Stoltmann Law Offices has been representing victims of SIM Swap scams for the past few years. This sordid scam involves a crook gaining access to your cell-phone SIM card through remote access and then essentially taking control of your phone to serve their purposes.  They’re looking for money, plain and simple. One of the most common security features many people use for their email, bank, investment, and crypto-currency accounts is called “2-step” authentication. If you want to change your password for these accounts, typically, you have to check your email and click a link that will then allow you to change a password.  Another security feature involves a pin or code being texted to you before you can change your password to an email or bank account.  If your cell phone number or SIM is “ported” to another phone not in your control, then someone else gets the text with that code; someone else can change the password to your email, investment, bank, and other accounts.  Your cell phone holds the lock and key to so much personal access, it must be secure or the fallout can be a catastrophe for victims.

On Sunday, October 18, 2020, ABC 7 Chicago aired a story on this ever increasing scam. Stoltmann Law Offices attorney Joe Wojciechowski was featured in this story as an advocate for victims of this fraud.  Stoltmann Law Offices has successfully recovered money lost or stolen as a result of SIM-Swap frauds and continues to represent victims. When suing a cell phone carrier like AT&T or Sprint, the claims must follow the dispute resolution processes outlined in the wireless customer agreements between you and the company. Buried deep in that small print lies an arbitration clause that is binding and requires disputes to be filed in the AAA (American Arbitration Association) under the Consumer Rules.  The good news about the AAA Consumer Rules is the company (AT&T, Sprint, Etc.) have to pay the arbitrator’s fees, which can get pretty high.  The bad news is, you won’t have access to the kind of discovery you would get in court.

Stoltmann Law Offices has a combine 40 years of experience prosecuting investor and consumer related claims in arbitration forums around the world.  If you or someone you know is a victim of a Sim-Swap and had money stolen as a result, please contact Stoltmann Law Offices at 312-332-4200 for a no-obligation, free consultation.  We are a contingency fee law firm which means we do not get paid unless you do!

 

 

Chicago-based Stoltmann Law Offices has represented investors who’ve suffered losses from dealing with brokers who’ve fleeced clients. This is a sad occurrence, but sometimes brokers take advantage of clients and steal their money. We’ve investigated countless cases when this has happened.

The instances are all too familiar to us: Usually it’s elderly, retired women who are preyed upon. A recent case involving a 73-year-old client is a case in point. A former LPL broker, Matthew O. Clason, of Chesire, Connecticut, is accused of stealing more than $300,000 from the client, “with whom he formed a personal relationship.” Clason, who had been a registered broker since 2004, sold securities from his client in 45 transactions over the last 20 months, the SEC said in its suit filed against the broker.

“He transferred about $330,000 [from proceeds of the sales of client assets] to a joint checking account they had opened at a large national bank, funding most of it through securities sold from a non-retirement account that charged the client 1.54% of her assets under management,” the SEC reported. The agency is requesting “that the court enter an order freezing Clason’s assets and requiring an accounting. The SEC also seeks permanent injunctive relief, disgorgement plus prejudgment interest, and civil penalties.” Clason, who was registered with LPL and Integrated Wealth Concepts, could not be reached for comment, according to AdvisorHub.com. He was fired by LPL on August 13 for failing to comply with firm policies with respect to handling client funds, the SEC said.

Stoltmann Law Offices, P.C. is a Chicago-based securities, investor protection, and consumer rights law firm that offers victims representation on a contingency fee basis nationwide. We’ve represented investors who’ve suffered losses in connection with the recommendation to invest in variable annuity products.

One strategy that unscrupulous brokers employ is to switch clients out of variable annuities into other insurance products or mutual funds. This move, of course, generates even more commissions, but may not be in the best interest of their customers. With variable annuities, investors who cash out of them within a short period of time also may incur high “surrender” fees, which are onerous. Variable annuities – the more complex and costly version of low-cost fixed annuities – are often oversold by brokers and advisors. Due to high “surrender” fees, they may lock in investors for a certain period of time. Then they may be paying even more commissions and fees in new investments.

