Ameriprise Annuity Switching
Ameriprise annuity switching led to a $1.4 million settlement with regulators. Investors recommended that they exchange an annuity at Ameriprise of a new annuity should speak to a professional to determine if they were a victim of fraud.
Annuity switching is generally considered suspect. While some legitimate reasons do exist, they are rare. The primary reason is to make an advisor a commission. Annuities pay a very high commission. An investor not only surrenders an old annuity with an exchange, but also all the growth that the old annuity accumulated. As such, many state and federal regulators require extensive notice to investors before a switch can take place and view most annuity switches as inappropriate.
Ameriprise failed to have supervisory procedures in place to protect against such forms of fraud. The regulators stated, “Specifically, Ameriprise did not provide sufficient guidance to [brokers] for determining whether certain
customers would benefit sufficiently from the rider’s growth credit feature before commencing withdrawals to justify the higher fees, which applied for the duration of the contract.”
Jeffrey Pederson represents investors concerning inappropriate annuity sales for over 20 years.
Morgan Stanley Private Credit Loss
If you are a Morgan Stanley private credit investor, you may be entitled to damages for your losses. Morgan Stanley gambled with private credit and that was inappropriate for many investors.
Morgan Stanley gated investors from obtaining redemptions. These funds saw a flood of investors seeking to liquidate their positions in early 2026. The funds fulfilled less than half of the requests.
The issue is that many of the investors should have never been invested in private credit. Morgan Stanley is one of the largest proponents of these investments. Many regulators limited these funds to only professional investors. That is because the funds were known to carry high liquidity and other risk.
High commissions paid by the funds to advisors creates potential fraud. History tells us that this is often the motivator to sell such high-risk funds to income investors with moderate appetites for risk. As reported in the Wall Street Journal, private credit business development companies “typically charge a management fee of 1.25% a year of the value of your investment. You will also pay a performance fee of 12.5% on net investment income.” Compare this to a normal commission for a blue-chip stock that is usually less than .5%.
The recommendation of these investments is not justified by an investor’s high net worth. “A customer’s net worth alone is not necessarily determinative of whether a particular product is suitable for that investor. “
Jeffrey Pederson represents investors and has handled suitability cases for over 20 years. Call for a free and confidential initial consultation.
FSK Junk Status
On March 24, 2026, Moody’s confirmed FSK junk status. The rating agency downgraded “FSK,” which is FS KKR Capital Corp.,a KKR private credit fund, to Ba1 from Baa3.
Per Moody’s, as reported by CNBC, “The downgrade reflects FSK’s continued asset quality challenges, which have resulted in weaker profitability and greater net asset value erosion over time relative to business development company (BDC) peers,”
For reasons this blog has previously identified, private credit funds have always been known to be high risk. In fact, when the underlying assets are unable to be determined or inspected an investment is unsuitable for any investor. This is true regardless of the investor’s financial status and can be the case even if the investor is accredited.
Advisors are required to investigate the underlying assets of the investment to assess the risk posed by recommending such an investment. An advisor violates Regulation BI when the advisor fails to do this.
Please call for a free and confidential initial consultation.
Avinesh Shankar Document Forgery
Between November 2022 and January 2024, Avinesh Shankar signed 64 customer names without the customers’ permission on 115 annuity applications. This is FINRA’s findings from an order accepting an offer of settlement from Shankar.
Shankar submitted the forged annuity applications to Pruco, his firm, without the customers’ knowledge that he forged their signatures. For each of the annuity applications, the associated annuity was unfunded at the time of application and remained unfunded.
Shankar’s apparent motive for the forgery was the heightened payments paid in advance of the sale of annuities. Pruco paid Shankar advanced commissions after receipt of 114 of the 115 annuity applications. In total, Shankar received from the firm $511,609.74 in advanced commissions for forged annuity applications.
FINRA Rule 2010 requires associated persons to observe high standards of commercial honor and just and equitable principles of trade in the conduct of their business.
