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Thursday, November 20, 2014

Wedbush Securities to Pay $2.4 Million to Settle SEC Probe

After a Securities and Exchange Commission (SEC) probe, Los Angeles based Wedbush Securities has agreed to settle a market-access case to the tune of $2.4 million. Wedbush has admitted wrongdoing in the case. The SEC found Wedbush failed to have adequate risk controls in place before it provided its customers with access to the market. They provided access to firms with thousands of essentially anonymous international traders. Wedbush's former executive vice president Jeffrey Bell and senior vice president Christina Fillhart agreed to settle the charges against them, as well. Both violated the market access rule. They will pay a combined total of $85,000 in disgorgement, prejudgment interest and penalties.

Houston Wealth Management Firm to Pay $3.8 Million to ExxonMobil Reitrees

USCA Capital Advisors LLC, a Houston based wealth management firm, must pay more than $3.8 million to a group of ExxonMobil retirees. The group of 19 sued for mismanagement of funds and for bad trading strategies. The panel of three arbitrators from the Financial Industry Regulatory Authority (FINRA) found USCA and its brokerage and investment advisory units liable. The retirees were awarded $853,000 in punitive damages, a rare sanction that arbitrators impose to punish and deter improper conduct. In 2013, the investors filed a case seeking damages of more than $12 million. They entrusted USCA with their retirement savings to grow and manage their accounts. In the case, the claimants alleged that they entrusted their retirement savings to USCA based on a series of promises about how USCA would protect, manage and grow their retirement savings using the so-called "Total Return" strategy. Claimants alleged that USCA promised that they would employ a disciplined investment model driven by objective marketing indicators. Claimants alleged that USCA assured Claimants that by using this "Total Return" model, Claimants would have protection of principal, participation in market growth during rising markets, and disciplines stop-losses to protect their investment during declines. Claimants alleged that USCA mismanaged their accounts, failed to follow the trading model, failed to implement the promised stop-loss measures, failed to conduct regular reviews, and failed to supervise the accounts. If you wish to sue USCA Capital Advisors, 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 losses.

Wednesday, November 19, 2014

Loss Recovery Options for Victims of Jeffrey Brian Grove

The Financial Industry Regulatory Authority (FINRA) has permanently barred from the industry Jeffrey Brian Grove, a former Charles Schwab & Co. broker out of the firm's Melbourne, Florida branch office. He is being accused of stealing $1 million worth of office supplies and equipment. For seven months during the course of 2014, Grove used a firm ordering system to purchase supplies, then subsequently sold them to individuals to make a profit for himself. Grove had been in the financial services industry for 17 years. On the same day he was terminated from Schwab, Mr. Grove was charged with conspiracy to traffic in oxycodone and unlawful use of a two-way communication device to commit a crime. If you invested money with Jeffrey Brian Grove, you may be entitled to recover some of your investment losses through the FINRA arbitration claims process. Please call our Chicago-based securities law firm at 312-332-4200 for a free consultation with an attorney to find out how we may be able to help you recover some of your investment losses.

FINRA Orders Ex-Merrill Lynch Advisor to Pay $400,000 in Arbitration Case

Terrance Wilkerson, an ex-Merrill Lynch advisor was ordered by the Financial Industry Regulatory Authority (FINRA) to pay more than $400,000 to the firm in damages for breach of a promissory note and unjust enrichment. $213,062 of the award were in compensatory damages, $172,417 were in attorney's fees and more than $6,700 were in administrative costs. Wilkerson was with Merrill Lynch in their Dallas branch from 2009 until 2012. He was let go from the firm for violating the scope of an approved outside business activity and receiving payment that was not disclosed to their management team. Wilkerson filed a counterclaim for $100,000 in damages from Merrill for breach of contract, defamation, disparagement and interference with current and prospective business relations. His counterclaim was denied by the regulatory authority.

