Securities Lawyer Blog | Victim of Fraud?

On July 25th., 2014, the Financial Industry Regulatory Authority (FINRA) charged five brokers formerly with New York based, Newport Coast Securities Inc.

According to FINRA’s charges, allegedly the brokers, Andre LaBarbera, David Levy, Antonio Costanzo, Douglas Leone, and Donald Bartelt churned 24 customers accounts from September, 2008 through May, 2013. Allegedly the five brokers used margin and risky securities which made them huge commission, but was devasting to the clients’ accounts. Allegedly the brokers made new account forms for the clients which gave a false net worth, investment objectives and the client’s investing experience. The losses were estimated over $1 million according to FINRA. Two former supervisors at Newport Coast, Marc Arena and Roman Luckey, were also charged.

FINRA stated that David Levy of West Palm Beach, Florida, and Antonio Costanzo of Chesapeake, Virginia, allegedly interfered with FINRA’s attempts to conduct their investigation by suggesting clients not cooperate with FINRA’s investigation. Levy, LaBarbera and Costanzo, are now employed by Titus Rockefeller LLC. Donald Bartelt, is based in Cave Creek, Arizona, and is with Newport Coast. Douglas Leone is now with Salomon Whitney LLC or Farmingdale, New York.

If you feel your account has been churned by your broker call Soreide Law Group for a free consultation at (888) 760-6552. We represent our customers nationwide before FINRA.

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DAVID W. JOHNSON (CRD# 1010443), a 55 year-old former JP Turner broker from Keller, Texas, is facing felony theft charges in Iowa. Johnson is charged with four first degree theft charges, after complaints from residents in Pocahontas, Coon Rapids, Algona and Fort Dodge, Iowa, came to light.

According to reports, allegedly Johnson took over $10,000 from each of these investors and then used the investors’ money for his own personal use.

David Johnson was formerly a licensed securities agent and investment advisor in Iowa from 1984 until 2012.

Arrest warrants were issued July 3rd, 2014. Johnson arrived in Humbolt County, Iowa, this week and is being held on a $500,000 cash bond.

According to FINRA’s BrokerCheck, DAVID W. JOHNSON was previously registered with the following securities firm(s):

J.P. TURNER & COMPANY, L.L.C. (CRD# 43177) – KELLER, TX
01/2010 – 01/2012

CAPITAL FINANCIAL SERVICES, INC. (CRD# 8408) – HUMBOLDT, IA
04/2006 – 12/2009

MML INVESTORS SERVICES, INC. (CRD# 10409) – SPRINGFIELD, MA
12/2001 – 04/2006

MML INVESTORS SERVICES, INC. (CRD# 10409) – SPRINGFIELD, MA
03/1996 – 12/1999

G. R. PHELPS & CO., INC. (CRD# 173) 11/1983 – 03/1996

Soreide Law Group has recently filed litigation against David W. Johnson regarding the sale of private placement investments to an elderly client. If you have experienced financial losses due to DAVID W. JOHNSON contact the Soreide Law Group for a free consultation on how to potentially recover your losses at 888-760-6552. We represent clients nationwide.

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Soreide Law Group, (888) 760-6552, based in Fort Lauderdale, Florida, recently obtained the following summary of information located on FINRA’s website, under “Disciplinary and Other FINRA Actions, July, 2014.”

John Frederick Wolle (CRD #5479607, Riviera Beach, Florida)

was barred by FINRA for allegedly falsifying and forging a client’s signature on an annuity application without the customer’s authorization. Wolle also failed to notify his firm of his outside business activities.

FINRA’s findings stated that allegedly Wolle photocopied a blank pre-signed annuity application and submitted the application to an insurance company signing the application as the selling agent. Wolle submitted another annuity application after being asked by a business associate, for the same customer using the pre-signed application he had, along with two additional documents on which he had also forged the customer’s signature. Wolle received approximately $14,000 in commissions for the annuity sales, and he had remitted the commissions to his business associate.

According to the FINRA report, Wolle’s client informed the insurance company that the annuity purchases were unauthorized. The insurance company cancelled the contracts.
(FINRA Case #2013035801101)

John Wolle, according to FINRA’s BrokerCheck, was previously registered with the following securities firm(s):
SINCLAIR & COMPANY, LLC (CRD# 133754) – DARIEN, CT
03/2011 – 01/2012

RIDGEWAY & CONGER, INC. (CRD# 113055) – NEW WOODSTOCK, NY
09/2008 – 03/2009

This ends the information from FINRA.

