Posts tagged ‘Chicago’
Recovery of Lightstone Value Plus REIT Losses
Have you suffered investment losses in the Lightstone Value Plus REIT? The White Law Group may be able to help.
The White Law Group is investigating potential securities fraud claims on behalf of investors who purchased risky REIT investments like Lightstone Value Plus REIT at the recommendation of their financial advisor or brokerage firm.
FINRA recently announced that it is paying close attention to the sale of REITs and, in particular, the ways in which broker/dealers marketed and sold the products to investors. In many cases, and notwithstanding the risk of REIT investments, broker-dealers marketed these investments as safe and secure. Non-traded REITs are often one of the higher commission products sold by a brokerage firm (often explaining the firm’s reason for recommending the investment).
It appears that Lightstone Value REIT has declined in value and that investors are unable to redeem their investment.
To determine whether you may be able to recover investment losses incurred as a result of your purchase of Lightstone Value Plus REIT, 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. The White Law Group’s experiences attorneys are dedicated to helping 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.
FINRA Rules on Private Placements
Private Placements have become a hot button issue for FINRA regulators and securities attorneys representing investors. The number of private placement cases has spiked considerably over the past few years in large part because of the sizable commissions brokerage firms generate from selling private placements. We are currently handling numerous cases involving private placement investments that went under like DBSI, Medical Capital, and Provident Royalties (among others).
New rules have been implemented requiring full disclosure of these commissions, and even more rules are being contemplated. The following is a brief overview of those FINRA Rules, as well as some of the relevant case law that discusses a brokerage firms obligation to perform due diligence on a private placement investment prior to recommending it to any of its clients.
The first significant rule that applies in private placement fraud cases is NASD Rule 2310. NASD Rule 2310 states that a brokerage firm must have a reasonable grounds to believe that a customer recommendation to purchase, sell or exchange a security (including a private placement investment) is suitable for the customer. See, also FINRA Notice to Member 03-71 concerning non-conventional investments and Notice to Member 05-18 concerning private placements of tenants-in-common interests.
This suitability analysis has two principal components. First, the “reasonable basis” suitability analysis requires the brokerage firm to have a reasonable basis to believe, based on a reasonable investigation, that the recommendation is suitable for at least some investors. This is where certain private placements, such as Medical Capital, DBSI, and Provident, fail the suitability test. Had brokerage firms perform the proper amount of due diligence on these investments, the firms would have realized that ponzi schemes are obviously not appropriate investments for any investors.
The second prong, is the “customer specific suitability analysis, which requires that the brokerage firm determine whether the security is suitable for the customer to whom it would be recommended. This is often referred to as the Know Your Customer Rule, but in essence, brokerage firms are required to account for a client’s age, investment experience, net worth, and investment goals in determining whether an investment is appropriate for a particular client. Private placements often fail the suitability test for this reason. Private placements, by there very nature, are often risky investments, which are virtually never appropriate for conservative or retired investors.
In addition to determining suitability, brokerage firms have a high due diligence requirement. Specifically, brokerage firms are charged with exercising a high degree of case in investigating and independently verifying an issuer’s representations and claims. Additionally, when an issuer is seeking to finance a new speculative venture, a broker dealer can not blindly rely on the issuer’s representations and are required to be particularly careful in this instance and must verify the issuer’s obviously self-serving statements.
A brokerage firm has an even greater responsibility to perform due diligence on a specific investment if the firm is deemed to be affiliated in some way with the issuer. This can occur if the brokerage firm assists the company in preparing the private placement memorandum or if there are red flags present.
Finally, brokerage firms are required to follow NASD Rule 3010 and to ensure that the firm’s personnel, including its registered representatives, comply with their legal and regulatory requirements.
Much of the foregoing is discussed in FINRA Regulatory Notice 10-22 on Regulation D offerings.
Brokerage firms are also required to follow FINRA Rule 5122 when dealing with private placements. FINRA Rule 5122 was developed in response to abuses in the sale of private placements issued by broker-dealers and their control entities. The Rule generally requires that a member firm or associated person (financial advisor) engaging in a private placement of unregistered securities issued by the firm:
(1) disclose to investors in a private placement memorandum, term sheet or other offering document the intended use of offering proceeds, the offering expenses and the amount of compensation that will be paid to the broker-dealer and its associated persons;
(2) submit the offering documents to the FINRA Corporate Financing Department; and
(3) comply with the requirement that at least 85% of the offering proceeds raised may not be used to pay for offering costs, discounts, commissions or any other cash or non-cash incentives.
