Investor Fraud

Summit Investment to Pay Investor $100K for LJM Preservation and Growth Fund

Published on: November 22, 2019 | by Shepherd Smith Edwards & Kantas, LLP

Summit Investment Management To Pay Investor $100K

A Financial Industry Regulatory Authority (FINRA) panel said that Summit Investment Management and portfolio manager, Thomas Carroll, must pay one firm client $100K for investing his money in funds from the investment manager, LJM Partners, which is no longer in operation.

The LJM Preservation and Growth Fund (LJMIX) has been named in numerous complaints since early last year when it suffered a huge plunge in value of over 80% in two days. This happened after the CBO Volatility Index experienced a spike.

Shepherd Smith Edwards and Kantas Pursues GPB Capital Investor Fraud Claim Against Kalos Capital, Ameriprise Financial and Ex-Broker Gary Imel

Published on: November 20, 2019 | by Shepherd Smith Edwards & Kantas, LLP

Our investment fraud lawyers at Sheperd Smith Edwards and Kantas, LLP (SSEK Law Firm) represent a number of investors who have suffered losses from investing in GPB private placements that were sold to them by brokerage firms and their brokers.

Kalos Capital and Ameriprise Financial (AMP) are of these broker-dealers. Our broker fraud attorneys have filed a brokerage firm misconduct claim against them on our client’s behalf. This is not our first GPB investor fraud claim involving Kalos Capital.

GPB Investor Fraud Claim: Kalos Capital, Ameriprise Financial & Ex-Broker Gary Imel Investigated

Shepherd Smith Edwards & Kantas Investigates Cetera Investment Services and Mengxuan Zhang

Published on: November 19, 2019 | by Shepherd Smith Edwards & Kantas, LLP

Shepherd, Smith, Edwards & Kantas (“SSEK”), a national law firm specializing in representing wronged investors, is looking into allegations against Mengxuan Zhang, previously employed by Cetera Investment Services out of Pasadena, CA. According to allegations, Ms. Zhang allegedly falsified customer signature pages on new account forms for some customers of Cetera. This included reusing signature pages without express permission and changing the dates on the forms so as to appear that customers had re-executed. One of the forms in question was an “illiquid investment acknowledgment form.” This is the type of form an investor in such products as GPB Capital or NorthStar Healthcare REIT would have to sign. After admitting her wrongdoing to Cetera, Ms. Zhang was officially discharged. She is currently not employed by any Broker Dealer as a financial advisor.

For her actions, Ms. Zhang has been suspended as a stockbroker/advisor by The Financial Industry Regulatory Authority Inc. (FINRA). She was also fined. Ms. Zhang accepted and consented to the findings by FINRA without admitting or denying the findings. According to FINRA, such actions on the part of Ms. Zhang violate FINRA Rule 2010. According to that Rule, a stockbroker/advisor must “….observe high standards of commercial honor and just and equitable principles of trade.” Under the terms with FINRA, Ms. Zhang may not make any statement publicly which denies FINRA’s findings regardless of the fact that she never specifically denied the allegations.

Financial Advisor Fraud Attorneys

Shepherd Smith Edwards and Kantas Investigates Investor Claims Involving Capital Financial Investments and Ex- Broker Sean Kelly

Published on: November 18, 2019 | by Shepherd Smith Edwards & Kantas, LLP

SSEK Investigates Capital Financial Investments And Ex-Broker Sean Kelly Over Investor Claims

At the heart of recent investor claims against Capital Financial are allegations against one of its ex-brokers, Sean Kelly.

Sean Kelly was accused last year by the US Securities and Exchange Commission (SEC) of defrauding a dozen investors. These investors, including senior retirees, were defrauded of over $1M through three of his companies, including Lion’s Share and Associates, that is based out of Georgia.

Shepherd Smith Edwards & Kantas Investigates Ex-Raymond James & Associates Advisor Stuart Nichols

Published on: October 31, 2019 | by Shepherd Smith Edwards & Kantas, LLP

SSEK Investigating Ex-Raymond James Advisor, Stuart Nichols

Another former Raymond James advisor has gotten into trouble over fraud allegations. The Financial Industry Regulatory Authority (FINRA) recently barred Stuart Nichols, a former broker with the firm, after he failed to participate in the self-regulatory authority’s probe into churning allegations made against him.

Churning involves engaging in excessive trading in a brokerage account for the purposes of making commissions.

GPB Capital CCO Michael Cohn is Charged with Obstruction

Published on: October 25, 2019 | by Shepherd Smith Edwards & Kantas, LLP

GPB Capital News: Michael Cohn Facing Obstruction Charges

The US Department of Justice (DOJ) has filed criminal charges against Michael Cohn, the Chief Compliance Officer and Managing Director of GPB Capital Holdings. Cohn is a former US Securities and Exchange Commission (SEC) examiner.

