Securities Lawyer Blog | Victim of Fraud?

TAG | private placements

Mar/13

19

Rep Fined and Suspended by FINRA for Commingling Funds

Comments off · Posted by Securities Lawyer in FINRA

Soreide Law Group, PLLC, a Securities Arbitration Law Firm, (888) 760-6552, found the following information on FINRA’s website under “Disciplinary and Other FINRA Actions, March, 2013.”

Robert Keith Brooks aka Robert Keith Stuart (CRD #1571789, Registered Principal, Miami, Florida)
was fined $7,500 and suspended from association with any FINRA member in any capacity for two months. Without admitting or denying the findings, Brooks consented to the described sanctions and to the entry of findings that he commingled his personal funds with investors’ funds for an oil-and-gas offering he solicited through a private placement memorandum.

Brooks raised $87,633.50, which he deposited into a bank account designated as an operating account for the oil-and-gas project. Brooks used the account to pay expenses related to the oil-and-gas project. During the same time period, Brooks deposited $8,912.50 of his personal funds into the bank account where the investors’ funds were deposited, thus commingling the funds.

The suspension is in effect from February 4, 2013, through April 3, 2013.
(FINRA Case #2011030168001)

The following information is from FINRA’s BrokerCheck:

Brooks is currently employed by and registered with the following FINRA Firm(s):

FREEDOM INVESTORS CORP.
333 BISHOPS WAY, STE 122
BROOKFIELD, WI 53005
CRD# 23714
Registered with this firm since: 1/20/2012

This broker was previously registered with FINRA at the following brokerage firms:

EZ STOCKS, INC.
CRD# 103866
BROOKFIELD, WI
02/2011 – 06/2012

RICHFIELD ORION INTERNATIONAL, INC.
CRD# 24433
MIAMI, FL
07/2008 – 02/2009

SOURCE CAPITAL GROUP, INC.
CRD# 36719
MIAMI, FL
08/2007 – 05/2008

This ends the information from the FINRA website.

Call Soreide Law Group for a free consultation with an attorney on how to potentially recover your investment losses at 888-760-6552.

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Feb/13

12

LPL REIT INVESTORS WARNING!!!!

Comments off · Posted by Securities Lawyer in FINRA

In an article in the Wall Street Journal, Feb. 11, 2013, Matthew Heimer writes that ever since the Federal Reserve started pushing interest rates to new lows, it’s been a common theme for retirees and other conservative investors accepting more risk to get a decent income from their portfolios. Last week LPL Financial Holdings agreed with state regulators to pay $2.5 million in fines and restitution for improperly supervising brokers who sold non-traded real estate investment trusts. (LPL neither admitted nor denied wrongdoing.) Non-traded REITs are high-yielding and popular – assets invested in the product have jumped about 50% since 2009, to $65 billion. But they’re for investors to track and value, since they don’t trade on public exchanges.

As Nathaniel Popper reports this week in the New York Times, opaque investments are becoming increasingly popular with less-sophisticated investors, leaving the investors overexposed to risks they don’t understand or vulnerable to fraud. The Financial Industry Regulatory Authority (FINRA) recently issued a notice expressing concern about products like these that could prove “potentially unsuitable and otherwise problematic for retail investors.” Other investments on FINRA’s list include business development companies, which invest in the debt of small privately held businesses, and private placement securities, which represent direct investments in such firms.

If you sustained investment losses due to your stock broker or financial advisor’s recommendations regarding non-traded REITs, private placements, or other complex products, 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 and complete our online form at: http://www.securitieslawyer.com.

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

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Feb/13

11

FINRA Filings from Conservative Investors Who Were Sold Complex Products is on the Rise

Comments off · Posted by Securities Lawyer in FINRA

Financial regulators are confronting investor frauds that are giving retirement savers steep losses on complex products that until a few years ago were aimed only at the most sophisticated investors, writes Nathaniel Popper in a New York Times article from Feb. 11, 2013.

These victims are among the millions of Americans whose mutual funds and stock portfolios fell in the financial crisis, and who started searching for ways to make better returns. Many investors put money into speculative bets promoted by aggressive financial advisers. These investments included private loans to young companies and shares in bundles of commercial real estate properties.

