vFinance Investments Sanctioned by FINRA
Tuesday, May 21st, 2013According to The Southern Florida Business Journal, a Boca Raton brokerage firm, vFinance Investments Inc., was fined $65,000 by the Financial Industry Regulatory Authority (FINRA) for “conducting a $5.95 million private placement for a company that was on a “restricted list” of firms that should not be dealt with.” In addition, FINRA cited vFinance “for having employees use their personal email accounts to solicit investments and not retaining those records. “
Based on a Letter of Acceptance, Waiver and Consent, it appears that the private placement at issue in the FINRA sanction is $5million in convertible notes. In 2008, vFinance acted as the private placement agent for Perf Go-Green
Holdings (PGOG).
According to FINRA’s BrokerCheck Report, vFinance Investments was formed in 1998 and is registered to sell securities in 53 US states and territories. In addition, the BrokerCheck Report revealed that in 2012 vFinance was fined $22,500 for selling corporate bonds at a price that was not fair and was ordered to pay approximately $7,700 plus interest in restitution to customers.
Brokerage firms have a fiduciary duty to their clients to perform adequate due diligence on an investment prior to offering it for sale to its clients. Brokerage Firms that fail to comply with FINRA rules can be liable for investment losses. This information, which is publicly available, has been provided by The White Law Group, LLC.
If you have questions about investments you made with vFinance Investments, Inc. the securities attorneys of The White Law Group may be able to help. To speak with a securities attorney, please call the firm’s Chicago office at 312-238-9650.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.
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VSR Financial Services Inc. Fined by FINRA for Alternative Investment Recommendations
Monday, May 20th, 2013According to Investment News, the Financial Industry Regulatory Authority (FINRA) has fined VSR Financial Services Inc. $550,000, in addition to a 45-day suspension of their chairman, Don Berry, for over concentrating client portfolios in alternative investments.
On May 15th, 2013 VSR entered into a Letter of Acceptance, Waiver, and Consent which alleges that Mr. Berry “failed to adequately implement the firm’s supervisory system pertaining to its supervision of concentrated positions in alternative investments through the use of a ‘discount program,’” which “artificially reduced the amount a customer had invested in a particular investment for purposes of calculation concentration.”
According to the Letter, “when calculating concentration at certain risk levels, VSR reduced the risk ratings on many investments, making the ratings inconsistent with the risks stated in the offering documents related to the investments.”
Alternative investments are security products other than stocks, bonds, and cash. Types of alternative investments include hedge funds, non-traded REITs, TICs, private placements, commodities and financial derivatives. Most alternative investments are intended for accredited high-net worth individuals because they are not subjected to the same public scrutiny and regulatory oversight as traditional investments. Furthermore, alternative investments are often more complex and lack liquidity.
Brokerage firms have a responsibility to make suitable investment recommendations that are inline with the clients risk tolerance. In addition, brokers are required to perform adequate due diligence prior to making investment recommendations to determine if an investment is appropriate given the clients age, liquidity needs, investment experience and financial objectives.
Broker-dealers that have not done their fiduciary duty or performed adequate due diligence when selling investments may be held liable for investment losses through FINRA arbitration.
The White Law Group has filed several FINRA arbitration cases involving VSR’s sales of alternative investments. Those cases have included alternative investments in Reef Oil and Gas, Mewbourne, Waveland, Bradford Energy, Vestara Medical, DBSI, Passco, and Behringer Harvard, among other alternative investments.
If you purchased alternative investments through VSR Financial Services Inc. and would like to discuss your litigation options, please call the securities attorneys of The White Law Group at 312-238-9650 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago Illinois and Boca Raton, Florida.
For more information on The White Law Group and the firm’s securities fraud practice visit http://www.whitesecuritieslaw.
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Former Wells Fargo Broker Barred for allegedly cancelling and rebilling transactions.
Thursday, May 16th, 2013FINRA recently announced that Adrienne Marie Llamas, a former financial advisor with Wells Fargo in Long Beach, California, has been barred from the association with any FINRA member in any capacity.
