Articles Tagged with fraud

Chicago-based Stoltmann Law Offices is representing investors who’ve suffered losses from financial advisors who’ve swindled investors through unauthorized transactions. Can financial advisers trade your portfolio or buy investments without your permission? Only if you give them “discretionary” authority and definitely not if they’ve failed to obtain your written okay.

Without a doubt, brokers can’t do anything with your assets if they forge your signatures to make a transaction. Joffre Salazar, a former broker with LPL Financial, was terminated by the brokerage firm after he “forged two customers’ signatures and initials on documents connected to the purchase of fixed annuities, which Salazar then also submitted without the customers’ authorization,” according to FinancialAdvisorIQ.com.

Salazar, who first registered with Finra, the federal securities regulator, in 1991, registered with LPL in 2016, according to Finra. In April 2019, LPL filed a termination notice for Salazar, stating that he resigned voluntarily, but two months later amended the form to disclose that it started a review of Salazar’s “involvement in processing [an] annuity application without customer authorization,” Finra stated.

Chicago-based Stoltmann Law Offices has represented athletes who’ve suffered losses from dealing with broker-advisors who have fleeced them. Just because a person is a professional athlete and makes tens of millions of dollars for playing a sport doesn’t mean they are financially sophisticated. Far too many great athletes fall prey to con men and advisors who rip them off.

Sadly, there’s a long list of athletes who’ve been defrauded by advisors. Some have achieved great fame in their sports such as boxer Mike Tyson, pitcher CC Sabathia, NBA great Kareem Abdul Jabbar and quarterbacks John Elway and Bernie Kosar. Sometimes all it takes is one crooked advisor to do a lot of financial damage. For example, major league pitchers Jake Peavy and Roy Oswalt and Quarterback Mark Sanchez had three things in common: They were well-paid athletes and shared the same financial advisor. Ash Narayan, an Irvine, California-based advisor with RGT Capital Management, pleaded guilty to defrauding the stars of some $30 million. Narayan was forced to pay nearly $19 million in restitution and serve 37 months in prison.

How were these pros swindled? Prosecutors stated that “from December 2009 to early 2016, he advised his clients to invest in a money-losing online sports and entertainment ticket company in Illinois (The Ticket Reserve, Inc.) without telling them that he was on the board, or that it was a risky and unprofitable business,” according to The Los Angeles Times.

According to a recent InvestmentNews article, former broker Bradley Mascho allegedly failed to appear at a hearing with the Financial Industry Regulatory Authority (FINRA). Mr. Mascho was terminated from Western International Securities in December 2017. He and Dawn Bennett, who also worked at Western International, were the subjects of an investigation by the Securities and Exchange Commission (SEC) that involved the sale of more than $20 million in convertible and promissory notes to at least 46 investors from December 2014 until July 2017. In connection with its fraud case against Ms. Bennett, the SEC also charged Mr. Mascho with aiding and abetting an offering fraud by the firm. He was the previous chief financial officer of DJB Holdings, Bennett’s investment firm. According to FINRA’s Letter of Acceptance, Waiver and Consent (AWC) against him, it stated that the regulatory body was investigating him for “potential serious violations, including fraud, undisclosed outside business activities, and private securities transactions.” These are all violations of securities laws and internal firm rules and regulations.

Bradley Mascho was previously registered with IDS Life Insurance Company in Minneapolis, Minnesota from March 1997 until July 1999, American Express Financial Advisors in Minneapolis from March 1997 until July 1999, Legg Mason Wood Walker in Baltimore, Maryland from September 1999 until February 2006, Royal Alliance Associates in Washington, D.C. from February 2006 until October 2009 and Western International Securities in Frederick, Maryland from October 2009 until December 2017. He has one customer dispute against him and one criminal pending charge alleging that he conspired to commit securities fraud, aided and abetted and conspired to commit wire fraud. All are felonies. He has one civil pending charge against him and has been permanently barred from the industry. This is according to FINRA records online.

Stoltmann Law Offices continue to investigate broker Timothy Tilton Ayre of Massachusetts, who has been charged by FINRA with the unlawful distribution of unregistered cryptocurrency securities and fraud.  The FINRA complaint alleges that Ayre bought the rights to HempCoin in 2015.  He repackaged it as a security backed by his own company Rocky Mountain Ayre, Inc. (RMTN).  Calling it “the first minable coin backed by marketable securities”,  Ayres sold HempCoin telling investors that each coin was equivalent to 0.10 shares of RMTN common stock. After selling more than 80 million HempCoin securities, FINRA charged Ayre with the unlawful distribution of an unregistered security because HempCoin was never registered and no exemption applied.  FINRA also alleges Ayre defrauded investors in RMTN by making materially false statements and omissions regarding RMTN and its financial statements, along with the unlawful distribution of HempCoin and failing to disclose his creation of it.

AdobeStock_78306447-1-300x199Stoltmann Law Offices continues to investigate Anthony Diaz, a broker with IBN Financial Services in Pennsylvania. Diaz allegedly began over-concentrating a client’s irreplaceable retirement assets into high-risk, commission-laden private placements, real estate investment trusts (REITs), and other illiquid, alternative investments. The customer was looking to generate income, while protecting his principal. He agreed to move his assets to IBN with the understanding that he was looking for stable investments. REITs, private placements and other alternative investments that Diaz recommended and sold to him, did not align with the customer’s wishes, and Diaz, as his financial advisor, had a duty to only recommend and sell to him those investments that were suitable for him, based on his age, net worth, investment objectives and investment sophistication and risk tolerance levels.
In November 2012, Diaz solicited the customer to purchase $350,000 worth of Bakken Drilling Fund III, which is now defunct. It is an oil, gas and energy stock, and these tend to be highly risky and illiquid investments. The fund filed for bankruptcy in October 2016, after raising over $20 million from 309 investors. This is according to a filing with the Securities and Exchange Commission (SEC). He also put him into Ameritech College Holdings for $95,000, ARC NY REIT, and ICAP Pacific Northwest Opportunity Fund.
According to publicly available records with FINRA online, Anthony Diaz has been permanently barred from the securities industry, and has 56 disclosures on his CRD report. 44 of these are customer complaints against him. He was registered with IBN Financial Services in Scotrun, Pennsylvania from September 2012 until April 2015. IBN can be liable for losses if you lost money because of Anthony Diaz.

