TAG | elder insurance scam
A Financial Industry Regulatory Authority (FINRA) arbitration panel ordered a former employee of Merrill Lynch, Deutsche Bank, and Oppenheimer & Co. to pay nearly $11 million to an investor who alleged his broker, Karl Hahn, misrepresented securities and made excessive trades.
The investor’s case against the former broker Karl Hahn, stems from transactions involving covered calls, a variable annuity and other investments. The investor filed the case in 2011, also named Bank of America Corp.’s Merrill Lynch unit, Deutsche Bank Securities Inc., a unit of Deutsche Bank AG and Oppenheimer & Co.
Karl Hahn worked at the three firms consecutively for approximately seven years between 2004 and 2011, according to FINRA’s BrokerCheck. The case against Merrill was settled, while those against Deutsche Bank and Oppenheimer were dismissed. Hahn’s alleged conduct toward the investor took place while the broker worked at all three of the firms.
The FINRA arbitrators awarded the investor approximately $4.1 million in compensatory damages and $6.4 million in punitive damages, according to the ruling. This is the second decision against Hahn in two months. FINRA arbitrators, held Deutsche Bank and Hahn jointly responsible in February in a $934,000 ruling on behalf of a couple and their trusts, who he allegedly swindled in a multi million-dollar insurance deal.
According to FINRA’s BrokerCheck, Karl Hahn was previously registered with FINRA at the following brokerage firms:
OPPENHEIMER & CO. INC.
06/2009 – 03/2011
DEUTSCHE BANK SECURITIES INC.
02/2008 – 06/2009
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
09/2004 – 02/2008
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.
Bank of America Merrill Lynch · covered calls · Deutsche Bank · Deutsche Bank loss lawyer · elder insurance scam · excessive trades by broker · finra securities arbitration lawyer · insurance scams by brokers · Karl Hahn · Karl Hahn fined by FINRA · Merrill Lynch losses · misrepresented securities · Oppenheimer & Co Losses Lawyer · variable annuity loss lawyer
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In an InvestementNews.com article by Darla Mercado, she writes that a group of mostly elderly investors trapped in a $7 million scam involving so-called “private annuities” will be getting back only a sliver of their original investment.
The trustee overseeing the bankruptcy case of insurance agent John F. Langford of Amarillo, Texas, revealed that most of the clients in a fraud masterminded by the agent will be getting back only 2.8 cents for every dollar they had invested.
Langford is currently doing time — 15 years in prison — after pleading guilty last fall to 15 counts of securities fraud and other charges. The Texas State Securities Board said that he stole close to $7 million from dozens of clients through the sale of unregistered products, including phony “private annuities” and promissory notes that promised interest rates as high as 9%.
Ms. Mercado writes that after going through Mr. Langford’s assets, which included an $85,000 Jackson National Life Insurance Co. annuity and $2,600 in furs and jewelry, trustee Kent Ries was able to scrape up $212,126 from which to pay off unsecured creditors’ claims. The jailed insurance agent owes money to 111 individuals and companies.
The InvestmentNews.com article said that among the largest claims Mr. Langford is facing: a $1.24 million claim from Hazel Carter, guardian of investor Ruth Alice Roach–Worak. Ms. Carter pursued Mr. Langford in federal bankruptcy court in Texas, arguing that Mr. Langford had made misrepresentations to Ms. Roach-Worak when selling “private annuities” to her between 2004 and 2006. Ms. Roach-Worak, who was over age 80 at the time, had chipped in about $950,000 in purchasing the phony investments, many of which weren’t expected to come due until she was over 90. Ms. Carter is expected to net only $35,765 out of her million dollar claim, according to trustee documents.
Mercado writes that a spokesman for the Texas State Securities Board, noted that in many fraud cases, victims manage to get only a few cents on the dollar. “There’s generally little recovery in fraud cases,” he said. “This fraud has gone on for a while, and Mr. Langford made a number of Ponzi-type payments. The money disappeared, and this is why it’s critically important for investors to check if the person and the investment are registered before making an investment.” He also noted that often victims make the mistake of purchasing unregistered investments from insurance agents, assuming that “because they’re involved in the financial field, they’re authorized to sell securities.”
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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