Misrepresentations of Blue Owl Finances
Misrepresentations of Blue Owl finances is something the financial industry either knows or should know about if happening. Brokers and advisors have a duty to conduct due diligence and unearth discrepancies.
Seeking Alpha and the Financial Times is reporting that one such financial firm asserts that such misrepresentation is occurring. Investment firm Glendon Capital Management said Blue Owl and several other private credit firms may have understated loss rates in their private credit portfolios, suggesting stated losses by the firms is high than stated.
An analysis of how the same or similar Blue Owl loans in prior years reveals the discrepancy. Blue Owl loans made at the end of 2025 differed with current public trading prices of debts tied to the very same companies. This gave Glendon “concerns about the true valuation” of its portfolio,
Investment advisors and brokers have a duty to conduct investigations into the finances of private offerings. This is referred to as “due diligence.” Such firms violate industry standards and have liability to their investors when they fail to conduct sufficient due diligence.
We represent investors suffering loss due to the failure of due diligence. Call for a free and confidential initial consultation.
Is a Private Credit Recommendation by Your Advisor Inappropriate?
A private credit recommendation can lead to a substantial loss of life savings. Investors should understand their rights when they are recommended such investments.
Your advisors have duties to only recommend investments that are consistent with your objectives and appetite for risk. If you are an investor nearing retirement or a conservative or moderate investor, you should only be recommended conservative or moderate investments. As such, speculative private credit investments should not be recommended to you.
Being wealthy does not cure an inappropriate investment recommendation. Investors with high net worth or with income above certain levels are considered “accredited.” Advisors often use this as an excuse for unsuitable recommendations. But even accredited investors have a right to recourse if an advisor recommends an investment inconsistent with either your objectives or risk tolerance.
Jeffrey Pederson represents investors sold inappropriate investments. Call for a free and confidential consultation with an attorney. He can tell you if your advisor’s recommendation is inappropriate.
Private Credit Loss Recovery
Investors may be entitled to recover losses for unsuitable private credit investments. A large portion of investors fall into this category. Jeffrey Pederson is an attorney who helps investors who have been inappropriately sold private credit investments.
Your advisor knew the investment was not a conservative or moderate investment. So the Blue Owl fire sale of its assets in late February 2026 was not a shock. The $1.4 billion liquidation reportedly sent “shockwaves” through the private credit sector. The investment had a limited track record. Further, the investment offered limited liquidity and had assets that are inherently difficult to value. These are all the red flags of a high-risk, speculative investment.
But Blue Owl is just one of many private credit investments, and all are, and have always been, too high-risk to be sold to many investors. This includes many money managers with their “fingers in the private credit pie.” The managers include Ares Management Corp., Blackstone Inc., whose high-risk BCRED was designed for large-scale retail brokerages, and Apollo Global Management Inc.
In Barrons on February 24, 2026, Jamie Dimon called private credit investments “dumb stuff.” He said that the investments remind him of the 2008 financial crisis. As with that crisis, he said, financial professionals ignored the high risks.
Since then, investors have lined-up to get their money back. Only a select few were successful. For example, 40.7% of investors in Blue Owl Technology Income Corp. sought to liquidate their holdings. 21.9% of Blue Owl Income Credit Corp investors sought to cash-in. Blue Owl allowed only 5% of investors to access their funds. Likewise, 10.4% of Morgan Stanley North Haven Private Income Fund investors sought to sell.
Consequently, selling on the secondary market is the only options for those wanting to liquidate. Secondary market prices are generally leave investors with substantial losses.
Regulators impose duties on advisors to only recommend investments that are suitable and in the best interests of their investors. Speculative investments are not in the best interests of most investors. Advisors have a duty to only offer investments consistent with an investor’s appetite for risk. Investors have rights when advisors breach this duty.