Obviously, the big one here is the disclosure of the commission paid. In many cases we have handled, the commission is either not disclosed or is disclosed in such a way that an unsophisticated investor cannot determine the commission paid to the brokerage firm making the representation. Private placements often pay a commission far in excess of other traditional types of investments (sometimes as high as 8-10%) and investors would certainly be more concerned about making such an investment if they knew that the broker was being paid this commission.
For more information on FINRA Rule 5122 look at FINRA Regulatory Notice 11-04.
If you have additional questions about private placements or are concerned about a private placement investment you made through a brokerage firm, the securities attorneys of The White Law Group may be able to help. For a free consultation, please call the firm’s 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.
Top Independent Broker-Dealers According to Investment News
| RANK | Broker-dealer | Total gross revenues |
| 1 | LPL Investment Holdings Inc. | $2.8B |
| • LPL Financial One Beacon St. Boston, MA 02108 joinlpl.com (888) 250-2420 |
$2.6B | |
| • Uvest 2810 Coliseum Centre Drive Charlotte, NC 28217 uvest.com (800) 277-8802 |
$195.2M | |
| 2 | Ameriprise Financial Services Inc. 108 Ameriprise Financial Center Minneapolis, MN 55474 ameriprise.com (612) 671-3131 |
$2.0B |
| 3 | Raymond James Financial Services Inc. 880 Carillon Parkway St. Petersburg, FL 33716 advisorchoice.com (800) 998-7537 |
$834.9M |
| 4 | Advisor Group | $773.9M |
| • FSC Securities Corp. 2300 Windy Ridge Parkway, Suite 1100 Atlanta, GA 30339 joinfsc.com (800) 547-2382 |
$229.1M | |
| • Royal Alliance Associates Inc. One World Financial Center New York, NY 10281 royalalliance.com (212) 551-5100 |
$317.5M | |
| • SagePoint Financial Inc. 2800 N. Central Ave., Suite 2100 Phoenix, AZ 85004 sagepointfinancial.com (866) 462-4432 |
$227.3M | |
| 5 | Lincoln Financial Network 2005 Market St., 34th Floor Philadelphia, PA 19103 joinlfn.com (866) 536-6630 |
$738.3M |
| 6 | MetLife Broker-Dealer Group | $724.7M |
| • MetLife Securities Inc. 1095 Sixth Ave. New York, NY 10036 metlife.com (888) 883-4684 |
$377.1M | |
| • New England Securities Inc. 1095 Sixth Ave. New York, NY 10036 nef.com (888) 883-4684 |
$194.3M | |
| • Tower Square Securities Inc. 1095 Sixth Ave. New York, NY 10036 towersquare.com (888) 883-4684 |
$45.9M | |
| • Walnut Street Securities Inc. 1095 Sixth Ave. New York, NY 10036 walnutstreet.com (888) 883-4684 |
$107.4M | |
| 7 | National Planning Holdings Inc. | $610.8M |
| • Invest Financial Corp. 8745 Henderson Road, Suite 300 Tampa, FL 33634 investfinancial.com (800) 245-4732 |
$175.1M | |
| • Investment Centers of America Inc. 212 N. Fourth St. Bismarck, ND 58501 joinica.com (800) 544-7113 |
$60.7M | |
| • National Planning Corp. 401 Wilshire Blvd., Suite 1100 Santa Monica, CA 90401 natplan.com (800) 881-7174 |
$258.2M | |
| • SII Investments Inc. 5555 W. Grande Market Drive Appleton, WI 54913 siionline.com (800) 426-5975 |
$116.8M | |
| 8 | Axa Advisors LLC 1290 Sixth Ave. New York, NY 10104 axa-equitable.com (212) 554-1234 |
$490.6M |
| 9 | Commonwealth Financial Network 29 Sawyer Road Waltham, MA 02453 commonwealth.com (866) 462-3638 |
$488.5M |
| 10 | Securities America Inc. 12325 Port Grace Blvd. La Vista, NE 68128 joinsai.com (800) 989-8441 |
$412.1M |
| 11 | Northwestern Mutual 720 E. Wisconsin Ave. Milwaukee, WI 53202 northwesternmutual.com (800) 323-7033 |
$378.7M1 |
| 12 | NFP Advisor Services Group 1250 S. Capital of Texas Highway, Building 2, Suite 125 Austin, TX 78746 nfp.com (512) 697-6000 |
