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Posted by Securities Lawyer in FINRA
The following information is from FINRA’s website under, “Disciplinary and Other FINRA Actions, May, 2012.”
Sean Donald Premock (CRD #3175558, Registered Representative, Fort Lauderdale, Florida)
submitted a Letter of Acceptance, Waiver and Consent in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Premock consented to the described sanction and to the entry of findings that he facilitated private securities transactions away from his member firm.
These findings stated that Premock was paid commissions from the sales totaling $18,820 without providing written notice to, or obtaining approval from, his firm prior to facilitating any of the investments.
The findings also stated that Premock made a series of material misrepresentations and omissions of fact in connection with the offering and selling of investment notes, including promising a monthly minimum rate of return, claiming that the investors’ principal was safe and would be repaid in its entirety after a period ranging from nine to 12 months, and representing that investor funds would be pooled and invested in a fund for the purpose of executing a unique trading strategy that would protect investor principal by employing a hedging strategy using reversible convertible notes (RCNs).
While Premock opened trading accounts in the name of the fund and conducted securities, futures and options trading with the fund’s investor money, investors were not paid a monthly rate of return, certain investors did not receive their principal at maturity, Premock did not purchase RCNs, and he used some of the investment funds for his personal benefit.
These findings also included that Premock prepared and issued monthly and quarterly fund statements that showed inflated account values. The statements uniformly showed steady account appreciation based on the accrual of fictitious monthly interest and cash bonuses.
FINRA found that Premock received a total of $32,000 from investors for investments in the fund and deposited these funds in the business checking account of a non-fund entity. None of the $32,000 from investors was transferred to any account belonging to the fund. Instead, Premock made several cash withdrawals, purchased several personal items, transferred funds to one family member, and transferred funds to his personal trading account.
FINRA also found that Premock received $20,000 from an investor for an investment in the fund and deposited this money in the fund’s checking account. Premock transferred $59,382.50 from one of the fund trading accounts to the fund’s checking account. That same day, a $79,422.45 transfer was made from the fund’s checking account to Premock’s business partner. The fund account balance was $39.95 and was closed soon thereafter. The investors were unaware of these uses of their money and did not authorize or consent to such uses.
In addition, FINRA determined that Premock failed to fully respond to FINRA requests for information and documents. Premock stated that he was unwilling to provide a response to all of the requested items and that he intended not to comply any further. (FINRA Case #2010024048601)
This ends the information from FINRA’s website.
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide.
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Posted by Securities Lawyer in FINRA
The following information is from FINRA’s website under, “Disciplinary and Other FINRA Actions, May, 2012.”
Harrison A. Hatzis (CRD #2640978, Registered Principal, Hallandale, Florida)
was fined $30,000 and suspended from association with any FINRA member in any capacity for two years.
The NAC imposed the sanctions following appeal of an Office of Hearing Officers (OHO) decision. The sanctions were based on findings that Hatzis provided incomplete and inaccurate information concerning his firm’s application for FINRA membership and misled FINRA.
This ends the information from FINRA’s website.
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide.
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Posted by Securities Lawyer in FINRA
The following information is from FINRA’s website under, “Disciplinary and Other FINRA Actions, May, 2012.”
Paul Andrew Fischetti (CRD #2300161, Registered Supervisor, Palm Harbor, Florida)
submitted a Letter of Acceptance, Waiver and Consent in which he was fined $5,000 and
suspended from association with any FINRA member in any capacity for six months. The fine must be paid either immediately upon Fischetti’s reassociation with a FINRA member firm following his suspension, or prior to the filing of any application or request for relief from any statutory disqualification, whichever is earlier.
Without admitting or denying the findings, Fischetti consented to the described sanctions and to the entry of findings that he failed to timely respond to FINRA requests for information.
The suspension is in effect from April 2, 2012, through October 1, 2012.
(FINRA Case #2010023912802)
This ends the information from FINRA’s website.
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide.
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Posted by Securities Lawyer in FINRA
The following information is from FINRA’s website under, “Disciplinary and Other FINRA Actions, May, 2012.”
Philip Christopher Crescimanno (CRD #4412658, Registered Representative, Land O’Lakes, Florida)
submitted an Offer of Settlement in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the allegations, Crescimanno consented to the described sanction and to the entry of findings that he operated an outside business without providing prompt written notice to his member firm and failed to obtain the firm’s approval.
These findings stated that by failing to report that he was an officer of his company and was involved in its operation, Crescimanno failed to comply with firm policies and procedures.
The findings also stated that Crescimanno failed to provide on-the-record testimony, materially impeding FINRA’s investigation.
(FINRA Case #2010021164401)
This ends the information from FINRA’s website.
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide.
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Posted by Securities Lawyer in FINRA
John Brian Busacca III (CRD #2302780, Registered Principal, Orlando, Florida)
was fined $30,000 and suspended from association with any FINRA member in any principal capacity for six months. The SEC sustained the sanctions following appeal of a NAC decision. The U.S. Court of Appeals denied Busacca’s petition for review.
