Cornerstone REIT Gets a New Name

Monday, September 29th, 2014

According to SEC records, another Cornerstone REIT has undergone a name change. Cornerstone Core Properties REIT is now called Summit Healthcare REIT. This is the REIT’s second name change.The REIT began as a property fund originally named Cornerstone Realty Fund until it qualified as a non-traded REIT in 2005.

Sentio Healthcare Properties is the other Cornerstone REIT that has undergone several name changes. The REIT formerly went by the names Cornerstone Growth & Income REIT, Cornerstone Healthcare Plus REIT, and Cornerstone Institutional Growth REIT.

SEC records state that the purpose of the name change was to better reflect the company’s focus on investment in healthcare real estate. However, the past performance of the REITs could very well have influenced the need to change names.

The Sentio REIT was originally sold to investors at $8 per share, but was valued at a meager $2.25 in 2012. Unfortunately for many investors, Cornerstone REITs did not turn out to be as profitable of an investment as they were led to believe.

The trouble with non-traded REITs is that they lack liquidity and are inherently risky. Compared to traditional investments, such as stocks, bonds and mutual funds, REITs are considerably more complex securities products, making them better suited for sophisticated and institutional investors.

Broker dealers that sell REITs are required to perform adequate due diligence on investment and to ensure that all recommendations are suitable for the investor in light of the investor’s age, risk tolerance, net worth, and investment experience. Firms that fail to do so, may be held responsible for any losses.

Unfortunately, the high sales commissions associated with REITs often provides some broker dealers with enough incentive to overlook suitability requirements (broker dealers earn extremely high sales commission for selling REITs, sometimes as high as 15%).

If you have invested in the Summit Healthcare REIT, Sentio Healthcare Properties, or another Cornerstone Fund, and would like to speak to a securities attorney about the potential to recover your investment losses, please call The White Law Group 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 Vero Beach, Florida.

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

Tags: , , , , , , , , , , , , , ,

Stockbroker Fraud in Pennsylvania

Friday, September 26th, 2014

According to the Pocono Record, a former Pennsylvania stockbroker has plead guilty to mail fraud. The charges against Joseph R. Gallardo stem from an investment fraud investigation.

Gallardo allegedly persuaded clients to invest in his personal real estate venture, Blue Meadow Group, LLC. Allegedly, investors were guaranteed lucrative returns and told their investment was protected. Instead, Gallardo reportedly used the money to purchase a gas station and convenience store. However, he is also accused of using the money to fund his online day trading account that suffered substantial losses.

According to reports, Blue Meadow Group was not an investment trust and the securities Gallardo was selling were not registered in the state of Pennsylvania. It is alleged that Gallardo lost approximately $1.8 million through his fraudulent activities.

According to BrokerCheck, Gallardo was a registered representative in three different states between 2001 and 2009. He worked In New York with Quick & Reilly from 09/2001 – 12/2003, in Massachusetts with Investors Capitial form 12/2003 – 12/2008, and in Pennsylvania with Brokersxprsss from 11/2008 – 02/2009.

Brokerage firms have a responsibility to monitor the business transactions of their employees, including transactions that occur outside of the firm. When a broker sells an investment product that is not approved by the firm, the act can be considered selling away. If a broker is convicted of selling away, the brokerage firm may be liable for negligent supervision and responsible for investment losses.

If you were a client of Joseph R. Gallardo and would like to discuss your potential to recover your losses, please call the securities attorney 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/compliance law firm with offices in Chicago, Illinois and Vero Beach, Florida.

To learn more about The White Law Group, visit www.WhiteSecuritesLaw.com.

 

Tags: , , , , , , , , , , ,

WFG Investments Faces Hefty Fine

Thursday, September 25th, 2014

According to InvestmentNews, the Dallas based broker-dealer, WFG Investments Inc., is facing a “global fine” that could cost the firm upwards of $650,000. The report indicates that the Financial Industry Regulatory Authority (FINRA) issue a “global fine” when attempting to settle long running problems within a brokerage firm. The reason for this potential fine is unclear at this time.

InvestmentNews reports that this is the firms second 6 figure fine in the past two years. WFG was fined $200,000 in 2013 for allegedly missing a stock-fraud scheme.

According to InvestmentNews, WFG Investments is a midsize firm with approximately 270 registered brokers. Reportedly, the firm had “t total revenues of $46.6 million for the 12 months ending in June, and posted a loss of $210,000.”

The potential “global fine” shortly follows FINRA’s investigation into former WFG broker, Mathew Bell. Bell along with six other individuals were arrested in July on securities fraud chargers. More on Bell can be found, here.

Brokerage firms have a fiduciary duty to put the interests of their clients above their own. Firms are also required to adequately supervise the activities of their brokers. If a broker misleads or uses deceitful tactics when making investment recommendations, the firm may be held liable for investment losses incurred by the client.

If you purchased investments with WFG and suffered losses, The White Law Group may be able to help. To speak with a securities attorney about your litigation options, 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 and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.

To learn more about The White Law Group visit, www.whitesecuritieslaw.com.

 

Tags: , , , , , , , , , , ,

Texas Broker Jailed for Ponzi Scheme

Wednesday, September 24th, 2014

According to FA-Mag.com, former Texas broker, William Charlton Mays IV, has been sentenced to 20 years for fraud and 10 years for theft in connection with an alleged Ponzi scheme. Mays allegedly took approximately $225,000 from investors by telling them they could earn up to 18 percent annual return from gold, silver and commodities investments.

Allegedly, Mays used the money he raised from investors for personal expenses including child support payments. He was also accused of using money from new investors to pay returns to old investors.

In addition to the prison sentence, Mays was fined $20k and ordered to pay back $102,117. It is unclear if Mays has the money to repay investors. As such, the White Law Group is investigating other avenues of recovery for investors.

When registered brokers commit fraud and steal from clients, the brokerage firm that employs them may be liable for negligent supervision and responsible for investment losses.

According to BrokerCheck, Mays was a registered broker in Corpus Christi, TX with LPL Financial from 09/2004 – 04/2009, Summit Brokerage Services from 04/2009 – 12/2010 and SWS Financial Services from 01/2011 – 11/2011.

If you are concerned about investments you made with William Charlton Mays IV 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/compliance law firm with offices in Chicago, Illinois and Vero Beach, Florida.

To learn more about The White Law Group, visit www.WhiteSecuritesLaw.com.

Tags: , , , , , , , ,

Merrill Lynch Advisors Asked to Resign

Tuesday, September 23rd, 2014

According to InvestmentNews, Bank of America Merrill Lynch asked two veteran advisors, James Goetz and Stephen Brown, to resign for allegedly recommending clients invest outside the firm. It is alleged that Goetz and Brown encouraged some clients to invest directly in a hedge fund the two managed rather than through Merrill Lynch’s investment platform.

Reportedly, Goetz and Brown were part of Merrill Lynch’s Private Banking and Investment Group that managed approximately $2.5 billion in assets. The firm was called the Brown Group. The advisers reportedly catered to wealthy investors with at least $10 million in assets.

When a financial advisor sells securities outside of their firm or without the firm’s permission that act can be considered selling away. The Financial Industry Regulatory Authority (FINRA) prohibits selling away. It is unclear from the report if FINRA is investigating the situation.

The foregoing information, which is available on the InvestmentNews website, is being provided by The White Law Group. 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 a free consultation with a securities attorney, please call the firm at (312)238-9650. For more information on The White Law Group and its representation of investors in FINRA arbitration claims, visit www.WhiteSecuritiesLaw.com.

Tags: , , , , ,