$325.9M |
| 13 | Wells Fargo Advisors Financial Network 1 North Jefferson Ave. St. Louis, MO 63103 wfafinet.com (866) 485-5383 |
$308.0M |
| 14 | John Hancock Financial Network 197 Clarendon St. Boston, MA 02117 jhnetwork.com (617) 572-6524 |
$287.9M |
| 15 | Waddell & Reed Inc. 6300 Lamar Ave. Overland Park, KS 66202 joinwaddell.com (913) 236-2000 |
$250.4M |
| 16 | Cambridge Investment Research Inc. 1776 Pleasant Plain Road Fairfield, IA 52556 joincambridge.com (800) 777-6080 |
$249.6M |
| 17 | Woodbury Financial Services 500 Bielenberg Drive Woodbury, MN 55125 woodburyfinancial.com (800) 800-2638 |
$223.2M |
| 18 | First Allied Securities Inc. 655 W. Broadway, 11th Floor San Diego, CA 92101 joinfasi.com (800) 336-8842 |
$209.1M |
| 19 | H.D. Vest Financial Services 6333 N. State Highway 161, Fourth Floor Irving, TX 75038 hdvest.com (800) 821-8254 |
$207.6M |
| 20 | Securian Financial Services Inc. 400 Robert St. N. St. Paul, MN 55101 securian.com (888) 237-1838 |
$205.8M |
| 21 | ING Financial Partners Inc. 909 Locust St. Des Moines, IA 50309 ingfinancialpartners.com (800) 356-2906 |
$189.6M |
| 22 | Princor Financial Services Corp. 711 High St. Des Moines, IA 50392 princor.com (888) 774-6267 |
$183.0M |
| 23 | NYLife Securities LLC 51 Madison Ave., Room 151 New York, NY 10010 nylifesecurities.com (800) 695-4785 |
$171.9M |
| 24 | M Holdings Securities Inc. (M Securities) 1125 N.W. Couch St., Suite 900 Portland, OR 97209 mfin.com (503) 232-6960 |
$130.3M |
| 25 | Transamerica Financial Advisors Inc. 570 Carillon Parkway St. Petersburg, FL 33716 tfa.transamerica.com (800) 322-7161 |
$127.0M |
| 26 | Next Financial Group Inc. 2500 Wilcrest Drive, Suite 620 Houston, TX 77042 nextfinancial.com (877) 876-6398 |
$123.6M |
| 27 | Ladenburg Thalmann Financial Services Inc. 4400 Biscayne Blvd, 12th Floor Miami, FL 33137 ladenburg.com (305) 572-4100 |
$114.9M |
| • Investacorp Inc. 4400 Biscayne Blvd. Miami, FL 33137 investacorp.com (305) 557-3000 |
$54.5M | |
| • Triad Advisors Inc. 5185 Peachtree Parkway, Suite 280 Atlanta, GA 30092 triad-advisors.com (800) 720-4003 |
$60.4M | |
| 28 | Cadaret Grant & Co. Inc. One Lincoln Center Syracuse, NY 13202 cadaretgrant.com (800) 288-8601 |
$109.1M |
| 29 | National Holdings Corp. | $108.6M |
| • National Securities Corp. 120 Broadway, 27th Floor New York, NY 10271 nationalsecurities.com (212) 417-8000 |
$72.6M | |
| • vFinance Investments Inc. 1200 N. Federal Highway, Suite 400 Boca Raton, FL 33432 vfinanceinvestments.com (561) 981-1000 |
$36.0M | |
| 30 | Park Avenue Securities LLC 7 Hanover Square New York, NY 10004 guardianlife.com (888) 600-4666 |
$101.8M |
| 31 | Genworth Financial Securities Corp. 200 N. Martingale Road Schaumburg, IL 60173 genworthfinancialsecurities.com (888) 528-2987 |
$95.5M |
| 32 | Ameritas Investment Corp. 5900 O St. Lincoln, NE 68510 aicinvest.com (800) 335-9858 |
$93.3M |
| 33 | ProEquities Inc. 2801 Highway 280 S. Birmingham, AL 35223 proequities.com (800) 288-3035 |
$79.1M |
| 34 | Investors Capital Corp. 230 Broadway E. Lynnfield, MA 01940 investorscapital.com (800) 949-1422 |
$75.9M |
| 35 | Centaurus Financial Inc. 2300 E. Katella Ave., Suite 200 Anaheim, CA 92806 centaurusfinancial.com (800) 880-4234 |
$73.8M |
| 36 | VSR Financial Services Inc. 8620 W. 110th St. Overland Park, KS 66210 joinvsr.com (800) 800-3177 |
$73.4M |
| 37 | Securities Service Network Inc. 9729 Cogdill Road, Suite 301 Knoxville, TN 37932 joinssn.com (866) 218-0452 |
$68.4M |
| 38 | Lincoln Investment Planning Inc. 218 Glenside Ave. Wyncote, PA 19095 lincolninvestment.com (215) 887-8111 |
$67.1M |
