On June 5, 2013, the Securities and Exchange Commission (SEC) charged that Laidlaw Energy Group was targeted in an SEC trading suspension involving questionable penny stocks, and also charged the CEO, Michael B. Bartoszek, who allegedly profited from selling his shares while investors were unaware of the company’s financial struggles.

According to Reuters, Laidlaw Energy (Ticker Symbol: LLEG.PK) is in the development of independent power plants that generate electricity from renewable resources, with a particular emphasis on biomass power and combined heat and power projects. Laidlaw Energy is headquartered in New York, New York.

The SEC’s complaint states that Laidlaw Energy Group and its CEO Michael B. Bartoszek sold more than two billion shares of Laidlaw’s common stock in 35 issuances to three commonly controlled purchasers at deep discounts from the market price. Laidlaw did not register this stock offering with the SEC, and no exemptions from registration were applicable. Bartoszek knew that the purchasers were dumping the shares into the market usually within days or weeks of the purchases to make hundreds of thousands of dollars in profits. Laidlaw’s $1.2 million in proceeds from these transactions was essentially the sole source of funds for the company’s operations during most of its existence. The SEC suspended trading in Laidlaw stock in June 2011.

The SEC’s complaint goes on to say that Bartoszek violated insider trading laws when he personally sold more than 100 million shares of Laidlaw common stock from December, 2009, to June, 2011, and made more than $318,000 in profits. Bartoszek was in possession of non-public information while making these trades on the basis of his insider knowledge about Laidlaw’s poor financial condition, the illegal “fire sale” of more than 80 percent of Laidlaw’s stock, and adverse developments about Laidlaw’s business prospects. As a result of the volume of Bartoszek’s sales and the lack of current, publicly available information about the company, these sales also violated the registration requirements of the federal securities laws.

Additionally, the SEC alleges that Laidlaw and Bartoszek made false statements about the ownership of Laidlaw shares in SEC filings to register certain common stock following the trading suspension. Laidlaw and Bartoszek misled investors to believe that the purchasers of the two billion unregistered shares had acquired them to hold as an investment in the company. The filings falsely represented that these purchasers were the current “beneficial owner” of more than 80 percent of Laidlaw’s common stock, an assertion that only could have been true if the purchasers had not sold any of their Laidlaw stock. In fact, as Laidlaw and Bartoszek knew, the purchasers had long ago dumped all of the stock.

If you have experienced a financial loss due to a Laidlaw Energy, call Soreide Law Group for a free consultation with an attorney on how to potentially recovery your investment at: 888-760-6552.

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The Securities and Exchange Commission (SEC), filed an application with the United States District Court for the Northern District of Georgia on June 12, 2013, for an order to enforce investigative subpoenas that were served on Bridge Securities, LLC, Bridge Equity, LLC, Bridge Equity, Inc. and FOGFuels, Inc. of Atlanta, Georgia. All respondents are under the control of Paul James Marshall, Atlanta, Georgia.

The SEC alleges that on March 14, 2013, they issued a Formal Order Directing Private Investigation entitled “In the Matter of Bridge Securities, LLC.” According to the SEC’s application, the four entity respondents have failed to comply with validly issued and served subpoenas for documents relating to this investigation, which involves, but is not limited to, the possible offerings and sales of securities interests in one or more of the entity respondents, for which no registration statement was in effect and for which no exemption from registration is available. The investigation relates to possible false and misleading statements by the respondent companies and/or their principals in effecting those transactions in or inducing or attempting to induce the purchase or sale of securities.

The Soreide Law Group represents clients nationwide before FINRA. Call for a free consultation on how to potentially recover your financial losses call 888-760-6552.

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BLAKE BANCROFT RICHARDS (CRD #4051402)

Blake Richards of Buford, Georgia, was charged by the Securities and Exchange Commission (SEC) with violations of the federal securities laws for misappropriating investor funds. In May, the SEC filed an emergency action seeking a temporary restraining order and other emergency relief in federal court against Richards.

The SEC’s complaint alleges that, since (at least) 2008, Richards, a registered representative of a broker/dealer, misappropriated at least $2 million from at least seven investors. The majority of the misappropriated funds constituted retirement savings and/or life insurance proceeds from deceased spouses.

The SEC also alleges that Richards instructed investors to write out checks to entities under his control with the understanding that Richards would invest their funds in fixed income assets, variable annuities and/or common stock. The complaint alleges that none of these investments were ever made. None of the investments appeared on the client’s brokerage account statements, and Richards received no commission income from these investments. The complaint further alleges that Richards used the funds for personal use.

