Lars Soreide, Esq, of Soreide Law Group, PLLC, had a recent FINRA Arbitration award published in the latest edition, May, 2013, of the PIABA Bar Journal. Only the most significant cases are chosen for publication in PIABA.
Mr. Soreide was the Claimant’s counsel and the Respondent was Wachovia Securities, dba Wells Fargo Advisors LLC, and the broker. The claimant asserted negligence, breach of fiduciary duty, negligent supervision, breach of contract, and fraud in connection with their investment in Fannie Mae preferred stock (FNMA PFD PERP SER S 8.25%). The Claimant was seeking $50,000. The Respondent had denied the allegations.
The FINRA Arbitration Panel found Wachovia liable on claims of negligence, negligent supervision, fraud, and breach of contract. It entered an award for rescission requiring that Wachovia repurchase all shares of the preferred stock from the Claimant at the original price totaling $48,399.70. The claims against the broker were denied. All hearing fees were assessed against Wachovia.
The PIABA Bar Journal adds, “This case is significant because it provides a template for other Fannie Mae preferred securities claims. The arbitrator granted full rescission and put the liability squarely on Wachovia’s research and marketing efforts while exonerating the broker.”

If you have experienced a financial loss due to your 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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In a May 7th., 2013 article from FINRA’s website, it was reported that according to the FBI’s latest Financial Crimes Report to the Public, investment fraud has increased by 52 percent since 2008. Unfortunately, investment fraud is largely underreported, and often targeted are retired citizens and seniors. 77 million baby boomers will be retiring over the next 20 years, and incidences of investment fraud are likely to increase further.

It was announced in response to this trend that the National Crime Prevention Council (NCPC) and the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation are partnering to help reduce investment fraud among consumers. The two organizations will establish Investment Fraud Prevention Programs at the state level through NCPC’s network of state crime prevention associations. The partnership will allow law enforcement officers to become more familiar with “Outsmarting Investment Fraud” tools, so that they are better equipped to address investment fraud in their communities. Investors will gain increased skills to prevent and report investment fraud.

The NCPC and the FINRA Foundation will be providing investment fraud educational materials free of charge to a vast network of law enforcement personnel and crime prevention practitioners across the nation. Working with partners, including AARP and the Consumer Fraud Research Group, the FINRA Foundation has conducted extensive research exploring why people fall prey to investment fraud and who is most often targeted. With the information gathered from its research, the Foundation has employed national, state, and grassroots partnerships to develop and distribute fraud prevention resources and conduct outreach to potential investors.

If you have experienced a financial loss due to your 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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In a May 9th., 2013 article from Reuters, Suzanne Barlyn writes about the three men, who made a living in the U.S. securities industry, and how it’s not easy to successfully reverse disciplinary sanctions from FINRA. Penalties are likely to stick, and the consequences can drag out for years.

According to the Financial Industry Regulatory Authority (FINRA), the decisions to revoke or suspend the licenses were appropriate, because the alleged wrongdoing – from allegedly lying on regulatory forms to improperly trading an account – played out repeatedly over months or years.

While the three facing the sanctions may feel FINRA was too harsh, the outcome is a reminder to those who make their living in the securities business that it is best to avoid being at the mercy of FINRA. The record shows that reversing or reducing FINRA’s sanctions on appeal, especially the most severe penalties, is unusual.

FINRA’s appellate body, the National Adjudicatory Council (NAC), reviewed sanctions imposed against 37 individuals and firms from October 2010 through March 2012. The NAC, which hears appeals filed by parties or selects decisions to review, upheld or increased sanctions for about 70 percent, or 26 of them.

Suzanne Barlyn writes that these are three lessons to be learned from the stories behind April’s appellate decisions:

*COME CLEAN ABOUT OUTSIDE ACCOUNTS:

Jeff Ng, who worked in a compliance role for AllianceBernstein Investments Inc, allegedly failed to tell the firm about four brokerage accounts he had at other firms, according to an April 24 NAC opinion. Ng, whose job involved monitoring whether clients’ portfolios were in synch with their investing plans, also did not tell the other firms that he worked in the securities business. Ng, on one account application, wrote that he was a “landscaper.”