SEC Upgrades Stock Exchange Technology Rules

The Securities and Exchange Commission (SEC) unanimously voted today to approve rules that will require the Nasdaq Stock Market, the New York Stock Exchange, Bats Global Markets, Inc. as well as dark pools owned by Credit Suisse and UBS to prove they can limit the frequency of technology disruptions. The SEC is considering expanding the requirement to include firms such as Citigroup Global Markets Inc and Citadel Securities, LLC. The rules come on the heels of wavering investor confidence in investing technology, and because of the significant impact technological malfunctions have had on investor confidence. It is the first time in 23 years that voluntary measures have been taken to address exchange's automated trading systems. The new rules require the exchanges to conduct tests of equipment, maintain backup systems and inform the SEC in writing of any significant disruptions within 24 hours.

Recovery Options for Victims of the Virtus Premium AlphaSector Fund

Stoltmann Law Offices is investigating the Vitrus AlphaSector Rotation Fund and the Vitrus Premium AlphaSector Fund, two mutual funds managed by F Squared Investments. These are exchange traded funds (ETFs) which are selected through a "proprietary quantitative model." ETFs are securities that track an index but trade like stocks on an exchange. Investors were misled by false statements about the performance of the model. In September of this year, the Securities and Exchange Commission (SEC) gave F Squared a Wells Notice after their investigation into how the company advertised the performance of its stock from April through September. F Squared claimed to use proprietary models to represent how the stock would do based on past performance, when in reality, the models were never tested. F Squared raised $27 billion in funds with these misleading statements and they omitted material facts. If you invested money in the Vitrus Premium AlphaSector Fund, or the Vitrus Premium AlphaSector Fund please give our Chicago based securities law office a call at 312-332-4200 to speak to an attorney about suing through a FINRA arbitration claim or lawsuit. We may be able to help you recover some of your losses.

Tuesday, November 18, 2014

Marc Halan Baldinger Update and How To Sue LPL For His Activities

If you lose money with Marc Halan Baldinger, his former brokerage firm, LPL Financial, can be sued to potentially recover those losses.  Baldinger, from Stuart, Florida was affiliated with LPL from September 2001 to December 2012. On November 14, 2014, Baldinger entered into a Letter of Acceptance, Waiver and Consent ("AWC") with the Financial Industry Regulatory Authority ("FINRA") in connection with allegations of "selling away." Selling away occurs when a broker participates in a private securities transaction for selling compensation without prior approval of his employer member firm.

In the AWC, Baldinger consented to a suspension in all capacities for a period of 18 months, payment of a fine in the amount of $10,000, and payment of $233,000 in disgorgement of selling compensation, plus interest. According to the AWC, "NASD Conduct Rule 3040 prohibits persons associated with a FINRA member from engaging in any manner in a private securities transaction without providing written notice to the FINRA member prior to that participation. Rule 3040 defines "private securities transaction" as, "any securities transaction outside the regular course or scope of the associated person's employment with the member." In the case of a transaction in which the associated person has received or may receive selling compensation, the associated person may not participate in the transactions unless and until the member approves in writing the associated person's participation in the transaction." The AWC adds, "between August 19, 2010 and November 24, 2012, Baldinger introduced 20 individuals and entities to brokerage firms RS and AFS, and assisted the customers in establishing accounts and purchasing inverse strips of Government National Mortgage Association Interest Only bonds ("GNMA I/Os"). The 20 clients, all high net worth individuals and entities, ultimately invested a combined total of at least $12 million in GNMA I/Os. Baldinger received compensation in connection with the investments totaling approximately $233,427. The above-described securities transactions were outside the course and scope of Baldinger's employment with his member firm, and Baldinger did not seek or obtain written approval from his member firm 10 participate in the transactions. As a result of the foregoing conduct, Baldinger violated NASD Conduct Rule 3040 and FINRA Rule 2010."

We have successfully sued LPL for selling away, theft, conversion and multiple other sorts of claims over the years and have won three cases against them after multi-day FIRNA arbitration hearings. To learn what can be done about Baldinger related selling away losses, please call our law firm in Chicago.

