DBSI Executives Found Guilty

Thursday, April 17th, 2014

According to reports, CEO and president of DBSI, Douglas L. Swenson, was convicted of thirty-four counts of wire fraud and forty-four counts of securities fraud. Three other top DBSI executives were also convicted on multiple fraud charges. The jury convicted Ellison, 65, of Boise, David Swenson, 36, of Boise, and Jeremy Swenson, 41, of Meridian, on forty-four counts of securities fraud.

The Idaho Statesman reports that prosecutors described the fraud as a Ponzi scheme, however the term was prohibited from use in court. Prosecutors claimed that DBSI used money from new investors to make payments to old investors. The company filed for bankruptcy in 2008 when they no longer could meet payment obligations.

In a written statement, the U.S Attorney Office for the District of Idaho said ” the United States presented evidence that the defendants publicly represented that DBSI was a profitable company and had a net worth in excess of $105 million when they knew that DBSI’s real estate and non-real estate business activities were universally unprofitable.”

Sentencing date has not been set. The four defendants face up to 5 years in prison for each count of securities fraud. Douglas Swenson could face up to 20 additional years for each count of wire fraud.

The U.S Attorney’s Office statement said that the company will have a “firm restitution obligation” to DBSI investors.

Unfortunately, it is unknown if the company has the funds to repay investors for the financial losses they have suffered. As such, The White Law Group is investigating other avenues for investors to recover their losses, including the liability of broker-dealers that sold DBSI investments.

Broker-dealers have responsibility to perform adequate due diligence to determine the legitimacy of any investment and the likelihood of success. In addition, broker-dealers must have a reasonable bases for all investment recommendations based on the client’s age, net worth, investment experience, risk tolerance, and investment objectives. If a broker-dealer fails to perform adequate due diligence or makes unsuitable investment recommendations they can be held liable for investment losses.

To determine whether you may be able to recover investment losses incurred as a result of your purchase of a DBSI investment, please contact 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 Boca Raton, Florida.

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

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Update for Icon Leasing Fund 12 Investors

Thursday, April 17th, 2014

According to recent letter to shareholders, Icon Leasing Fund Twelve announced that the Fund will officially close and enter a liquidation period effective April 30, 2014.  The letter also states that “the amount and timing of future payments will fluctuate” as the companys assets are sold. 

Icon Leasing Funds Eight and Ten are also currently in a liquidation period. Upon information and belief, Icon Fund Nine has completed its liquidation period and investors are unlikely to receive further payments.

According to Bloomberg, Icon Leasing Fund Twelve acquired and leased equipment in the fields of marine vessels and equipment, manufacturing equipment, mining equipment, telecommunications equipment, and gas compressors to name a few.

Given the current state of the aforementioned Funds, it appears that investors may have suffered losses.  It also appears, based on information gleaned from investors in these funds, that some broker-dealers failed to perform adequate due diligence on these investments. Broker-dealers have a responsibility to perform due diligence on any offering and to have a reasonable basis for any investment recommendation.

Brokers-dealers that make unsuitable investment recommendations or fail to perform adequate due diligence may be in violation of securities law enforced by the Financial Industry Regulatory Authority (FINRA). If you purchased an ICON Fund that you believe was not in line with your risk tolerance, investment experience and/or investment objectives, your broker-dealer may be liable for investment losses through FINRA arbitration.

To determine if your broker-dealer may be liable for your investment losses in DBSI TIC, 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 Boca Raton, Florida.

To learn more about The White Law Group, visithttp://www.whitesecuritieslaw.com.

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PNC Investments LLC fined by FINRA

Tuesday, April 15th, 2014

PNC Investments LLC (CRD# 129052, Pittsburgh, Pennsylvania) recently submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $90,000. The firm has paid restitution to all affected customers.

Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it failed to apply an appropriate rollover or breakpoint discounts to eligible unit investment trust (UIT) purchases for customers. As a result, the firm overcharged customers a total of$52,040.12. The findings stated that the firm failed to adequately enforce its existing WSPs concerning rollover and breakpoint sales charge discounts so as to ensure discounts were properly applied to all eligible UIT purchases by customers.

This information which is publicly available on FINRA’s website has been provided by The White Law Group, LLC.

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 a free consultation with a securities attorney, please call the firm’s Chicago office at 312/238-9650.

For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.

