Claus Foerster Accused of $3 Million Investment Scam

Monday, July 7th, 2014

According to reports, the Financial Industry Regulatory Authority (FINRA) has barred Claus Foerster from the industry in connection with an alleged Ponzi Scheme. Authorities have accused Foerster of stealing nearly $3 million from clients since 2000. Allegedly Claus told investors that their funds would be invested in a fund known as S.G. Investments but instead the funds were placed in a bank account controlled by Foerster.

The reports allege that Foerster provided clients with fictitious account statements and two clients were provided purported dividend payments each month. At least 13 known clients fell victim to Foerster’s alleged scheme.

According to Foerster’s FINRA Broker Report, he was employed by Morgan Keegan & Co. Inc. beginning in 2008 and came to Raymond James last February. Foerster’s employment at Raymond James appears to have been terminated by on on June 4.

The report also indicates that Raymond James is in the process of attempting to make restitution to the clients involved. Given the seriousness of these allegations, it is recommended that victims of Foerster’s scheme seek legal counsel to ensure that their legal rights are protected.

The White Law Group is investigating what liability Foresters employer may have for client’s losses. When a FINRA registered representative conducts business outside the scope of the brokerage firm where they are registered, the act can be considered “selling away.” If proven, the brokerage firm may be liable for negligent supervision of their broker representative and held responsible for investment losses in a FINRA dispute resolution claim.

If you were a client of Claus Forester and would like to discuss your litigation options to recover investment losses, please call the firm 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 www.WhiteSecuritiesLaw.com.

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

Update on Former Ohio Brokers Jeffrey L. Gainer and Jerry A. Cicolani, Jr.

Monday, June 30th, 2014

According to Ohio.com two former Ohio brokers, Jeffrey L. Gainer and Jerry A. Cicolani, Jr. are named in a major civil lawsuit filed by Securities and Exchange Commission (SEC) lawsuit for their involvement in an alleged Ponzi scheme that duped investors out of $20 million. The scheme involved the allegedly bogus oil and fuel company, KGTA Petroleum, set up by Thomas Abdullah and Kenneth Grant.

Between October 8, 2012 and February 2014, according to the SEC complaint, KGTA raised at least $20.73 million from investors. “Gainer and Cicolani found investors for KGTA, set up meetings with Grant and Abdallah, relayed information about KGTA to prospective investors, and obtained investor signatures on the agreements that memorialized the investment.” During that time, the complaint says Gainer and Cicolani were representative with Prime Solutions Securities, Inc. (“PSSI”) – a Cleveland-based registered broker-dealer.

The SEC accuses Gainer and Cicolani of acting as unregistered brokers and selling the notes to investors without a registration statement. Gainer and Cicolani allegedly sold directly to investors and hid the transactions from their broker-dealer employer, a practice known as “selling away.”

Furthermore, Gainer and Cicolani are accused of hiding from investor the “enormous fees” they were paid. The SEC complaint alleges Gainer and Cicolani were paid a combined total of $6 million in selling fees. “In other words, they have been paid approximately 29% of all funds raised from investors for KGTA.”

The SEC complaint also names Grainer’s wife, Nancy Gainer, and Cicolani girlfriend, Kelly Hood, as relief defendants alleging the massive fees were funneled through entities owned by the two women. Interestingly, Kelly Hood was also an employee of PSSI, according to the complaint, and “She is also the owner of Turnbury Consulting Group, LLC which received over $3.5 million from KGTA between October, 2013 and March 2014.”

According to the Financial Industry Regulatory Authority’s (FINRA) BrokerCheck, Gainers’, Cicolanis’ and Hoods’ employment at PSSI was terminated. Cicolani’s has 68 customer disputes on his BrokerCheck report.

The White Law Group is investigating what liability PSSI may have for their employees actions. When a FINRA registered representative conducts business outside the scope of the brokerage firm where they are registered, the act can be considered “selling away.” If proven, the brokerage firm may be liable for negligent supervision of their broker representative and held responsible for investment losses in a FINRA dispute resolution claim.

If you suffered losses investing with Jeffrey L. Gainer and Jerry A. Cicolani, Jr. and would like to discuss your potential to recover your losses through a FINRA arbitration claim, 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 securities fraud, investor protection, and securities regulation/compliance law firm dedicated to the representation of investors in FINRA arbitration claims throughout the United States. Our offices are located in Chicago, Illinois and Boca Raton, Florida.

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

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

Investment Loss Investigation into Lightstone Value Plus Real Estate Investment Trust

Thursday, June 26th, 2014

Have you suffered investment losses in Lightstone Value Plus REIT? If so, The White Law Group may be able to help.