“Since the crisis, we’ve seen more and more people reaching out into different types of exotic investments that are a big concern to us,” said William F. Galvin, the Massachusetts secretary of the commonwealth.

Wednesday, Feb. 6th., 2013, Mr. Galvin’s office ordered one of the nation’s largest brokerage firms, LPL Financial, to pay $2.5 million for improperly selling the real estate bundles, known as nontraded REITs, or real estate investment trusts, to hundreds of Massachusetts residents from 2006 to 2009, in some cases overloading clients’ accounts with them.

J. Bradley Bennett, chief of enforcement at the Financial Industry Regulatory Authority, or FINRA, said that for the last two years, 10 staff members have looked at the “proliferation of these products, to understand how they are being sold.”

“It’s got our attention,” he said. “We recognize the trends.”

Brokers are eager to sell these investments because they often bring in higher commissions. Several of these products hold out the promise of higher returns. Many of the investors in these complex products have filed claims with FINRA.

Private placements have been on the list of top enforcement concerns published by the national organization of state securities regulators every year since 2007. The private placements are supposed to be available only to wealthy, sophisticated investors, but several loopholes have allowed them to end up in the portfolios of less sophisticated retirement savers.

REITs have been one of the most heavily sold products. The new version, nontraded — the type that got LPL Financial in trouble in Massachusetts — can be bought and sold only in private transactions.

The outstanding amount of such nontraded REITs grew to $65 billion last year, from $43 billion in 2009. FINRA also issued a $14 million fine in October against David Lerner Associates, a large purveyor of nontraded REITs in the New York area.

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 complex products, 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 and complete our online form at: http://www.securitieslawyer.com.

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

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Jan/13

30

Does Your Stock Broker Owe You Money?

Comments off · Posted by Securities Lawyer in FINRA

With the stock market crash of 2008-2009 there has been an onslaught of investors filing lawsuits against their stock brokers and brokerage firms for providing them with unsuitable advice. There is a direct inverse correlation with stock index averages and new case filings. In other words, in a down market more cases are filed. Many of these cases had no merit and were largely suits over market losses, but a large percentage represented investors that were legitimately steered into investments products that proved to be illiquid, commission laden, or a complete fraud, such as a ponzi scheme. All of these claims against stock brokers and brokerage firms must be filed with the Financial Industry Regulatory Authority or “FINRA” for short.
Recently investors have been having success bringing FINRA arbitrations against brokerage firms for the sale of the following types of investments:

1) Reverse convertible notes- These were marketed as safe securities that produced an income that are typically linked to the common stock of a particular company and if the underlying stock drops, then the note converts to common shares, and unsuspecting investors who thought they had a fixed income product end up with large amounts of falling common stock they never wanted;

2) Fannie and Freddie Mac preferred shares -sold on and after their 2008 IPO where investors were told the investments were government insured when they were not;

3) Tenant in common or TIC investments- Investors were told to shelter their real estate profits by purchasing a TIC through a 1031 exchange but ended up paying excessive commissions that far exceeded any tax liability and ended up with an over leveraged illiquid asset;

4) Private Placements- Many of these investments have proven to be illiquid, commission laden, and lack material disclosures to the investors;

5) Account Churning- This is where the broker trades excessively in the account with a high velocity generating excessive commissions usually disguised to the investors as “mark ups” or “mark downs”. This is an extra “hidden” commission the investors do not usually realize typically this is coupled with an excessive use of margin; and

6) Overconcentration- This is where a broker recommends a high concentration in one security or one asset class which can result in unnecessary risk, especially if you are at or nearing retirement.

If you are an investor and you feel your stock broker recommended an inappropriate investment or investment strategy that resulted in significant losses, Soreide Law Group offers a free consultation and portfolio analysis to decide if you have legal grounds to pursue a FINRA arbitration. To speak with a lawyer call (888) 760-6552 or (954) 760-6552.

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Jan/13

13

Did You Invest With Beverly Hills Broker Bambi Holzer?

