John Herman Fick (CRD #4197483, Registered Representative, Fuquay-Varina, North Carolina)

was fined $5,000 and suspended from association with any FINRA member in any capacity for 18 months. This fine must be paid either upon Fick’s reassociation with a FINRA member firm after his suspension, or before the filing of any application or request for relief from any statutory disqualification, whichever is earlier. Without admitting or denying the findings, Fick has consented to the described sanctions and to the entry of findings that he signed customers’ names to insurance policy-related documents without the customers’ knowledge or consent.

The FINRA findings said Fick falsified an insurance application for a customer. Fick was no longer associated with a member firm, and he was unable to sell his former firm’s insurance products, and never submitted to the former firm the application that the customer had completed and returned to him. Fick filled out an insurance application for the customer from his present firm’s parent company, using an incorrect address for the customer’s residence address on the application and incorrect information for the customer on the application. Without authorization to do so, Fick signed the customer’s name on the insurance application and submitted it to the insurance company. An official from the company canceled it before a policy was issued. FINRA’s findings also stated that while associated with another member firm, Fick signed a customer’s name on an insurance policy receipt and a payment service form without authorization.  The firm terminated Fick when the unauthorized signatures were discovered.

The suspension is in effect from May 7, 2012, through November 6, 2013.

(FINRA Case #2010025071201 ) 

This information was on FINRA’s website under “Disciplinary and Other FINRA Actions, June, 2012. 

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients before FINRA nationwide. If you have sustained investment losses due to your stock broker/dealer, 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: http://www.securitieslawyer.com.

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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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The following article was posted on FINRA’s website:

WASHINGTON — It was announced that The Securities and Exchange Commission’s (SEC) Office of Investor Education and Advocacy and the Financial Industry Regulatory Authority (FINRA) have issued an investor alert called Structured Notes with Principal Protection: Note the Terms of Your Investment to educate investors about the risks of structured notes with principal protection, and to help them understand how these complex financial products work. The retail market for these notes has grown in recent years, and while these structured products have reassuring names, they are not risk-free.

 Structured notes with principal protection typically combine a zero-coupon bond — which pays no interest until the bond matures — with an option or other derivative product whose payoff is linked to an underlying asset, index or benchmark. The underlying asset, index or benchmark can vary widely, from commonly cited market benchmarks to currencies, commodities and spreads between interest rates. The investor is entitled to participate in a return that is linked to a specified change in the value of the underlying asset. However, investors should know that these notes might be structured in a way such that their upside exposure to the underlying asset, index or benchmark is limited or capped.

 ”Structured notes with principal protection contain risks that may surprise many investors and can have payout structures that are difficult to understand,” said Lori J. Schock, Director of the SEC’s Office of Investor Education and Advocacy. “This alert is a ‘must read’ for investors considering these products, especially those with the mistaken belief that these investments offer complete downside protection.”

 ”The current low interest rate environment might make the potentially higher yields offered by structured notes with principal protection enticing to investors,” said FINRA Senior Vice President for Investor Education John Gannon. “But retail investors should realize that chasing a higher yield by investing in these products could mean winding up with an expensive, risky, complex and illiquid investment.”

Investors who hold these notes until maturity will typically get back at least some of their investment, even if the underlying asset, index or benchmark declines. But protection levels vary, with some of these products guaranteeing as little as 10 percent — and any guarantee is only as good as the financial strength of the company that makes that promise.

 FINRA and the SEC’s Office of Investor Education and Advocacy are advising investors that structured notes with principal protection can have complicated pay-out structures that can make it hard to accurately assess their risk and potential for growth. Additionally, investors considering these notes should be aware that they could tie up their principal for upwards of a decade with the possibility of no profit on their initial investment.

Structured Notes with Principal Protection: Note the Terms of Your Investment also includes a list of questions investors should ask before investing in these products.

 The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. The SEC’s Office of Investor Education and Advocacy provides a variety of services and tools to address the problems and questions that individual investors may face. The Office conducts educational outreach, assists with investor complaints and inquiries, and facilitates individual investors in bringing their perspectives to the Commission and its staff.  

FINRA, the Financial Industry Regulatory Authority, is the largest non-governmental regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business – from registering and educating all industry participants to examining securities firms, writing and enforcing rules and the federal securities laws, informing and educating the investing public, providing trade reporting and other industry utilities, and administering the largest dispute resolution forum for investors and registered firms.

This very valuable information comes from FINRA’s website.

Securities Attorney, Lars Soreide, of Soreide Law, PLLC, has represented clients nationwide. If you or a family member feel you have become a victim of structured notes with principal protection loss, 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, or visit www.securitieslawyer.com.

Soreide Law Group, PLLC., representing investors nationwide before FINRA  the Financial Industry Regulatory Authority.

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