Publications

Wall Street Journal

How Troubled Brokers Cluster, Often Among Elderly Investors

At Burt & Max’s Bar and Grille one day this summer, stockbroker Rafael Golan gave a group of elderly people a financial seminar. After his hourlong talk on topics from real estate to annuities, the free food arrived.

Dinners like this have landed him clients before. Some later lodged complaints against him, making him part of a cluster of brokers with troubled regulatory records that a Wall Street Journal analysis identified in this corner of Florida.

Among those clients were Pinny and Rebecca Slotnick, octogenarians who became Mr. Golan’s customers in 2003 after a dinner and later filed a complaint with regulators alleging he mishandled their accounts. He paid them a $125,000 settlement this year. He denies any wrongdoing in this or any other case.

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Reuters

Special Report:  For these oil and gas bets, the odds favor the house

Atlas Energy LP has a deal for investors eager to get in on the U.S. energy boom: Contribute at least $25,000 in a partnership that will drill for oil and gas in Texas, Ohio, Oklahoma and Pennsylvania and then share any revenue from the wells’ output.

Atlas Resources LLC, a subsidiary of the Pittsburgh, Pennsylvania-based energy group, aims to raise as much as $300 million before the offer closes Dec. 31. The company says it will toss in up to $145 million of its own capital, too.

But not all investors are created equal in this undertaking. Atlas’s confidential offering memorandum, reviewed by Reuters, shows why.

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New York Times

Brokers Countersue to thwart suits of unhappy investors

Ron Vaerewyck was making his way through the convention floor at the annual World Money Show in Orlando, Fl, in February 2008 when he stopped by the booth of Reef Securities of Richardson, Tex.

The brochures for Reef’s private placements in the energy industry showed an impressive track record.

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Wall St. Cheat Sheet

Is Your Broker Churning Your Investment Account?

Financial Professionals are like any profession – there are good ones and there are bad ones. As long as financial advisors are compensated by commissions, some of the unscrupulous ones will continue to attempt to enrich themselves by excessively trading accounts.

Churning is excessive trading by a broker in a client’s account largely to generate commissions. Churning claims arise out of the inherent conflict of interest involved when a financial advisor is compensated by commissions earned in buying and selling securities on behalf of a client.

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The Bond Buyer

Two Firms File Cases Against UBS Over Puerto Rico Closed Ended Funds

Two law firms have filed cases against UBS over losses on closed-end funds holding Puerto Rico municipal bonds.

On Tuesday, White Law Group filed an arbitration case with FINRA for a single investor claiming more than $450 million in losses. The firm claims UBS engaged in fraud, breach of fiduciary duty, negligence, and negligent supervision, according to a press release.

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Wall St. Cheat Sheet

Troubling Trend – Brokerages Negotiate Clean Records

As a securities attorney who represents investors in claims against brokerage firms, I have noticed a recent trend that is troubling — a recent push by brokerage firms to cover up the misdeeds of their brokers. With increasing frequency, I have seen that brokerage firms are now including as a condition of settlement that the customer not fight the firm’s request to have the case “expunged” from their financial advisor’s record…

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Kiplinger

Beware These 5 Problematic High-Yield Investments

When Pat Conway invested the majority of his life’s savings a few years ago in two non-traded real estate investments, he thought he had secured his retirement once and for all. Behringer Harvard Short-Term Opportunity Fund and Behringer Harvard REIT I yielded 3% and 7%, respectively. Moreover, his broker vowed that double-digit capital appreciation would surely follow, so Conway reinvested most of his dividends in the ventures. “That was my anchor for retirement,” says Conway, 66, a retired computer programmer from Lenexa, Kan., a suburb of Kansas City…

…Like most products on this list, non-traded REITs are typically sold with a number of upfront charges, including commissions, which can reach as high as 15%. “In order to earn back your principal and achieve the desired return, the investment has to be risky,” says D. Daxton White, a lawyer in Chicago who represents investors in disputes. Non-traded REITs may return principal or take on debt to fund payouts if they don’t earn enough from operations.

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Association of Certified Financial Crime Specialists

Illinois Receives Dubious Honor of Being Second State Ever Sued for Fraud by SEC

Earlier this month, Illinois became the second state ever to be the target of a cease and desist order from the US Securities and Exchange Commission for fraud related to its state-backed securities.

D. Daxton White, an attorney at the White Law Group, a securities law firm in Boca Raton and Chicago, said the SEC seems to be increasing its focus on state securities.

He said, “I believe the SEC’s investigation of Illinois and its sales of municipal bonds may be a strategic shift by the SEC.”

“Given that the SEC has already launched a similar investigation into the State of New Jersey… it appears the (SEC) will be more closely scrutinizing the sale of municipal bonds by various states,” White continued.