FINRA requires licensed securities professionals to tell their firms about outside accounts. They must also tell the outside brokerage where they open the account that they work in the securities industry. That is because brokerages must monitor employees’ securities transactions – even those employees make through other firms – to prevent wrongdoing, such as engaging in risky private securities transactions with customers. Some firms prohibit employees from having accounts elsewhere.

*DON’T HIDE THE PAST, 36 TIMES

The regulatory problems during the 1980s came back to haunt Joseph Amundsen in 2011, when FINRA permanently barred him from the industry for those alleged offenses. He appealed the FINRA sanction twice, including most recently, to the U.S. Securities and Exchange Commission. Amundsen, failed to tell FINRA that California had revoked his accounting license in 1986, according to an April 18 SEC opinion. Earlier, a court prohibited Amundsen from practicing before the SEC for allegedly issuing a false company audit report.

Amundsen, of Easton, Pennsylvania, later became relicensed as an accountant and obtained several types of securities industry licenses. But he did not mention his earlier troubles in response to questions on a form submitted to FINRA 36 different times through various employers.

The NAC, which upheld the bar last year, wrote that “Amundsen lacks the integrity and fitness” to work in the securities industry. The SEC upheld the bar and said his failure to disclose was “egregious.”

*EXCESSIVE TRADING STANDS OUT:

Taking too many liberties with a new client’s account led to a permanent bar by FINRA for Alan Davidofsky, a former Oppenheimer broker in Delray Beach, Florida. The 57-year-old client had conservative investment goals for a $127,000 account when Davidofsky became her adviser in 2007. Davidofsky allegedly recommended a riskier strategy, according to a NAC opinion on April 26. Her account sank 90 percent after a 2008 market dive. She paid more than $31,000 in commissions during the previous 10 months. Davidofsky made 104 trades during that time, including 90 without the client’s permission, according to the NAC, which selected the case for review. Oppenheimer terminated Davidofsky for the conduct in 2008 and reimbursed the client $100,000.

“Serious sanctions are needed to protect the investing public,” the NAC wrote.

Soreide Law Group, PLLC, represents clients nationwide before FINRA. Call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552.

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On May 8th., 2013, FINRA, the Financial Industry Regulatory Authority Inc. fined three financial companies $900,000 in total, for failing to stop money laundering and other suspicious transactions, and officials at the firms were fined a total of $100,000.

“Today’s actions reinforce FINRA’s continued focus on firms’ ability to identify and respond to potential misuse and abuse of the markets,” said Brad Bennett, FINRA executive vice president and chief of enforcement. “Firms must have adequate anti-money-laundering and supervisory systems in place to detect and report suspicious transactions.”

FINRA fined Atlas One Financial Group LLC $350,000 and its former chief compliance officer, Napoleon Arturo Aponte, $25,000 and suspended him for three months. Also, FINRA fined Firstrade Securities Inc. $300,000, and World Trade Financial Corp. $250,000. World Trade Financial, president and owner Rodney Michel was fined $35,000 and suspended for four months, and chief compliance officer Frank Brickell was fined $40,000 and suspended for nine months. Minority owner Jason Adams was fined $5,000 and suspended for three months.
The firms and officials settled with FINRA without admitting or denying the charges.

FINRA claimed that Atlas One failed to detect suspicious activities in several accounts between February 2007 and May 2011. The Justice Department had opened a money-laundering investigation in 2007 on six accounts controlled by one customer, according to FINRA. Atlas One did not look into any other accounts — with the same Costa Rican mailing address — that were not involved in the Justice review. FINRA claimed Firstrade failed to detect suspicious trading activity by Chinese issuers.