According to SEC records, Lightstone Value Plus REIT was incorporated in 2004 offering up 20,000,000 shares of common stock to investors. The REIT intended to acquire both residential and commercial properties, which would include retail multi-tenanted shopping centers, industrial and office properties.

Private placements, like the Lightstone Value Plus REIT, are unregistered securities products that carry considerable risk and often lack liquidity. Despite the inherent risk associated with private placements, brokers eager to make a sale, often tout the potential for high returns and downplay the risks. Private placements are arguably unsuitable for most investors and generally intended for sophisticated and institutional investors.

Brokers are required by the Financial Industry Regulatory Authority (FINRA) to recommend investments that are suitable for their clients. In order to determine suitability, brokers must take into consideration the investor’s age, risk tolerance, net worth, and investment experience, among other factors.

Unfortunately, the high sales commissions generated by the sale of private placements, often provides some brokers with enough incentive to overlook suitability requirements. According to SEC records, Lightstone Value Plus REIT offered brokers up to 7% in sales commission.

Brokers that overlook FINRA suitability requirements or mislead investors regarding the risks associated with a private placement investment can be liable for losses through FINRA arbitration.

To determine whether you may be able to recover investment losses incurred as a result of your purchase of Lightstone Value Plus Real Estate Investment Trust, 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 Boca Raton, Florida.

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

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

Investment loss Investigation in Walton Camino Fund Real 1

Thursday, June 26th, 2014

Have you suffered investment losses in Walton Camino Fund Real 1? If so, The White Law Group may be able to help.

According to SEC records, Walton Camino Fund was organized in June, 2008 and set out to raise over $11 million from investors. The company’s description indicates they are in the business of “purchasing and managing as an investment real estate in City of Niederwald, within Hays and Caldwell Counties, Texas.”

Private placements, like the Walton Camino Fund, are unregistered securities products that carry considerable risk and often lack liquidity. Despite the inherent risk associated with private placements, brokers eager to make a sale, often tout the potential for high returns and downplay the risks. Private placements are arguably unsuitable for most investors and generally intended for sophisticated and institutional investors.

Brokers are required by the Financial Industry Regulatory Authority (FINRA) to recommend investments that are suitable for their clients. In order to determine suitability, brokers must take into consideration the investor’s age, risk tolerance, net worth, and investment experience, among other factors.

Unfortunately, the high sales commissions generated by the sale of private placements, often provides some brokers with enough incentive to overlook suitability requirements. According to SEC records, Walton Camino Fund offered brokers nearly 7% in sales commission.

Brokers that overlook FINRA suitability requirements or mislead investors regarding the risks associated with a private placement investment can be liable for losses through FINRA arbitration.

To determine whether you may be able to recover investment losses incurred as a result of your purchase of Walton Camino Fund Real 1, 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 Boca Raton, Florida.

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

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

Mark Raymond Talley barred from securities industry.

Wednesday, June 25th, 2014

According to a FINRA disciplinary action announcement, Mark Raymond Talley (CRD #4969783, Registered Representative, Ft. Mitchell, Kentucky) recently submitted an Offer of Settlement in which he was barred from association with any FINRA member in any capacity.

Without admitting or denying the allegations, Talley consented to the described sanction and to the entry of findings that he recommended that his customer replace an existing variable annuity with a new variable annuity. The findings stated that Talley misrepresented orally and in writing that the existing variable annuity was out of the surrender period and could be sold without incurring a surrender fee when in fact, the annuity was still in the surrender period and the customer would incur a $15,000 surrender fee if it was sold. As a result of Talley’s representation, the customer sold the annuity and purchased a new one. On a switch form related to the transaction, Talley falsely stated that he verified that the customer’s existing annuity was out of the surrender period and claimed he had obtained this information by speaking to an individual he claimed was an employee of the insurance company that underwrote and issued the annuity. Talley did not, in fact, contact the insurance company. Therefore, the information he placed on the switch form was false. The customer signed the switch form and Talley submitted it to his member firm. The firm filed a Uniform Termination Notice for Securities Industry Registration (Form U5) in which it disclosed that Talley was permitted to resign after the firm determined that he had provided inaccurate information on a client disclosure document. The findings also stated that in connection with FINRA’s investigation into that disclosure, Talley provided false answers to FINRA in response to a request for information. Talley provided partial testimony in a FINRA on-the-record interview, but failed to appear to complete the testimony.

Full the full findings, see FINRA Case #2012032650301.

According to his FINRA Broker Report, Talley was registered with Fifth Third Securities from September 2009 through May 2012 and with Chase Investment Services Corp. from January 2008 through March 2009.

The foregoing information, which is all publicly available on FINRA’s 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 Boca Raton, Florida.

For a free consultation with a securities attorney, call The White Law Group at 312/238-9650.  For more information on the firm, visit http://www.whitesecuritieslaw.com.

Tags: , , , , ,