Leveraged ETFs
Leveraged ETFs, or “multiplier ETFs,” are speculative investments. Unless you are a speculative investor, an advisor or broker’s recommendation of such investments is likely violating legal duties he has to you.
Unique characteristics of these ETFs make them high risk. First, the investment, whose return mirrors the return of an underlying index, resets daily. This makes a multiple day loss almost insurmountable. As such, most regulators prohibit the holding of such an investment for more than a single day.
FINRA, the regulator overseeing brokerages, takes a similar position. FINRA states, “Because they reset each day, leveraged and inverse ETFs typically are inappropriate as an intermediate or long-term investment.” It goes on to say that only in a sophisticated trading strategy, should the position be held more than “one day.”
Second, when the underlying index starts to fall, the ETFs leveraged by the index accelerate the loss. A downward trend in the index prompts holders of leveraged funds to sell to avoid a heighten loss. These outflows further losses in the index as a whole. This vicious cycle is known as “negative gamma.”
Many advisors have lost their licenses due to recommending such investments.
Call Jeffrey Pederson to learn if you have recourse. Initial consultations are free and confidential.
Unsuitable Crypto Strategies
You may have recourse if you are a moderate investor and your advisor recommended unsuitable crypto currency investments or strategies. These investments are speculative and suitable for only the most sophisticated and aggressive investors.
Many crypto strategies suffered substantial losses in 2025. MicroStrategy, also known as Strategy, lost 46% of its value from its height. Similar losses have been incurred by Bitmine Immersion, BMNR, and ETHZilla, ETHZ. These crypto treasury companies were not only known to have exposure to speculative crypto assets but were also known to be overvalued based upon the underlying crypto currency.
Advisors have a duty to act in their investors’ best interests. This includes not only understanding the underlying assets supporting the price of an investment, but also to only invest or recommend investments consistent with an investor’s objectives and risk tolerance. Advisors have a duty to know these things. So it is a form of fraud when they act contrary to these investor characteristics.
Jeffrey Pederson represents investors sold investments not in their best interests. Call for a free initial consultation.
Supreme Alliance Annuity Switching
FINRA alleges, that between September 2019 and May 2022 Supreme Alliance failed to take appropriate actions to prevent annuity “switching fraud.”
Specifically, Supreme failed to establish and maintain a supervisory system and written supervisory procedures reasonably designed to supervise recommendations of purchases and exchanges of deferred variable annuities, an action charging investors high commissions, and supervise the conduct and documentation of investigations into newly hired brokers.
Variable annuities are complex, long-term investments that offer tax-deferred treatment of earnings and contain securities and insurance features. These features may include guaranteed periodic income payments or a guaranteed death benefit. FINRA requires that firms and their associated persons exercise particular care before recommendation of a variable annuity.
Switching or exchanging of annuities is generally suspect. Annuities pay high commissions due to the long-term nature of annuities. An investor incurs a very high cost when that investor sells an existing annuity to purchase a new annuity. Additionally, the investor receives the cash value which does not compensate for the growth of the investment and often includes penalties for the withdrawal. There are very few features in a replacement annuity that can justify such costs.
Jeffrey Pederson represents victims of annuity switching. Please contact him to discuss questionable annuity switching or exchanges.
Bart Harrison Investment Loss
Investors filed four lawsuits in a three-year period concerning investment advice of Bart Harrison. These suits all allege that the recommendations were unsuitable in violation of either the FINRA suitability rule or Regulation BI. Harrison is a representative of Emerson Equity.
At least one of these lawsuits concerning the recommendation of a Delaware Statutory Trust (DST). Emerson Equity, Harrison’s employer, has come under fire recently for recommending investment into certain DSTs the Emerson allegedly has not sufficiently researched or vetted.
Failure to conduct sufficient investigation into an investment is a regulatory violation and can constitute negligence on behalf of a broker or brokerage.
Jeffrey Pederson represents investors in such suits and has been doing so for over 20 years. Please call for a consultation.
First Trust Portfolios Inappropriate Payments
Regulators accuse First Trust Portfolios of making inappropriate payments to brokers. FINRA, the Financial Industry Regulatory Authority, alleges First Trust gave numerous excessive gifts in connection with securities brokers selling First Trust investments. This all raises concerns as the conflicts of interest on the part of those selling First Trust investments to investors.
Between at least 2018 and at least February 2024, First Trust provided expensive gifts to stockbrokers and financial advisors for selling First Trust investment company securities. Such gifts were in amounts that significantly exceeded FINRA limits, and in certain instances provided non-cash compensation preconditioned on Client Firm representatives achieving sales targets.
During the same period, First Trust falsified records concerning non-cash compensation provided to stockbrokers and financial advisors, and First Trust sent false information concerning the value, nature, and frequency of non-cash compensation provided to the broker employers. Finally, the Firm failed to establish, maintain, and enforce a system reasonably designed to achieve compliance with non-cash compensation rules and expense-related recordkeeping requirements.
We represent investor who were inappropriately sold investments. Call for a free consultation.
Yield Wealth Ponzi Scheme
On September 9, 2025, the FBI charged Yield Wealth (“Yield”) founder Paul Regan with securities fraud and wire fraud. Yield misrepresented how those companies would use investors’ money and the protections investors would have against losses. Regan’s fraudulent scheme, making payments to older investors with new investor funds, tricked over 300 people to invest more than $60 million in Yield and the affiliated Next Level investment products.
