A National Securities Arbitration & Investment Fraud Law Firm
William “Billy” Nelson entered the securities industry over 18 years ago and to date has 16 disclosure events reported on his FINRA BrokerCheck record. Allegations against Nelson, currently with Meyers Associates, L.P., include a wide range of transgressions such as:
After serving 10 years in prison for prior securities law violations, investment fraud orchestrator Edward Durante is back in the news for allegations of a penny stock pump-and-dump scheme.
Durante was criminally charged in December 2015 by the U.S. Attorney’s Office for the Southern District of New York and civilly charged by the Securities Exchange Commission (the “SEC”) for defrauding at least 50 investors out of at least $11 million through the sale of securities of VGTel, Inc. (“VGTel”), a shell company Durante controlled.
According to the SEC’s complaint, Durante sold approximately six millions shares of VGTel stock to investors using various fictitious names to hide his criminal past, including “Edward Wise,” “Ted Wise,” “Efran Eisenberg,” and “Anthony Walsh.” He solicited and enlisted the aid of Larry Werbel (CRD# 828351) and his adviser firm Evolution Partners Wealth Management, LLC (“Evolution Partners”), Sheik Khan (CRD# 2448117), Christopher Cervino (CRD# 2778817), Walter Reissman, and Kenneth Wise to help perpetrate the scheme, according to the complaint.
According to the Financial Industry Regulatory Authority (FINRA) BrokerCheck website, a customer filed a complaint against Teutonico (CRD# 2875434) on November 23, 2015 for excessive trading. This is the eleventh disclosure on his checkered broker report and the fifth in the last year. Teutonico has been employed by Network 1 Financial Securities, Inc. since December 2012.
Silver law group previously covered Teutonico’s checkered broker report and the ramifications of a report littered with disclosures. On March 27, 2015, Teutonico, without admitting or denying the findings, consented to sanctions in the amount of $5,000 and a suspension totaling 15 business days for failing to observe the high standards of commercial honor and just and equitable principles of trade in violation of FINRA Rule 2010.
Teutonico’s other FINRA report disclosures indicate multiple clients alleging he churned their accounts – meaning he allegedly made excessive trades in client accounts to generate commissions. Additionally, the disclosures allege that he made unsuitable and unauthorized transactions, abused commissions, breached his fiduciary duty, executed excessive markup/markdowns and committed possible fraud, all totaling more than $650,000 in requested damages.
The U.S. Securities and Exchange Commission (SEC) has charged Oregon-based Aequitas Management, LLC (“Aequitas”), and several of its executives with operating a $350 million investment scheme that defrauded investors in a last-ditch effort to raise funds to save Aequitas from a complete financial collapse. Aequitas, along with CEO Robert J. Jesenik, Executive Vice President Brian A. Oliver, and former CFO and COO N. Scott Gillis, were charged with multiple violations of federal securities laws in a Complaint filed in Oregon federal court. The SEC is seeking injunctive relief, disgorgement of ill-gotten gains, prejudgment interest, and civil monetary penalties as well as bars prohibiting Jesenik, Oliver, and Gillis from serving as officers or directors of any public company.
According to the SEC’s Complaint, Aequitas and four of its corporate affiliates (Aequitas Holdings LLC, Aequitas Commercial Finance LLC, Aequitas Capital Management Inc., and Aequitas Investment Management LLC) defrauded more than 1,500 investors nationwide between January 2014 and January 2016 into believing they were making health care, education, and transportation-related investments. To the contrary, the Complaint alleges that invested funds were instead being used for other purposes, including to pay lucrative salaries and extravagant perks for Jesenik, Oliver, and Gillis; and to stave off the businesses’ impending financial collapse. In mid-2014, Corinthian Colleges, a for-profit education provider, defaulted on its recourse obligations to Aequitas, which significantly increased Aequitas’ already dire cash flow problems. Rather than disclose to its investors the rapidly deteriorating state of its finances, Aequitas purportedly hid that vital information and used investor funds to keep its enterprise afloat — even using some new investor funds to pay earlier investors in a classic Ponzi scheme fashion. By November 2015, Aequitas’ operations reached a point of nearly total collapse; and in February 2016, the firm dismissed two-thirds of its employees and hired a Chief Restructuring Officer.
“We alleged that Aequitas had severe and persistent cash flow shortages and top executives knew they weren’t using money raised from investors like they said they would. But they refused to disclose the true financial condition, continued to draw lucrative salaries, and roped even more unknowing investors into a losing venture,” said Jina L. Choi, Director of the SEC’s San Francisco Regional Office.
Formerly registered with Ameriprise Financial in California, ex-broker Li-Line Hsu was recently suspended by the Financial Industry Regulatory Authority (FINRA). He was suspended under Rule 9552 which was failure to keep information current or to provide information.
Individuals who are subject to FINRA’s jurisdiction are responsible for providing testimony, data, reports, materials or information that has to be filed with the government agency. Individuals also responsible for keeping their supporting documents and membership applications current.
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. 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.
According to news reports, numerous RIAs have been connected with the fraudulent Aequitas, including:
On February 18, 2016, the FBI raided the headquarters of UDF, the manager of a family of real estate investment trusts (“REITs”) and other funds, sending shares of UDF’s largest fund, United Development Funding IV (“UDF IV”), tumbling 54% before NASDAQ halted trading, according to InvestmentNews.
The FBI raid is the most recent negative activity for the troubled fund manager. In November 2015, UDF’s auditor, Whitley Penn disclosed he would no longer be auditing UDF’s financial statements and UDF board member William Kahane resigned. A few weeks later in December 2015, Kyle Bass and his firm Hayman Capital Management, posted a report and letter alleging UDF was managed “like a Ponzi scheme.” UDF responded to the reports, saying that it had been under SEC investigation since April 2014.
On February 5, 2016, Bass and his firm set up the website https://udfexposed.com/ in order to further substantiate his allegations. Additionally, Bass revealed that he had a significant short position in UDF.
A grand jury of the U.S District Court in Spartanburg, S.C. indicted former broker Claus C. Foerster (CRD# 1912949) for defrauding clients of $2.8 million over a 14-year period.
Foerster perpetrated the fraud from 2000 to June 2014 while employed as a financial advisor at Smith Barney & Co., Morgan Keegan & Co. and Raymond James Financial Inc., according to an indictment filed March 8, 2016 in the U.S. District Court in Spartanburg, S.C.
The charges follow the Financial Industry Regulatory Authority Inc.’s 2014 decision to bar Foerster from the brokerage industry due to allegations that he was running a Ponzi scheme.
In August 2015, Princor Financial Services Corp. broker Rick Esparza consented to findings he borrowed money from his client. The California broker allegedly made numerous withdrawals from his client’s variable annuity totaling a personal loan of $67,500. When Esparza failed to make timely payments, the client complained.
As a result, the client was granted $75,000 in settlement damages and, less than a week later, Princor Financial Services Corp. discharged Esparza from its employ.
With almost 40 years in the securities industry, Child has a total of 14 disclosure events reported on his BrokerCheck record. Many events consist of customer disputes as to Child’s actions relating to customer brokerage accounts. The three most recent complaints involve allegations of suitability, with requested damages in excess of $2.5M since October 2015.
Previous customer disputes include allegations such as:
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