AdobeStock_77502568-1-300x199Former UBS broker John MacColl was charged with defrauding more than 15 retail investors in a $4 million scheme. He used high-pressure sales tactics that targeted mostly elderly retirees, according to a complaint filed with the Securities and Exchange Commission (SEC) in federal court in Michigan. He persuaded clients to invest in a “highly-sought-after” private fund that would diversify their portfolios and provide investment returns as high as 20%, exceeding the returns they would receive with investments at UBS. Between 2008 and 2018, MacColl told investors to sell or take a line of credit out against the securities in their accounts and to deposit the money into their personal bank accounts, according to the complaint. He then told them to make checks payable to “Mac 011” or “Mac01”. He then added his name to the payee line and deposited the checks into his own account. Other criminal charges were filed in a federal court in Michigan this week. One victim invested her life savings and money from her deceased husband’s life insurance payout, which she was going to use to pay for college for her three children. MacCall spent the money on personal expenses, and about $410,000 was used to pay back other investors in a ponzi-scheme fashion.

AdobeStock_66548440-1-300x169The Financial Industry Regulatory Authority (FINRA) has barred former Comprehensive Asset Management broker Pamela Shuttleworth, from the securities industry. Ms. Shuttleworth had violated securities laws and internal firm rules. Ms. Shuttleworth failed to respond to a FINRA investigation against her, which resulted in her automatic bar. FINRA was investigating her regarding allegations that she was the supervisor responsible for monitoring the emails of a former representative of her brokerage firm, Comprehensive Asset Management. Pamela Shuttleworth was a registered representative of Comprehensive Asset Management and Servicing from December 2014 until June 2017. She worked in the Parsippany, New Jersey branch. Comprehensive may be liable for losses in the FINRA arbitration forum because the firm had a duty to reasonably supervise Shuttleworth while she was employed there. We take cases on a contingency fee basis only.

AdobeStock_112465076-1-300x164Stoltmann Law Offices continues to investigate National Securities Corp broker Jonathan Aschoff and his recommendations of the following Biotech securities:

Avenue Therapeutics Inc (ATXI.O);

Checkpoint Therapeutics Inc (CKPT.O); and

AdobeStock_200379710-300x200Stoltmann Law Offices continues to investigate Healthcare Trust REIT, a non-traded real estate investment trust (REIT), that seeks to acquire a diversified portfolio of real estate properties focusing primarily on healthcare-related assets including medical office buildings, seniors housing, and other healthcare-related facilities. This is according to the company’s website. Recent news suggests that Healthcare Trust may be in further decline, and that investors may have lost money in the REIT. REITs are not suitable for all investors. They tend to be highly illiquid and risky investments, and a broker must take into account a customer’s age, net worth, investment objectives and investment risk tolerance, among other factors before recommending or selling any investment. If he does not, his brokerage firm may be liable for losses on a contingency fee basis, because the firm has a duty to reasonably supervise its representatives in order to make sure they do not violate securities laws or internal firm rules. You may have options if your broker recommended or sold you Healthcare Trust REIT investments. We take cases on a contingency fee basis only.

AdobeStock_194438920-300x200Former LPL broker Sanders Spangler was barred from the securities industry by the Financial Industry Regulatory Authority (FINRA). LPL terminated him for executing unauthorized trades in non-discretionary customer accounts in February 2017. In March 2018, FINRA barred him due to his failure to appear for an on-the-record testimony. Failure to appear for this results in an automatic bar from the industry. In March 2018, Spangler’s ex-wife alleged that he was forging her account documents. This dispute is currently pending. In October 2017, according to Spangler’s FINRA BrokerCheck report within the industry, available online, a customer alleged that he was over-concentrating the customer’s investments in risky energy stocks. He also alleged that Spangler liquidated his account without permission from the customer. This dispute is also currently pending. In June 2017, a customer alleged that Sanders Spangler instigated unsuitable, unauthorized trades in a non-discretionary customer account without the customer’s knowledge or permission. These are all against securities laws and internal firm rules.
Advisors must have the full consent and written approval of the customer before placing any trades. Unauthorized trading occurs when a broker sells a security without the proper written consent needed from the investor. An advisor must also take into account a customer’s age, net worth, investment objectives and investment risk tolerance, among other things when recommending and selling an investment. If he does not, his brokerage firm may be liable for losses. Energy investments, such as the ones Spangler sold to at least one customer, tend to be highly illiquid, unsuitable investments. If investors lose money because of a broker’s recommendation or sale, the brokerage firm may be liable for losses on a contingency fee basis in the FINRA arbitration forum, because the firm has a duty to reasonably supervise its employees while they are registered there.
Sanders Spangler, according to his online, FINRA BrokerCheck report, was previously registered with Edward Jones in St. Louis, Missouri from July 2000 until October 2005 and LPL in San Antonio, Texas from October 2005 until March 2017. He has six customer disputes against him, one of which is currently pending. They allege suspected forgery, over-concentration in energy stocks, account liquidation without client knowledge, unsuitable investments, unauthorized trading, poor performance, and discretion. He has one regulatory matter against him. He has been permanently barred from the securities industry.

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