The sanctions were based on findings that Busacca failed to reasonably supervise the firm’s operations system conversion and its operations activities to detect and/or prevent certain violations, including, but not limited to, inaccurate box counts, erroneous records of customer securities, failure to timely validate or take exception to transfer instructions, failure to make timely buy-ins, failure to timely liquidate unpaid-for customer securities positions in cash accounts in violation of Regulation T of the Federal Reserve Board, violation of margin requirements as prescribed by NASD Rule2520(c), and failure to report data to FINRA.
The findings stated that Busacca failed to reasonably supervise the firm’s operations considering his extensive travel and focus on business development despite his knowledge of the firm’s significant operational problems, the lack of adequate personnel in place to address the firm’s problems, and Busacca’s failure to diligently and promptly address all of the firm’s operational issues.
The findings also stated that Busacca, acting on his member firm’s behalf as its president, employed an unregistered CCO.
The suspension is in effect from April 16, 2012, through October 15, 2012.
(FINRA Case #E072005017201)
This information was obtained from FINRA’s website.
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide.
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Posted by Securities Lawyer in FINRA
In an article by Bruce Kelly of InvestmentNews.com, from May 10, 2011, he writes that the largest nontraded real estate investment trust in the industry, Inland American Real Estate Trust Inc., is under investigation by the Securities and Exchange Commission for potential violations of federal securities laws regarding its fees and administration.
The SEC’s investigation of Inland American, which has $11.2 billion in real estate assets, centers on the details of its fees.
Inland American “has learned that the SEC is conducting a nonpublic, formal fact-finding investigation to determine whether there have been violations of certain provisions of the federal securities laws,” the company said in its quarterly report. Those potential violations are “regarding the business manager fees, property management fees, transactions with affiliates, timing and amount of distributions paid to investors, determination of property impairments, and any decision regarding whether the company might become a self-administered REIT.”
“Inland American has not been accused of any wrongdoing and we are fully cooperating with the SEC,” said Nicole Spreck, a company spokeswoman. “Inland American does not believe it has done anything wrong and we continue to execute against our business plan and strategy. Beyond that we really can’t comment on the investigation itself because it is a confidential process at the request of the SEC and we plan to honor that request. “
Kelly goes on to say that the nontraded-REIT industry has seen a number of REITs cut their estimated values and drawn increased scrutiny from securities regulators over the issue. Inland American is one of five REITs that have been sponsored by The Inland American Real Estate Group of Companies Inc., according to that company’s website. At the end of last year, Inland American directly or indirectly owned 964 properties, representing 49 million square feet of retail industrial and office space. The REIT also owned 9,500 apartment units and 15,600 hotel rooms.
The InvestmentNews.com article reports that a related REIT, Retail Properties of America Inc., has also seen difficulties recently. Formerly known as Inland Western Retail Real Estate Trust Inc., Retail Properties of America had an initial public offering last month in which its shares were listed at an equivalent of $3.20 per share. Last June, that REIT’s management said its estimated value was $6.95 per share.
If you or a loved one experienced losses by investing in Inland American REIT, or any other nontraded REIT, at the advice of your broker, call (888)760-6552 or visit http://www.securitieslawyer.com.
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Posted by Securities Lawyer in FINRA
AXA Advisors, LLC, without admitting or denying the findings, prior to a regulatory hearing and without an adjudication of any issue, submitted a Letter of Acceptance, Waiver and Consent (“AWC”), to the Financial Industry Regulatory Authority (FINRA)which FINRA accepted. AXA Advisors, LLC, Respondent (AWC 2009020149901, March 13, 2012).
AXA Advisors, LLC employs aproximately 5,800 registered representatives at 1,300 branch offices; the firm is a subsidiary of AXA Financial, Inc. (a member of AXA Group). AXA is a general securities business, primarily engaged in the distribution of mutual funds, variable life insurance and variable annuity contracts. AXA has no prior relevant disciplinary history.
Registered Representative, Kenneth Neely, began in the securities industry in 1987, and was affiliated with several FINRA member firms. According to FINRA’s allegations, when Neely became associated with AXA in August 2007, he had been the subject of four customer complaints, including three arbitrations, concerning his business practices at prior employers. AXA was aware that he was experiencing financial difficulties. The AWC alleges that in 2001, while employed at UBS, Neely began a Ponzi scheme, which he continued during his employ with Stifel and then at AXA, where he persuaded customers to participate in a fictitious “St. Louis Investment Club” and to invest in an equally fictitious real estate investment trust, the “St. Charles REIT.” Following his July 2009 termination by AXA for admittedly commingling and converting funds, FINRA entered into an AWC with Neely (AWC/20080157230901 /July 23,2009) and Neely was barred from the industry.
FINRA concluded that AXA’s response to the red flags raised by Neely’s ‘spreadsheet,’ his explanations, and his background, constituted a failure to reasonably supervise him and a further failure to investigate adequately the various indications concerning his misconduct, in violation of NASD Rules 2010 and 2110.
FINRA imposed upon AXA the sanctions of a Censure and $100,000 fine.
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a family member have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: www.securitieslawyer.com.
Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.
