite being a conservative or moderate risk investor.
From January 2019 through at least December 2021, Union Capital failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures (WSPs), reasonably designed to achieve compliance with the suitability requirements of FINRA, the regulator overseeing brokerage firms, Rule 2111 and the Care Obligation of Rule 15l-1 of the Securities Exchange Act of 1934 (Regulation Best Interests or “Reg BI”) with respect to its financial advisors’ recommendations of leveraged and inverse exchange-traded funds and leveraged and inverse mutual funds (Non-Traditional Funds). This is the finding of the FINRA.
As of June 30, 2020, and continuing through at least December 2021, Union Capital also failed to comply with Reg BI’s requirements by not establishing, maintaining, and enforcing supervisory procedures reasonably designed to achieve compliance with Reg BI with respect to recommendations of Non-Traditional Funds.
Non-Traditional Funds are complex financial instruments designed to return a multiple of the performance of an underlying index or benchmark (leveraged funds), the opposite of the daily performance of the index or benchmark (inverse funds), or both (leveraged inverse funds), usually over the course of a single day. As such, Non-Traditional Funds typically rebalance their portfolios on a daily basis (also known as the daily reset), which means they are designed to achieve their stated objective on a daily basis.
It is generally inappropriate to hold such investments for more than a single day. The investments are intended to be a single-day hedge. The losses can accumulate exponentially if held for more than a single day. This means that the investment is only appropriate for investors willing to take the highest risks.
In June 2009, FINRA issued Regulatory Notice 09-31 to caution member firms that, due to the effect of compounding, the performance of leveraged and inverse products, like Non-Traditional Funds, for periods longer than the intended holding period “can differ significantly from the performance (or inverse of the performance) of their underlying index or benchmark during the same period of time” and therefore “typically are not suitable for retail investors who plan to hold them for more than one trading session.” The Notice specified that this applies equally to leveraged and inverse exchange-traded funds and leveraged and inverse mutual funds, which raise many of the same issues. Non-Traditional Fund prospectuses typically provide similar warnings concerning the suitable holding period for retail investors.
The Law Offices of Jeffrey Pederson fights to protect investors. Please call for a free and confidential initial consultation.
