If you lost money in any of these investments, contact Silver Law Group for a free consultation.
Former broker Christopher Brogdon, who was a licensed broker at Dean Witter Reynolds in New York from 1978 to 1991, was permanently barred from membership in the National Association of Securities Dealers (FINRA’s predecessor) and is now being brought to justice by the SEC.
Energy Stocks and high yield bonds from oil and gas companies have suffered large losses after the collage of oil prices. Investors, including many seniors and others seeking income were encouraged to invest in energy stocks, master limited partnerships (MLPs) or oil and gas offerings as a conservative way to enjoy growth and income.
This January, the Financial Industry Regulatory Authority (FINRA), fined Merrill Lynch $7 million for improperly supervising customers’ use of leverage in their brokerage accounts. The clients had been sold loan management accounts (LMAs), which are lines of credit that allowed the customers to borrow money by using their brokerage accounts as collateral. This is similar to the use of margin in a brokerage account. Unfortunately, many clients used the proceeds from LMA accounts to purchase more securities, and ended up losing large amounts of money in the process.
Many investors understand very little about managed futures funds. Managed futures funds have long been touted by major Wall Street firms that manage and market this type of investment strategy. Investors are sold these funds with promises the investor is getting access to an asset classes not readily available to most investors. Investors rely on the fund managers as the experts at trading futures contracts. However, these highly misunderstood investments are ripe with excessive fees, costs and commissions which may dramatically impact potential investor’s return on investment.
Senate Acceptance Corp., an auto premium finance company, was the subject of an involuntary petition for a Chapter 7 Bankruptcy filing made on December 2, 2103 by major investors in the company. Senate Acceptance Corp. raised capital funds from investors to finance operations through the sale of unsecured promissory notes. According to the Chapter 7 petition, Senate Acceptance Corp. had not paid interest to a petitioner-investor on their promissory notes since August 31, 2013 and was allegedly operating a Ponzi scheme.
UBS Puerto Rico has reported huge losses in multiple proprietary closed-end bond funds. Offering documents for UBS Puerto Rico Fixed Income Funds (“Funds”) frequently characterized the Funds’ investment objective as current income consistent with the preservation of capital. However, many of these Funds utilized leverage to bolster performance. Many of these closed-end bond Funds are now suffering massive losses and declining bond prices. These funds were frequently sold to conservative investors or retirees seeking income. Some investors were encouraged to borrow money to purchase these Funds. As of September 30, 2012, UBS Asset Managers of Puerto Rico either managed or co-managed over 10 billion dollars in fund assets.
Silver Law Group is currently investigating the UBS Willow Fund. UBS Financial Services, Inc. (“UBS”) offered and sold this hedge fund to investors as a distressed debt fund. At its peak, the Willow Fund had close to $400 million in assets under management. UBS recently announced that the Willow Fund is liquidating after it had incurred substantial losses.
In the current low-interest rate environment, many retail investors are allocating a greater portion of their portfolio to alternative investments in search of higher yield. Unfortunately, many broker-dealers are entering conservative investors into unsuitable investments. The complexity of alternatives is designed in favor of the seller, and broker-dealers have an obligation to provide their clients with disclosures and follow suitability rules. There is great potential for deception in the advertising of alternatives, which are frequently illiquid and difficult to value.
Silver Law Group is investigating companies that purportedly sell investments in precious metals, such as gold, silver, platinum, and palladium. Over the past 12 months, the United States Commodity Futures Trading Commission (CFTC) and the Federal Trade Commission (FTC) have issued numerous consumer alerts about precious metal frauds.
Silver Law Group is investigating the sale of Non-Traded REITs by LPL and other broker-dealers. The REITs include Inland American, Cole Credit Property Trust, Wells Real Estate Investment Trust, W.P. Carey Corporate Property Associates and Dividend Capital Total Realty.
Silver Law Group is investigating Matthew G. Weber, C.P.A., an accountant and former partner at the New York-based accounting firm of Citrin Cooperman & Company. On July 10, 2012, Mr. Weber was indicted by a grand jury in Manhattan and arraigned on multiple charges of grand larceny and repeated failures to file personal income and earnings taxes.
In April 2010, both the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) filed lawsuits against McGinn Smith and its principals, alleging that from 2003 through April 2010, McGinn Smith committed an ongoing fraud against over 900 investors.
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