The White Law Group, LLC, a South Florida securities fraud, broker fraud, securities arbitration, investor protection and Chapter 7 bankruptcy law firm based in Boca Raton, Florida.

Recovery of Ponzi Scheme Investment Losses

Wednesday, June 19th, 2013

Have you suffered losses as a result of your dealings with Maxwell B. Smith and Health Care Financial Partners? If so the securities attorneys of The White Law Group may be able to help.

According to reports, New Jersey financial advisor and broker, Maxwell B. Smith, was sentenced to seven years in prison for operating a Ponzi scheme that bilked more than $9 million from investors. Smith admitted that in 1992 he began soliciting investments in the sham entity, Health Care Financial Partners (“HCFP”). Smith allegedly created phony investment prospectus and promised investor yearly divided returns of 7.5% to 9% per investment.  He sold the debt securities in HCFP through fraudulent bond offerings ranging in price from $25,000 to $300,000 and used the proceeds for personal expenses.

The White Law Group is investigating the liability that Smith’s employer may have for failure to properly supervise Smith during the 17 years he ran the HCFP Ponzi scheme. When a broker, like Smith, sells phony investments the brokerage firm may be liable for failure to supervise and responsible for investment losses.

According to BrokerCheck Report, Smith was employed with five different brokerage firms during the relevant time, that were located in New Jersey, Pennsylvania, Kentucky, and New York. Smith worked with Rickel & Associates from 08/1990 to 08/1997, Atlantic Group Securities from 09/1997 to 12/1999, J.J.B. Hilliard, W.L Lyons from 12/1999 to 01/2004, PNC Investments 01/2004 to 01/2005, and Cantone Research INC from 01/2005 to 04/2009.

If you suffered losses while investing with Maxwell B. Smith and would like to discuss your recovery options, please call the securities attorneys of The White Law Group at 312-238-9650for 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 http://www.whitesecuritieslaw.com .

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Recovery of Noble Royalties Investment Losses

Thursday, June 13th, 2013

Have you suffered substantial losses in your investment with Noble Royalties? If so, the securities fraud attorneys at The White Law Group may be able to help you recover your losses.

Noble offers multiple investment products to accredited investors through various broker-dealers. The White Law Group is investigating the liability some broker-dealers may have for selling Noble investment products, particularly Noble Royalty Access Fund III, IV and V, tounsuitable investors.

Oil and gas private placements, like many of the Noble investment products, are often speculative ventures. Private placements are light in regulatory oversight and as such intended for accredited investors.

Broker-dealers are required by the Financial Industry Regulatory Authority (FINRA) to sell private placements only to accredited investors that meet suitability standards. The investors’ age, risk tolerance, net worth, and investment experience should be taken in to account inorder to determine whether a particular investment recommendation is suitable. Broker-dealers that overlook FINRA suitability requirements can be liable for investment losses through FINRA arbitration.

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Will the bond bubble burst?

Thursday, June 13th, 2013

When disclosing the risk of a particular bond offering, a financial advisor must make the investor fully aware of the following risks associated with all bonds: (1) Inflationary risk – i.e., the risk that fixed-income investments historically underperform other investments during times of inflation; (2) Credit risk – i.e., the risk that the company offering the bond could be downgraded by reporting agencies (such as Moody’s) affecting the value of the bond, and (3) Interest rate risk – i.e., the risk that the value of the bond could decrease if interest rates increase (this is precisely the risk that is currently present in the bond market and which must be disclosed by a broker before recommending a bond to any client).

In today’s investment climate, the big disclosure that a broker must make has to do with interest rate risk.  With interest rates at all time lows, history tells us that the risk that current long term bonds will reduce in value when/if rates increase is quite high.  If a financial advisor failed to disclose this potential risk of investing in bonds, and instead represented that investing in bonds is “safe,” then the investor may have a claim for failure to adequately disclose the true risks of investing in bonds at historically low yields.  This risk is magnified if the maturity of the bond is longer.  The longer the maturity of a particular bond or group of bonds, the greater impact changing interest rates will have.  So, if a financial advisor recommends to a client in a historically low yield environment (like the one we are currently in) to over-concentrate their portfolio in long term bonds, the risk of loss is substantially greater than if the broker recommended short term bonds.

