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Friday, January 30, 2015

Legal Options For Recovering Direxion Russia Bull 3X Leverage Exchange Traded Funds (RUSL)

Many retail investors are reeling from investment losses in the Direxion Russia Bull 3X Leverage (RUSL) exchange traded funds.  Collapsing oil prices and the downing of a plane have led to large drops in the Russian stock market.  Unfortunately investors in the Direxion Russia Bull 3X Leverage have suffered huge losses.

In most instances the leveraged ETF is grossly unsuitable for retails clients at firms like H&R Block, Wells Fargo, UBS or Ameriprise. The leverage in these products creates risks that most investors simply cant be exposed to. Similar to margin, the leverage works wonderfully when the market is going up but when the market crashes, the impact is often cataclysmic.

 Richard Ketchum, Chairman of the Financial Regulatory Authority said in a speech last week that additional regulations may be needed on new products such as leveraged ETFs. FINRA has warned brokerage firms, including last summer, about selling leveraged ETFs to retail investors. FINRA has disclosed they are looking closely at the sales practices of brokerage firms selling leveraged ETFs.

If you'd like a free review by an attorney with respect to whether Direxion Russia Bull 3X Leverage investment losses can be recovered through the FINRA arbitration or class action process, please call our investment fraud lawyers in Chicago, Illinois

FINRA’s Eight Products to Watch for 2015

The Financial Industry Regulatory Authority (FINRA) has come out with its 2015 exam priorities letter and has named eight products it will monitor for investor risk:  

 Variable Annuities: Investment features similar to mutual funds. May be too complex for some investors to grasp. FINRA will look at how brokers are paid when selling the products and the suitability of those recommendations.    

Non-traded Real Estate Investment Trusts (REITs): A corporation, trust or association that owns or manages income-producing property. Many can have poor liquidity. FINRA will ask that firms conduct regular background checks on the REITs their brokers recommend.  

 Exchange Traded Products that track alternatively Weighted Indices: Exchange traded products are tied to stocks, commodities, and indices. Investors in these products get a return linked to a market index like the Standard & Poor's 500 index. FINRA will look at how firms are stating the superior returns in these products over more traditional ones.  

 Structured retail products: These are unsecured debt instruments with payoffs that are linked to their underlying assets. They attract investors because they can offer higher returns but they are also thinly traded, incur high costs, and have market risk. FINRA will make sure brokers understand these structured products and how they work and perform.    

Floating rate bank loan funds: These funds typically invest in floating rate bank loans. Although they are mainly used by institutional investors, they can affect retail investors that are exposed to them through mutual funds. FINRA is worried that the funds investing in the loans could face liquidity challenges if a large number of a fund's investors try to make redemption requests at the same time.    

Securities-backed line of credit: These revolving loans allow investors to borrow money from banks using the securities that they hold as collateral in their brokerage accounts. FINRA wants firms to have procedures in place that allows them to interact with the lender so that it can monitor the customer's account.    

Interest rate-sensitive fixed income securities: In its 2014 exam priorities letter, FINRA warned about the risk to investors that hold interest rate sensitive products. FINRA's position on the products is the same in 2015. It wants firms to discuss the impact of rate changes on the price of the products when they communicate with their clients.

Suing Kirsten Flynn Hawkins for Investment Losses

Stoltmann Law Offices is investigating Kirsten Flynn Hawkins, a former registered representative with Suntrust Investment Services, Inc. Ms. Hawkins allegedly took money from customers and used it to pay for personal expenses from the period of August 2011 until August 2014. She is being investigated for misuing customer funds. Ms. Hawkins previously worked at Crestar Securities Corporation in Richmond, Virginia from May 1995 until May 2000, Suntrust Securities in Atlanta, Georgia from May 2000 until August 2001 and Edward Jones in St. Louis, Missouri from August 2001 until January 2003. She is no longer registered with any member firm. If you invested money with Kirsten Flynn Hawkins, our Chicago-based securities attorneys may be able to help you recover your losses. Please call us at 312-332-4200 to find out how. The call is no-cost, no-obligation.

Investment Losses With Girard Securities Can be Recovered Through FINRA Arbitration

The Securities and Exchange Commission will audit Girard Securities because of its supervision of its branch offices. The commission is focusing heavily on the supervision of registered representatives in branch offices. The Financial Industry Regulatory Authority (FINRA) will conduct a routine audit of the same firm starting on March 9th. The SEC will be asking for a large amount of data from the firm. A mid-January press release included SEC examination priorities of 2015, stating their intent to "protect retail investors and investors saving for retirement," and their exam of broker-dealer supervision of branch offices will include "using data analytics to identify branches that may be deviating from compliance practices of the firm's home office." Brokerage firms have a duty to reasonably supervise their branch offices and registered representatives. If you lost money with Girard Securities, they may be liable for your losses if they failed to supervise their branches properly. Please call us at 312-332-4200 to speak to an attorney to find out how we may be able to help you recover your investment losses through the FINRA arbitration process.