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Phoenix Business Journal

Phoenix REITs Drawn into Investigation ofSsales, Business Practices

A Phoenix-based company is tangled in a Massachusetts securities investigation in which regulators slapped a large brokerage with a lawsuit last week, claiming dishonest and unethical business practices in dealing with real estate investment trusts.

“The many retired people who own these products certainly care about this,” said attorney D. Daxton White, a partner in the White Law Group in Chicago, which represents investors. “They’re desperately looking for options on how to get their money back.”

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San Diego Reader

Graybeards Beware

Beware nontraded real estate investment trusts. That advice was issued early this month by the Financial Industry Regulatory Authority, the nongovernmental regulator of securities firms.

Florida-based White Law Group is investigating possible securities claims against brother Ray Lucia. The subject: the appropriateness of a nontraded real estate investment trust recommendation. The sale occurred back while Ray was still in the business. White says that the problem is that such investments “are often illiquid, and investors cannot readily access their money for unforeseen expenses (like medical expenses).”

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Financial Advisor Magazine

Pacific Cornerstone REIT Among Those Facing Dramatic Drop in Value

Cornerstone Real Estate Investment Funds sold through Pacific Cornerstone Capital Inc. have joined other REITs in experiencing a drastic drop in value in recent months.

The White Law Firm in Chicago is investigating the broker-dealers who sold the Cornerstone shares. The firm has received numerous calls from investors who have lost substantial portions of their portfolios because of the drop, says Dax White, managing partner.
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Financial Planning

Investing in TICs? Proceed with Caution

Advisors with clients who want to move money into real estate investments known as tenant-in-common offerings under section 1031 of the Internal Revenue Code need to be wary.

“TICs can involve high risks and liquidity problems and in many cases brokerage firms misrepresent these risks and instead focus on the income stream that is promised [and sometimes guaranteed]by these investments,” as the White Law Group, a securities fraud litigation and FINRA arbitration investor protection firm, warns on its web site.
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Investment News

SIFMA, FINRA Clash Over Deadbeat Brokers

The Securities Industry and Financial Markets Association wants Finra to crack down on deadbeat brokers who have failed to pay back promissory notes.

Specifically, the trade group wants the Financial Industry Regulatory Authority Inc. to change its rules so that brokers can’t plead poverty to get out of an arbitration repayment order.
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Investment News

Thinkorswim Users Sue TD Ameritrade for $8.2 Million in Options Losses

TD Ameritrade Inc. has been hit with an $8 million arbitration claim by a group of options traders who say they lost money last summer during final integration of the thinkorswim trading platform.
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InvestmentNews

Investors in Lerner REITs May Find No Redemption – InvestmentNews
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Investors who want to redeem their shares in the Apple family of non-traded REITs marketed by David Lerner Associates Inc., which has become the target of a regulatory action, may be out of luck.

Redemption requests for nontraded real estate investment trusts normally are processed at the end of each quarter.

“My suspicion is that if the Apple REITs have too many requests from clients, that could force a suspension of the redemption program,” said Daxton White, a plaintiff’s attorney. He said that he has spoken to about 10 David Lerner clients who bought the Apple REITs.

Lawyers and Settlements

Securities Suits Still Going Strong at White Law Group

Two years on and a bit more, attorneys like Daxton White are still filing suit or doing FINRA (Financial Industry Regulatory Authority) mediation and arbitration hearings for clients who were bilked, defrauded, led down the garden path and otherwise separated from their money by unscrupulous and indeed sometimes criminal brokers and investment companies.

New York’s Bernie Madoff and his celebrity clients got the headlines, but there were many others out there doing the same.

“We are very busy,” says White from his office in Chicago at the White Law Group. “The only concern we have with our cases is that many of the brokerage firms we are suing are being sued by so many people that a lot of them are on the brink of bankruptcy.”

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Las Vegas Review-Journal

Investigation Focuses on Henderson-based Desert Capital

Two years on and a bit more, attorneys like Daxton White are still filing suit or doing FINRA (Financial Industry Regulatory Authority) mediation and arbitration hearings for clients who were bilked, defrauded, led down the garden path and otherwise separated from their money by unscrupulous and indeed sometimes criminal brokers and investment companies.

New York’s Bernie Madoff and his celebrity clients got the headlines, but there were many others out there doing the same.

“We are very busy,” says White from his office in Chicago at the White Law Group. “The only concern we have with our cases is that many of the brokerage firms we are suing are being sued by so many people that a lot of them are on the brink of bankruptcy.”

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Sun-Sentinel

Your Money Q&A: How long after losing money can I file a claim?

Most investor claims must go through arbitration, rather than through courts. They must be submitted under rules established by the Financial Industry Regulatory Authority, an industry self-regulatory organization. Finra’s code says claims can be made within six years after the event, according to Rose M. Schindler, the former Finra Regional Director in Boca Raton. She is now with The White Law Group.

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