With various experts predicting that an increase in interest rates could result in dramatic losses in long term bonds, the question becomes which funds are potentially at risk.  The following are all bond funds with long “effective maturities”:

BlackRock High Yield Municipal Instl

BlackRock High Yield Municipal Inv A

BlackRock High Yield Municipal Inv C

Federated US Government Bond Svc

Franklin AL Tax-Free Income A

Franklin AL Tax-Free Income C

Franklin CA Insured Tax-Free Inc A

Franklin CA Insured Tax-Free Inc Adv

Franklin CA Insured Tax-Free Inc C

Franklin CA Tax-Free Inc Adv

Franklin CA Tax-Free Income A

Franklin CA Tax-Free Income B

Franklin CA Tax-Free Income C

Franklin CO Tax-Free Income A

Franklin CO Tax-Free Income Adv

Franklin CO Tax-Free Income C

Franklin CT Tax-Free Income A

Franklin CT Tax-Free Income Adv

Franklin CT Tax-Free Income C

Franklin Double Tax-Free Income A

Franklin Double Tax-Free Income Adv

Franklin Double Tax-Free Income C

Franklin Federal Tax-Free Income A

Franklin Federal Tax-Free Income Adv

Franklin Federal Tax-Free Income B

Franklin Federal Tax-Free Income C

Franklin FL Tax-Free Income A

Franklin FL Tax-Free Income C

Franklin High Yield Tax-Free Inc A

Franklin High Yield Tax-Free Inc Adv

Franklin High Yield Tax-Free Inc B

Franklin High Yield Tax-Free Inc C

Franklin Insured Tax-Free Income A

Franklin Insured Tax-Free Income Adv

Franklin Insured Tax-Free Income B

Franklin Insured Tax-Free Income C

Franklin MA Tax-Free Income A

Franklin MA Tax-Free Income C

Franklin MD Tax-Free Income A

Franklin MD Tax-Free Income Adv

Franklin MD Tax-Free Income C

Franklin NC Tax-Free Income A

Franklin NC Tax-Free Income Adv

Franklin NC Tax-Free Income C

Franklin NY Tax-Free Income A

Franklin NY Tax-Free Income Adv

Franklin NY Tax-Free Income B

Franklin NY Tax-Free Income C

Franklin PA Tax-Free Income A

Franklin PA Tax-Free Income Adv

Franklin PA Tax-Free Income B

Franklin PA Tax-Free Income C

Franklin VA Tax-Free Income A

Franklin VA Tax-Free Income Adv

Franklin VA Tax-Free Income C

Guggenheim Municipal Income A

Guggenheim Municipal Income C

Guggenheim Municipal Income Instl

Ivy Municipal High Income A

Ivy Municipal High Income B

Ivy Municipal High Income C

Ivy Municipal High Income I

Ivy Municipal High Income Y

Pioneer High Income Municipal A

Pioneer High Income Municipal C

Pioneer High Income Municipal Y

RS High Income Municipal Bond A

RS High Income Municipal Bond C

RS High Income Municipal Bond Y

T. Rowe Price Tax-Free High Yield

T. Rowe Price Tax-Free High Yield Adv

T. Rowe Price US Treasury Long-Term

Vanguard Extended Dur Treas Idx I

Vanguard Long-Term Bond Idx InstlPls

Vanguard Long-Term Bond Index I

Vanguard Long-Term Bond Index Inv

Vanguard Long-Term Corp Bond Idx I

Vanguard Long-Term Corp Bond Idx Signal

Vanguard Long-Term Govt Bd Idx Signal

Vanguard Long-Term Govt Bond Idx I

Vanguard Long-Term Treasury Admiral

Vanguard Long-Term Treasury Inv

Waddell & Reed Muni Hi-Inc A

Waddell & Reed Muni Hi-Inc B

Waddell & Reed Muni Hi-Inc C

Due to their long maturities, these bond funds appear most exposed to the risk of increased interest rates.

If you suffered losses investing in long-duration bond funds 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 Boca Raton, Florida.

