Articles Posted in JP Morgan

Chicago-based Stoltmann Law Offices has represented hundreds of investors who have been victims of one of the most egregious investment frauds: Ponzi schemes. These swindles promise quick riches and rely upon an increasing number of “investors” to keep the operation going, sometimes over a period of years. The schemes eventually blow up when new investors can’t be found to perpetuate it or promoters are outed by investors or associates for faking returns.

The most famous Ponzi scheme – and perhaps one of the largest – involved broker-money manager Bernie Madoff. Over a period of 17 years, Madoff defrauded thousands of investors, lying about profitable trades. In 2009, he was sentenced to 150 years in prison, after pleading guilty to a $65 billion swindle of some 65,000 victims around the world. Many of Madoff’s victims, which ranged from non-profit organizations to celebrities, were financially ruined. A court-appointed “Madoff Victims Fund” has distributed nearly $3 billion to investors. His sons, who worked for their father’s firm, turned Madoff into authorities when they learned of the scam.

Despite the notoriety of the Madoff swindle, Ponzi schemes are still ensnaring innocent investors. As one of the oldest investment fraud vehicles around, the Ponzi scheme has two selling points: Promoters promise outrageous returns in a short period of time and rely upon continuing stream of new victims to “pay off” early investors in fake profits. This perennial false promise of easy riches makes it one of the most durable schemes for dishonest brokers, who continue to sell them — until the frauds collapse.

Stoltmann Law Offices has brought arbitration claims against dozens of brokerage firms like Ameriprise Financial, Merrill Lynch, Morgan Stanley, Wells Fargo, and JP Morgan Securities involving the unsuitable recommendations for investors to invest in oil and gas related securities.  In 2014 and 2015, we represented dozens of investors against various firms involving Master Limited Partnerships, or MLPs, which are almost always related to the oil and gas industry.  Then, during a big drop in the price of oil, a lot of oil and gas companies went into bankruptcy, dragging a lot of investor money with them.  History is repeating itself.

The price of oil has completely tanked in the last month. Even before the COVID-19 pandemic, the price of oil was being pressured by a price war involving Saudi Arabia, Russia, and OPEC.  Combined with the broad-based ongoing market crash, oil and gas investments – which are inextricably linked to the price of oil – have suffered catastrophic losses.  There are some well-know names on this list:

Goldman Sachs MLP and Energy Renaissance Fund – GER: Year to Date has dropped from 4.37 to 0.68 per share

In this digital era, where iris biometrics are flowering prints of digits are still being relied upon by brokerages and banks to catch crooks and to stop them from working at cashiers’ windows.  A few days ago, Citigroup Global Markets was fined $1.25 million in part for failing to screen over 500 employees through fingerprinting, a technology first employed in the United States in the first decade of the 20th century.

Three workers with criminal convictions fell through the cracks. While it does happen, finger pointing of financial firms for failure to do mandatory fingerprinting by regulators is rare.  Two years ago, FINRA fined J.P. Morgan the same amount for not fingerprinting 2,000 workers.

FINRA and state regulators require fingerprinting for broker-dealers. The SEC doesn’t mandate fingerprinting for investment advisers, but some states do for the smaller advisers who are under their oversight. All job applicants to the FDIC must submit fingerprints.

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