Such practices hurt investors and have caught the attention of FINRA, the securities industry regulator. FINRA recently fined Wells Fargo Advisors Financial Network and Clearing Services more than $2 million for switching 100 clients from annuities to other products.  The regulator found that from January 2011 through August 2016, Wells Fargofailed to supervise the suitability of recommendations that customers sell a variable annuity and use the proceeds to purchase investment company products, such as mutual funds or unit investment trusts.”

Stoltmann Law Offices, P.C. is a Chicago-based securities, investor protection, and consumer rights law firm that offers victims representation on a contingency fee basis nationwide.  Our lawyers have grown accustomed to suing telecom carriers like AT&T and Sprint in arbitration for hacking victims. AT&T, Sprint, and T-Mobile customers fall victim all too often to SIM-Swapping or SIM-porting scams where crooks gain access to their cell phone numbers and from there, can execute any number of plays to gain further access to these victims’ banks accounts.  The most common type of account that gets hacked in these situations based on our lawyers’ experiences – by far – are Coinbase accounts where these crooks transfer Bitcoin or other crypto assets to third party accounts. When these investors complain to Coinbase that their accounts were robbed, Coinbase typically goes palms-up and says, too bad, so sad, and victims are left stunned that unauthorized access to their accounts, including transfers to unauthorized third parties, was allowed.

Coinbase is lightly regulated to say the least.  But, it is a money services business and is registered with FinCen (the U.S. Department of the Treasury, Financial Crime Enforcement Network).  On its website, Coinbase admits that it is required to comply with any number of laws and regulations, including on a state by state basis in which they operated, along with the U.S. Bank Secrecy Act, and the U.S. Patriot Act.  Coinbase is not a bank or brokerage firm so although it is regulated, as far as financial services are concerned in the United States, entities like Coinbase are on the fringe of regulation. Crypto is already the wild-wild west of the quasi-securities world and Coinbase is a primary facilitator of that market.  Still, Coinbase must follow certain regulations, including what are generally known as the “Know Your Customer” (KYC) Rule and anti-money laundering (AML) rules and regulations.  At the state level, in Illinois for example, Coinbase is licensed as a Money Transmitter through the Illinois Department of Financial and Professional Regulation.

Like our cases against AT&T and Sprint for losses in connection with SIM Swap scams, claims against Coinbase have to be brought through the American Arbitration Association (AAA) Consumer Rules process.  First though, customers have to comply with a specific pre-dispute complaint process or risk having their case thrown out of arbitration for failing to comply with these policies.  If you had more than $50,000 stolen from you as a result of your Coinbase account being hacked or accessed, you should call Stoltmann Law Offices, P.C. at 312-332-4200 for a no-obligation, initial consultation with an experienced arbitration attorney.  We are a contingency fee law firm which means we do not get paid unless you do.

 

Chicago-based Stoltmann Law Offices continues to investigate the Vida Longevity Fund. Managed by Vida Capital, the limited partnership invests in annuities and life- and structured settlements. It’s a complex product that has mostly invested in insurance products.

Vida managers had originally promised investors a 10% to 14% annualized return, although in recent years, the fund has been posting negative returns. Managers may have mispresented the investments and risk profile of the vehicle, which is operated as a hedge fund.

Like many investments promising high returns, Vida seemed appealing at a time when savings rates are near rock bottom, especially for federally guaranteed accounts. That’s why companies offering “alternative” products with “non-correlated” strategies have attracted billions in investor dollars. They promise high returns with seemingly little risk.

Chicago-based securities and investor protection law firm Stoltmann Law Offices, P.C., is currently investigating claims involving William Edward Torriente (Eddy Torriente) in connection with allegations he engaged in unauthorized trading. Eddy Torriente, who was employed with Comerica Securities from 2011 to September 2020, worked out of a branch office in Scottsdale, Arizona.  According to public reports, Eddy Torriente voluntarily resigned from Comerica on September 21, 2020 while undergoing an internal investigation by Comerica into allegations made by a client that Torriente placed unauthorized transactions in the client’s accounts.  Typically, if a complaint by an investor client is unfounded, the advisor doesn’t leave the firm.  According to FINRA, the complaint was “denied” by the firm but the timeline indicates there was very little time between the receipt of the complaint and the firm “denying” it.  Even more intriguing, Torriente “voluntarily resigned” before this client complaint was even received.  Mr. Torriente is now registered as an investment adviser representative for Wealthsource Partners, but is currently not a registered representative of a FINRA broker/dealer. If you or someone you know had dealings with Mr. Torriente and believe he executed trades in your account on an unauthorized basis, you should contact Stoltmann Law Offices for a consultation.

