Travis Wetzel Pleads Guilty to Wire Fraud

Wednesday, November 19th, 2014

According to the States Attorney for the District of Maryland, a former LPL broker, Travis Wetzel, pled guilty to wire fraud and money laundering in a scheme that defrauded an elderly client.

According to the plea agreement, between July 2010 to September 2012, Wetzel transferred  $1,282,224 from an elderly clients annuity account and used the funds for personal use. At the time, Wetzel was reportedly the operations branch manager. Wetzel allegedly made the transfers without authorization from the client, and knew the clients age and physical condition would facilitate repeatedly taking money from the client’s account.

Wetzel agreed to forfeit $1,282,244. He faces a maximum sentence of 30 years in prison for wire fraud and 10 years for money laundering.

Brokerage firms have a responsibility to adequately monitor their employees. When a broker is imprisoned for violating securities laws, the brokerage firm may be liable for negligent supervision and responsible for investment losses.

If you suffered losses as a result of investments made with Travis Wetzel and would like to discuss your litigation options, please contact The White Law Group at 312-238-9650 for a free consultation.

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 Vero Beach, Florida.

To learn more about the firm, please visit www.WhiteSecuritiesLaw.com.

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Massachusetts Regulator Investigates Realty Capital Securities’ REIT Sales

Wednesday, November 12th, 2014

According to InvestmentNews, Massachusetts secretary, William Galvin, is investigating how Realty Capital Securities sold nontraded REITs. Mr. Galvin’s office includes the Massachusetts securities division and is specifically looking at what information investors received when they bought the REITs.

Mr. Galvis’ investigation follows the FBI’s inquiry into an accounting error by the REIT, American Realty Capital Properties (ARCP). Nicholas Schorsch is a chairman of ARCP and was the CEO of ARCP until  Oct 1. Schorsch is also an executive chairman of RCS Capital, the broker-dealer holding company of Realty Capital Securities and the CEO of American Realty Capital (ARC).

According to investmentNews, American Realty Capital is trying to distance themselves from ARCP. Several ARC Reits updated filings with the Securities and Exchange Commission emphasize that they are separate entities from ARCP. For example, American Realty Capital Global Trust II emphasised that they are not affiliated with ARCP and have independent accounting teams.

Reports suggest that the $23 million ARCP accounting error was intentionally uncorrected. The mistake led to the resignation of the company’s chief account officer and chief financial officer. Given that the error was allegedly “intentional,” it is not surprising that ARCP is under the scrutiny of the FBI and State Regulators.

REITs are generally considered complex, high-risk securities products. As such, many states, including Massachusetts, have set guidelines specific to REIT sales. Broker dealers that sell REITs have a responsibility to make investment recommendations that are consistent with the investors risk tolerance, financial objectives, investment experience and net worth. When broker dealers fail to make suitable investment recommendations they may be liable for investment losses.

If purchased a REIT and have suffered losses,The White Law Group may be able to help. If you would like to discuss your litigation options, please contact The White Law Group at (312)238-9650 for a free consultation.

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 Vero Beach, Florida.

To learn more about the firm, please visit www.WhiteSecuritiesLaw.com.

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Investigation involving City Capital Corporation

Tuesday, November 11th, 2014

Have you suffered investment losses in City Capital Corporation? If so, The White Law Group may be able to help by filing a claim against the broker dealer that sold you the investment.

The SEC recently filed a complaint against the CEO of City Capital Corporation, Ephren W. Taylor, accusing him of operating a Ponzi scheme that swindled $11 million from investors. Investors were allegedly told their funds would purchase and support various small businesses and were issued promissory notes that touted annual interest rates of 12% to 20%.

Unfortunately for investors, according to the SEC, Taylor allegedly used the funds to pay unrelated expenses, which included making “returns” to investors with new investor money.

It is unclear if Taylor has the funds to repay investors. As such, The White Law Group is investigating other avenues of recovery. It appears that some broker dealers may have solicited City Capital Corporation to clients. Broker dealers have a fiduciary duty to perform adequate due diligence on any investment offering. Brokers dealers that sold City Capital Corporation and failed to perform due diligence could be held liable for investment losses.

If you purchased City Capital Corporation through a brokerage firm and would like to discuss your potential to recover investment losses, please call The White Law Group at (312)238-9650 for a free consultation.

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 Vero Beach, Florida.

For more information on The White Law Group, visit www.WhiteSecuritiesLaw.com.