Without admitting or denying the findings, Llamas consented to the described sanction and to the entry of findings that following a registered representative’s instructions, Llamas cancelled and rebilled numerous transactions between customer accounts and accounts that the representative owned or controlled. Cancelling and rebilling profitable trades between accounts is a fraudulent practice known as cherry-picking. Llamas exclusively processed approximately 90 fraudulent cancel-rebills. The rebills allegedly transferred approximately $4,127,669.56 in securities transactions from customer accounts to accounts the representative controlled.
Llamas’ FINRA Broker Report also reveals that she was terminated by Wells Fargo in November 2011 for “issues relating to moving cancel and rebill transactions in a customer account to a financial advisor account without proper documentation.”
The White Law Group is investigating the liability that Llamas’ employers may have for his alleged conduct. To the extent that her employers failed to properly supervise Llamas contributing to clients’ losses, the employers may be held liable for damages in a FINRA arbitration claim.
If you suffered losses investing with Llamas and would like to discuss your litigation options, please call the securities attorneys of The White Law Group at 312/238-9650 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on the firm, visit http://www.whitesecuritieslaw.com.
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Broker barred from securities industry for alleged theft.
Thursday, May 16th, 2013FINRA recently announced that Joseph Mahmud, a registered representative in Lafayette, Louisiana has been barred from the securities industry.
Without admitting or denying the findings, Mahmud consented to the described sanction and to the entry of findings that without a customer’s knowledge or authorization, he made unauthorized withdrawals and misappropriated approximately $95,000 from the customer’s annuity. The customer did not receive the proceeds from the withdrawals. Mahmud’s member firm, after detecting Mahmud’s conduct, credited the customer’s annuity in the amount of $99,959.88, which represented the amount misappropriated plus interest. In a related criminal proceeding, based in part on the described conduct, Mahmud pled guilty to grand larceny in the second degree and identity theft in the first degree.
According to a Forbes report, Mahmud entered the securities industry in August 2005 and from November 2, 2009 through June 17,2011, he was dually employed with Chase Investment Services Corp. (“CISC” ) as an investment representative; and Chase Bank as a personal banker.
The White Law Group is investigating the liability that Mahmud’s employers may have for his alleged conduct. To the extent that his employers failed to properly supervise Mahmud contributing to clients’ losses, the employers may be held liable for damages in a FINRA arbitration claim.
If you suffered losses investing with Mahmud and would like to discuss your litigation options, please call the securities attorneys of The White Law Group at 312/238-9650 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on the firm, visit http://www.whitesecuritieslaw.com.
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Investor Alert Regarding Lump-Sum Payments for Retirees
Wednesday, May 15th, 2013Are you thinking of selling your pension or structured settlement for a lump-sum payment? Have you been contacted by a salesperson soliciting a “pension income program” or “factored structured settlement”? If so the following information may be of importance to you.
Selling your pension or settlement income-stream may sound enticing during financially hard times. However, the report warns that lump-sum offering is often significantly lower than the total you would receive if you continued with periodic payments. In addition, selling your pension or settlement may
involve extremely high transaction fees, tax consequences, and in many cases you may be required to take out a life insurance policy in case you die before the company you sold your income stream to has received all payments.
Before you purchase a pension or settlement income-stream product, the Investor Alert warns ,that these types of products are often pitched using word like “guaranteed and “safe.” However, you should be aware that these products are risky, illiquid and may involve commissions of 7% or higher.
In addition, pension or settlement income-stream products are not always structured as securities and therefore would not have to register with the SEC or state security regulators. “ As such, reliable information about these products may be difficult to find an resolving disputes should an
investment go sour may also be difficult.”
Interestingly, a number of state security regulators have begun to investigate pension and settlement income-stream products. The states of Massachusetts and New York have opened an inquiry into multiple firms that are offering lump-sum payments for pensions, according to Investment News.
Massachusetts Securities Division is investigating how these firms conduct business and how they are marketing the lump-sum offers. New York security regulators have similar concerns and are “looking into possible fraud, misrepresentation and violation of usury laws.
The Investor Alert is available in full, here.
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