Unauthorized trading is a fundamental violation in the securities industry. These claims take multiple different shapes. The most obvious form is when a financial advisor, who does not have formal “discretion” in a customer’s account, goes ahead and places trades, either buys/sells stocks, bonds, options, mutual funds, etc., without first receiving approval from the client. These claims can also take the form of a failure to execute or failure to follow a client’s instructions.  If, for example, a client tells a broker to buy 100 shares of Apple, and the broker doesn’t do it, that is a failure to execute, and a form of unauthorized trading. These claims can become even more nuanced however and could involve situations where the broker fills some orders as instructed, but ignores others, or simply uses his discretion on what orders to execute.  Financial advisors simply cannot exercise this sort of discretion in a client’s account without formal, written agreements providing that discretion.

A broker who trades on an unauthorized basis violates several FINRA Rules and state securities regulations in doing so. For example, in Arizona, it is a violation of the Arizona Securities Act to trade on an unauthorized basis. See R14-4-130(16) which specifically identifies “Making unauthorized use of of securities or funds of a customer…for personal benefit” as an unethical practice in violation of the Arizona Securities Act, A.R.S. §§ 44-1961(A)(13) and 44-1962(10). Brokers traditionally trade on an unauthorized basis for one reason – to generate commissions.  Further, FINRA Rule 2010 prohibits unauthorized trading because such a practice is considered to be inapposite to the concept of commercial honor and just and equitable principles of trade.

Stoltmann Law Offices, P.C., a Chicago-based securities and investment fraud law firm offering nationwide representation to investors who are victims of fraud and negligence of their financial and investment advisers, is currently representing clients who have suffered losses in connection with several Eco-Vest sponsored conservation easements, including Hammersmith Landing Holdings LLC.

Investors in Hammersmith Landing Holdings run the risk of facing steep IRS penalties as a result of the potentially fraudulent nature of the easement structure. On its face, Hammersmith offered investors a 4.1 – 1 deduction to investment ratio, which is more than double the ratio considered by the IRS to be reflective of a questionable tax avoidance transaction.  EcoVest, the issuer of Hammersmith and hundreds of other conservation easements, has been under active investigation by the Department of Justice since 2018 and by the Senate Finance Committee since as early as 2016.  A new wrinkle in the governments enforcement and investigation into these tax avoidance schemes is the recent revelation that President Trump has taken advantage of these conservation easements for many years and could have participated in structures that the IRS now considers to be illegal.

What investors actually get when they purchase a conservation easement is a Regulation D private placement – it is a security sold by a broker/dealer. As such, financial advisors and brokerage firms have numerous duties and obligation to vet the investment and to perform reasonable due diligence on the security prior to even offering it for sale.  There are several regulatory notices from FINRA that speak directly to this obligation, including Regulatory Notice 10-22, NASD Notice to Members 03-71 which discussed vetting of “non-conventional investments”, NASD Notice to Members 05-26, which discusses the vetting of “new products” and more recently, FINRA Regulatory Notice 13-31 which addresses supervision issues specific to advisors who sell a lot of these same products to several clients. Fundamentally, the due diligence and vetting process is rooted in FINRA’s Suitability Rule, specifically, FINRA Rule 2111.05(a).

Chicago-based Stoltmann Law Offices is investigating claims made by the Securities and Exchange Commission that financial advisor Scott Fries of Piqua, Ohio engaged in a Ponzi-like scheme , defrauding investors of nearly $200,000.  According to the complaint filed by the SEC last week, Fries raised approximately $178,000 from investors and used that money to pay personal expenses like his mortgage, payday loans, and credit cards. The SEC further alleges that Fries attempted to fraudulently conceal his activities by creating fake account statements which he delivered to his clients that purported to show their money invested in legitimate investments. The SEC alleges Fries’ misconduct violated several federal securities laws including Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. 240.10b-5, Section 17(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. § 77q(a), and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 (“Advisers Act”), 15 U.S.C. §§ 80b-6(1) and 80b-6(2).