| 39 | American Portfolios Financial Services Inc. 4250 Veterans Memorial Highway, Suite 420E Holbrook, NY 11741 americanportfolios.com (631) 439-4600 |
$66.3M |
| 40 | Sigma Financial Corp. 4261 Park Road Ann Arbor, MI 48103 sigmafinancial.com (888) 744-6264 |
$60.4M |
| 41 | Geneos Wealth Management Inc. 9055 E. Mineral Circle, Suite 200 Centennial, CO 80112 geneoswealth.com (888) 812-5043 |
$59.2M |
| 42 | Capital Financial Group Inc./H. Beck Inc. 11140 Rockville Pike, Fourth Floor Rockville, MD 20852 cfginc.com (800) 333-6884 |
$58.8M |
| 43 | J.P. Turner & Co. One Buckhead Plaza, 3060 Peachtree Road N.W., 11th Floor Atlanta, GA 30305 jpturner.com (888) 578-8763 |
$56.0M |
| 44 | Questar Capital Corp. 5701 Golden Hills Drive Minneapolis, MN 55416 questarcapital.com (888) 446-5872 |
$55.4M |
| 45 | QA3 Financial Corp. One Valmont Plaza, Fourth Floor Omaha, NE 68154 qa3.com (888) 337-4094 |
$50.0M |
| 46 | Summit Brokerage Services Inc. 595 S. Federal Highway, Suite 500 Boca Raton, FL 33432 summitbrokerage.com (800) 354-5528 |
$45.0M |
| 47 | Equity Services Inc. One National Life Drive, M480 Montpelier, VT 05604 equity-services.com (800) 344-7437 |
$42.0M |
| 48 | Berthel Fisher & Company Financial Services Inc. P.O. Box 609 Marion, IA 52302 berthel.com (319) 447-5700 |
$40.7M |
| 49 | Pacific West Financial Group 555 S. Renton Village Place, Suite 700 Renton, WA 98057 pwfinancial.com (888) 236-7979 |
$40.3M |
| 50 | The O.N. Equity Sales Co. One Financial Way Cincinnati, OH 45242 onesco1.com (513) 794-6794 |
$40.3M |
| 51 | Hornor Townsend & Kent Inc. 600 Dresher Road Horsham, PA 19044 htk.com (800) 957-7300 |
$39.4M |
| 52 | United Planners Financial Services 7333 E. Doubletree Ranch Road, Suite 120 Scottsdale, AZ 85258 joinunitedplanners.com (800) 966-8737 |
$38.8M |
| 53 | J.W. Cole Financial Inc. 6928 W. Linebaugh Ave. Tampa, FL 33625 joinjw-cole.com (866) 592-6531 |
$36.5M |
| 54 | Girard Securities Inc. 9560 Waples St., Suite B San Diego, CA 92121 girardsecurities.com (858) 622-2140 |
$35.0M |
| 55 | WRP Investments Inc. 4407 Belmont Ave. Youngstown, OH 44505 wrpinvestments.com (800) 589-2023 |
$32.2M |
| 56 | Crown Capital Securities LP 725 Town and Country Road, Suite 530 Orange, CA 92868 crowncapitalsecurities.com (800) 803-8886 |
$30.7M |
| 57 | Independent Financial Group 12636 High Bluff Drive, Suite 100 San Diego, CA 92130 ifgsd.com (858) 436-3180 |
$30.4M |
| 58 | PlanMember Securities Corp. 6187 Carpinteria Ave. Carpinteria, CA 93013 joinplanmember.com (800) 874-6910 |
$30.2M |
| 59 | LaSalle St. Securities LLC 940 N. Industrial Drive Elmhurst, IL 60126 joinlasallest.com (800) 777-7865 |
$29.3M |
| 60 | Great American Advisors Inc. P.O. Box 357 Cincinnati, OH 45201 gaadvisors.com (800) 216-3354 |
$28.5M |
| 61 | Sammons Securities Co. LLC One Sammons Plaza Sioux Falls, SD 57193 sammonssecurities.com (866) 520-6869 |
$26.4M |
| 62 | Kovack Securities Inc. 6451 N. Federal Highway, Suite 1201 Fort Lauderdale, FL 33308 joinksi.com (866) 564-6574 |
$26.3M |
| 63 | Century Securities Associates Inc. 501 N. Broadway St. Louis, MO 63102 centurysecurities.com (314) 342-4050 |
$25.0M |
| 64 | First Midwest Securities Inc. 207 W. Jefferson St., Suite 102 Bloomington, IL 61701 firstmidwestsecurities.com (800) 662-8452 |
$22.7M |
| 65 | Harbour Investments Inc. 575 D’Onofrio Drive, Suite 300 Madison, WI 53719 harbourinv.com (888) 855-6960 |
$22.5M |
| 66 | Prospera Financial Services Inc. 5429 LBJ Freeway, Suite 400 Dallas, TX 75240 joinprospera.com (972) 581-3000 |
$21.3M |
| 67 | Capital Investment Co. 17 Glenwood Ave. Raleigh, NC 27603 capital-invest.com (919) 831-2370 |
$19.5M |
| 68 | Wall Street Financial Group Inc. 255 Woodcliff Drive Fairport, NY 14450 wsfg.com (800) 836-4652 |
