Securities Investigation involving UBS’s V10 Enhanced FX Carry Strategy

Monday, March 2nd, 2015

According to reports, a lawsuit was recently filed  against UBS Group for selling its V10 Enhanced FX Carry Strategy product without allegedly explaining the risk and complexity of the investment.

The lawsuit reportedly further alleges that UBS’s V10 Enhanced FX Carry Strategy was pitched as a high-yielding foreign-exchange investment that used computer algorithms to minimize the risk of losses in periods of volatility.

To compound matters for investors in this product, now investigators at the Department of Justice are reportedly examining whether UBS traders shortchanged investors in UBS’s V10 Enhanced FX Carry Strategy by overcharging them when they carried out the currency trades needed to execute the strategy.

The White Law Group is investigating the liability that brokerage firm’s may have for recommending this risky investment.  Brokerage firms are required to perform adequate due diligence on any investment they recommend and to adequately disclose the risks of any investment.  Additionally, brokerage firms are required to ensure that all investment recommendations made are suitable in light of the client’s age, investment experience, investment objectives, net worth, and income.

To the extent that a brokerage firm fails to perform adequate due diligence, to properly disclose the risks, or recommends an investment unsuitably, the firm may be held responsible for any resulting losses in a FINRA arbitration claim.

According to the offering materials, investors in UBS’s V10 Enhanced FX Carry Strategy bought notes whose value was tied to an index called the V10. Marketing documents on UBS’s website show how the index was calculated: First, currencies from the Group of 10 countries are ranked daily by their one-month interest rates. Using forward contracts, the bank bets that the three highest-yielding currencies will advance and the three lowest will decline. When volatility rises above a predetermined level, the positions are reversed.

Betting on the currency market is extremely risky and should only be undertaken by extremely sophisticated and/or institutional investors.

Investing in UBS’s V10 Enhanced FX Carry Strategy may not be suitable for you if:

¨ You seek an investment that offers any principal protection.
¨ You are not willing to accept the risks of foreign exchange trading in general.
¨ You do not believe the Index Return will be positive.
¨ You are not willing to make an investment that will be exposed to both upside and downside price risks on long and short positions in the foreign exchange forward contracts underlying the UBS V10 Currency Index as they may be dynamically adjusted in response to market conditions.
¨ You prefer lower risk (and accept the potentially lower returns) of fixed income investments with comparable maturities and issuer credit ratings that bear interest at a prevailing market rate.
¨ You seek current income from your investments.
¨ You are unable or unwilling to hold the Securities to maturity.
¨ You seek an investment for which there will be an active secondary market.
¨ You are not willing or are unable to assume the credit risk associated with UBS, as issuer of the Securities.

Unfortunately it appears that some financial advisors may have downplayed these risks and recommended UBS’s V10 Enhanced FX Carry Strategy unsuitably.

If you invested in UBS’s V10 Enhanced FX Carry Strategy and you 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 White Law Group, visit http://www.whitesecuritieslaw.com.

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Investigation into United Realty Trust

Friday, February 27th, 2015

Recent news regarding the real estate investment trust, United Realty Trust, may be of concern to some investors. According to Investment news, a former executive of Cabot Lodge securities, Al Akerman, sent a letter to the SEC’s Office of the Whistleblower regarding “apparent accounting irregularities and alleged fraud” concerning the REIT.

According to InvestmentNews, Mr. Akerman’s letter alleges “apparent accounting irregularities and alleged fraud with United Realty Trust.” Furthermore the letter alleges that “the REIT was going to fail an assets test because of a $1.5 million liability that was owed to the REIT by its adviser, United Realty Advisors LP.”

Counsel for United Trust have called into question Mr. Akerman’s truthfulness in the matter, according to investment news, alleging Mr. Akerman’s claim of being a whistleblower was done to conceal his alleged criminal behavior.

REITs are undoubtedly complex products that are arguably unsuitable for many investors. Compared to traditional investments, such as stocks, bonds and mutual funds, REITS are considerably more complex and involve a high degree of risk. Unfortunately many investors were not made adequately aware of the risks and lack of liquidity associated with REITs.

Broker dealers are required to perform adequate due diligence on any investment they recommend and to If broker fails to make suitable investment recommendations or fail to adequately disclose the risks, they may be liable for investment losses.

If you have concerns about your investment in United Realty Trust or another REIT, please contact 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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Jason Muskey Accused of Fraud

Friday, February 20th, 2015

Have you suffered financial losses as a result of investments made with Jason Muskey? If so, The White Law Group may be able to help you recover your investment losses through an arbitration claim with the Financial Industry Regulatory Authority (FINRA).

According to a press release from the United States Attorney’s Office for the Middle District of Pennsylvania, criminal charges have been filed against Jason Muskey for allegedly diverting nearly $2 million from clients accounts. Muskey is charged with mail fraud, money laundering and identity theft.