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FINRA Arbitration Filed Against VSR Financial Over Alternative Investment Losses

Tuesday, November 11th, 2014

The White Law Group announces the filing of another FINRA arbitration claim against VSR Financial involving alternative investments, oil and gas partnerships and non-traded REIT investment losses.

The claim, filed by The White Law Group, was submitted to FINRA Dispute Resolution on behalf of eight Texas investors alleging claims for violation of common law fraud, breach of fiduciary duty, negligence, and negligent supervision. The claim further alleges that VSR Financial unsuitably invested the clients in the following alternative and high risk investments (among others):

Alliance Petroleum Corp 2005 C
ArciTerra Strategic Retail Echelon
ArciTerra Whitefish Opportunity Fund, LLC
Atlas America Public #18 – 2008-A Ltd
Atlas America Series #21-A Ltd
Atlas America Series #22 – 2002 Ltd
Black Diamond Energy Partners 2004 – B, Ltd.
Black Diamond Energy Partners 2007 – A, Ltd.
Bradford Drilling Associates 17, LP
Bradford Drilling Associates 21, LP
Bradford Drilling Associates 24, LP
Bradford Drilling Associates 25, LP
Bradford Drilling Associates 29, LP
Mewbourne Energy Partners 03-A, L.P.
Mewbourne Energy Partners 04-A, L.P.
Mewbourne Energy Partners 05-A, L.P.
Mewbourne Energy Partners 09-A, L.P.
Mewbourne Energy Partners 11-A, L.P.
Penneco Drilling Associates 2004-A
Penneco Drilling Associates 2007-A
Reef Income & Development Fund 3
Reef SWD 2007 – A, LP
Waveland Drilling Partners 2007-A, L.P.
Waveland North Paradigm III – B Partners
ArciTerra Strategic Retail Trinity Place
NetREIT Common
Waveland Vanguard Partners, LLC
Waveland Resource Partners 1, L.P.
Waveland Drilling Partners 2007-A, L.P.
Cypress Income Fund V 8.25% Note
Cypress Income Fund 8 8.25% Note
Cypress Income Fund 11
Cole Credit Property Trust II, Ltd.
United Development Funding III
UDF Land Opportunity Fund Investors, LLC
Florida Capital Real Estate Partners 28, Ltd
NetREIT
ArciTerra Note Fund II, LLC
Mewbourne Energy Partners 08-A, L.P.
Mewbourne Energy Partners 10-A, L.P.
Mewbourne Energy Partners 11-A, L.P.
Mewbourne Energy Partners 12-A, L.P.
Mewbourne Energy Partners 13-A, L.P.
Reef SWD 2007 – A, LP
Behringer Harvard Multifamily REIT I, Inc.
Odyssey Diversified Notes VII
FS Energy & Power Fund
Reef SWD 2007 – A, LP
Neomatrix
Bradford Drilling Associates 19, LP
Waveland Resource Partners 1, L.P.
Waveland Resource Partners 2, L.P.
Alliance Petroleum Corp 2004 A
Alliance Petroleum Corp 2005 B
Atlas America Public #14 – 2004 Ltd
ICON Income Fund 9
Bradford Drilling Associates 19, LP
Bradford Drilling Associates 21, LP
Bradford Drilling Associates 24, LP
Bradford Drilling Associates 25, LP
Behringer Harvard Opportunity REIT I, Inc.
Black Diamond Energy Partners 2004 – B, Ltd
Ridgewood Energy N Fund
Ridgewood Energy O Fund
Ridgewood Energy P Fund
Ridgewood Energy R Fund
United Development Funding III
Mewbourne Energy Partners 03-A, L.P.
Mewbourne Energy Partners 04-A, L.P.
Mewbourne Energy Partners 05-A, L.P.
Mewbourne Energy Partners 06-A, L.P.
Mewbourne Energy Partners 07-A, L.P.
Mewbourne Energy Partners 09-A, L.P.
Ridgewood Energy N Fund
Ridgewood Energy O Fund
Ridgewood Energy P Fund
Ridgewood Energy Q Fund
Atlas America Public #14 – 2004 Ltd
Bradford Drilling Associates 19, LP
Bradford Drilling Associates 23, LP
Bradford Drilling Associates 24, LP
Bradford Drilling Associates 25, LP
Alliance Petroleum Corp 2005 A
Alliance Petroleum Corp 2005 B
Alliance Petroleum Corp 2006 B
Odyssey Residential Realty II, LLC 9% Note
CNL Lifestyle Properties, Inc.
Waveland Drilling Partners 2006-B, L.P.
Waveland Drilling Partners 2007-A, L.P.
Penneco Drilling Associates 2004-1
Mewbourne Energy Partners 10-A, L.P.
Mewbourne Energy Partners 11-A, L.P.
Mewbourne Energy Partners 12-A, L.P.
Mewbourne Energy Partners 08-A, L.P.
Mewbourne Energy Partners 09-A, L.P.
Mewbourne Energy Partners 05-A, L.P.
Mewbourne Energy Partners 06-A, L.P.
CNL Retirement Properties, Inc
Waveland Vesta Medical, LLC
ArciTerra Strategic Retail II, LLC
Gentry Mills Capital (GMI – ES 14, LP)
ArciTerra Real Estate Investment Trust, Inc.
Cypress Income Fund 10 8.25% Note
DBSI 2006 Land Opportunity Fund, LLC
Florida Capital Real Estate Partners 27, Ltd
NetREIT Common
Odyssey Operating Partnership II, Ltd
Reef SWD 2007 – A, LP
Waveland Vanguard Partners, LLC
Waveland Vesta Medical, LLC
Waveland Resource Partners 1, L.P.
Alliance Petroleum Corp 2006 A
Atlas America Series #26 – 2005 Ltd
Bradford Drilling Associates 19, LP
Mewbourne Energy Partners 08-A, L.P.
Mewbourne Energy Partners 12-A, L.P.
Waveland Drilling Partners 2007-A, L.P.
Waveland North Paradigm III – B Partners
GMI-ES 14 LP
United Development Funding III
Frontier Masters Series 1
KBS Strategic Opportunity REIT
United Develop Fund Land Op LP
Frontier Diversified Series 1
ArctTerra REIT Inc.
Behringer Harvard Multifamily I
NetREIT