Comments off · Posted by Securities Lawyer in FINRA

Soeide Law Group is currently investigating broker, Bambi I. Holzer, CRD #1088028. Ms. Holzer is currently a registered representative with Newport Coast Securities of Beverly Hills, CA. There have allegedly been numerous (over 50) reports filed against her in her 25+ year career, and over $11 million in awards and settlements. Several of these complaints have been regarding the improper sale of private placements, and the sale of variable annuities, another high-risk product that is now under heavy scrutiny from federal regulators.

She was previously employed by these Beverly Hills, CA, brokerages: Wedbush Morgan Securities, Sequoia Equities Securities Corp., and Brookstreet Securities Corp.

If you feel you may have a claim against Bambi Holzer call 888-760-6552.

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. Visit our website at: http://www.securitieslawyer.com.

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Jan/13

8

New FINRA Rule 5123 Regarding the Sale of Private Placements Became Effective December 3, 2012

Comments off · Posted by Securities Lawyer in FINRA

In an effort to protect investors over the sale of private placements, the new Financial Industry Regulatory Authority (FINRA), Rule 5123, was effective on December 3, 2012. Under the new FINRA Rule 5123, FINRA member firms that sell an issuer’s securities in a private placement will be required, subject to certain exemptions (which include private offerings to most types of institutional investors), to:
•file with FINRA a copy of any offering documents used to sell the private placement, such as private placement memoranda, term sheets or other offering documents or
•indicate that no offering documents were used.

Member firms must make this filing within 15 days from the date the firm makes the first sale of securities in private placements. New FINRA Rule 5123 also requires that firms file any amended versions of offering documents originally filed.

The new FINRA Rule 5123 will be limited primarily to private placements involving individual accredited and non-accredited investors who are not exempt from the Rule’s filing requirements.

Each member firm that participates as a placement agent in the offering is responsible for filing under new FINRA Rule 5123, but one member firm may be designated to file on behalf of the other participating member firms as long as all participating member firms are listed in the FINRA filing. Each firm relying on a designated filer should receive confirmation of the filing from the designated filer to satisfy its own filing obligation. Also, exemptions are applied on a firm-by-firm basis. Firms must electronically file the requisite offering documents in searchable PDF format with FINRA through the Private Placement Filing System on the FINRA Firm Gateway.

Available Exemptions

The new FINRA Rule 5123 includes private placement offerings solely to one or more of the following purchasers:

•Institutional accounts
•Qualified purchasers
•Qualified institutional buyers
•Investment companies
•An entity composed exclusively of qualified institutional buyers
•Banks
•Employees and affiliates of the issuer
•Knowledgeable employees
•Eligible contract participants and
•Institutional accredited investors

Other private placements that are exempt from filing under new FINRA Rule 5123 include, offerings of exempt securities, Rule 144A and Regulation S offerings, and offerings of interests in commodity pools operated by a registered commodity pool operator. New FINRA Rule 5123 will, in practice, be limited primarily to private placements involving individual accredited and non-accredited investors, who are not exempt from the Rule’s filing requirements.

New FINRA Rule 5123 became effective on December 3, 2012, and applies only prospectively to private placements that begin selling efforts on or after that date.

Under Rule 5122, FINRA outlines standards on disclosure, use of proceeds and filing requirements for private placements of securities issued by member firms themselves, rather than sales of securities by other issuers. Also effective December 3, 2012, firms must submit filings regarding member firm private offerings, as required by FINRA Rule 5122, through the FINRA Firm Gateway.

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. Visit our website at: http://www.securitieslawyer.com.

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Jan/13

8

Did You Invest in Private Placement Funds with Gramercy Securities?

Comments off · Posted by Securities Lawyer in FINRA

Securities Lawyer, Lars Soreide, of Soreide Law Group, is currently investigating Gramercy Securities, Inc. This brokerage has been alleged to have placed unsophisticated investors’ money into unsuitable investments. There have been claims, for example, of a recent widow losing her entire net worth by investing in risky private placements. Some of these risky private placements were in the Inland American Real Estate Investment Trust, LaeRoc Edge Funds, and Arciterra Whitefish Opportunity Fund.