Allegedly, through his business, Muskey Financial Services, he forged client’s signatures to deposit money from their investment account into his personal account. In addition, when clients wanted to make withdrawals from their accounts, Muskey allegedly took funds from other clients accounts to purchase cashier checks to pay the client. The alleged wrongdoing occurred over a seven year period between 2007 to 2014.

It is unclear if investors will be able to get their money back from Muskey. According to the press release, the government is seeking forfeiture of Muskey’s assets, properties in Pennsylvania, a time share in the Grand Cayman Island and two boats.

The White Law Group is investigating the potential liability of the brokerage firm that employed Muskey has for his actions. When a FINRA affiliated broker fails to follow industry rules and allegedly steals from clients, the brokerage firm may be liable for negligent supervision and may be responsible for losses in a FINRA arbitration claim.

According to Jason Muskey’s BrokerCheck Report he worked in Pennsylvania with MetLife Securities from 01/2003 – 12/2005, Carillon Investments from 01/2006 – 06/2006, and most recently with Ameritas Investment Corp from 06/2006 – 06/2014.

If you believe that you’re a victim of Jason Muskey while he was employed by a FINRA affiliated brokerage firm and would like to discuss your legal options with a securities attorney, 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 dedicated to the representation of investors in FINRA arbitration claims against brokerage firms throughout the United States. The firm’s offices are located in Chicago, Illinois and Vero Beach, Florida.

For more information on The White Law Group, please visit our website at www.WhiteSecuritiesLaw.com.

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Fraud Charges filed against Timothy S. Demski and Walter F. Grenda

Friday, February 20th, 2015

If you suffered losses investing in Prestige Wealth Management Fund, the securities attorneys of The White Law Group may be able to help you recover your investment losses.

According to a press release, the Securities and Exchange Commission (SEC) recently accused the owners of a Buffalo area investment advisory firm of making false and misleading statements to clients. Timothy S. Demski and Walter F. Grenda are accused of recommending that their clients at Reliance Financial Advisers invest in a risky hedge fund that suffered substantial losses.

The SEC alleges that Demski and Grenda knew that the hedge fund manager, Scott Stephan, had very little hedge fund investing experience. In fact, the SEC alleged the two advisors distributed offering materials that greatly exaggerated Stephan’s experience in the securities industry.

The clients of Demski and Grenda – many who were retired or nearing retirement- invested approximately $12 million in the Prestige Wealth Management Fund. The Fund began trading in April 2011 and did not generate the returns investors were expecting. In October 2012, Grenada allegedly withdrew his clients from the fund before it collapsed a few months later. Unfortunately, Demski’s clients reportedly lost the vast majority of their investment – nearly $4 million.

Hedge funds employ various complicated trading schemes in an effort to maximize returns. These trading schemes involve risks which causes hedge fund returns to be extremely volatile. As such, they are better suited for experienced and accredited investors who can afford to risk total loss of their investment.

Although Demski and Grenda operated their own investment advisory firm, they were both registered brokers with another company. According to FINRA BrokerCheck, both men worked for Wall Street Financial Group from 10/2006 to 03/2011, before moving to the brokerage firm Mid Atlantic Capital Corporation in September 2011.

Brokerage firms have a legal responsibility to adequately supervise the investment transactions of their registered brokers. When a broker recommends investment products outside the scope of the firm, the act can be considered “selling away.” If a broker “sells away,” the brokerage firm may still be liable for negligent supervision and responsible for investment losses.

If you invested in Prestige Wealth Management Fund 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, 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 White Law Group, please visit www.WhiteSecuritiesLaw.com.

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SEC Commissioner Speaks Out about Lack of Bond Oversight

Wednesday, February 18th, 2015

According to FA-Magazine, the commission of the SEC, Luis Aguilar, made claims that retail investors are often victim to higher markups in the municipal bond market compared to institutional investors.

According to Aguilar, retail investors paid more that $10billion in excessive markups and markdowns between 2005 and 2013.

Aguilar also claimed that retail investors in municipal bonds are victimized by a lack of transparency, higher markups than for institutional investors, and the SEC’s inability to regulate public offerings by issuers.

According to the commissioner, “Retail investors lack access to reliable price information about the municipal securities they may want to buy or sell. As a result, it is exceedingly difficult for retail investors to determine if the prices they are offered and the fees they are charged by their brokers are reasonable.”

The problem will not be an easy one to fix. Aguilar suggests that the Financial Industry Regulatory Authority (FINRA) and the Municipal Securities Rulemaking Board require broker dealers to disclose markups before executing trades for investors.

If your broker failed to adequately disclose the markups associated with of investing in bonds, you may be able to recover your losses through a FINRA arbitration claim.

For a free consultation with a securities attorney, please call The White Law Group 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, visit www.whitesecuritieslaw.com.

 

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