$18.8M |
| 69 | Ensemble Financial Services Inc. 179 Sully’s Trail, Suite 302 Pittsford, NY 14534 ensemblefs.com (585) 419-1010 |
$13.1M |
| 70 | CFD Investments Inc. 2704 S. Goyer Road Kokomo, IN 46902 joincfd.com, cfdinvestments.com (765) 453-9600 |
$12.1M |
| 71 | IMS Securities Inc./IMS Financial Advisors Inc. W. 8 Tower, 10205 Westheimer Road, Suite 500 Houston, TX 77042 ims-securities.com (713) 266-2993 |
$10.6M |
| 72 | Leonard & Co. 1450 W. Long Lake Road, Suite 150 Troy, MI 48098 leonardandcompany.com (248) 952-5858 |
$10.2M |
| 73 | Spire Investment Partners LLC 12355 Sunrise Valley Drive Reston, VA 20191 spireip.com (703) 748-5815 |
$8.2M |
| 74 | Synergy Investment Group 8320 University Executive Park Drive, Suite 110 Charlotte, NC 28262 synergyinvestments.com (704) 333-7637 |
$7.5M |
| 75 | Coordinated Capital Securities Inc. 704 River Place, Commerce Center III Madison, WI 53716 ccsmadison.com (608) 221-4545 |
$5.6M |
| 76 | GBS Financial Corp. 558 B St. Santa Rosa, CA 95401 gbsfinancial.com (707) 568-2400 |
$4.7M |
| 77 | TFS Securities Inc. 437 Newman Springs Road Lincroft, NJ 07738 tfsweb.com (732) 758-9300 |
$1.6M |
If you have questions about investments you made with one of these firms, The White Law Group may be able to help. For a free consultation, please call the firm’s 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.
Recovery of 1861 Capital Management Fund Losses
The White Law Group is investigating potential claims on behalf of investors who invested in the 1861 Capital Management municipal arbitrage fund.
The municipal bond arbitrage strategy employed by this fund was risky and exposed investors to significant losses.
It appears that 1861 Capital Management Fund was marketed to clients as a fixed income product offering slightly higher returns than a municipal bond. In reality, the trading strategy employed by the fund was far riskier. Based on the way the product was marketed, investors (many of them retirees) reasonably believed that their investment in this fund was conservative.
Various brokerage firms, including UBS, sold this product to many of their high net worth clients.
If you have questions about investments you made in the 1861 Capital Management fund, The White Law Group may be able to help. For a free consultation, please call the firm’s 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.
Proposed Amendment to FINRA Rule 5122
FINRA is requesting comment on a proposal to amend FINRA Rule 5122, which requires, subject to certain exemptions, disclosure in the offering document of the intended use of offering proceeds, expenses, and the amount of selling compensation to be paid to the broker-dealer and its associated persons, in any private placement in which a participating broker-dealer (or its control entity) is the issuer.
Private placements are often one of the higher commission products sold by brokerage firms and the proposed amendment to the rule is likely in response to the high number of private placements that were sold over the last couple of years by brokerage firms. Some of these private placements, like Medical Capital and Provident Royalties, were sold by brokerage firms even though it appears that these investments were fraudulent. Perhaps if the commissions brokerage firms earned in recommending these investments had been more adequately disclosed, investors would not have invested in them.
If you have questions regarding about a private placement you purchased, the securities attorneys of The White Law Group may be able to help. For a free consultation, call the firm’s 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.