According to FINRA’s BrokerCheck, Blake Richards was previously registered with FINRA at the following brokerage firms:

LPL FINANCIAL LLC
CRD# 6413
BUFORD, GA
05/2009 – 05/2013

AMERIPRISE ADVISOR SERVICES, INC.
CRD# 5979
DULUTH, GA
02/2007 – 05/2009

A. G. EDWARDS & SONS, INC.
CRD# 4
BRASELTON, GA
08/2004 – 02/2007

If you experienced a financial loss due to Blake Richards, call Soreide Law Group for a free consultation with an attorney on how to potentially recovery your investment at: 888-760-6552.

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Recently, FINRA issued an alert regarding “alternative” funds. FINRA points out the key differences between “alternative” funds and the more conventional stocks and bonds.

A few points from FINRA on alternative funds:

Investment Structure: An alternative fund of funds may offer greater diversification than a single-strategy or even multi-strategy alt fund. At the same time, this greater diversification may lead to a flattening of return and potentially less transparency.

Strategy Risk Factors: In addition to the usual market- and investment-specific risks mutual funds have, alt funds carry risks from the strategies they use.

Investment Objectives: One fund might be designed to capitalize on management expertise in a specific area, while another might seek exposure to commodities, currencies and other alternative investments.

Operating Expenses: Alternative mutual funds can be pricey relative to their traditional managed fund peers; the average annual operating expense is around 1.5 percent per year.

Fund Manager: Learn as much as you can about the fund manager, such as how long he or she has managed the fund. FINRA recommends that the investor research the professional background of a fund manager using FINRA’s BrokerCheck.

Performance History: Many alternative funds have limited performance histories. Many were launched after 2008, so it is not known how they might perform in a down market.

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, represents clients nationwide before FINRA. If you or a loved one 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: 888-760-6552.

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Benjamin Chouchane, (CRD# 4590169) a former broker for LinkBrokers Derivatives Corp., a unit of London-based ICAP Plc (IAP), pleaded guilty to making millions of dollars by lying about the prices of securities bought and sold for clients as reported in a recent article in Bloomberg Businessweek.

Chouchane was arrested in October along with Marek Leszczynski (CRD# 3018771), another ex-LinkBrokers employee, and was charged by Manhattan prosecutors with scheming to commit securities and wire fraud. He pleaded guilty before a U.S. District Judge to one count of conspiracy. The prosecutors said that Chouchane, Leszczynski, and others misrepresented the prices at which securities were bought and sold, earning their employer illegal profits and bonuses for themselves.

Chouchane was indicted with Leszczynski in December on two counts of conspiracy to commit securities and wire fraud and one count of securities fraud. A third man, Henry Condron (CRD# 4231972), pleaded guilty in October to being part of the scheme.

Court records show Chouchane also agreed to forfeit $5 million earned as proceeds traceable to his crime. Sentencing will be Oct. 24. Chouchane faces a possible five-year prison term.

The U.S. Securities and Exchange Commission (SEC) alleged in a suit filed in October that the three men and a fourth former LinkBrokers employee, Gregory Reyftmann (CRD# 4645588), illegally took $18.7 million from customers by reporting fake execution prices on more than 36,000 transactions over four years according to the Bloomberg article.

FINRA records show the men all worked for LinkBrokers.

The following appeared on FINRA’s BrokerCheck:
Broker Benjamin Chouchane was previously registered with FINRA at the following brokerage firms:
LOUIS CAPITAL MARKETS, LP
CRD# 48013
NEW YORK, NY
04/2011 – 10/2012

LINKBROKERS DERIVATIVES CORPORATION
CRD# 123000
JERSEY CITY, NJ
02/2005 – 01/2011

REFCO SECURITIES, LLC
CRD# 14094
NEW YORK, NY
12/2002 – 02/2005

Broker Marek Leszczynski was previously registered with FINRA at the following brokerage firms:

MADISON CAPITAL MARKETS, INC.
CRD# 139515
MIAMI, FL
04/2011 – 10/2012

LINKBROKERS DERIVATIVES CORPORATION
CRD# 123000
JERSEY CITY, NJ
10/2005 – 12/2010

If you experienced a financial loss due to any of the above brokers with LinkBrokers Derivatives Corp, call Soreide Law Group for a free consultation with an attorney on how to potentially recovery your investment at: 888-760-6552.

