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Monday, October 20, 2014

SEC Charges Former Stratton Oakmont Broker with Fraud

Anthony Coronati, a former broker with Stratton Oakmont, (the Long Island chop shop famously depicted in the movie "The Wolf of Wall Street,") was charged with fraud on Friday by the Securities and Exchange Commission (SEC). He was ordered to pay back $400,000 in restitution to investors and was barred permanently from the securities industry. Mr. Coronati defrauded investors by persuading them to invest money in equity securities through a ficticious hedge fund. He and his investment company, Bidtoask, also sold membership interests in technology companies that had not yet held Initial Public Offerings (IPOs). Investors were told that their investments in companies such as Facebook, would not result in them having to pay any fee charges, markups or commissions, when in reality, they did call for hefty fees. Coronati also lied about what shares Bidtoask owned in other technology companies, many of which were not even in the process of holding IPOs. Mr. Coronati issued ponzi-like payments to his Bidtoask investors. He also created and sent fake account statements to investors, falsely stating that their positions in the hedge fund were worth over $120,000. He then set up a brokerage account in his own name and used it to deposit investor money. He subsequently stole some of those funds and used them for personal expenditures such as plastic surgery and a Caribbean vacation.

Friday, October 17, 2014

LPL Financial Ordered to Pay $541,000 to Investors Involved in Variable Annuities Switches

Massachusetts securities regulators ordered LPL Financial to pay back $541,000 to senior citizens who were forced to pay surrender charges. The charges have to do with fees the elderly investors paid when switching variable annuities. Certain annuity switch transactions were made where the surrender charges associated with them were not disclosed adequately to the clients. There were 157 transactions made, and all of the clients were 65 years of age or older. LPL must reimburse the victims within 15 days.

This is the third time in eight months that the firm has gotten into trouble with regulators, and the second time in four months that they were forced to shell out money for their variable annuities practices. In June, LPL was fined $2 million and ordered to pay $820,000 in restitution by the Illinois Securities Department.

The firm was accused of not documenting their variable annuity exchanges adequately. In March, the Financial Industry Regulatory Authority (FINRA) fined LPL Financial $950,000 for supervisory deficiencies in the sale of various alternative investment products such as nontraded REITs, hedge funds and managed futures. If you wish to sue LPL Financial for variable annuity investment losses through the FINRA arbitration claims process, please call our law firm at 312-332-4200 for a free review.

Number of Enforcement Actions Filed with SEC at an All-Time High

The Securities and Exchange Commission (SEC) has filed a record number of enforcement actions for the fiscal year that ended on September 30th. 755 actions were filed, which resulted in $4.16 billion in penalties and disgorgements. This is up from the year before, when 686 actions were filed and $3.4 billion in penalties and disgorgements were ordered. SEC Chairwoman, Mary Jo White attributes the all-time high numbers to an increase in the reliance on technology.

The technological advances have proved to be quicker, more effective ways to weed out the bad guys. In a statement, White was quoted as saying: "The innovative use of technology-enhanced use of data and quantitative analysis-was instrumental in detecting misconduct and contributed to the Enforcement Division's success in bringing quality actions that resulted in stiff monetary sanctions." The increase in enforcement actions and money is good news for investors. The spike in numbers sends the message that no securities fraud related offense is too small. Hopefully this trend will continue throughout 2014.

Sean Steven Howell of Allstate Financial Services, Inc.

Stoltmann Law Offices is investigating Sean Steven Howell, formerly a broker with Allstate Financial Services in Seattle, Washington. From 2010 until 2012, Howell applied for life insurance applications on himself through Allstate. He also falsified six life insurance applications that generated $92,000 in commissions. He did not complete the underwriting of the six policies, and did not pay the initial premium on four of them. Howell was terminated from Allstate, and the Financial Industry Regulatory Authority (FINRA) barred him from working at any member firm. To learn how to sue AllState Financial Services to recover Sean Steven Howell related losses, please call our Chicago based securities law firm at 312-332-4200.

Ex-Ameriprise Adviser Pleads Guilty to Stealing $1 Million

Susan Walker, a former Ameriprise Financial adviser from Wayzata, Minnesota, pleaded guilty on Wednesday to pilfering almost $1 million from 24 clients. From 2008 until 2013, Ms. Walker opened investment accounts without her client's knowledge or permission, deposited stolen funds into them and then withdrew the funds. She then spent the money on private school tuition and vacations.

She used some of the funds to pay for her certification with the Certified Financial Planner Association Board of Standards, Inc. ,(CFP) in 2009 and 2011. In 2013, the CFP suspended her certification and the Financial Industry Regulatory Authority (FINRA) barred her from the industry.

Ameriprise was obligated to supervise her during the entire time she was affiliated with the firm.  Failure to do so can make Ameriprise responsible for all losses associated with her conduct. If you invested money with Susan Walker or Ameriprise Financial, please call our Chicago-based securities law firm at 312-332-4200 to speak to an attorney about possible recovery options.

Former Merrill Lynch Brokers Charged with Selling Away

James Goetz and Stephen Brown, former brokers with Merrill Lynch, were fired from its Private Banking and Investment Group two weeks ago. The two advisors were based in Pittsford, New York and managed $2.5 billion for clients. They were fired for selling away, or convincing clients to invest in hedge funds outside of the firm. According to the Financial Industry Regulatory Authority (FINRA) the two men convinced investors to invest in risky trading strategies. If you invested with James Goetz or Stephen Brown or Merrill Lynch, please call our securities law firm at 312-332-4200 for a free consultation.