If you have become a victim of annuity or insurance fraud, contact Soreide Law Group for a free consultation on how to recover your investment losses. To speak with an attorney, call 888-760-6552.

Soreide Law Group, PLLC, represents Insurance Fraud Victims in Federal Court, State Court, and before the Financial Industry Regulatory Authority (“FINRA”).

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Jul/14

28

Former North Carolina Broker Pleads Guilty in $2.5 Million Ponzi Scheme

Claude Darrell McDougal, 55, Charlotte, NC, pleaded guilty in US District Court to securities fraud. McDougal was accused of running a Ponzi scheme, bilking approximately twenty-five of his Charlotte investors out of $2.5 million between 2006 and 2010. McDougal faces up to 20 years in prison and a $5 million fine.

Allegedly, McDougal’s told clients their money would be invested in securities in McDougal’s company, US Financial Alliance Consultants LLC, of Charlotte which he started in 2005. US Financial Alliance Consultants LLC, was never registered as a securities broker. They told their clients they would guarantee a return of 6-15% annually.

According to the prosecutors, McDougal only invested $580,000 of $2.5 million of investors’ money, and paid out to them $450,000. These payouts came from new investors’ funds, not the profits which were generated from investments. McDougal used more than $1 million of his investors’ money for his own personal use.

Claude Darrell McDougal, according to FINRA’s BrokerCheck, also was previously registered with the following securities firm(s):

CENTAURUS FINANCIAL, INC. (CRD# 30833) – CHARLOTTE, NC
11/2006 – 08/2009

PFS INVESTMENTS INC. (CRD# 10111) – DULUTH, GA
04/1987 – 04/2005

If you’ve experienced losses in this or any other Ponzi-like scheme, call Soreide Law Group for a free consultation on how to potentially recover those losses. To speak with an attorney, call 888-760-6552. We represent our clients nationwide.

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Jul/14

23

Orlando Broker Fined and Suspended Over Hedge Fund

Fort Lauderdale, Florida, based Soreide Law Group, (888) 760-6552, has obtained the following summary of information from FINRA’s website, under “Disciplinary and Other FINRA Actions, July, 2014.”

Kevin Anthony Tuttle (CRD #2414158, Orlando, Florida)

was fined $50,000 and suspended by FINRA for two years. Tuttle, as an outside business activity, obtained permission from his firm to manage two hedge funds along with his partner who was also a registered representative at the same firm. Tuttle and his partner sent their investors quarterly reports and account statements with inflated account values, and they sent summary quarterly statements to fund investors which showed improper valuations of their investments and interests. The investors who were sent the summary quarterly statements, had suffered losses. This misrepresented that their investments in the fund had increased in value.

According to the FINRA report, Tuttle failed to disclose that the valuation of the fund was based on defaulted promissory notes and promissory notes that had been cancelled. Tuttle failed to inform investors that the valuations on summary quarterly statements included capital accounts that were inflated and contained promissory notes that were in default or were cancelled. The fund investors deposited $3.8 million into the fund, in part, on the misrepresentations and omissions in the summary quarterly statements. Tuttle was negligent in not disclosing the proper valuation of the fund to these customers. Tuttle and his partner withdrew $141,632 of excess fees from the fund.
The suspension is in effect from May 19, 2014, through May 18, 2016.
(FINRA Case #2011027666902)

Kevin Anthony Tuttle was previously registered with the following securities firm(s):

MERRIMAC CORPORATE SECURITIES, INC. (CRD# 35463) – ORLANDO, FL
09/2007 – 07/2011
GUNNALLEN FINANCIAL, INC (CRD# 17609) – ORLANDO, FL
09/2006 – 09/2007
BERTHEL, FISHER & COMPANY FINANCIAL SERVICES, INC. (CRD# 13609) – ORLANDO, FL
11/2005 – 08/2006
CAPITAL SECURITIES OF AMERICA, INC. (CRD# 36405) – HARTVILLE, OH
02/2004 – 10/2005
WACHOVIA SECURITIES FINANCIAL NETWORK, LLC (CRD# 11025) – ST. LOUIS, MO
01/2001 – 02/2004
JWGENESIS FINANCIAL GROUP, INC (CRD# 38166) – BOCA RATON, FL
01/1999 – 01/2001
CHATFIELD DEAN & CO., INC. (CRD# 14714) – GREENWOOD VILLAGE, CO
12/1994 – 01/1999

This ends the information obtained from FINRA.

If your broker/financial advisor recommended risky hedge funds which created losses to your portfolio, call Soreide Law Group for a free consultation with an attorney on how to potentially recover those losses at: 888-760-6552.

