Articles Tagged with District Court

The Securities and Exchange Commission (SEC) and the U.S. District Court for the District of Utah, handed down final judgments against two men last week that they accused of running a ponzi scheme that defrauded more than 50 investors out of more than $7 million. Tyson Williams and Stanley Parrish were accused of defrauding the investors through the sale of securities in ST Ventures. They told investors that ST Ventures would purchase collateralized mortgage obligations, a type of mortgage-backed security, and then leverage them to produce a large return for the investors within 30 to 90 days. The SEC also claimed that Williams and Parrish made “material misrepresentations and omissions” regarding the investment including the risk of the investment and the use of investor funds. They also told the investors that their investment principal would “never be at risk of loss,” because investing in CMOs is a “very safe and liquid investment.” They told the investors that their funds would only be used to purchase CMOs.

In reality, the men ran a ponzi scheme, with more than $1.5 million in payments made to old investors with new investor money. The men also misappropriated over $3.5 million of investor money for their personal use. Last week, the District Court for the District of Utah ordered Williams and Parrish to pay a disgorgement of $3,111,484.89, prejudgment interest of $1,067,778.29 and a civil penalty in the amount of $130,000.

Stoltmann Law Offices is investigating Patrick Mackaronis, against whom the Securities and Exchange Commission (SEC) filed a complaint in the District Court of New Jersey, alleging that Mackaronis recommended investments in a technology start-up company that was part of a fraudulent scheme. Allegedly he sold investments in the company while ignoring the risks of potential fraud. The SEC alleged that he blindly touted the investments. Mackaronis actually used investor money to pay for their mortgage, credit card bills, car leases, college tuition, landscaping and at casinos. Mackaronis was forced to pay $85,000 to disgorge the commissions he earned, $8,000 in interest, a $50,000 penalty and agreed to a three-year bar from the securities industry.

According to his Financial Industry Regulatory Authority (FINRA) online BrokerCheck report, Mackaronis was registered with Wells Fargo Advisors in Wayne, New Jersey from May 2008 until August 2012. He has three customer disputes against him and he is not licensed within the industry. Please call us today to discuss how you may be able to sue Wells Fargo in the FINRA arbitration forum on a contingency fee basis for investment losses.

Stoltmann Law Offices is still interested in speaking to those investors who may have invested money with Malcolm Segal, a former branch manager of Aegis Capital Corp in Langhorn, Pennsylvania. Last week, Segal was sentenced to ten and a half years in prison by the Securities and Exchange Commission (SEC) for fraudulently selling certificates of deposit. He pled guilty to wire fraud and mail fraud in February and was sentenced Thursday in U.S. District Court in Philadelphia and ordered to pay his victims $3 million in restitution. The SEC also had filed a civil complaint for fraud against him and barred him from the financial industry. His scheme ended in 2014. Segal falsely claimed that his certificates of deposit could provide higher interest rates on FDIC-insured CDs than otherwise available to the general public. In some instances, Segal purchased those CDs on behalf of investors, but took the money for himself. He then told the customers he had purchased the CDs for them and misappropriated their money. Eventually, Segal also stole directly from customer brokerage accounts in an effort to keep funding the ponzi payments and to keep his scheme from being detected.

Fidelity Management Trust Co. has been accused of breaching its ERISA fiduciary duties for allegedly receiving unreasonable compensation through its brokerage window feature and a kickback scheme with an investment advice company. Fidelity allegedly selected mutual funds with higher expense ratios for the plan brokerage window that allowed the investment firm to rake in “significant amounts” in revenue-sharing payments in violation of the Employee Retirement Income Security Act. The lawsuit was filed in the U.S. District Court for the District of Massachusetts by participants in the Delta Air Lines Inc. retirement plan. As of 2014, the plan had approximately $7.5 billion in assets, of which more than $2.8 billion were invested through Fidelity’s brokerage window. The participants paid Fidelity enormous fees simply for obtaining access to mutual funds that were already established on Fidelity’s platform. It was also alleged that Fidelity earned unreasonable compensation by engaging in a kickback scheme with Financial Engines Advisors or to participants, according to the complaint.

Did you lose money with Daniel and Matthew Rivera of Robbins Lane Properties? If so, please call our securities law offices in Chicago at 312-332-4200 for a free consultation with one of our securities attorneys. We may be able to help you bring a claim against them and sue Robbins Lane Properties in the Financial Industry Regulatory Authority (FINRA) arbitration forum on a contingency fee basis. We only make money if you recover yours.

According to a complaint filed in the District Court of New Jersey, the Securities and Exchange Commission alleged that Daniel and Matthew Rivera, brothers, engaged in a fraudulent ponzi scheme in which they falsely promised investors they would share profits of their real estate venture, Robbins Lane, the redeveloped and sold properties. Robbins Lane was a sham, with no employees and no operations, and the brothers misappropriated funds for their personal benefit. Many of the investors they scammed were elderly and unsophisticated and their money went to pay for the Rivera brothers’ family college tuition and homes, sporting events and different businesses, among other things. Approximately $2.7 million was fraudulently obtained from 30 investors.

Brokers have a responsibility treat investors fairly, which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.

The U.S. attorney’s office in Chicago is cracking down on “spoofing.” Spoofing is an illegal practice in which traders profit from placing orders they intend to cancel, at times only milliseconds later. Chicago is at the epicenter of the futures market, and therefore, is emerging at the forefront of the criminal and civil litigation in this matter. Earlier this month, in the U.S. District Court in Chicago, the first criminal conviction of a spoofer was won. The Commodity Futures Trading Commission is pressing civil spoofing charges against a Chicago trading firm and the CFTC lodged civil charges last month against Chicago-based 3Red Trading and its owner, Igor Oystacher. Firms such as Citadel, Jump Trading, DRW Holdings and Allston Trading have made Chicago a hub for high-speed trading and are aggressive in worldwide financial markets. One recent example was Panther Energy Trading’s Michael Coscia, who was found guilty by a jury on 12 criminal counts on November 3rd, and his case hinged on content, as he admitted that he cancelled tens of thousands of orders over a nine-week period in 2011.

Rival firms are bringing each other to court on spoofing charges and incriminating each other. Citadel filed multiple complaints with the CFTC and CME regarding anonymous trading that was traced to 3Red. Citadel claimed they lost millions of dollars as a result of 3Red’s actions. The firm also complained about Panther’s trading and a Citadel employee testified for the prosecution in the Coscia trial. High-speed firms are suing each other in Chicago federal court, as well. HTG Capital Partners sued “John Doe” over spoofing and is trying to reveal the name of the culprit.

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