World Trade Financial and its executives were fined for not implementing and enforcing a supervisory system for a penny stock operation that generated more than $61 million between March 2009 and August 2011.

If you or a family member have sustained investment losses due to your stock broker or financial advisor’s recommendations, call Soreide Law Group for a free consultation on how to potentially recover your losses at 888-760-6552.

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Did your broker/financial advisor sell you an investment in Diversified Lending Group, Inc., and Applied Equities, Inc? The SEC alleges that DLG and AEI raised at least $216 million from hundreds of investors nationwide, many of whom are senior citizens, by promising guaranteed high returns through real estate-related investments. The complaint alleges that the directors diverted substantial investor money to ventures unrelated to real estate.

“Investors were lured into this alleged scheme based on misrepresentations about the true nature of the securities and the defendants’ business,” said Rosalind Tyson, Regional Director of the SEC’s Los Angeles Regional Office. “Our emergency action today demonstrates that the SEC will act aggressively in fraud situations like this to preserve assets for investors.”

The SEC’s complaint charges these companies with selling securities in the form of one- or five-year “Secured Investment Notes,” representing that DLG pools investor money and invests it 70 to 80 percent in real estate property and 20 to 30 percent in mortgage lending. The SEC alleges that once investors invested in the Notes, defendants continued to represent to them that their money was being used as represented, that DLG’s investments were profitable, that their money was safe, and that returns of either 9 percent or 12 percent were guaranteed. These investments sold may have been in violation of State and Federal securities Laws.

However, the SEC’s complaint alleges that these companies did not invest DLG investor proceeds as represented. Instead, they diverted a substantial amount of investor money to undisclosed business ventures unrelated to real property or mortgage lending.

Neither DLG nor AEI have ever registered with the SEC. The Commission’s complaint alleges that DLG, and AEI violated the antifraud provisions of the federal securities laws, and in addition to the emergency and interim relief that has been obtained, the SEC seeks a final judgment permanently enjoining the defendants from violating the antifraud provisions and ordering them to pay disgorgement of ill-gotten gains and financial penalties.

If your broker or financial advisor sold you this investment contact Soreide Law Group today to learn more about your rights. If you were a victim of their fraudulent investments contact us today toll free at 888-760-6552. We represent investors nationwide.

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Soreide Law Group is currently investigating claims against Great American Advisors, and its former broker, David Brouwer. Brouwer allegedly had made misrepresentations about equity-linked notes that he recommended to some of his clients in 2007 and 2008.

In 2011, the SEC issued an Order Instituting Administrative and Cease-and-Desist Proceedings against Brouwer, which barred Brouwer from any broker/dealer and investment advisor.

According to FINRA’s BrokerCheck, Brouwer is not currently registered with FINRA.:
DAVID G. BROUWER
CRD# 1351773

Brouwer was previously registered with FINRA at the following brokerage firms:
GREAT AMERICAN ADVISORS, INC.
CRD# 36451
HOMESTEAD, FL
05/2002 – 09/2009

EDWARD JONES
CRD# 250
ST. LOUIS, MO
05/1985 – 04/2000

If you sustained investment losses with Great American Advisors and David Brouwer, call for a free consultation on how to potentially recover your losses at: 888-760-6552.

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The Allen Konrad Meridian Redevelopment Value Fund is a limited partnership formed for the purpose of investing in real estate and other entities. This fund was initially offered through Alterna Wealth Management (formerly Allen Konrad Asset Management) located in Boca Raton, Florida. There is often high risk, and may have been marketed to a client who wished to maintain a low risk portfolio, due to age or future objectives. Limited partnerships often have high commissions and fees, which can make it beneficial to the financial advisors who recommend them. Consequently, clients may have claims against the brokerage firms and brokers who recommended these investments.

If your broker/dealer recommended Allen Konrad Meridian Redevelopment Value Fund, you may be able to recover your investment losses through a FINRA arbitration. To speak with an attorney call Soreide Law Group at 888-760-6552.

