Posts tagged ‘investment losses’
SEC Alerts Investors about Investment Fraud Risks related to Social Media
The SEC recently released an “investor alert” with the goal of helping “investors be better aware of fraudulent investment schemes that may involve social media.” The SEC acknowledges in the alert that social media has become an important tool for the investing public to accumulate information about all facets of investing. Investors are increasingly looking to social media like Twitter, YouTube, LinkedIn and Facebook for information on brokers and brokerage firms and also to do research on individual investments and investment vehicles. The SEC wants it to be known that “While social media can provide many benefits for investors, it also presents opportunities for fraudsters. Social media, and the Internet generally, offer a number of attributes criminals may find attractive.”
According to the SEC, social media provides those inclined to commit fraud the opportunity to “contact many different people at a relatively low cost.” Additionally, the ease at which individuals can create profiles and pages that may appear legitimate may be to their advantage. The alert says, “…that feeling of legitimacy gives criminals a better chance to convince you to send them your money.” Finally, social media provides an opportunity to those wishing to commit fraud with some anonymity which may “make it harder for fraudsters to be held accountable.”
The SEC goes on to give tips for how investors may use the positive aspects of social media for investing, while protecting the investors from fraudulent investments schemes. Like many investor alert’s, the SEC says being an “educated investor” in the best way to protect one’s self. They offer five tips to “avoid fraud online.”
1. “Be Wary of Unsolicited Offers to Invest”
2. “Look out for Common “Red Flags””
3. “Be Thoughtful About Privacy and Security Settings”
4. “Ask Questions and Check Out Everything”
5. Avoid “Common Investment Scams Using Social Media and the Internet”
- “Pump-and-Dumps” and Market Manipulations
- “Fraud Using “Research Opinions,” Online Investment Newsletters, and Spam Blasts”
- “High Yield Investment Programs”
- “Internet-Based Offerings”
You can find the full text of the SEC investor alert about social media at this address: http://investor.gov/news-alerts/investor-alerts/investor-alert-social-media-investing-avoiding-fraud
If you are concerned that you have been the victim of securities fraud and would like to speak to a securities attorney about your potential to recover your losses through securities arbitration please call our Chicago office at 312-238-9650.
The White Law Group, LLC is a national securities fraud, securities arbitration, 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.
FINRA Arbitration Panel Demands Oppenheimer Repurchase Auction Rate Securities
According to a recent article from Reuters, a Financial Industry Regulatory Authority (FINRA) arbitration panel has ruled in favor of an investor who invested in Auction Rate Securities with Oppenheimer & Co. before that market failed in 2008. The panel reportedly ruled that the investor “was entitled to “recission of $5.98 million in New Jersey Turnpike auction rate securities that she bought in 2007…” In addition to repurchasing the nearly $6 million dollars’ worth of ARS, Oppenheimer must also cover legal fees in excess of $100,000. In the claim filed against Oppenheimer & Co., in addition to other allegations, they were accused of breach of fiduciary duty and negligence.
Reuters described that “Auction rate securities were sold as highly liquid short-term instruments similar to money-market funds, but with slightly higher returns,” but as a result of a massive market failure in 2008, “…large investment banks that ran the auctions ran into liquidity crunches, [and] thousands of investors were left with securities that could not be sold.
The freeze in the auction rate securities market caused major problems for investors and brokerage firms alike. Litigation followed and, as evidenced by this recent panel decision, continues. There may still be time for investors who suffered investment losses as a result of the purchase of auction rate securities (ARS) to pursue their investment losses through a FINRA arbitration claim.
The White Law Group may be able to assist investors damaged due to the purchase of auction rate securities in pursuing recovery of losses through the FINRA dispute resolution process. The White Law Group is nearly exclusively dedicated to FINRA arbitration proceedings on behalf of investors.
If you invested in auction rate securities (ARS) prior to the market failure in 2008 with Oppenheimer & Co. or another firm, suffered losses, and would like to speak to a securities attorney about your potential to recovery your losses through a FINRA arbitration claim please call our Chicago office at 312-238-9650.
The White Law Group, LLC is a national securities fraud, securities arbitration, 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.
Potential Recovery of Martin T. Wegener Investment Losses through FINRA Arbitration
Have you suffered losses due to your investment with Martin T. Wegener (Marty Wegener) and/or his entities Wealth Resources, Inc. and Wealth Resources, LLC? If you have, The White Law Group may be able to help you recover some of your losses through a Financial Industry Regulatory Authority (FINRA) dispute resolution claim.
In June of 2010 the Securities and Exchange Commission (SEC) “filed a civil injunctive action against Martin T. Wegener (Wegener)…and two companies formed, owned, and controlled by Wegener, Wealth Resources, Inc. and Wealth Resources, LLC (collectively, Wealth Resources), for fraudulently offering and selling at least $6.5 million in securities.” More recently, in November of 2011, The Grand Rapids Press reported that Mr. Martin Wegener was also facing felony criminal charges related to the alleged investment scheme. And Last week, The Grand Rapids Press stated that Mr. Wegener “pleaded guilty to mail fraud in a $6-million Ponzi-type scheme involving at least 20 investors” and further that he had accepted a plea deal in which he “acknowledged he intended to defraud clients.”
