Posts tagged ‘brokerage firm’
Securities Fraud Investigation Involving 1861 Capital Discovery Domestic Fund
The White Law Group is investigating possible securities fraud involving the marketing and sale of the 1861 Capital Discovery Domestic Fund.
Specifically, we are investigating whether brokerage firms, including UBS, misrepresented the safety and security of the 1861 Capital Discovery Domestic Fund.
1861 Capital Management, the firm that created the 1861 Capital Discovery Domestic Fund, is a municipal arbitrage hedge fund. Its focus is on municipal arbitrage and attempting to take advantage of differences between municipal bonds and other types of debt, including Treasury securities and corporate bonds.
Municipal bond arbitrage generally consists of building a leveraged portfolio of tax-exempt municipal bonds and simultaneously hedging the duration risk in that municipal bond portfolio by shorting other debt instruments. Such hedging is often referred to as interest rate swaps. Obviously, this complex strategy is not without risk as the trading is typically highly leveraged – increasing the downsize loss potential.
Notwithstanding the risks of the 1861 Capital Discovery Domestic Fund, it appears that the investment was marketed and sold by UBS and other broker dealers as a safe, secure, and low-risk municipal bond portfolio. It further appears that these brokerage firms, in marketing 1861 to investors, targeted high net worth individual investors who were generally risk averse, took a conservative approach to investing and were interested in the safety and security offered by tax free municipal bonds.
If you have any information that may assist The White Law Group in its investigation into the sale of the 1861 Capital Discovery Domestic Fund, please contact the firm’s Chicago, Illinois office 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 Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.
Bismarck, North Dakota Securities Fraud / Broker Fraud Attorney
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.
The White Law Group has its offices in Chicago, Illinois and Boca Raton, Florida because of the obvious benefits of being located so close to the FINRA Dispute Resolutions offices in those cities (FINRA’s Southeast headquarters is located at Boca Center Tower 1, 5200 Town Center Circle, Boca Raton, FL 33486- less than one mile from our office, and FINRA’s Midwest headquarters is located at 55 West Monroe Street, Suite 2600, Chicago, IL 60603-1002- close to the firm’s Chicago office).
Having our offices located so close to FINRA’s regional headquarters has its advantages, particularly since all cases filed in the southeast portion of the United States are administered out of FINRA’s Boca Raton, Florida Dispute Resolution office, and all cases in the Midwest portion of the United States are administered out of FINRA’s Chicago, Illinois Dispute Resolution office. In fact, any securities fraud cases filed with FINRA on behalf of a customer living in Florida, Georgia, Alabama, North Carolina, South Carolina, Mississippi, Arkansas, Tennessee, Louisiana, Virginia, Puerto Rico, Delaware, and Washington, D.C. will likely be assigned to FINRA’s Southeast Region office and administered out of the Boca Raton, Florida office and any securities fraud case filed with FINRA on behalf of a customer living in North Dakota, South Dakota, Minnesota, Nebraska, Kansas, Oklahoma, Texas, Missouri, Iowa, Wisconsin, Illinois, Indiana, Kentucky, Ohio and West Virginia will likely be assigned to FINRA’s Midwest Region office and administered out of the Chicago, Illinois office.
Although located in Chicago, Illinois and Boca Raton, Florida, The White Law Group handles securities fraud cases throughout the country and North Dakota, including reviewing securities fraud cases in Bismarck, Grand Forks, Fargo, Jamestown, Devils Lake, Valley City, and Williston. With over 30 years of securities law experience, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions.
To contact The White Law Group, please call 312-238-9650. Or, for more information about The White Law Group or securities fraud, you can also visit our website at http://www.whitesecuritieslaw.com.
Investigation Into Possible Securities Fraud Involving Travis Wright And Waterford Loan Fund
The U.S. Securities and Exchange Commission has recently sued a Utah man for fraudulently misusing $139 million of investor funds. According to a lawsuit filed in federal court in Salt Lake City, Travis Wright misappropriated all but $6 million of the $145 million he raised from about 175 investors between 2001 and 2009 by selling notes issued by his Waterford Loan Fund LLC.
The White Law Group is investigating whether investors in the Waterford Loan Fund were introduced to the firm or to Travis Wright by their financial professional or brokerage firm. If a financial professional or brokerage firm recommended that an investor invest with Waterford Loan Fund, they may have liability for failing to perform the necessary due diligence to determine that the Waterford Loan Fund was a ponzi scheme.
Waterford Loan Fund LLC and its Waterford Funding LLC affiliate are being liquidated in bankruptcy.
If you have any information that may assist The White Law Group in its investigation, please contact our Chicago office 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 Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions. For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.
