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It was about three years ago that the Florida Legislature adopted the Revised Uniform Arbitration Act (“RUAA”), a revised code that was intended to clarify the arbitration process and promote various requirements of due process.  Among many issues the revision addresses, attorneys’ fees changes were one of the most significant, especially to the Financial Industry Regulatory Authority (“FINRA”) arbitrations.

Typically, the American rule of law does not automatically grant the winning side its attorneys’ fees.  According to FINRA’s Basic Arbitrator Training, arbitrators can award attorneys’ fees when:

1. the parties’ contract includes a clause that provides for attorneys’ fees; or

Two former pro athletes, one from the NBA and the other the NFL, won an $819,000 FINRA arbitration award against Morgan Stanley Smith Barney (“Morgan Stanley”) after Morgan Stanley allegedly failed to supervise a former broker.

Keyon Dooling, a first-round pick, played in the NBA for 12 seasons. John St. Clair, a former offensive tackle, played in the NFL for 11 seasons.  Their broker was Fort Lauderdale, Florida-based Aaron Parthemer (CRD# 2546369), and the misconduct occurred while Parthemer was employed by Morgan Stanley.

According to an InvestmentNews report, Parthemer convinced Dooling and St. Clair to invest in Global Village Concerns, a sportswear company, while only convincing Mr. Dooling to invest in Club Play, a Miami Beach nightclub.  According to the report, the investments became worthless.

Real estate finance company United Development Funding (“UDF”) publicly speaks nearly three months after an FBI raided its headquarters in February 2016.

In a news release, UDF said a board-authorized probe into its inner workings by an outside law firm UDF hired found no evidence of fraud or misconduct on the part of the trust, its management, or its advisor.  Silver Law Group has been monitoring the situation since March.

The news comes in light of heavy fire the real estate finance company has come under going back to 2015.  In December 2015, Hayman Capital Management principal Kyle Bass, anonymously at the time, posted a report and letter enumerating UDF business red flags and alleging it was being run like a Ponzi scheme.

Silver Law Group is investigating West Palm Beach, Florida-based RBC Capital Markets (“RBC”) broker Samuel K. Koltun (CRD# 1739664) for customer complaints alleging he unsuitably recommended and overconcentrated their portfolio in Puerto Rico bonds and failed to disclose the risks associated with such an investment.

Koltun has six misconduct disclosures on his Financial Industry Regulatory Authority (“FINRA”) BrokerCheck report, of which three have been reported in the past eight months.  The three most recent complaints all allege overconcentration in Puerto Rico bonds.

This isn’t Koltun’s first encounter with trouble, though, according to the report.  FINRA suspended Koltun in 2004 for unsuitable recommendations he made to customers.

The Securities and Exchange Commission (the “SEC”) filed charges against 10 individuals, five of which were registered brokers, involved in schemes to trick investors into buying shares of ForceField Energy Inc.

According to the complaint, the schemes involved ForceField’s then-chairman, Richard St. Julien, steering these registered brokers to sell the Coconut Creek, Florida-based company by bribing them with money and other benefits.  All of these “benefits” were covertly given to the registered representatives, with the parties going so far as communicating with prepaid disposable “burner” phones and encrypted, content-expiring text messages.

The registered representatives included Richard L. Brown, Gerald J. Cocuzzo (CRD# 4047511) of Newbridge Securities Corporation, Naveed A. (Nick) Khan (CRD# 4615944) of Meyers Associates, Maroof Miyana (CRD# 4513966) of  Legend Securities, and Pranav V. Patel (CRD# 130645) of Dawson James.

Silver Law Group is investigating numerous registered investment advisors (“RIAs”) connected to Oregon-based Aequitas Management, LLC’s (“Aequitas”) “Ponzi-like” scheme and $350 million of investor losses.

On March 10, 2016, the Securities and Exchange Commission (“SEC”) filed a complaint against Aequitas and its various subsidiaries, which Silver Law Group recently released here (insert hyperlink).  The complaint’s most damning allegations include Aequitas defrauded over 1,500 investors nationwide between Jan. 2014 and Jan. 2016 of more than $350 million as a last-ditch effort to raise funds to save it from complete financial collapse.  This “Ponzi-like” scheme defrauded investors while the most senior executives used the investments to fund their lucrative salaries and extravagant company perks, according to the complaint.

Amidst further research, Silver Law Group has discovered that numerous RIAs have been connected with the fraudulent Aequitas, including:

Silver Law Group is investigating claims related to West Palm Beach, Florida broker Paul V. Blum (CRD # 735003).

We have recently been retained to pursue a securities arbitration claim against RBC Capital Markets, LLC (“RBC”), Blum’s former brokerage firm, alleging, amongst other issues, that RBC and Blum engaged in an unsuitable bond trading program which caused losses in energy companies and other investments.

Blum has two recent complaints pending against him. The two complaints, similar to our client’s, allege unsuitable recommendations for the purchase of bonds that have since defaulted and the unauthorized purchase of high-yield bonds.

Silver Law Group is currently investigating possible securities law violations and breaches of fiduciary duties against Ivy Asset Strategy Fund (WASAX)  and Waddell & Reed Asset Strategy Fund (UNASX), both wholly-owned subsidiaries of Waddell & Reed Financial, Inc. (NYSE: WDR).

On May 15, 2014, Ryan C. Caldwell, a co-portfolio manager for both Funds, resigned. Since his resignation, the Ivy Asset Strategy Fund has fallen by more than 30% in value and has lost billions of dollars in assets. The fund is currently trading at $21 per share, down from $30 per share in 2014.  Most recently, Waddell & Reed shares plunged upon the announcement of Michael L. Avery’s, co-manager of the Ivy Asset Strategy Fund, retirement on February 2, 2016.

Silver Law Group represents the interests of investors who have been the victims of investment fraud. If you have questions about your legal rights pertaining to these Funds, please contact Scott Silver of the Silver Law Group for a free consultation at ssilver@silverlaw.com or toll free at (800) 975-4345.