The SEC release about the civil injunction filed in 2010 said that “from at least 2007 to March 2010, Wegener, who, along with Wealth Resources, acted as an unregistered broker and investment adviser, raised at least $6.5 million from at least twenty investors by falsely representing that he would invest their funds in securities through Wealth Resources.” Wegener apparently also provided the investors with “…purported “brokerage account” statements from Wealth Resources that falsely represented that he invested the money in a variety of investments…”
Instead of investing the money raised in securities, the SEC alleged that Mr. Wegener misappropriated the money and used it for personal uses, business expenses and “…to make Ponzi-like payments to other customers who requested a return of all or part of their investment.”
According to Martin T. Wegener’s CRD (CRD# 2247662), publicly available at FINRA.org, he has not been a registered representative of a FINRA member firm since 05/2010. The CRD indicates that he was registered with New England Securities, a FINRA member firm, from 03/1998 – 05/2010. This time period overlaps with much of the time frame associated with the alleged fraud.
When a registered broker conducts business outside of the firm he is registered with, that activity may be considered “selling away.” If a registered broker “sells away” from his firm, the firm may still be liable for negligent supervision of their broker agent and may be responsible for investment losses in a FINRA dispute resolution claim.
If you invested with Martin T. Wegener and/or his entities Wealth Resources Inc. and Wealth Resources LLC and would like to speak to a securities attorney about your potential to recover the investment losses through FINRA arbitration 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.
SEC sues SIPC over Stanford Investment Fraud Victim Coverage
The White Law Group is closely monitoring the ability for investment fraud victims of R. Allen Stanford and Stanford Group Co.’s alleged investment scheme to recover their losses resulting from the purchase of Certificate of Deposit (CD) investments. Just days ago, we wrote that the SIPC told Congress in a letter that they continued to maintain that they were not responsible to pay out to investors even though Stanford’s brokerage firm was a member of the SIPC (http://www.whitesecuritieslaw.com/2011/12/07/sipc-at-odds-with-sec-over-stanford-ponzi-scheme-victim-compensation/).
The SIPC argues that since the CD investments were issued from an offshore bank, the investors are not eligible for the up to $500,000 SIPC coverage. Members of Congress and investors urged the SEC to take strong action against the SIPC as opposed to brokering a settlement. This week, the SEC took that action by filing documents in federal court seeking to require the SIPC to cover the victims of the alleged Stanford Ponzi Scheme.
According to the investmentnews.com, the SEC contends that they have authority to decide if investors should be covered. The SIPC strongly disagrees and is prepared to fight the SEC’s position in court. President of the SIPC, Steve Harbeck, was quoted as saying, “Given the diametrically opposed positions of the SEC and SIPC, this matter is going to have to be resolved in the courts.”
Investors will have to keep a close eye on the federal court proceedings to see if they will be collecting a portion of their losses from the SIPC. While they wait on the court’s decision, investors are also continuing to pursue recovery through the court appointed receivership which is moving forward with their claims process.
Finally, investors may be able to pursue recovery through one other avenue while they wait on the SIPC and the receivership, FINRA arbitration. If the financial advisor that sold investors their Stanford CD’s is still registered with a FINRA member firm, investors may be able to recover their losses in a claim against their financial advisor through FINRA dispute resolution. To speak to a securities attorney about your ability to recover your Stanford CD investments losses through FINRA arbitration 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.
SIPC at Odds with SEC over Stanford Ponzi Scheme Victim Compensation
In a recent blog post (http://www.whitesecuritieslaw.com/2011/11/17/recovery-of-stanford-group-investment-losses-through-finra-arbitration/), we gave an update on the potential for recovery for investors who bought fraudulent Certificate of Deposit (CD) investments from R. Allen Stanford’s Stanford Group Co. Our firm is investigating the potential for recovery of investment losses though FINRA arbitration in claims against the financial professionals that sold the investments.
Additionally, investors have 2 other main avenues through which they are hoping for recovery. The first is through the court ordered receivership and the second through the SIPC. The Securities Investor Protection Corporation (SIPC) can offer up to $500,000 in coverage to accounts with member firms. The SIPC initially denied coverage to investors who purchased CD’s from Stanford, but in June the SEC urged them to reconsider and threatened legal action.
The SIPC has remained largely silent since they promised to reconsider the SEC’s request during a board meeting in September. However, CNBC is now reporting that in a recent letter to Congress, the SIPC continues to contend that they are not responsible for the Stanford accounts.
Investors and the SEC believe that the SIPC should cover the losses because, “…most of the CDs were purchased through Stanford’s U.S. broker-dealer, a SIPC member.” According to CNBC, The SIPC told congress that “providing the coverage would be ‘unprecedented,’ because the investors ‘chose to purchase CDs issued by an offshore bank in Antigua,’ which is not covered by SIPC.” The letter also stated that there is “fundamental disagreement” between themselves and the SEC on this matter.
The SIPC and the SEC are apparently engaging in private discussion about the Stanford issue which CNBC said is “apparently are aimed at settlement to avert a lawsuit by offering a partial payout to investors.” CNBC also reported that both some members of Congress and investors may push the SEC to take legal action for full coverage sooner than later, while securities industry trade group, SIFMA, has made statements that it agrees with the SIPC that they are not responsible for covering the fraud losses.
The White Law Group will continue to carefully monitor this situation and how it impacts investors. If you invested in a Stanford Certificate of Deposit (CD) investment and would like to speak to a securities attorney about your potential to recovery investment losses through a FINRA dispute resolution claim 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.