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ROBERT GIST CRD# 716088

was permanently barred by FINRA for allegedly misappropriating millions dollars from 30 of his customers. This occurred, according to the FINRA report, from 2003 through 2011. Robert A. Gist, Atlanta, GA, allegedly told his clients that he would invest his clients’ financial investments in securities positions. Instead of investing the money, Robert Gist allegedly invested the clients’ money in ENCAP Technologies, LLC – which happened to be a company co-founded by Robert A. Gist. Robert Gist allegedly created and sent account statements with fictitious securities positions to his customers every six months. Gist also allegedly sold units of ENCAP Technologies, or used other investors funds, in order to make payments to his customers.

According to FINRA’s BrokerCheck, Robert Gist is no longer registered with FINRA. Gist was previously registered with FINRA at the following brokerage firms:

RESOURCE HORIZONS GROUP LLC
CRD# 104368
ATLANTA, GA
03/2001 – 12/2011

CENTENNIAL CAPITAL MANAGEMENT, INC.
CRD# 38988
ATLANTA, GA
11/1997 – 03/2001

CADARET, GRANT & CO., INC.
CRD# 10641
SYRACUSE, NY
07/1993 – 09/1997

If you have experienced a financial loss due to Robert Gist, a former broker with Resource Horizons Group, LLC, call Soreide Law Group at (888) 760-6552 for a free consultation with an attorney.

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In an effort to protect senior citizens from money swindles, financial regulators have released a new guide for teaching seniors how to detect financial scams and avoid being exploited in a recent article from LifeHealthPRO.

Investor Protection Trust (IPT) reported the findings of a recent survey of doctors and nurses and elder financial fraud.

The Federal Deposit Insurance Corp. and the Consumer Financial Protection Bureau developed the curriculum for instructing groups of seniors and their caregivers. It can be used by employees of financial firms, adult protective service agencies, senior advocate groups and law enforcement personnel, the agencies said Wednesday.

This curriculum, is titled “Money Smart for Older Adults.” The guide notes scams that seniors should look out for, for example, people asking for their bank account numbers over the phone.

The results of a recent online survey of 603 doctors and nurses across the country said that 21 percent – are aware that they are often dealing with elderly victims of investment fraud/financial exploitation. Over 60 percent said that research linking mild cognitive impairment to financial scams and seniors is consistent with what they see in their practice, and 92 percent supported the notion that mild cognitive impairment often makes seniors more vulnerable to investment fraud.

The other significant findings from the survey included:

•More than four out of five doctors/nurses (84 percent) are willing to refer an elderly patient who may be the victim of investment fraud to those who may be able to help them with their financial affairs or to the proper authorities for help.
•About three out of five doctors (61 percent) would be interested in continuing medical education credits to learn more about spotting the signs of investment fraud/financial exploitation of the elderly.
•More than four out of five doctors/nurses (81 percent) think that doctors have an important role in recognizing and reporting the signs of investment fraud/financial exploitation targeting the elderly.
•More than nine out of 10 doctors/nurses (91 percent) think that older Americans are vulnerable to investment fraud/financial exploitation.
•Four out of five doctors/nurses (82 percent) say that investment fraud/financial exploitation targeting the elderly is a serious problem.

In a survey from 2010, IPT found that more than 7 million senior Americans have already been the victim of a financial fraud.

If you know a senior who has experienced a financial loss due to their stockbroker or financial advisor’s recommendations, call Soreide Law Group for a free consultation with an attorney at: 888-760-6552.

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John Thomas Financial CEO, Anastasios “Tommy” Belesis, has been under the scrutiny of the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority Inc. (FINRA) over the past few months. Now he is in danger of losing his office on 14 Wall Street, where John Thomas occupies the entire 23rd floor, according to a report in the New York Post. John Thomas is also suffering a recent “slew of employee defections,” according to the Post. Those leaving include head of research Wayne Kaufman.

“The 38,705-square-foot space has been on the market for two weeks through real estate brokerage CBRE [Inc.], according to the real estate listing service CoStar Group,” the Post reported.

Belesis built an independent broker-dealer across the street from the New York Stock Exchange. He is a flamboyant, sharp-dressed executive with a yen for an “old school” type of Wall Street featuring hard-charging brokers, and he had 15 minutes of fame with a walk-on roll in an Oliver Stone movie.

