Story Serves as Cautionary Tale Against Nontraded REITs

A tale against nontraded REITs as a bad investment broker pushes woman into a nontraded Cornerstone REIT for her IRA. Fraud attorney David Meyer explores.

FINRA Launches a New Public-Access Disciplinary Actions Database

On Monday, FINRA announced the launch of a new public-access disciplinary actions database that is available for free on the organization’s website.

SEC Accuses Koch Asset Management and Founder Donald Koch of Investment Fraud

The SEC filed an enforcement order against Donald L. Koch and Koch Asset Management LLC (KAM) on April 25 for an alleged "mark-the-close" investment scheme.

Investors File Claim Against Brokerage Principal for $4.1 Million in Losses

Sixteen investors have filed a lawsuit against Stephen D. Pizzuti and Merrimac Corporate Securities, Inc. in connection with $4.1 million investment scheme.

Mass. Financial Adviser Pleads Guilty to Stealing $3 Million

Sean Mansfield, a West Springfield financial adviser, pled guilty this week to wire fraud, embezzlement, and money laundering for stealing $3 million.

St. Louis Woman Pleads Guilty to $6 Million Investment Scheme

Victoria McGee-Harris, a securities broker from St. Louis, Missouri pled guilty to fraud charges on Thursday in a $6 million investment fraud case.

FINRA Disciplinary Actions Up in 2010

If it seems like FINRA has been filing more enforcement actions over the past twelve months or so, it’s because it has. According to a study released Monday, the self-regulatory organization filed 152 more disciplinary actions in 2010 than in 2009 (“Finra's Disciplinary Cases Rose 13% in '10, Study Says,” Wall Street Journal, Feb. 28, 2010). The 13 percent increase has been, in many industry professionals’ eyes, the direct result of increased public pressure on regulators to crack down on securities fraud. "Regulators felt the pressure after the [2008] financial collapse to beef up their enforcement efforts," said James Fanto, a professor at Brooklyn Law School in New York, in the article. "They've all been shamed into being more aggressive.” In 2010, FINRA brought 1,310 disciplinary action cases compared to 1,158 in 2009. And, if recent events are any indication, that increase may continue through 2011. Already this year, a number of brokerage firms have announced the receipt of FINRA Wells notices, including E*Trade and National Securities. (A Wells notice is the notification that a regulator intends to bring an enforcement action against a company or individual.) But, it’s not just the number of actions filed by FINRA that is important. Disciplinary actions also provide an indicator of where regulators are placing their focus. As David Lipton, a law professor at Catholic University of America in Washington, D.C., told the WSJ: “…disciplinary actions reflect what regulators are penalizing.” As reported in the article, cases against brokers and firms for advertising issues, including misrepresentations and omissions, generated the most fines ($4.75 million) in 2010. Actions against firms and brokers for improper communications related to credit default sweeps, electronic communications violations, and suitability violations were also prevalent last year, and generated $4.5 million, $4 million, and $3.8 million in fines, respectively. About our law firm: The law firm of David P. Meyer & Associates represents individuals across the country who have been harmed by investment fraud. All of our cases are handled on a contingency fee basis and we never request a retainer of any kind. Contact us toll-free at 1.866.429.2360 for more information or complete the online form on the top of this page and we will respond promptly.

Lincoln Financial Fined by FINRA for Former Broker's "Selling Away" Scheme

On Sept. 27, a FINRA arbitration panel declared Lincoln Financial liable for $4.43 million in damages and interest to approximately 24 former clients, according to an Oct. 5 InvestmentNews article. FINRA ruled that the firm's liability was the result of negligent conduct in failing to prevent one of the firm's registered brokers from operating a "selling away" scheme.

Michigan Advisor Accused of Defrauding School System and Township in Ponzi Scheme

Last week, a criminal Complaint was filed against Dante DeMiro for his role in an alleged Ponzi scheme, which the FBI says defrauded both the Mona Shores Public Schools system and Comstock Township out of millions of dollars, according to WOODTV.com. The victims believed DeMiro, an investment advisor with Munivest in Southfield, Michigan, was investing their money in federally insured certificates of deposit.