The obstruction of justice charge is related to the regulator’s probe into the alternative asset firm, which is accused of operating a $1.5B Ponzi scam. Now, Cohn is accused of stealing information from the Commission before leaving the regulator last October to start his employment at GPB Holdings.

Shepherd Smith Edwards and Kantas Investigates Claims Involving Fired UBS Broker David Fagenson

Published on: October 17, 2019 | by Shepherd Smith Edwards & Kantas, LLP

SSEK Investigating David Fagenson, A Former UBS Brokerage Investment Advisor

If you are an investor who worked with former UBS broker, David Fagenson, and suffered substantial losses or suspect you may have been charged excessive fees and commissions, please contact our broker fraud lawyers at Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) today.

David Fagenson was suspended by the Financial Industry Regulatory Authority (FINRA) last year after he allegedly engaged in unsuitable trading in the accounts of three senior investors ranging in age from their 70s to mid-90s. However, this is not the first fraud allegation in which Fagenson has been involved.

American Realty Capital Properties to Pay Investors $1B

Published on: September 12, 2019 | by Shepherd Smith Edwards & Kantas, LLP

Nicholas Schorsch’s former real estate investment trust (REIT) American Realty Capital Properties Inc. (ARCP) has arrived at a $1B settlement with investors who sued over the company’s accounting scandal that led to inflated financial results five years ago. Now called Vereit, the REIT will pay $738.5M of the class action securities fraud settlement, while Schorsch’s American Realty Capital (AR Capital) will pay $225M. American Realty Capital Property’s ex-CFO Brian Block will pay $12.5M of the settlement. Meantime, Grant Thornton, the firm’s auditor during the period of the scandal, will pay $49M.

American Realty Capital Properties admitted to a $23M accounting error in late 2014. After ARCP restated its financials, investors sold their shares, causing a $3B drop in the REIT’s value. At one point, ARCP held $20B in assets.

Investors sued, accusing the REIT of incorrectly stating financials so as to spur acquisitions and inflate financial results. Two years ago, Block pleaded guilty to securities fraud related to the accounting misstatements.

Financial Sherpa Accused of Cherry Picking

Published on: September 2, 2019 | by Shepherd Smith Edwards & Kantas, LLP

In a settlement reached with the US Securities and Exchange Commission (SEC), Financial Sherpa and its principal James L. Beyersdorf will pay more than $232K of disgorgement, over $15K of prejudgment interest, and a $188K penalty for allegedly defrauding investment advisory clients by engaging in a cherry picking scam. The regulator contends that Beyersdorf allocated a disproportionate amount of option trades that were profitable to himself and his wife while distributing the unprofitable ones to the firm and his clients. Beyersdorf oversaw some $6.7M in assets for 13 individual investors.

According to the SEC, he purchased options in the firm’s omnibus trading account during the morning, distributing the trades later in the day. The regulator claims that because of the allegedly illegal trading, over six months– from October 2017 and April 2018– Beyersdorf and his wife ended up with a net positive one-day return of more than 45% on the options trades that were sent to their accounts. Meantime, the negative one-day return for the firm’s individual clients that received the unprofitable trades was also 45%. The Commission said that the odds of the “disparate performance” occurring by chance was under one-in-a million.

Also, while the registered investment advisory’s strategy for the majority of its clients involved placing about 90% of each of their assets in exchange-traded funds (ETFs) and 10% in short term options trading, the account of Beyersdorf’s wife traded nearly exclusively in options and did not hold any ETF positions.

Ex-Merrill Lynch Investment Adviser Accused of Stealing $1.7M

Published on: August 27, 2019 | by Shepherd Smith Edwards & Kantas, LLP

Marcus Boggs, a former Merrill Lynch investment adviser, is now facing US Securities and Exchange Commission (SEC) charges accusing him of using $1.7M of client monies to pay his own credit card bills. According to the regulator, Boggs, who was a Chicago-based RIA, illegally transferred funds from the accounts of three retail advisory clients on more than 200 occasions.

The firm fired him after finding out about the alleged misconduct, which would have taken place between 2016 and December 2018. Boggs was a registered investment adviser (RIA) with Merrill for 12 years, which was the entire time that he worked in the securities industry.

His job was to offer investment advice to clients, and Boggs didn’t have the authority or permission to liquidate the assets or trade in his alleged victims’ accounts. However, he allegedly went on to sell securities in said accounts and directly take money out of them for his own use.