Call and speak directly with Jeffrey Pederson about your matter, and not an associate attorney or paralegal. Initial consultations are free and confidential.
Kenneth Welsh Theft
Wells Fargo may be responsible as the SEC accuses Kenneth Welsh of stealing more than $3 million from his Wells Fargo clients.
The SEC barred Kenneth A. Welsh, 44, from the financial services industry on February 13, 2026. The action follows his criminal conviction for defrauding five of his clients.
The allegations are that Welsh, of River Edge, NJ, stole $3 million from his clients, which he used to buy gold coins and other precious metals and funnel to family credit card accounts that he controlled.
Specifically, the SEC alleged that from January 2016 to January 2021, Welsh transferred funds from his clients’ accounts to pay off balances in credit card accounts held in the names of his wife and parents. Welsh also allegedly caused checks to be fraudulently drawn on his clients’ accounts. The SEC alleges that Welsh made at least 137 fraudulent transactions and used the stolen funds to purchase gold coins and other precious metals, buy luxury goods, and make electronic fund transfers to himself. Welsh ultimately admitted to the theft.
Welsh’s actions occurred while he was a representative of Wells Fargo. To date, there are at least eight investor suits or arbitrations threatened or filed against Wells Fargo concerning the actions of Welsh.
Ode Okuma Theft
On February 6, 2026, the SEC settled charges against Ode Okuma for $13 million in alleged theft and securities fraud. He is alleged to have victimized his Equitable Advisors investors.
The SEC alleges that Okuma stole funds from an 81-year-old investor. He is also accused of stealing from the estate of the investor’s recently deceased sister. The allegations go on to state Okuma used the money for his personal benefit.
FINRA, the Financial Industry Regulatory Authority, barred Okuma in 2025. Okuma refused to provide information and documents requested pursuant to FINRA Rule 8210 in connection with an investigation into whether he converted funds of an elderly customer. This constitutes a forfeiture of his right to contest or defend against the charges. As a result, Okuma violated FINRA Rules, and FINRA barred Okuma from associating with any FINRA member in all capacities.
On September 17, 2025, FINRA began its investigation into allegations that Okuma stole funds of an elderly investor, FINRA sent a request to Okuma for the production of information or documents pursuant to FINRA Rules. Okuma refused to defend the claim.
Okuma worked for Equitable advisors at all relevant times. Stifel Financial sold Equitable and its advisors in October. The firm serves around 4,550 advisors managing $101 billion in assets according to media sources.
Jeffrey Pederson represents defrauded investors. Call today and speak to Jeffrey Pederson, and not a secretary or junior attorney.
Crypto ETF Loss Recovery
Crypto ETF losses impacted many investors. However, many of these investors should have never been recommended such investments. Investments based on crypto is unsuitable for investors approaching or in retirement, or those investors who had conservative or moderate appetite for risk. Advisors violated their duties to act in the best interests to such investors with these recommendations.
Securities laws require securities brokers and investment advisors to recommend investments in their investors’ best interests. An investment recommendation must be consistent with the investor’s investment objectives and risk tolerance. An advisor who fails to do so violates the Exchange Act of 1934 and various state securities laws.
Such rules are often violated with the recommendation of crypto ETFs. Those familiar with the securities industry know that advisors often violate such rules when they recommend crypto ETFs. Those familiar with the securities industry have understood the extremely high risk of crypto ETFs since their inception. As legendary investor Michael Burry stated, crypto lacks an organic way to slow its descent once the drop begins. There is no inherent value; once the decline starts, people may sell continuously until the drop halts.
Furthermore, experts argue that this risk is not mitigated by the adoption of cryptocurrency by corporate treasuries. As Burry says, “there is nothing permanent about treasury assets.” Spot ETFs only encourage speculative trading of crypto. He warns that crypto ETFs could go to zero.
Jeffrey Pederson helps investors. Call for a consultation if you were sold a crypto ETF you suspect was unsuitable.