Posts tagged ‘investment fraud’
The Tidal Group, Inc. fined by FINRA
The Tidal Group, Inc. (CRD #39782, Schertz, Texas) recentlysubmitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $20,000.
Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it provided inaccurate information to investors in some private placement offerings of oil and gas interests in some prospects. The PPMs for the prospects included maps that identified the proposed drilling location, as well as surrounding wells. The maps contained legends that included a symbol for plugged and abandoned wells. The findings stated that maps in the offerings’ PPMs did not have these wells marked as plugged and abandoned.
This information which is publicly available on FINRA’s website has been provided by The White Law Group, LLC.
If you have questions about investments you made with The Tidal Group, Inc., the securities attorneys of The White Law Group may be able to help. To speak with a securities attorney, 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.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.
KMS Financial Services, Inc. fined by FINRA
KMS Financial Services, Inc. (CRD #3866, Seattle, Washington) recently submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $50,000, which includes the disgorgement of financial benefits received of $7,727.13.
Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it and two registered representatives sold $4,280,000 of interests in a hedge fund to customers and received $50,555.05 in incentive fees from the hedge fund’s general partner. From the fees, the firm paid the registered representatives $42,827.92, leaving the firm with $7,727.13 in net incentive fees. The findings stated that the firm failed to conduct adequate due diligence. It relied on the representatives’ opinions, failed to contact the hedge fund’s accounting firm to determine the nature of its services, and failed to confirm information the general partner provided.
The firm failed to review a New York Stock Exchange hearing panel decision sanctioning a founder of the hedge fund, who was also its portfolio manager. The firm requested financial statements for the hedge fund but the partner would not provide them. The firm later received an account reconciliation for the firm customers, which a different accounting firm prepared. The firm did not inquire whether or why the partner had changed accounting firms. The findings also stated that the firm became aware of “red flags” regarding the hedge fund and based on the red flags, and as a result of its failure to conduct adequate due diligence, it did not have reasonable grounds to believe the hedge fund was a suitable investment for any customer. The findings also included that the firm’s WSPs were not reasonably designed to ensure it conducted adequate due diligence of private placement offerings, and failed to implement its procedures in that it did not use the due diligence questionnaire incorporated in its procedures. In determining the appropriate sanctions, FINRA considered the fact that the firm paid $2,730,000 to settle claims by the customers who purchased the hedge fund.
This information which is publicly available on FINRA’s website has been provided by The White Law Group, LLC.
If you have questions about investments you made with KMS Financial Services, Inc., the securities attorneys of The White Law Group may be able to help. To speak with a securities attorney, 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.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.
Ongoing Investigation into Sala-Multi Series Fund and Foresee Strategies Insurance Fund
The White Law Group continues to investigate potential FINRA arbitration claims against the broker-dealers that may have improperly sold Sala-Multi Series Fund and Foresee Strategies Insurance Funds.
The hedge funds, Foresee Strategies Insurance Fund, were issued by Sun Life Financial as variable annuity subaccounts to Sala-Multi Series Fund and than sold to investor by various broker-dealers such as SagePoint Financial Inc, Geneos Wealth Management Inc, Lincoln Financial Network, National Planning Corp, and FSC Securities Corp.
Foresee Strategies Insurance Fund suffered devastating losses and was shut down in 2010. According to Investment News, “FINRA is investigating half a dozen independent broker-dealers that sold variable annuities with subaccounts invested in hedge funds that resulted in $18 million in client losses during the credit crisis.”
In addition, Sun Life Financial, according to their own web site is in the processes of selling their U.S. annuity business to Delaware Life holdings. Sun Life Financial president, Dean A. Connor stated that “This transaction represents a transformational change for Sun Life. It significantly advances our strategy of reducing Sun Life’s risk profile and earnings volatility, focuses our U.S. operations on our areas of greatest strength and opportunity, and crystallizes future earnings and capital releases that will further support our growth and shareholder value creation. “
Upon information and belief many investors were unaware of risks or mislead by the broker-dealer that sold them the annuity investment. However, investors may be able to recovery their losses through FINRA arbitration against their broker-dealer or financial advisor.
Arbitration claims against broker- dealers often involve unsuitability, misrepresentation, and omission of facts. Broker-dealers and financial advisors have a fiduciary duty to make investment recommendations that are suitable for potential clients based on such factors as age, risk tolerance, and financial need.