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There were allegations filed with the Financial Industry Regulatory Authority or FINRA Dispute Resolution, which state that a broker-dealer with AXA Advisors in Orange County, California, persuaded a retired couple, and a retired woman, to invest in essentially worthless and inappropriate investments. This alleged Ponzi scheme preyed on retired Filipino-Americans.

The clients allege that the former AXA advisor guided them to invest $50,000 in Striker Petroleum in 2008. In 2009, the Securities & Exchange Commission filed suit against Striker alleging that Striker was essentially a Ponzi scheme. In 2011, the U.S. District Court in Dallas issued an order that investments in Striker were “essentially worthless” and that losses in those investments were “the result of fraud.” Also, the SEC issued a Cease and Desist order against the former AXA broker-dealer for selling other Ponzi-scheme style investments in Striker and other oil and gas properties.

As a result of this misrepresentation of Striker as a “safe investment,” the retired couple lost their entire investment.

Likewise, the former AXA broker-dealer advised the retired woman to invest $36,000 from her 401k into Halek Energy, which she also described as a “very safe investment” with working oil and gas wells in Texas. It further alleges that the former advisor also sold an unsuitable variable annuity that has locked up her assets for 10 years, until she is 80 years old.

Halek Energy, like Striker, was essentially worthless and the retired woman lost her entire investment.

FINRA claims seek damages against both the broker-dealer and AXA for the loss of the client’s investments, as well as compensation for their losses, penalties, fees and costs.

If you or a family member have sustained investment losses due to your stock broker or financial advisor’s recommendations in Striker Petroleum or Halek Energy, call for a free consultation on how to potentially recover your losses. To speak with an attorney call Soreide Law Group at 888-760-6552.

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FINRA, the Financial Industry Regulatory Authority Inc., is alerting broker-dealers to a number of shortcomings in how they communicate with investors about non-traded real estate investment trusts (REITs).

According to FINRA, broker-dealers are falling short in a some areas, including distributing materials that contain misleading and inaccurate statements about the potentials of investing in illiquid real estate programs.

“Recent reviews by FINRA of communications with the public regarding real estate programs have revealed deficiencies,” FINRA said. These broker-dealer communications “have emphasized the distributions paid by a real estate program and failed to adequately explain that some of the distribution constitutes return of principal,” the FINRA notice said.

FINRA’s notice to members is the latest effort to improve the sales practices around and increase transparency of illiquid REITs, which are sold almost exclusively through independent broker-dealers such as LPL Financial LLC, and Ameriprise Financial Services Inc.

Some broker-dealers may be downplaying the risks associated with such REITs. “In addition, some communications have not provided sufficient discussions of the risks associated with investing in the products in order to balance the presentation of benefits.”

Disclosure should be more accurate and explain how the REITs operate, FINRA said. Descriptions of the REITs in communications to clients also should be consistent with the REIT’s prospectus.

“In order to be fair and balanced, firm communications concerning a real estate program may not include an annualized distribution rate until the program has paid distributions that are, on an annualized basis, at a minimum equal to that rate for at least two consecutive full quarterly periods,” the FINRA notice said.

If you or a family member have sustained investment losses due to your stock broker or financial advisor’s recommendations regarding non-traded REITs, private placements, or other illiquid, complex products, call for a free consultation on how to potentially recover your losses. To speak with an attorney call Soreide Law Group at 888-760-6552.

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Soreide Law Group, PLLC, is committed to helping victims recover investment losses due to fraudulent or negligent conduct on behalf of their broker or financial advisors. We are able to represent investors nationwide in the handling of their securities arbitration claims. Our practice focuses on recovering investment losses due to stockbroker negligence or securities fraud. The following stocks have an overall sell rating. If you lost more than $50,000 in any of these stocks that your BROKER RECOMMENDED, call for a free consultation with an attorney at: 888-760-6552.