The claim seeks damages in excess of $1,000,000.

Before recommending an investment, a broker-dealer has a fiduciary duty to adequately disclose the risks involved in the investment and to perform the necessary due diligence to determine whether the investment is suitable for the investor.  It is alleged that VSR Financial failed to perform the necessary due diligence on these investments prior to recommending them to these particular investors.

The financial advisor that handled the account at issue is named John Towers.  According to his FINRA Broker Report (CRD), it appears that John Towers worked in VSR Financial’s Plano, Texas office from June 2002 until December 2013.  It also appears that in December 2013, Mr. Towers was suspended from the securities industry by FINRA for allegedly recommending that a married couple invest in high-risk private placements and real estate investment trusts.  Mr. Towers’ CRD also indicates that he has been the subject of at least sixteen (16) customer complaints.

When asked about the claim, D. Daxton White, the firm’s managing partner, stated “This claim bears striking similarities to other claims we have filed against VSR involving this particular financial advisor.”

FINRA Dispute Resolution is an arbitration venue for investors with claims against their brokerage firm or financial professional.  It provides investors with an opportunity to attempt to recoup their investment losses and is an alternative to filing such claims in court.

For more information on the claim filed by The White Law Group, please contact the firm’s Chicago office at 312-238-9650.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.

For more information on The White Law Group and its representation of investors in FINRA arbitration claims, visit http://www.whitesecuritieslaw.com.

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Investigation into Potential Default of Puerto Rican Utility

Friday, November 7th, 2014

According to InvestmentNews, the expected default of Puerto Rico Electric Power Authority, or Prepa, has raised concern for some money managers. Approximately one in four U.S. Municipal bond funds hold some exposure in the power utility.  The exposures typically account for less than 1% of the various fund’s portfolio. However, that does not appear to be the case for some single-state and high yield funds.

InvestmentNews analysis of data from Morningstar Inc. found that some single-state and high yield funds have exposure risk around or above 2%. The data analysed included funds from Oppenheimer and Franklin Templeton Investments.

According to InvestmentNews, Oppenheimer funds and Franklin Templeton Investments have both filed federal lawsuits alleging that the new law passed by local lawmakers, which would allow the power utility to ask bondholder to take a loss, is illegal.

Many investors have suffered losses in bond funds heavily invested in Puerto Rico debt. The White Law Group continues to investigate the liability that brokerage firms may have for recommending these funds.

Broker dealers are required to insure that investment recommendations are suitable given the client’s age, investment experience, net worth, investment objectives and risk tolerance.  Given that most municipal bond investors are trying to play it safe, risky bets on Puerto Rican debt likely made these funds unsuitable for them.

If you suffered losses in a bond fund overexposed to Puerto Rico, like from Oppenheimer or Franklin Templeton Investments, 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 Vero Beach, Florida.

For more information on the firm, visit www.whitesecuritieslaw.com.

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