Fort Wayne Broker Charged with 7 Counts of Securities Fraud

Randell E. Morrison of Fort Wayne has been charged with seven counts of securities fraud and one count of corrupt business influence for his alleged role in cheating investors out of $800,000 between 2005 and mid-2010, according to a September 16 The News-Sentinel article.

Former PrimeVest Representative Ordered to Pay $1.1 Million in Restitution

Brian Anderson, a former registered representative with PrimeVest Financial Services, was sentenced last week to 68 months in federal prison and ordered to pay $1.1 million in restitution, according to a September 9 InvestmentNews article.

SEC Bars Texas Broker in $850,000 Promissory Note Scheme

The U.S. Securities and Exchange Commission (“SEC”) recently barred a Dallas-area broker from the securities industry of his involvement in a classic “selling away” scam. The broker, Gregory Todd Froning, is alleged to have raised approximately $850,000 from fifteen of his brokerage customers and advisory clients between 2005 and 2009. Froning raised the funds through an unregistered offering of promissory notes secured by rights to convert to equity interests in Wealth Planning Partners LLC, a financial planning company he owned. According to the SEC complaint, investors were told that their money would be used to “fund operating expenses and growth of the financial planning company.” However, Froning diverted the funds for personal use, and in typical Ponzi-scheme fashion used some of the funds raised from newer investors to pay “returns” to older investors.

What You Need to Know About Excessive Trading Activity Claims

Excessive trading, also known as churning or over-trading, is not allowed and is considered a form of broker fraud. If you believe that you have lost money due to excessive trading or some other type of broker misconduct, contact an experienced broker fraud attorney from our office for a free case evaluation.

Unsuitable Trades Can Lead to Financial Loss

Brokers are required to use due diligence to obtain pertinent information about clients that would affect investment recommendations. If you have lost money on an unsuitable trade, contact one of our securities fraud lawyers at 1.866.827.6537.

Be Wary of High-Pressure Sales Calls from Brokers

You need to be cautious if you have received unsolicited calls from a broker who is pressuring you to make an investment. Read this blog for advice on how to proceed in this type of situation. Contact the law firm of David P. Meyer & Associates at 1.866.827.6537, if you have lost money due to investment fraud.

How to Avoid Financial Loss from Unauthorized Trading

Read this blog to learn tips on how to avoid financial loss resulting from unauthorized trading. Contact one of our securities fraud lawyers for a free case evaluation regarding your broker misconduct claim.

FINRA Bars Head Trader and Chief Compliance Officer

The Financial Industry Regulatory Authority (FINRA) announced today that it permanently barred the former Chief Compliance Officer and Head Trader (Tod Bretton) for Prestige Financial, Inc. of New York, for "engaging in a fraudulent trading scheme that generated approximately $1.3 million in profits for him and his firm at the expense of customers by subjecting their orders to improper and undisclosed additional charges." It is only too bad that Bretton was able to engage in this scheme for nearly 3 years before he was stopped. According to FINRA, he covered up his fraud by creating false order tickets and trade confirmations. Bretton had no prior FINRA disciplinary history, but he is now barred from ever being associated with any FINRA member, in any capacity. For more information, click this link: http://www.finra.org/Newsroom/NewsReleases/2010/P121341

Barred Broker and Current Ohio Township Trustee Sued by Baird

Kevin P. O’Brien, a township trustee in Anderson, Ohio (near Cincinnati) has been sued by his former financial firm, Robert W. Baird & Co. The lawsuit, filed recently in Hamilton County Common Pleas Court accuses Mr. O’Brien of stealing over $300,000 from a client. Mr. O'Brien was a representative in Cincinnati with Baird until 2008 when he was discharged by the firm.

FINRA Fines, Suspends Broker for Failure to Supervise

The Financial Industry Regulatory Authority (FINRA) recently fined and suspended former Raymond James broker Karen L. Fence of New Jersey for failing to supervise the activities of a representative.