ACI Arch Coal Inc $1.0B Energy Oil, Gas & Consumable Fuels 2.45% +1.7
ACTG Acacia Research Corp $1.2B Industrials Professional Services 2.12% +1.1
AMD Advanced Micro Devices, Inc. $2.4B Information Technology Semiconductors & Semiconductor Equipment — +2.2
AMRN Amarin Corporation plc (ADR) $1.0B Health Care Biotechnology — +1.5
ANR Alpha Natural Resources, Inc. $1.6B Energy Oil, Gas & Consumable Fuels — +1.7
APOL Apollo Group Inc $2.0B Consumer Discretionary Diversified Consumer Services — +0.3
ATI Allegheny Technologies Incorporated $2.8B Materials Metals & Mining 2.77% +1.8
AU AngloGold Ashanti Limited (ADR) $7.3B Materials Metals & Mining 1.84% +0.5
AUQ AuRico Gold Inc $1.2B Materials Metals & Mining 3.21% +0.9
BVN Compania de Minas Buenaventura SA (ADR) $5.5B Materials Metals & Mining 2.44% +0.6
CLF Cliffs Natural Resources Inc $2.9B Materials Metals & Mining 2.95% +2.3
EGO Eldorado Gold Corp (USA) $5.4B Materials Metals & Mining 1.87% +0.5
FFIV F5 Networks, Inc. $5.9B Information Technology Communications Equipment — +1.3
GRPN Groupon Inc $3.9B Consumer Discretionary Internet & Catalog Retail — —
HK Halcon Resources Corp $2.1B Energy Oil, Gas & Consumable Fuels — +1.8
HMY Harmony Gold Mining Co. (ADR) $2.1B Materials Metals & Mining 2.34% +0.2
IAG IAMGOLD Corporation (USA) $2.1B Materials Metals & Mining 4.56% +0.5
JCP J.C. Penney Company, Inc. $3.7B Consumer Discretionary Multiline Retail — +1.8
KCG Knight Capital Group Inc. $1.3B Financials Capital Markets — +0.2
KGC Kinross Gold Corporation (USA) $6.1B Materials Metals & Mining 2.98% +0.5
MCP Molycorp Inc $1.1B Materials Metals & Mining — —
MTL Mechel OAO (ADR) $1.6B Materials Metals & Mining 6.41% +2.9
NFX Newfield Exploration Co. $3.0B Energy Oil, Gas & Consumable Fuels — +1.4
OIBR Oi SA (ADR) $2.6B Telecommunication Services Diversified Telecommunication Services 13.07% +1.2
PGH Pengrowth Energy Corp (USA) $2.6B Energy Oil, Gas & Consumable Fuels 9.39% +1.4
PWE Penn West Petroleum Ltd (USA) $4.5B Energy Oil, Gas & Consumable Fuels 11.72% +1.4
QSII Quality Systems, Inc. $1.1B Health Care Health Care Technology 3.94% +0.7
RENN Renren Inc $1.0B Information Technology Internet Software & Services — —
SHCAY Sharp Corporation (ADR) $3.9B Consumer Discretionary Household Durables — +1.0
SID Companhia Siderurgica Nacional (ADR) $5.7B Materials Metals & Mining 2.55% +1.8
TIBX Tibco Software Inc. $3.2B Information Technology Software — +1.4
TROX Tronox Ltd $2.3B Materials Chemicals 4.92% —
VVUS VIVUS, Inc. $1.3B Health Care Pharmaceuticals — +1.2
WLT Walter Energy, Inc. $1.1B Materials Metals & Mining 2.83% +1.9
X United States Steel Corporation $2.5B Materials Metals & Mining 1.16% +2.3
YZC Yanzhou Coal Mining Co Ltd (ADR) $2.0B Energy Oil, Gas & Consumable Fuels 8.72% +2.2
ZNGA Zynga Inc $2.5B Information Technology Software —

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