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Posted by Securities Lawyer in FINRA
Today, in a Wall Street Journal article, Craig Karmin writes that the Securities and Exchange Commission (SEC), is currently investigating an $11 billion real-estate company for potential violations of federal securities laws, looking at the business of real estate investment trusts that aren’t traded on exchanges.
They are looking at the activity of Inland American Real Estate Trust to determine if the REIT committed violations related to management fees, the timing and amount of distributions paid to investors, and transactions with affiliates, according to a company filing with the SEC on Monday.
The WSJ article reported that Thomas McGuinness, an Inland American executive, said the company has been “fully cooperating” with the SEC and that “Inland American does not believe it has done anything improper and it continues to execute its business plan and strategy.”
Inland American, with $11.2 billion in property, is the largest in the non-traded REIT industry of about 90 nontraded REITs that have raised more than $73 billion, mostly from small investors. The investigation comes at a time when other nontraded
REITs are drawing attention from regulators or reporting weaker valuations and dividend cuts.
Karmin writes that the Financial Industry Regulatory Authority (FINRA), which oversees the financial advisers that market these REITs, has proposed new guidelines on adviser disclosure of REITs. Last year, Finra also sued New York brokerage David Lerner Associates Inc., which sold a series of funds known as Apple REITs. Finra reported that Lerner targeted unsophisticated investors with products ill-suited for them. Lerner has described the Finra action, which is still pending, as “rife with falsehoods.”
The WSJ article goes on to say that the SEC has previously said that it has been pressing some nontraded REITs to provide better disclosure on their share valuations. Unlike public stocks, whose values are set in the marketplace, valuations for nontraded REITs have varied. Some have relied on outside appraisers, others on their own management. Lately, some of the nontraded REITs have started to provide more up-to-date valuations, but this has occasionally resulted in sharp declines in share prices.
Karmin writes that Inland American, which closed the fund in 2009, owns 964 properties, including retail, hotels, office, industrial and apartment buildings. The REIT’s parent company, Inland Real Estate Group of Companies, is a 40-year-old real-estate company in Oak Brook, Ill., with $25 billion in assets. They were also the sponsor of a publicly traded REIT now known as Retail Properties of America, RPAI -0.22% an owner of strip malls and shopping centers. Last month, the REIT sold shares publicly at a price that struck many as lower than expected. The shares valued last June at $6.95 were valued during the IPO at $3.20, before a reverse stock split.
Many other nontraded REITs have disappointed their investors by cutting or eliminating dividends. KBS Real Estate Investment Trust I informed shareholders in March that it was suspending the monthly payments of 5.25% and it marked its share price down 30% to $5.16.
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a family member have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: www.securitieslawyer.com.
Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.
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Posted by Securities Lawyer in FINRA
Soreide Law Group, PLLC, is investigating claims against brokerages who sold their clients CIP Leveraged Fund Advisors, LLC. These investments may have been misrepresented to a more conservative client, as safe or low risk. Also, it is alleged that some brokers may have over-concentrated CIP in their clients’ portfolios.
CIP Leveraged Fund Advisors, LLC, also known as CIP, which stands for Cornerstone Industrial Properties, (managing partner Cornerstone Ventures) is a real estate investment fund manager for leveraged real estate investment funds. CIP also created and sold three non-traded, illiquid REITs, which may have tied their value into the performance of these funds–Cornerstone Healthcare Plus REIT (CHP), Cornerstone Healthcare Real Estate Funds (CHREF), and Meadowbrook Healthcare Properties (MHP).
Unfortunately for investors, CIP interests are now worthless. In February, 2010, Pacific Cornerstone Capital, Inc., of which CIP is an affiliated business, and it’s former CEO, Terry Roussel, were fined $750,000 for failing to provide investors with complete information on CIP Leveraged Fund Advisors, LLC.
The following firms have sold CIP Leveraged Fund according to the SEC’s Form D:
Advisory Group Equity Services, Ltd.
American Investors Company
Capital Financial Services, Inc.
Cullum & Burks Securities, Inc.
Cascade Financial Management Inc.
Pacific Cornerstone Capital, Inc.
Sammons Securities Company, LLC
Investors Capital Corp.
Equity Services, Inc.
Intervest International Equities Corporation
Private Consulting Group, Inc.
Investment Management Corporation
Royal Securities Company
Sigma Financial Corporation
USAllianz Securities, Inc.
Financial West Group
Harvest Capital LLC
Northland Securities, Inc.
Ameritas Investment Corp.
RBC Dain Rauscher Inc.
If you invested in CIP Leveraged Fund Advisors, LLC, with any of the above listed brokerages or any other brokerages, you may be able to potentially recover your losses through arbitration. For more information call Soreide Law Group at (888) 760-6552 or visit
http://www.securitieslawyer.com.
Free consultation, representing investors nationwide. No fee if no recovery.
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Posted by Securities Lawyer in FINRA
Soreide Law Group, PLLC, is currently investigating potential claims for the investors of JP Morgan’s Chase Private Client Group who were sold in-house proprietary products such as the Chase Strategic Portfolio.
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a family member have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: www.securitieslawyer.com.
Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.
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