Nancy Eckler and Kevin Wolf of Wells Fargo Advisors LLC

Recently, a FINRA arbitration claim was filed against Wells Fargo Advisors, LLC due to conduct of Naples, Florida based brokers Nancy Eckler and Kevin Wolf.  The FINRA arbitration claim involved allegations of unsuitable recommendations that investors purchase speculative stock options and Wells Fargo Advisor's failure to adequately supervise Eckler and Wolf.  Pursuant to FINRA Conduct Rule 2310, brokers are obligated to make suitable and approprirate investment recommendations.  The following practices are examples of violations of the suitability rules:
  • Recommending speculative low-priced securities without attempting to obtain information about the client's financial situation, needs, and other assets
  • Failing to describe important facts and risks about the security to each client
  • Making trades of excessive size in a client's account
  • Churning in a client account (making trades too frequently)
  • Fraudulent activity - making unauthorized transactions in a customers account or setting up fictitious accounts to disguise prohibited activities
  • Recommending trades that are too expensive, too risk or beyond the client's financial ability
To receive a free recommendation by a securities attorney whether investment losses related to Nancy Eckler or Kevin Wolf can be recovered in the FINRA arbitration forum on a contingency fee basis, please call our securities law firm at 312.332.4200

Tuesday, October 14, 2014

F. Patrick Owen Wells Fargo Advisor “Annuity Switching” Victims

We are currently representing a former client of Wells Fargo financial advisor F. Patrick Owen who incurred substantial surrender charges as a result of improper switching from indexed annuities to variable annuities.The client incurred substantial surrender charges as a result of the switching. In addition Owen is alleged to have mismanaged the transfer of the client’s funds by requesting that the surrendered annuities be paid directly to her in cash, rather than doing a 1035 tax-exempt exchange where the funds would be sent directly from one insurance company to another. As a result, the client faces substantial tax liability and penalties in addition to surrender charges.

Annuity switching is a form of churning that involves switching a client from one annuity to another in order for the financial advisor to earn a commission. Owen is accused of failing to disclose the full amount of charges the client would incur for surrendering the indexed annuities. Owen is also accused of failing to use appropriate care in submitting the surrender requests.

For investors who lost money with Patrick Owen and Wells Fargo Advisors, an arbitration claim or lawsuit might be an option for recovering investment losses and related damages. To learn about your legal options to recover your losses, please call our securities law firm in Chicago, Illinois to speak to an attorney for a no-cost review at 312-332-4200.

Stoltmann Law Offices Investigates Halcyon Cabot Partners, Ltd. and Meyers Associates in Connection with the Supervision of Craig L. Josephberg

Stoltmann Law Offices is investigating Halcyon Cabot Partners, Ltd. and Meyers Associates in connection with their supervision of broker Craig L. Josephberg. He was charged with running a pump-and-dump scheme by the Securities and Exchange Commission (SEC) in July 2014, for the sale of stock in CodeSmart Holdings, Cubed Inc., StarStream and The Staffing Group, Ltd.

Between October 2012 and July 2014, Josephberg was registered with Halcyon Cabot Partners, Ltd. and Meyers Associates and the companies may be liable for their failure to properly supervise him, according to Financial Industry Regulatory Industry (FINRA) rules.

He was indicted for defrauding investors in CodeSmart, Cubed, StarStream and Staffing Group by falsely controlling the volume and price of shares in the three companies by (a) signing off on unauthorized purchases of stock in accounts of unwilling investors, (b) engineering price movements and trading volume in the stocks, (c) sending out false and misleading press releases, (d) falsifying SEC filings and (e) fraudulently concealing his and other defendants' ownership interests.

 If you invested money with Craig L. Josephberg, Halcyon Cabot Partners and/or Meyers Associates, please call our Chicago based securities law office at 312-332-4200 for a free consultation with an attorney about how we can possibly recover your losses.

Monday, October 13, 2014

Suing LPL Linsco To Recover James “Jeb” Bashaw Selling Away Investment Losses

For clients of former LPL Financial star branch manager James "Jeb" Bashaw, his previous brokerage firm, LPL Linsco, can be sued to recover selling away related investment losses.  Bashaw was terminated in September for several allegations, including participating in private securities transactions without providing written disclosure to and obtaining written approval from LPL, according to his report on CRD.  Engaging in securities transactions without broker-dealer approval is commonly known as "selling away" in the securities industry, one of the most common allegations of breaking industry rules made against registered reps.

According to published reports, Mr. Bashaw allegedly also borrowed from a client and engaged in a business transaction that created a potential conflict of interest without providing written disclosure to and obtaining written approval from the firm, according to the CRD report.  Mr. Bashaw's profile on BrokerCheck, the industry database maintained by the Financial Industry Regulatory Authority Inc., states that LPL terminated Mr. Bashaw for allegedly "failing to follow firm policies and industry regulations."

For clients of James "Jeb" Bashaw, the FINRA arbitration process can be used to sue LPL to recover any selling away or other related investment losses.  The firm was obligated to reasonably supervise his activities during the time he was affiliated with the firm.  Failure to do so can make the firm liable.  We have successfully sued LPL multiple time for supervisory related issues in selling away cases in the past.  Please call our securities fraud law firm in Chicago at 312.332.4200 to hear how LPL can be sued on a contingency fee basis to recover losses associated with Jeb Bashaw.