Representing Foreign Investors In FINRA Arbitrations
It is not uncommon for foreign investors to seek to establish an investing relationship with a United States based broker-dealer (either because the client is seeking the security of investing in U.S. investments, or because these firms provide the client with the ability to discreetly invest their assets outside of their home country).
Whether the client realized it or not when establishing their account with these U.S. broker-dealers, the client likely signed an arbitration agreement requiring them to submit to FINRA arbitration in the event of a dispute. In so doing, the client agreed to resolve any dispute (including a claim related to investment losses) through FINRA’s Dispute Resolution process.
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. The firm represents foreign investors in claims against their U.S. brokerage firm in such FINRA arbitrations.
The Firm has its offices in Chicago, Illinois and Boca Raton, Florida because of the obvious benefits of being located so close to the FINRA Dispute Resolutions offices in those cities (FINRA’s Southeast headquarters is located at Boca Center Tower 1, 5200 Town Center Circle, Boca Raton, FL 33486- less than one mile from our office, and FINRA’s Midwest headquarters is located at 55 West Monroe Street, Suite 2600, Chicago, IL 60603-1002- close to the firm’s Chicago office).
Having our offices located so close to FINRA’s regional headquarters has its advantages, particularly since FINRA assigns cases to the FINRA office closest to where the client resides. For example, an investor residing in Central or South America will typically have their case assigned to FINRA’s Boca Raton, Florida Dispute Resolution office with the hearing conducted in Miami. As such, having our office located in Boca Raton has huge benefits in administering these cases. Additionally, Rose M. Schindler, who is Of Counsel to The White Law Group, is the former Regional Director of FINRA Dispute Resolution’s Boca Raton office.
We have reviewed cases on behalf of many foreign investors with claims against United States brokerage firms, including reviewing claims on behalf of investors residing in Colombia, Argentina, Brazil, Venezuela, Costa Rica, Puerto Rico, the Virgin Islands, Bolivia, Ecuador, Paraguay, Uruguay, and Chile. These claims often involve large American brokerage firms servicing Latin American investors from their offices in Miami, firms such as Merrill Lynch, Morgan Stanley Smith Barney, Wachovia, Wells Fargo, Ameriprise, and UBS.
With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions.
To contact The White Law Group, please call 312-238-9650. Or, for more information about The White Law Group or securities fraud, you can also visit our website at http://www.whitesecuritieslaw.com.
Investigating regarding the appropriateness of structured products such as ELKS for retail investors.
The White Law Group is investigating the appropriateness of structured product investments sold by various broker-dealers (including Citigroup’s ELKS structured product), to retail investors.
Structured products are complicated investments that are only appropriate for sophisticated or institutional investors. Structured products are designed to facilitate highly customized risk-return objectives by taking a traditional security, such as a conventional investment-grade bond, and replacing the usual payment features (e.g. periodic coupons and final principal) with non-traditional payoffs derived not from the issuer’s own cash flow, but from the performance of one or more underlying assets.
It’s become apparent that many retail investors have suffered losses associated with structured products that were sold to them by their financial advisor. Many brokerage firms peddled structured products using monikers such as PACERS, STRIDES, SPARQS, and ELEMENTS.
One example of such a structured product is one developed by Citigroup called ELKS, or equity linked security. Citigroup’s ELKS (equity linked security) product is a risky derivative instrument where an investor is offered a specified return on a structured security tied to an individual stock. Providing the stock maintains a minimum value, the guaranteed return is paid. However, if the stock ever falls below the minimum value (sometimes around 80 percent), the ELKS immediately converts into shares of that stock. Then if the price of the underlying stock declines, the investor could receive a stock worth much less than their initial investment.
While ELKS offer potentially higher returns, the downside risk is unlimited if the stock price declines. Also, if the underlying stock increases dramatically in value, the investor only gets the guaranteed return (and does not benefit from the dramatic gain).
Other examples of structured products sold by brokerage firms include UBS’ PERLES structured product (PERformance Linked to Equity Securities), and Morgan Stanley’s Performance Leveraged Upside Securities (or PLUS).
The broker-dealers that sell these structured products charge investors an upfront commission to buy them and likely earn additional profits through hedging of the investments and the underlying stocks. Brokerage firms were aggressively selling structured derivative products like ELKS to unsophisticated retail investors a few years ago, prompting FINRA to warn member firms of concerns that customers didn’t understand the inherent risks (see, for example, FINRA Notice to Member 05-59).
If you have any information that may assist us in our investigation into possible securities fraud involving the sale of structured products by financial advisors, please contact 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 Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions. For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.