In March, the SEC charged Belesis and a Houston radio host with deceiving investors in two hedge funds. Then FINRA filed a complaint in April alleging that Belesis had harassed John Thomas brokers.

Belesis opened John Thomas in 2007 and moved to 14 Wall Street two years later, according to the Post. At its peak, the firm had 200 brokers. To motivate its sales force, John Thomas in the mornings blasted “Eye of the Tiger” and other “Rocky” themes, according to the Post.

If you were a client of Thomas “Tommy” Belesis, and/or his firm, John Thomas Financial (JTF), you may have a potential claim for recovery. Call Soreide Law Group for a free consultation with an attorney: 888-760-6552.

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Municipal bonds (also known as “munis”) are beginning to look tempting — but investors who buy munis in a hurry can sometimes hand over their first year’s worth of income to their broker, writes Jason Zweig in a recent article for Wall Street Journal.

However, with a few simple steps, you can control your risk and maximize your net return.

The health of many municipalities is improving even as tax-free bonds offer relatively attractive returns. Yields on the highest-quality, widely traded munis, triple-A-rated, 10-year “general obligation” bonds, have risen by 0.45 percentage point since May 1, according to a senior market strategist at Municipal Market Data.

While U.S. Treasury yields have risen recently, “muni yields have truly skyrocketed,” says a chief municipal strategist. “We’re approaching the levels where retail investors will start to raise their hands again. The pent-up retail demand is very strong.”

Investors should proceed with caution, or they can lose their investment. Unlike stocks, the investor doesn’t pay a commission when they buy a municipal bond. Instead, the investor pays a “markup”—the difference between the broker’s cost and the price the investor pays.

Most brokers don’t disclose their markup. Because they focus too much on yield and not enough on price, “most retail investors have no idea how much they’re getting charged on these trades,” says an asset manager in New York specializing in municipal bonds.

Markups can be huge. The WSJ article points out that for one out of 20 trades, people who bought $250,000 or less in municipal bonds paid a markup of at least 3.04%—or approximately a full year’s worth of interest income at today’s rates. By comparison, you will pay less than $10 in commission to buy a stock at most online brokers, or 0.004% on a $250,000 purchase; a typical mutual fund charges management fees of about 1% a year.

Of the approximately 1.2 million issues outstanding, only about 14,000 trade at all on any given day, according to the Municipal Securities Rulemaking Board, a regulatory body that oversees the muni market.

Brokers rightly point out that it can be difficult and costly to find any particular bond on a given day. Federal rules require that markups be “fair and reasonable” but don’t define those terms exactly.

There is no reason why you should pay a much higher markup than someone else recently did for a similar-size trade in the same security writes Zweig.

The MSRB maintains a website, Electronic Municipal Market Access, or Emma, that shines some much-needed sunlight into this shadowy world.

“[Brokers] respond if they know you’re looking over their shoulder,” says Ernesto Lanza, the deputy executive director of the MSRB. “If you’re buying a bond, look at all the ‘customer bought’ trades to see what other customers paid. Then say to your dealer, ‘Try to match this.’”

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The SEC, Securities and Exchange Commission, and FINRA, the Financial Industry Regulatory Authority Inc. warned investors yesterday that e-mail spam designed to dupe investors into “pump-and-dump” stock offerings is increasing. “Pump-and-dump” is defined as “an illegal practice in which investors attempt to artificially inflate the price of a stock by disseminating inaccurate or misleading information. These investors have a long position on the stock in question and seek to inflate the price in order to sell their shares for a higher profit. Pumping and dumping violates securities laws and can lead to hefty fines. Victims often stand to lose a good deal on pumping and dumping as the price of the stock usually falls to its previous level in a relatively short period of time.”

These promoters claim to have inside information or special access to new technology or investing strategies in the hopes of luring in investors and driving up the company’s stock price. They then sell the shares for a profit.

“E-mail stock spamming is back in high gear,” the regulators said in an Investor Alert, citing a recent report by McAfee, a computer security subsidiary of Intel Corp. These messages also are being sent through social media, such as Facebook and Twitter.

“Don’t fall for these scams,” the alert states. “They are the ‘inbox’ equivalent of a boiler room sales operation, hounding investors with potentially false information about a company. Just hit the delete key.”

If you have experienced a financial loss due to a “pump-and-dump” scheme, call Soreide Law Group for a free consultation with an attorney on how to potentially recovery your investment at: 888-760-6552.

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