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David Lerner Associates Broker Martin Walcoe May Have Sold Energy 11, Energy Resources 12, and SOAEX to Customers

Published on: July 7, 2021 | by Shepherd Smith Edwards & Kantas, LLP

Syosset, NY Financial Advisor is Named in $920K of Pending Customer Disputes Alleging Unsuitability

Our energy, oil and gas investment fraud attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) are looking into allegations that David Lerner Associates broker, Martin Kevin Walcoe, may have unsuitably sold Energy 11 LP, Energy Resources 12, and Spirit of America Energy (SOAEX) investments to customers. All three investments have been sold exclusively by David Lerner Associates’ registered representatives to its customers.

Walcoe has spent his entire 34 years in the industry as a David Lerner Associates broker. He has five disclosures on his BrokerCheck record. Two of them are still pending, with customers seeking $920K in damages:

Centaurus Financial & JP Turner Brokers Including Cindy Chiellini, Atul Makharia and Greg Scott Young Targeted South Carolina & Tennessee Retirees in Structured Products Scam

Published on: June 12, 2020 | by Shepherd Smith Edwards & Kantas, LLP

Accused of Defrauding Plant Workers, Including Retirees

Centaurus Financial advisor Ricky Mantei (Mantei Group), formerly a JP Turner stockbroker, is alleged to have been the mastermind behind a large enterprise that spanned four offices in two states and resulted in the retirement savings of many unsuspecting investors being lost.

Mantei is now named in 35 customer disputes. The majority, 30 of these broker fraud complaints, were filed over the last two years and many of them are still pending. Most of the complaints filed in the last two years accuse Mantei of heading up a one size fits all investment fraud that overconcentrated customers’ accounts in structured products and other risky, illiquid, and speculative investments. Many of his alleged victims were retirees, including plant workers in South Carolina and Tennessee.

Shepherd Smith Edwards and Kantas Investigating Claims From LPL Financial Customers Who Invested in Nontraded REITS and Publicly Traded Property Interval Funds

Published on: April 20, 2020 | by Shepherd Smith Edwards & Kantas, LLP

LPL Blocks Sales of Nontraded Real Estate Investment Trusts and Publicly Traded Property Interval Funds

This week, LPL Financial (LPLA) announced that it had suspended its sales of several nontraded REITs, as well as a number of publicly traded property interval funds. This is because the novel coronavirus (COVID-19) was placing these investments at a higher risk of losses.

In an email to InvestmentNews, LPL EVP of Products and Platforms, Rob Pettman, wouldn’t offer the names of the funds but did note that the broker-dealer hoped to offer them to investors again once the markets had calmed.

The Top Types of Securities Fraud All Investors Must Know

Published on: April 14, 2020 | by Shepherd Smith Edwards & Kantas, LLP

Broker Fraud Along With The Coronavirus May Be Causing Investment Losses

Becoming the victim of securities fraud is a serious matter. With stocks plummeting and the markets fluctuating all over the place in the wake of COVID-19, investors may not realize that it’s not just the economic reverberations of the coronavirus that’s plaguing their portfolio.

They also may be losing money because their stockbrokers or investment advisor were fraudulent or negligent when handling their investments and placed them in an even more precarious financial situation with more losses than they would now be sustaining otherwise.

Merrill Lynch Ordered to Pay $1.7 Million in Puerto Rico Bond Fraud Case Involving Broker Alex Gierbolini

Published on: January 27, 2020 | by Shepherd Smith Edwards & Kantas, LLP

Merrill Lynch Fined For Involvement In Puerto Rico Bond Fraud Case

In a recent award, a Financial Industry Regulatory Authority (FINRA) arbitration panel has decided that Merrill Lynch must pay a former professional baseball player and his wife $1.7 million in compensatory damages, plus $88,758 in costs, for losses they sustained from investing in Puerto Rico bonds and closed-end bond funds.

The retired MLB player is Angel Pagan and his wife is Windy Pagan, a former Ms. Puerto Rico. Angel was an outfielder for the NY Mets, the Chicago Cubs, and the San Francisco Giants before retiring to live on the island.