Broker-dealers and financial advisors are legally obligated do disclose all the risks of the investment, and perform a reasonable investigation of the investment prior to making recommendations.
If you invested in the Sala-Multi Series Fund or Foresee Strategies Insurance Funds Financial would like to speak to a securities attorney about your litigation options, please call 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.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.
LaeRoc Fund Investigation
The White Law Group is investigating potential securities fraud claims against the broker-dealers that improperly or unsuitably recommended private placements such as Laeroc 2002 Income Fund, LaeRoc 2004-2005 Income Fund, LaeRoc 2005-2006 Income Fund, Laeroc Edge Fund, Laeroc Income Fund 007.
According to its website, LaeRoc is a real estate investment firm based in Los Angeles. The company buys, manages, and develops commercial properties along the west coast and Hawaii.
Real estate private placements, like LaeRoc, are volatile illiquid investments intended for accredited investors and high net worth individuals. Investors depend and trust that their broker-dealer is performing the necessary due diligence to ensure that the investment is appropriate given the investors age, risk tolerance, and finical objectives before making recommendations.
However, many broker-dealers fail to uphold their fiduciary duty when recommending private placements, likely to earn the high commission paid out when they sell the investment. The sales commission a broker-dealers earns is often 3 to 4 times higher than traditional stock.
The high risks and lack of liquidity in real estate private placements, like LaeRoc Fund, make them unsuitable for many investors. Brokerage firms that sell these types of investments are required to perform adequate due diligence to ensure that the investment has a reasonable likelihood of success and to take into account an investors age, risk tolerance, and financial objectives when making investment recommendations.
To determine whether you may be able to recover investment losses incurred as a result of your purchase of LeaRoc Income Fund, 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.
For more information on The White Law Group, visit http://www.
KBS REIT I Valuation Drops Again and Signals More Trouble for Investors
Investors in the popular non-traded REIT, KBS Real Estate Trust Inc. (KBS REIT I), were reportedly notified on Monday that the value of their shares is now estimated by the company at $5.16. The new valuation represents a 29% drop from the last change to the valuation in late 2009 and a nearly 50% drop since shares of KBS REIT I were initially offered at $10.00. Additionally, KBS investors were told that they would no longer be receiving any distributions. KBS REIT I is just the latest major non-traded REIT to see a drop in its valuation in recent months as many of these investments have struggled with a difficult real estate market over the last couple of years.
This most recent valuation will likely be troubling to many investors in the KBS non-traded REIT. If you invested in KBS REIT I and are wondering if you may have recourse to recover your investment, The White Law Group may be able to assist you in pursuing recovery of your nontraded REIT damages through FINRA arbitration process. The Financial Industry Regulatory Authority (FINRA) continues to pay close attention to issues related to non-traded REITs, including how they are sold and valuated.
The White Law Group has represented many investors who have struggled with non-traded REIT investments, including KBS Real Estate Investment Trust, Inc. (KBS REIT I), over the past few years in the FINRA dispute resolution claims.
The firm has seen several issues commonly arise around how non-traded REITS are sold and represented to investors. In many cases the risks associated with nontraded REITs were not adequately represented before purchase and investors have often been over-concentrated in this type of real estate investment. In some cases, the fact that advisors receive relatively high commissions for the sale of nontraded REITs compared to other products may have contributed to some investors being unsuitably invested in non-traded REIT investments. Finally, it seems common that the illiquid nature of non-traded REITs has not been made clear to some investors. Investors in nontraded REITs, like KBS REIT I, that have had redemption programs suspended may have difficulty selling their investments or suffer a serious loss on the secondary market.
Brokerage firms and financial advisers have a fiduciary duty to perform due diligence on any investment and to insure that an investment is appropriate in light of the investor’s age, investment experience, and investment objectives. If a broker or brokerage firm fails in this responsibility, investors may have an actionable claim to recover their investment losses in a claim through FINRA dispute resolution.
If you are concerned about your investment in KBS Real Estate Investment Trust, Inc. (KBS REIT I) or another nontraded REIT investment and would like to speak to a securities attorney about potential to recover your investment losses through FINRA dispute resolution please call 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.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.