Thursday, January 29, 2015

Recovering Losses with Loren Holzhueter

Loren Holzhueter, a former insurance agent, swindled at least 22 investors out of $10 million, according to the Securities and Exchange Commission (SEC). He was charged in a securities fraud lawsuit. He owned ISC Inc., an insurance brokerage, and made claims to investors about how he would use their money. Mostly he told them that their money would be placed in mutual funds or Individual Retirement Accounts (IRAs) and that they would be able to withdraw those funds at any time. In reality, he used their money to fund ISC, covering daily expenses, expanding the business and even for payroll purposes. Before soliciting money from some of the investors, Holzhueter was being investigated by the Internal Revenue Service (IRS) in 2013, which he hid from investors. That case is still ongoing. In ponzi scheme-like fashion, Holzhueter paid out some of the swindled money to original investors. He also churned out false statements of investment performances and provided those to the unassuming clients. The case is ongoing. If you invested money with Mr. Holzhueter, or his company, ISC Inc., you may be able to recover investment losses with the help of Stoltmann Law Offices. Please call our Chicago-based securities fraud office to speak to an attorney. Our number is 312-332-4200.

Securities Class Action Lawsuits Drop Significantly

According to recent data collected, 11 companies in the Standard & Poor's 500 had securities class action lawsuits filed against them. This is way down from any other year since 2000. In 2014 alone, that number is down 45% to an all-time low of $57 billion, says a study by Cornerstone Research and Stanford Law School. Along with the decrease in numbers comes smaller settlements. In 2013, the average size was $86 million. In 2014, the average size was $34 million. This constitutes a three-year low out of 94 cases total, the fewest since 1996. The cause is likely the bull market, which continues its six-year streak. During the global financial crisis, class action lawsuits abounded with abandon, as stock market shareholders attempted to regain some of their steep financial losses. Securities class action lawsuits that accuse companies of falsifying statements, or of covering up actual losses or problems that should have been disclosed, rose only by a little over 3% from 2013 to 2014, but both numbers are still below the average obtained from 1997 to 2014.

Suing David Alan Lavine, Former UBS Broker

The Financial Industry Regulatory Authority (FINRA) permanently barred former UBS Financial Services broker, David Alan Lavine from the industry. Lavine was barred for failing to comply with a FINRA investigation. Allegedly, Lavine failed to repay a loan to his former employer, Morgan Stanley, as well as participated in outside business transactions, such as an unapproved private securities transaction. He worked at UBS in Houston, Texas from October 2011 until October 2014. Before that, he worked for Morgan Stanley in Houston from June 2009 until October 2011. He also worked for Morgan Stanley & Co. Incorporated from July 2007 until June 2009 and with A.G. Edwards & Sons, Inc. from February 2005 until August 2007. He has one customer dispute against him. He is no longer registered with any FINRA member firm. If you lost money with David Alan Lavine, we may be able to help you recover your losses. We are securities attorneys based in Chicago, Illinois. Please call us for a no-cost consultation at 312-332-4200.

Wednesday, January 28, 2015

Suing Barkley J. Lundy, Jr. and PFS Investments

Stoltmann Law Offices is investigating former stockbroker Barkley J. Lundy, Jr. and his former brokerage firm, PFS Investments. Lundy, from Rapid City, South Dakota, is accused of misusing and misrepresenting customer funds from January 2011 until March 2014, while he was a registered representative of PFS. He deposited money from at least 20 customers into his own bank account and then retained a list of those customers. He also took customer's money, deposited it into his own personal account and then put it back into the customer accounts. He was terminated from PFS because of this conduct in August 2014 and was subsequently barred from the securities industry permanently. If you lost money with Barkley Lundy, you may be able to sue his former firm, PFS Investments, for failing to properly supervise him. Please call our Chicago-based securities law firm at 312-332-4200 to speak to an attorney about how we may be able to help you recover your investment losses.

Suing Oppenheimer for Penny Stock Losses

The Securities and Exchange Commission (SEC) fined investment advisory firm and broker dealer Oppenheimer & Co., $20 million in regulatory fines on Tuesday. The firm was hit for improperly selling penny stock in unregistered offerings on behalf of customers. Oppenheimer will pay half the fines to the SEC and half to the U.S. Department of the Treasury's Financial Crimes Enforcement Network for executing billions of shares in penny stocks in the name of Gibraltar Global Securities, a Bahamas-based brokerage firm. They were not registered to do business within the U.S. Gibraltar was also charged by the SEC for illegally operating as a broker-dealer over transactions. Additionally, Oppenheimer sold billions of shares of penny stocks on behalf of other customers. Those sales generated $12 million dollars, of which Oppenheimer received $588,400 in commissions.

Update For Clients of Former UBS Broker Michael B. Doyle

The Financial Industry Regulatory Authority (FINRA) ordered former UBS broker Michael B. Doyle to pay the firm more than $4 million. This represents more than half of the total awards handed out by the regulatory authority against advisors this month. UBS argued breach of contract when Doyle left UBS in 2011 to join an independent advisor firm in San Francisco and filed a claim to recover $3.66 million. This amount was granted, along with interest at a rate of 4% for four years and legal fees. Doyle was found to have borrowed money from a customer.

He formerly worked for Kidder, Peabody & Co. Incorporated in New York from 1991 until 1994, Merill Lynch in New York from 1994 to 1997, Citigroup Global Markets in Menlo, California from 1997 until 2008 and Sanctuary Securities in Mill Valley, California from 2011 until 2014. He was registered with UBS in San Francisco, California from October 2008 until November 2011. He had seven customer disputes against him. Borrowing money from customers is a violation of FINRA conduct rules. UBS can be held liable for actions engaged in by their financial advisors. He is no longer registered with any member firm. If you lost money with Michael B. Doyle, you may be entitled to recover your investment losses. Please call us at 312-332-4200 to speak to an attorney to find out how we may be able to help you.