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Merriman Capital, Inc. fined by FINRA

Tuesday, April 15th, 2014

Merriman Capital, Inc. (CRD #18296, San Francisco, California) recently submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured, fined $120,000 and required to retain an independent consultant to conduct a comprehensive review of the adequacy of the firm’s WSPs.  The firm shall adopt and implement the independent consultant’s recommendations and shall provide FINRA with a written implementation report, certified by a firm officer, setting forth the details of the implementation.

Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it failed to maintain WSPs reasonably designed to achieve compliance with applicable securities laws and regulations.  The findings stated that the firm’s WSPs listed specific legal rules and regulations to be complied with, but failed to describe the specific procedures to be followed by the firm, or the person responsible for carrying out many of its procedures to be followed by the firm.

The findings also stated that the firm’s supervisory procedures failed to address several lines of its business.  Among other deficiencies, the firm’s WSPs failed to address private placements even though selling such securities was a substantial portion of the firm’s business and it raised more than $16 million for its parent company through several private offerings.  The firm’s procedures also failed to designate an appropriate principal to supervise private placements of its own securities.

The findings also included that the firm revised its WSPs to address private placements but the revised procedures were still insufficient. In spite of FINRA notification that the new procedures appeared to be deficient, the firm continued to engage in private placements of its parent company’s securities while maintaining the inadequate supervisory procedures.  FINRA found that the firm raised approximately $10 million by selling shares of unrated preferred stock issued by its parent company but did not file the offering materials with FINRA. Prior to the effective date of FINRA Rule 5122, the firm had discussed potential terms with an investment adviser representative, but had not commenced its selling efforts. FINRA also found that the firm raised $3.1 million by selling shares of three-year promissory notes issued by its parent company that paid 10 percent interest. The term sheet disclosed to investors that intended uses of the proceeds from the placement included between $750,000 and $1,000,000 to be paid to settle litigation. The firm and its parent company did not make any other disclosures about the intended use of the proceeds. In addition, FINRA determined that the majority of the proceeds were intended for ordinary operating expenses, not to resolve litigation. The firm used a written investor presentation to solicit investors for the placement that failed to disclose information and contained false statements. Even though an earlier version of the presentation was reviewed and signed off of by a firm principal, a firm principal did not approve the final version prior to use and the firm did not maintain a separate file for the communication evidencing its approval.

This information which is publicly available on FINRA’s website has been provided by The White Law Group, LLC.

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 a free consultation with a securities attorney, please call the firm’s Chicago office at 312/238-9650.

For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.

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Chase Investment Services Corp. fined by FINRA

Tuesday, April 15th, 2014

Chase Investment Services Corp. (CRD #25574, Chicago, Illinois) recently submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $825,000.

Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it failed to deliver approximately 1,101,271 prospectuses to its customers for certain mutual fund and exchange-traded fund (ETF) transactions.

The findings stated that the firm satisfied its mutual fund and exchange-traded fund prospectus delivery obligation by contracting with a third-party service provider. Although the firm relied on the service provider to deliver its mutual fund and ETF prospectuses to customers, it remained the firm’s responsibility to review transactions and verify that a prospectus was properly delivered when required. The firm launched a fee-based, discretionary, unified managed account through which clients could hold, among other investments, mutual funds, ETFs and money market funds. Due to a configuration error in the automated systems the firm utilized for prospectus delivery, the firm directed its service provider to deliver prospectuses for mutual fund and ETF transactions to the investment adviser, a firm affiliate, instead of customers. As a result, the firm failed to deliver prospectuses to the unified managed account customers for whose accounts mutual funds and ETFs had been purchased, and those customers were not provided with important disclosure information about the products. The findings also stated that the firm failed to establish and maintain a supervisory system reasonably designed to achieve compliance with federal rules regarding prospectus delivery requirements. The firm did not have a formal procedure for reviewing the service provider’s prospectus delivery reports for the unified managed accounts and did not assign anyone to review the service provider’s prospectus delivery reports or the service provider’s system for these accounts. The firm had access to the service provider’s system, which identified to whom a prospectus had been delivered, but failed to follow up and review the information to ensure that the service provider was sending prospectuses to customers as required. In fact, the firm did not provide the firm groups that monitored prospectus delivery compliance access to the service provider system. Thus, the firm did not detect that it failed to send prospectuses to its customers for mutual fund and ETF transactions.

This information which is publicly available on FINRA’s website has been provided by The White Law Group, LLC.

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 a free consultation with a securities attorney, please call the firm’s Chicago office at 312/238-9650.

For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.

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