LaeRoc funds are real estate private placements. LaeRoc Partners is a real estate investment firm managing over $650 million in assets. The LaeRoc private placement was promoted by brokers as a safe or conservative investment. These representations allegedly were misleading.

Soreide Law Group, PLLC, represents clients nationwide. Call for a free consultation on how to potentially recover your private placement financial losses. To speak with an attorney call 888-760-6552, or visit our website at: http://www.securitieslawyer.com.

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Dec/12

5

Did You Purchase Cyprus Equipment Fund Private Placements?

Comments off · Posted by Securities Lawyer in FINRA

Soreide Law Group securities attorney, Lars Soreide, is currently investigating Cyprus Equipment Fund 14, LLC. If your broker sold you this private placement, and you experienced financial losses, we would like to speak to you.

The following are the other Cyprus Equiment Funds:

Cypress Equipment Fund VII
Cypress Equipment Fund VIII
Cypress Equipment Fund IX
Cypress Equipment Fund X
Cypress Equipment Fund XI
Cypress Equipment Fund XII
Cypress Equipment Fund 13
Cypress Equipment Fund 14
Cypress Equipment Fund 15
Cypress Equipment Fund 16
Cypress Equipment Fund 17
Cypress Growth Fund

Cypress Financial Corporation is based in San Francisco and is an equipment leasing company. Cypress offers “private placements” to the public, which are then sold by FINRA registered broker/dealers.

Soreide Law Group, PLLC, represents clients nationwide. Call for a free consultation on how to potentially recover your private placement financial losses. To speak with an attorney call 888-760-6552, or visit our website at: http://www.securitieslawyer.com.

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Nov/12

6

Did You Invest in These Oil and Gas Funds?

Comments off · Posted by Securities Lawyer in FINRA

Did you invest in Mountain V Oil and Gas, or Ridgewood Energy Funds I through Z?

Typically, investing in an oil and gas deals or limited partnerships can be a speculative venture that may have the risks associated with illiquid investments. When making investments in oil and gas deals or energy limited partnerships, we highly recommend caution.

Mountain V Oil & Gas, Inc., with it’s headquarters in Bridgeport, West Virginia, was founded in 1994 by Steve and Mike Shaver to obtain oil and gas reserves in the Appalachian Basin.

Ridgewood Energy Funds, I, J, K, L, M, N, O, P, Q, R, S, T, U, V, W, X, Y and Z, were limited partnership deals that may not have produced returns in excess of the client’s original investment. Now, the investors in Ridgewood Energy Funds, have illiquid limited partnership interests that may not be producing the income they were promised by their broker/financial advisor.

Investors in these oil and gas funds who have suffered financial losses may potentially be able to recover their losses through a FINRA arbitration.

Oil and gas funds typically are sold through private placement securities offerings. These investments can be risky and not suitable for the portfolios of the conservative investor.

If you or a family member have sustained losses in any of these oil and gas investments due to your stock broker or financial advisor’s recommendation, call 888-760-6552, or visit http://www.securitieslawyer.com.

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

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Oct/12

31

Bluerock Real Estate Private Placement of BR Senior Secured Debenture Trust, LLC

Comments off · Posted by Securities Lawyer in FINRA

Currently, the Soreide Law Group is investigating the sales and marketing of Bluerock Real Estate’s private placement offering of BR Senior Secured Debenture Trust, LLC.

According to the description, “The Trust is a wholly-owned subsidiary of Bluerock Real Estate, LLC (“Bluerock”). Bluerock is a national real estate investment firm headquartered in Manhattan, focused on acquiring, developing, managing and syndicating multifamily and commercial properties throughout the United States. Bluerock and its principals have sponsored and structured real estate transactions totaling approximately 25 million square feet and with approximately $3 billion in value.”

An investment in Secured Debentures is speculative and may involve significant risk, including loss of principal. Secured Debentures are not a diversified investment.

If you or a loved one were sold BlueRock Senior Secured Debenture Trust, LLC, by a broker or financial advisor, call Lars K. Soreide, of Soreide Law Group, PLLC, at 1-888-760-6552 or visit us on the web at http://www.securitieslawyer.com. Free consultation, no fee if no recovery, representing investors before FINRA nationwide.

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