Before the SEC took action, the Financial Industry Regulatory Authority (FINRA) barred Fries from the securities industry in November 2019 for violating FINRA Rule 8210. In response to being terminated for cause by his broker/dealer firm TransAmerica, FINRA launched an investigation into the allegations which led to Fries’ termination. If a broker/advisor fails to respond to these requests for information under FINRA Rule 8210, they can be barred for life from the securities industry. In many instances, brokers refuse to answer Rule 8210 requests because doing so would put them in the untenable position of having to answer question under oath.  It is likely, given the SEC’s allegations, that Fries chose not to answer FINRA Rule 8210 requests because it was not in his best interest for their to be a record of whatever this scheme actually was.

Investors who were caught up in this scheme run by Fries have legal options to attempt to recover their losses.  First and foremost, at all times relevant, Fries was a registered, licensed, representative of TransAmerica. This means victims – even those that were not contractual customers of TransAmerica – can file an arbitration action against TransAmerica to seek recovery of their losses. As a FINRA registered broker/dealer firm, TransAmerica is legally obligated to supervise the conduct of its financial advisors. This supervision requirement is rooted in the Securities Act and all applicable state laws, including myriad FINRA Rules and regulations, including FINRA Rule 3110.  Case law also supports the proposition that even non-customers of the firm can sue for the firm’s role in facilitating or failing to supervise their advisors. See McGraw v. Wachovia Securities, 756 F. Supp. 2d 1053 (N.D. Iowa 2010). When “red flags”of misconduct present themselves, firms like TransAmerica have a duty to act and to take steps to protect investors.

Barrington, Illinois based Stoltmann Law Offices has been retained by victims of Matthew Piercey’s alleged Ponzi scheme involving Wealth Legacy, UpVesting Fund, Zolla Investment Fund, amongst other alleged investments, to pursue claims against potentially liable third parties. Matthew Piercey was arrested at Lake Shasta, California after attempting to evade the FBI using an underwater scooter. Piercey was arrested and indicted on 31 counts of wire fraud, money laundering, mail fraud, and witness tampering. Piercey is alleged to have orchestrated a $30 million Ponzi scheme, converting investor funds that were supposed to be invested in supposedly legitimate investment vehicles, like the Zolla Investment Fund.  Piercey’s alleged co-conspirator, Ken Winton, was arrested separately, although under less dramatic circumstances.

Victims of Matthew Piercey’s Ponzi scheme may have claims against third-parties to recover their losses. Pursuing Matthew Piercey directly in a lawsuit to recover is probably a fool’s errand. Once the criminal justice system is through with him, there won’t be anything left. Sure, assuming he is found guilty of these heinous crimes, he will be ordered to make restitution to victims, but the money is gone and his earning capacity will be destroyed.  So victims need to look to third parties for recovery.

If you were referred to Matthew Piercey or Ken Winton by a lawyer, a financial advisor, a wealth manager, or a CPA or accountant, those individuals could be liable to you for the losses you have sustained as a result of Piercey’s alleged schemes. 

Chicago-based Stoltmann Law Offices continues to represent investors who’ve suffered losses in connection with financial advisors who have oversold energy stocks and other energy-related investments. With the COVID-19 pandemic depressing demand for everything from gasoline to jet fuel, it’s been a mostly rotten year for energy stocks. In fact, when news first hit the markets in early March, stocks in many oil & gas companies and funds that invested in them crashed. At one time, the Energy Select SPDR (XLE), an exchange-traded fund that invests in energy companies, was down as much as 58%.

The net effect of tens of millions of Americans sheltering in place, avoiding travel and not commuting slashed demand for fuels. Only a handful of people were getting on jets, buses, ships, trains, or driving to work. That resulted in energy companies eliminating dividends and losing money.  While the economy has recovered somewhat as more states have re-opened in recent months, energy demand is nowhere near where it was at the beginning of 2020. The U.S. economy is now in a recession, which may continue into 2021.

What is important to realize about oil/gas prices is, the decline in energy demand actually began a few years ago – primary energy consumption dropped by half in 2019 alone — hasn’t stopped brokers from selling investments in oil & gas companies. They have sold stocks, limited partnerships, and mutual funds that concentrate in fossil fuels, which are volatile commodities and have a long history or volatility.

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