Investors Should Continue to Beware of Internet Ebola Schemes

The Department of Licensing and Regulatory Affairs (LARA) have cautioned investors to beware of internet-based Ebola scams. Almost 1,200 domain names with the word "ebola" in them have been registered in the past six months. Of these, almost 200 have been red flagged as suspicious by the North American Securities Administrators Association's (NASAA) Internet Fraud Investigations project group. Investors should use common sense and proceed with caution when deciding whether to invest in ebola-related investment opportunities.

Recovery Options for Victims of Jodie L. Miller Who Bought Tri-Med Corporation

For clients of Jodie L Miller who purchased Tri-Med Corporation securities, the FIRNA arbitration claims process can be used to potentially recover investment losses against Linsco LPL. Tri-Med's business involved financing account receivables for personal injury claims. Tri-Med purchased from medical providers at discounted rates outstanding receivables relating to personal injury claims, with the expectation that insurers would pay the entire receibable once the claim was resolved through litigation or settlement. To fund its purchases, Tri-Med sold interest bearing notes collateralized by Letters of Protection (LOPs). The LOPs allegedly assured that the relivable would be repaid from any proceeds obtained as a result of the settlement or litigation. Tri-Med officers and directors lured investors into investing in medical practice related account receivables securitized by Letters of Protection. Instead of investing the money, the masterminds of the scheme used the funds to pay off earlier investors or on themselves. They enticed over 230 investors to invest in the notes since October 2011.

Jodie Miller first learned of Tri-Med in late 2011 and around that time conducted some, but inadequate, due diligence on Tri-Med. Virtually all of the information she obtained came from Tri-Med itself. The information included a letter, purportedly from the issuer's counsel, stating that the Tri-Med notes were exempt from registration and, among other things, qualified for treatment under the safe harbor provisions of Regulation D and "Rule 507." This letter should have raised serious questions and concerns on Miller's part. There is no Rule 507 exemption under Regulation D, and never has been, which Miller, as a securities professional, should have known. Moreover, a cursory review of filings on the SEC website would have shown that Tri-Med had never filed a Form D, which is required for any private offering seeking to qualify under the safe harbor provisions of Regulation D. Miller, however, did not review the SEC's website. In fact, the Tri-Med notes were unregistered and no exemption from registration applied. From January 16, 2012 through November 27, 2012, while registered with VALIC and LPL Linsco, she participated in 19 sales of unregistered Tri-Med notes in amounts ranging from $10,000 to $150,000. Those 19 transactions involved 14 investors and a total of $764,500 in Tri-Med notes. Tri-Med paid Miller approximately $38,225 in commissions for the sales. Six VALIC customers purchased Tri-Med notes from Miller and at least one of those customers believed that he was purchasing a product that VALIC was recommending.

The firms she was affiliated with were obligated to supervise her activity during the relevant time period. Failure to do so can make them liable. We've successfully sued LPL dozens of times in the last 14 years. To receive a free valuation by a lawyer as to whether Tri-Med Corporation notes can be recovered on a contingency fee basis, please call our securities fraud law firm at 312.332.4200 for a free evaluation by a lawyer.

FINRA to Request Comments on 3 New Rules

The Financial Industry Regulatory Authority (FINRA) is requesting comments on its proposal to establish three new "pay-to-play" rules for broker dealers by December 15th of this year. The new rules would restrict member firms from engaging in solicitation activities on behalf of investment advisors if covered employees made a disqualifying political contribution. These proposed rules mirror ones already in place by the Securities and Exchange Commission (SEC), except for the fact that violations of them would "require full disgorgement of fees received," and "soliciting firms to provide extensive disclosure to the relevant government entity." Also required in the new rules is a "two year time out from political contributions to officials with the power to effect a mandate, broadly define a contribution as 'anything of value' and includes private funds." FINRA is expected to adopt the new rules soon.