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Jul/14

23

Miami Broker Barred by FINRA

The Soreide Law Group, (888) 760-6552, based in Fort Lauderdale, Florida, has obtained the following summary of information from FINRA’s website, listed under “Disciplinary and Other FINRA Actions, July, 2014.”

Oilda Caridad Hernandez (CRD #1076766, Miami, Florida)

was barred by FINRA because she failed to appear for an FINRA requested investigation.

FINRA stated that they had requested Oilda Hernandez’s appearance to obtain information concerning an investigation arising out of a corporate wash sale sweep. These transactions involved non-U.S. corporate bonds
that her member firm executed. Hernandez informed FINRA that she would not be appearing for testimony.
(FINRA Case #2011030619901)

Oilda Caridad Hernandez, according to FINRA’s BrokerCheck, was previously registered with the following securities firm(s):

MML INVESTORS SERVICES, LLC (CRD# 10409) – CORAL GABLES, FL
12/2013 – 03/2014
ACTIVA CAPITAL MARKETS, INC. (CRD# 42619) – MIAMI, FL
08/2009 – 03/2013
KOVACK SECURITIES INC. (CRD# 44848) – MIAMI, FL
12/2003 – 10/2008
THE PARTNERS FINANCIAL GROUP, INC. (CRD# 31979) – MIAMI, FL
11/2002 – 12/2003
THE PARTNERS FINANCIAL GROUP, INC. (CRD# 31979) – MIAMI, FL
11/1997 – 09/2002
RURAL SECURITIES, INC. (CRD# 39294) – MIAMI, FL
02/1996 – 12/1997
OPPENHEIMER & CO., INC. (CRD# 630) – NEW YORK, NY
01/1995 – 02/1996
THE PARTNERS FINANCIAL GROUP, INC. (CRD# 31979) – MIAMI, FL
06/1993 – 12/1994
AMERISECURITIES CAPITAL CORP. (CRD# 22111) 01/1990 – 02/1993
CULVER & DUNN SECURITIES CORPORATION (CRD# 21627)

This ends the information obtained from FINRA’s Website.

(The Wikipedia definition of a “wash sale” is as follows: “a sale of a security, stock, bonds, or options, at a loss and repurchase of the same or substantially identical security shortly before or after. The regulations around wash sales are to protect against an investor who holds an unrealized loss and wishes to make it claimable as a tax deduction within the current tax year. The security is then repurchased in the hope that it will recover its previous value, which would only become taxable in some future tax year.”)

Call Fort Lauderdale based Soreide Law Group for a free consultation with an attorney at: (888) 760-6552.

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On July 21, 2014, California officials said a $20.4 million judgment was obtained against Synergy Oil LLC, a Newport Beach firm, and company manager, Robert Falco, for fraudulently marketing oil and gas investments. The judgment was ordered in late June in Orange County Superior Court. The judge ordered the defendants to return the money clients had invested, and pay a $6.6 million fine. The judgment also said that Synergy and Falco violated a 2011 “desist and refrain” order which was issued by the state.

The State of California sued Synergy Oil LLC and Robert Falco in 2012. They alleged that 265 clients from around the country were conned into investing $13 million in oil and gas exploration deals.

If your broker/financial advisor recommended the purchase of Synergy Oil stock, or you have experienced a loss through risky oil and gas stocks, call a Securities Arbitration Lawyer for a free consultation on how to potentially recover your losses. To speak with an attorney, call 888-760-6552. Soreide Law Group has represented clients nationwide.

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Jul/14

22

Former Broker With HSBC Securities in Miami Barred by FINRA

The Fort Lauderdale-based Soreide Law Group, (888) 760-6552, obtained the following summary of information from FINRA’s website, under “Disciplinary and Other FINRA Actions, July, 2014.”

Ann Maria Ferrao (CRD #4481123, Miami, Florida)

was barred by FINRA for refusing to appear before FINRA and testify in an investigation into allegations that she misappropriated funds from her clients’ bank accounts. This was allegedly done for her personal benefit and the benefit of other clients.
FINRA’s findings stated that Ann Ferrao told FINRA through her attorney that she would not appear to
testify.
(FINRA Case #2014040438401)

Ann Maria Ferrao was previously registered with the following securities firm(s):

HSBC SECURITIES (USA) INC. (CRD# 19585) – MIAMI, FL
07/2005 – 03/2014

ABN AMRO FINANCIAL SERVICES, INC. (CRD# 20373) – CHICAGO, IL
11/2001 – 05/2004

The summary of information on FINRA’s website ends here.