Many insurance agents and brokers sold these unregistered securities without being licensed and without conducting sufficient investigation to determine if these investment products were legitimate. Private investments require registration or an exemption from registration to be sold to investors. Even when exempt from registration, agents must have a securities license, conduct a reasonably diligent investigation into the investment and recommend the investment only to suitable investors.
Sales representatives, many of whom were insurance agents, sold Yield as a savings account. These agents stated that Yield was an alternative to traditional banks that offered not only greater returns but greater protections. This greatly misrepresented the safety of the product. The agents would have discovered that the representation was not true with only a simple investigation. Instead, the agents relayed the fraud and inappropriately sold the investments to those looking for safety.
We have represented investors for over 20 years. Please contact us to discuss this or other incidents of securities fraud.
Inland Real Estate Loss
We are currently investigating Inland Real Estate and Inland Investments on behalf investors concerning potentially inappropriate due diligence by Emerson Equity. Keith Lampi, the long-time executive and CEO, resigned abruptly on October 20, 2025. This is a red flag for possible deeper, systemic problems at Inland. Many investors trusted Inland based upon the recommendation of Emerson Equity.
Inland appointed Lampi as CEO on February 1, 2024. Lampi began his career with Inland in 2001. He was involved in evaluating the risk factors of the Inland funds and other disclosures to the SEC. His resignation does not appear planned due to the regulatory filings disclosing the departure made after the fact.
We are a firm representing investors. Please call us with information you have concerning Inland.
Joseph Kelly Securities Fraud
August 22, 2025, FINRA issued an AWC, a regulatory settlement, in which fined Joseph Kelly $10,000, suspended him from association with any FINRA member in all capacities for nine months, and ordered to pay $69,830, plus interest to his investors.
Kelly has numerous blemishes on his employment history. This includes a recent tax lien and multiple suits and another threatened suit from one of his investors. His most recent employer is VCS Venture Securities, but most action occurred while representing Spartan Capital.
Without admitting or denying the findings, Kelly consented to the sanctions and to the entry of findings that he willfully violated Reg BI, requiring that brokers act in the best interests of their investors, and violated FINRA Rules 2111 and 2010. Kelly committed these violations by recommending a series of trades that were excessive, unsuitable and not in the customers’ best interest.
The findings stated that some of the customers relied on Kelly’s advice and routinely followed his recommendations, and as a result, Kelly exercised de facto control over their accounts. De facto control over an account is not necessary for a violation but does evidence the severity of the violation. Kelly’s recommendations to the customers generated $365,344 in total commissions and caused $262,683 in total realized losses. The amount of restitution is equal to the total commissions charged to two of the customers as the remaining affected customers previously settled claims with Kelly’s member firm.
Jeffrey Pederson represents investors in cases where brokers fail in their duties. Call to discuss this or other actions of broker misconduct.
Michael Graham Securities Fraud
A Colorado grand jury indicted Michael Graham on two counts of securities fraud on August 15, 2025. Authorities allege Graham sold fraudulent investments meant to benefit economically distressed communities.
Instead of investing the funds, Graham is alleged to have used the funds as his own “personal piggy bank.”
Graham allegedly solicited around $1.1 million from investors in his private fund, Gravitas Qualified Opportunity Zone Fund I LLC (Gravitas). This fund was dedicated to long-term property investments in economically distressed communities, according to Graham.
The indictment alleged that Graham used investor funds to purchase properties in Aurora, CO for Gravitas, which he later transferred to his own name without disclosing to investors. Additionally, the indictment alleged that Graham failed to disclose that he’d divert
the majority of investor funds to other entities, including Sebastian Partners, LLC and Sebastiane Partners, LLC.
On November 12, 2024, Colorado Securities Commissioner filed civil fraud charges, for a temporary restraining order and for an asset freeze against Graham and his entities. The matter was also referred to the Colorado
Attorney General’s criminal prosecutors who secured the indictment.
A grand jury indictment is a formal accusation that an individual committed a crime under Colorado laws. All defendants are presumed innocent until proven guilty.
If you or anyone you know has invested in one of Graham’s companies, Sebastian Partners, LLC; Sebastiane Partners, LLC; or Gravitas Qualified Opportunity Zone Fund I, LLC, please contact us. We are a Colorado firm dedicated to giving investors personal service.
Ryan Finch DST Recommendations
We are currently representing investors recommended DST investments by Emerson broker Ryan Finch.
Finch recommended a number of IHC (Inspired Healthcare) DSTs (Delaware Statutory Trusts). Investments include Inspired Senior Living at Eatonton, Carson Valley and San Marcos, along with Emerson Equity Bridge Fund. All are retailed by Finch and Emerson Equity. As such, Finch and Emerson Equity had an obligation to conduct a reasonable due diligence investigation into IHC. We are investigating whether such reasonable investigation should have discovered the widespread fraud at IHC.
Inspired Healthcare Capital sent investors a letter stating that it is suspending distributions. This is likely due to a fraud of it and its executives. Plaintiffs in that prior suit alleged that IHC and executives misrepresented their financial condition, and guaranteeing leverage, in connection with seeking a loan.
Securities brokerage firms, like Emerson, have a duty to conduct reasonable due diligence for the investments that they sell. Emerson failed to discover such wrongdoing despite the widespread nature of the fraud.
We represent investors. Please contact us if you have information or wish to speak to an attorney about this issue.