Alleged $125M Offering Fraud Touted “Highly Profitable” Trading Strategy

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

The US Securities and Exchange Commission (SEC) has secured an asset freeze against three people and entities accused of operating a $125M offering fraud. The regulator contends that the international trading program, run by Mediatrix Capital, Inc. and its principals Michael Stewart, Michael Young, and Bryant Sewall, touted an algorithmic trading strategy that was supposedly “highly profitable,” had never experienced a month when it didn’t make money, and rendered over 1600% of returns.

The SEC contends that the reality was a very different story, with the trading strategy regularly losing money–over $18M from trading just in 2018. The Commission is accusing the defendants of the following:

- Misrepresentations involving the trading strategy’s ability to make money

Massachusetts Fines LPL Financial $1.1M

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

Secretary of the Commonwealth of Massachusetts William Galvin has imposed a $1.1M fine on target=”_blank” rel=”noopener noreferrer”>LPL Financial (LPLA) after finding that the brokerage firm did not properly register 651 of its advisors in the state. Galvin’s office contends that for six years, LPL let these brokers work in Massachusetts despite the lack of registration and that this violates the state’s securities laws.

In Massachusetts, a brokerage firm is required to register its agents before they are allowed to engage in securities-related business in the state. As of May 9, LPL had 4,219 agents who were registered in the state.

However, the lack of registration by 651 of its agents between March 2013 and April 4, 2019 prevented Massachusetts securities regulators from being able to check their qualifications and histories to ensure that investors who worked with them were in safe hands. 441 of these unregistered agents acted as financial advisors to at least one or more state residents during the period at issue. The other 210 agents supervised the agents who were advisors to these customers.

Former Och-Ziff Capital Executive Admits To Lying

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

Michael L. Cohen, the ex-head of Och-Ziff Capital Management Group in Europe, has pleaded guilty to one criminal count of lying to authorities. The guilty plea comes a year after he was accused of defrauding a client, a biomedical research charity, of millions of dollars. Although prosecutors have not identified the charity, sources have told various media that it was Wellcome Trust, which backs research in health, science, and other fields.

Cohen, who was based in the UK at the time while working for the hedge fund management firm, is the one who brokered the sale of shares in an African mining company to the charity. The company belonged to one of his business associates.

Cohen made $4M from the sale of the shares. He allegedly failed to tell the charity that he himself owned shares in the mining company.

Investment Adviser is Accused of Defrauding More than $570K

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

Gonzalo Ortiz, an investment adviser, is facing charges accusing him of defrauding one investor of more than $570K. According to the Securities and Exchange Commission (SEC), Ortiz appropriated about $224,500 of his client’s funds and lost about $290K through trades that he made.

In its complaint, the SEC said from 2015 to 2017, Ortiz persuaded an acquaintance to give him control of nearly $570K, much of which were retirement funds. The investment adviser allegedly did this by promising the investor a 50% yearly return and while falsely touting a successful track record in investing.

At first, said the Commission, the investor gave Ortiz $200K to invest. Although the investment adviser was not authorized to use the money for his own use, he allegedly spent about $56K on cars and other goods while losing the remainder of the funds through trading. Ortiz then gave the investor a bogus account statement showing an over 50% return on the investment, compelling his client to give him another $200K to invest.

Investor Fraud Claims Include Kiddar Capital and Stanford Ponzi Scam

Published on: February 26, 2019 | by Shepherd Smith Edwards & Kantas, LLP

$20M Ponzi Scam Results in Guilty Plea for Kiddar Capital Founder

Todd Hitt, Kiddar Capital’s founder and a member of a prominent commercial real estate family in Virginia, has pleaded guilty to criminal fraud charges accusing him of operating a $20M Ponzi fraud that involved several schemes. According to prosecutors, Hitt solicited about $30M from investors and then proceeded to use most of the money to fund his lavish lifestyle while using newer investors’ funds to pay older investors. He also allegedly made “false statements and material omissions” to investors when he didn’t tell them that their money was comingled with unrelated projects and not just the real estate and venture capital investments for which their funds were supposedly designated.

The U.S. Attorney’s Office for the Eastern District of Virginia contends that because of Hitt’s “fraudulent conduct,” investors lost about $20M. He is facing up to 20 years behind bars and is expected to pay a fine of millions of dollars. He previously settled related civil fraud charges filed against him by the US Securities and Exchange Commission.