If you have experienced financial losses due to the recommendation of your broker/financial advisor call Fort Lauderdale based Soreide Law Group for a free consultation with an attorney at: (888) 760-6552.

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Jul/14

22

Orlando Broker Barred by FINRA for Allegedly Giving False Valuation of Hedge Fund

Fort Lauderdale-based Soreide Law Group, (888) 760-6552, has obtained the following summation of information from FINRA’s website, under “Disciplinary and Other FINRA Actions, July, 2014.”

John Warren DuBrule (CRD #1223724, Orlando, Florida)

was barred by FINRA for allegedly engaging in securities fraud by the distribution of quarterly statements containing false information about the valuation of a hedge fund.

FINRA’s findings stated that DuBrule inflated the value of the fund’s assets on its quarterly statements by including the face value and promised interest of defaulted promissory notes as assets of the fund. This falsely inflated the value of investors’ interests in the fund. DuBrule made materially false and misleading statements and omissions to investors to get them to re-invest additional funds.

FINRA’s findings stated that John DuBrule and his wife invested $88,554 in the fund. They withdrew a total of $92,405, on the inflated value of their investments in the fund. Allegedly, DuBrule misappropriated investor funds by withdrawing the funds despite knowing that the promissory notes had been cancelled and the value of the fund’s assets had decreased substantially. Investors deposited $3.8 million, this based on the fraudulent misrepresentations and omissions in the summary quarterly statements.

(FINRA Case #2011027666902)

John W. DuBrule was previously registered with the following securities firm(s):

MERRIMAC CORPORATE SECURITIES, INC. (CRD# 35463) – ALTAMONTE SPRINGS, FL
09/2008 – 09/2013
BERTHEL, FISHER & COMPANY FINANCIAL SERVICES, INC. (CRD# 13609) – ORLANDO, FL
11/2005 – 08/2006
CAPITAL SECURITIES OF AMERICA, INC. (CRD# 36405) – ORLANDO, FL
02/2004 – 10/2005
WACHOVIA SECURITIES FINANCIAL NETWORK, LLC (CRD# 11025) – ST. LOUIS, MO
01/2001 – 02/2004
JWGENESIS FINANCIAL GROUP, INC (CRD# 38166) – BOCA RATON, FL
01/1999 – 01/2001
CHATFIELD DEAN & CO., INC. (CRD# 14714) – GREENWOOD VILLAGE, CO
11/1990 – 01/1999
THE STUART-JAMES COMPANY, INCORPORATED (CRD# 11691) – DENVER, CO
08/1990 – 12/1990
BLINDER, ROBINSON & CO., INC. (CRD# 5096) 12/1983 – 10/1990

This summation of information on FINRA’s website ends here.

If you had financial losses due to the recommendation of your broker/financial advisor call Fort Lauderdale based Soreide Law Group for a free consultation with an attorney at: (888) 760-6552.

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Soreide Law Group has already filed three FINRA arbitration claims against financial advisor, Matthew A. Bell and have been contacted by multiple investors looking to also pursue claims.

Matthew A. Bell, Craig L. Josephberg, and other financial advisors, were allegedly involved in a ‘pump-and-dump’ scheme involving shares of Cubed, Inc., The Staffing Group Ltd., CodeSmart, and StarStream Entertainment Inc. In a ‘pump-and-dump’ scheme, the broker/financial advisor pumps up the price to their clients of a stock to give the appearance that it is in demand after they have personally purchased it at the low price. This artificially increases it’s value. When the price rises brokers then purchase the stock for their clients, then when the price is high after a demand is created, the brokers dump shares they own personally, and the stock which has an inflated value, drops considerably and the client in turn loses their investment.

Allegedly, Bell and Josephburg, from 2012, purchased shares in Cubed, Inc., The Staffing Group Ltd., CodeSmart, and StarStream Entertainment Inc. for their clients, even when they were ‘dumping’ their own shares in the companies. Matthew Bell was with Securities America, Inc. and WFG Investments, Inc. in San Antonio, Texas. Craig Josephberg was with Halcyon Cabot Partners and Meyers Associates, L.P. in New York, NY.

Currently, Bell and Josephberg have been indicted by the U.S. Attorneys Office in New York, and the U.S. Securities & Exchange Commission (SEC) has filed a civil action against Bell and Josephberg and others regarding this matter.

Soreide Law Group represents clients nationwide before FINRA. If you were clients of Matthew A. Bell, or other brokers/financial advisors involved in this ‘pump and dump’ scheme and have experienced losses, please call an attorney for a free consultation on how to potentially recover those losses: 888-760-6552.

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