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

Tags: bond fraud attorney, bond fraud lawyer, bond fund bubble, bond interest rate risk, bond losses attorney, bond losses lawyer

More Bad News for Thompson National Properties

Thursday, June 13th, 2013

According to reports, a former chief financial officer of Thompson National Properties was recently suspended for five months from the securities industry for failing to conduct adequate and independent due diligence into an array of Thompson’s real estate deals.

According to a FINRA Order, FINRA recently suspended Wendy J. Worcester, who was also co-chief compliance officer of the broker-dealer controlled by Mr. Thompson, TNP Securities LLC, from working with a Finra broker-dealer and fined her $15,000.

The Order alleges that Ms. Worcester “failed to conduct adequate and independent” due diligence regarding three separate private-placement offerings sponsored by Thompson National Properties LLC.  FINRA further alleged, according to the reports, that she “thus compromised the independence” of the broker-dealer, TNP Securities.

The Order further states that in 2009 Thompson National Properties was allegedly hurting for cash, posting losses that year of almost $25.8 million, and that this resulted in negative net equity of $13.6 million for the firm, which was in the middle of launching its REIT, the TNP Strategic Retail Trust Inc.  FINRA further alleges that two of the Thompson private placements, both note programs, paid old investors with new investor money or money from elsewhere in the operation.

The Order specifically states that “[d]uring 2009 and 2010, the [TNP 12% Notes Program LLC and TNP Participating Notes Program LLC] were unable to pay certain investor distributions from operating cash flow,” and that, instead, they “relied on new investor proceeds or transfers of cash from [Thompson National Properties] or its affiliates in order to make distributions to investors.”

Upon information and belief, both these note programs are now in default.

According to the Finra order, Ms. Worcester consented to it without admitting or denying its allegations.  Finra is also apparently conducting an investigation into Mr. Thompson and TNP Securities for failing to hand over a log of more than 300,000 e-mails to the firm’s attorney. Earlier this year, the REIT suspended the payment of dividends to investors.

The White Law Group has been monitoring this situation for some time.  Based on what is now known about the Thompson National Properties offerings – TNP Strategic Retail Trust, TNP 12% Notes Program, and TNP Participating Notes Program – it appears that the brokerage firms that sold these investments may be liable for any losses due to their failure to perform adequate due diligence on these offerings.

Brokerage firms have a fiduciary duty to their clients to perform adequate due diligence on any offering before offering it for sale to their clients.  For more information on The White Law Group’s investigation into potential FINRA arbitration claims involving these products, visit http://www.whitesecuritieslaw.com/2013/03/20/tnp-strategic-retail-trust-cuts-dividend/ or http://seekingalpha.com/instablog/1047207-d-daxton-white/1662781-information-for-tnp-strategic-retail-trust-and-thompson-national-properties-investors

For a free consultation with a securities attorney regarding your TNP litigation options, please call The White Law Group’s Chicago office at 312/238-9650.

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

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Securities Fraud Investigation into Greg Campbell

Monday, June 10th, 2013

According to reports, while working at Merril Lynch, Campbell established Loan Management Accounts (LMAs) for his clients, often without their consent, which he used to divert over $1.4 million into his own personal accounts.  Campbell allegedly used the money to pay his mortgage and finance luxury cars.

In addition, while working as a senior wealth manager for Four Seasons Wealth Management, a company that offered financial advisory services to clients through LPL Financial, Campbell diverted funds approximately $360,000 from his clients’ IRA accounts. Many of Campbell’s victims were purportedly elderly and close family relatives.

Brokerage firms have a supervisory responsibility to monitor the activity and conduct of their brokers. When a FINRA registered broker, such as Campbell, misappropriates and diverts client’s funds for personal use, the brokerage firm may be liable for negligent supervision and responsible for losses in a FINRA dispute resolution claim.

According to Campbell’s BrokerCheck Report (CRD), he worked as a registered FINRA broker with A. G. Edwards & Sons from 01/2004-06/2006, Merrill Lynch from 06/2006-10/2011, and LPL Financial from 11/2011-11/2012.

If you invested with Greg J. Campbell and would like to speak to a securities attorney about your potential to recover losses through FINRA arbitration, please call the securities attorneys of The White Law Group at 312-238-9650 for a free consultation.

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