Articles Tagged with investors

AdobeStock_35532974-1-300x200Were you a client of TD Ameritrade, Charles Schwab, ETrade or Fidelity? Were your account positions sold out to satisfy margin calls? If so, under some circumstances, the brokerage firm can be sued to recover the losses associated with the margin blowout activity.

Ordinarily, brokerage firms have the right to liquidate investors out of various positions to satisfy margin calls. We are currently representing clients who were told by the brokerage firm they had a specific period of time to satisfy the margin calls. Unfortunately, the firms then proceeded to sell the clients out of those positions prior to the time given to satisfy the margin calls. The verbal representations made by the firm modified the contract and required the firms to give the investors that period of time to satisfy the calls.

The FINRA arbitration claims process or class-action lawsuits can be used to recover damages associated with the margin blowouts. Please call our law firm in Chicago Illinois for a no-cost review by an attorney.

Did your Credit Suisse broker recommend to you The VelocityShares Daily Inverse VIX Short-Term (XIV) exchange-traded note (ETN) to you? If so, you may be able to recover your losses with this security on a contingency fee basis in the Financial Industry Regulatory Authority (FINRA) arbitration forum. XIV supposedly gives the opposite return of the Cboe Volatility Index (VIX), which is the market’s turbulence gauge, and is supposed to bet on calm markets. It and its sister fund, ZIV, are designed to go up when the volatility of the S&P 500 goes down. XIV was issued by Credit Suisse, slumped almost 4 percent on Tuesday morning, and closed down 93 percent on the same day, losing nearly 100 percent of its value. Many exchange-traded securities that are also supposed to be bets on calm markets were halted Tuesday, after losing the majority of their value overnight.

According to the XIV fund’s prospectus: “The ETNs, and in particular the 2x Long ETNs, are intended to be trading tools for sophisticated investors to manage daily trading risks…The ETNs are riskier than securities that have intermediate or long-term investment objectives, and may not be suitable for investors who plan to hold them for longer than one day.”

XIV is down more than 80 percent in extended trading as of yesterday, because of its popularity with hedge funds betting on an ever-calm market. Because of the market decline, fear has sparked among some traders that violent declines in ETNs like XIV would cause market volatility measures to spike further. It also raised fears of even bigger losses from hedge funds and other investors holding this security, as they may not be able to sell.

AdobeStock_66548440-1-300x169This afternoon PIABA published its report on Non Attorney Representatives (NARs). Co-authored by PIABA President Andrew Stoltmann and fellow PIABA board member Dave Neuman, it calls on FINRA to ban these firms from representing investors in the forum. The report details many of the extensive problems and issues with NARs, examines their paltry win rates and some of the people who run these operations. The entire report can be found on PIABA’s website below. Nothing short of a complete ban, with some notable exceptions for law school clinics and close family members of the investor, will suffice.


According to a complaint filed in the U.S. District Court in Philadelphia, Pennsylvania, between 2001 and 2016, Paul W. Smith raised $2.35 million from 30 investors by telling them he would invest their money in publicly traded securities through The Haverford Group. This was an outside partnership that Smith formed and did not disclose to his broker-dealer employers. Many of his victims were retired and/or elderly. The Securities and Exchange Commission (SEC) alleged that Smith made very few securities investments and instead largely used the money to repay other investors and for his own personal use. He allegedly fabricated phony account statements that reflected fictitious balances and gains and used money from investors to repay others to avoid suspicion. Smith was misappropriating investors’ money and lying about it. The Financial Industry Regulatory Authority (FINRA) permanently barred him from industry last June for failing to provide requested documents.

According to his online, FINRA BrokerCheck report, Paul W. Smith was previously registered with Prudential-Bache Securities from December 1982 until February 1987, E.F. Hutton from January 1987 until April 1988, Shearson Lehman Hutton in New York, New York from April 1988 until January 1990, Janney Montgomery Scott in Philadelphia, Pennsylvania from January 1990 until July 2000, Tucker Anthony Inc. in Boston, Massachusetts from June 2000 until February 2002, Philadelphia Brokerage Corp in Wayne, Pennsylvania from January 2002 until May 2007 and Bolton Global Capital in Wayne from May 2007 until February 2017. He has 11 customer disputes against him, eight of which are currently pending. He has been permanently barred from the industry.

Stoltmann Law Offices is investigating Wells Fargo broker Jeffrey Wilson, who was accused of unsuitable investment advice concerning various investment products including energy stocks that likely include master limited partnerships (MLPs). In August 2017, a customer alleged that Wilson recommended the purchase of unsuitable energy securities in or around August 2014. The claim is currently pending. In May 2016, another client alleged that Wilson, from June 2014 through November 2015, made unsuitable investments in oil and energy investments. This was settled for $250,000. Oil and gas investments can be risky and highly illiquid ones that are not suitable for every investor because of the decline in the price of oil. Many investors lost significant amounts of money because of these investments. A broker must take into account a client’s age, net worth, investment objectives and investment risk tolerance before recommending or selling any investment. If he does not, his brokerage firm may be liable for losses on a contingency fee basis in the Financial Industry Regulatory Authority (FINRA).

According to FINRA records, Mr. Wilson was previously registered with New York Life Securities Corp from October 1983 until August 1985, Merrill Lynch in Las Cruces, Mexico from September 1985 until October 2007, Morgan Stanley in Las Cruces from October 2007 until June 2009 and Morgan Stanley in Las Cruces from June 2009 until June 2014. He is currently registered with Wells Fargo in Las Cruces and has been since May 2014. He has four customer disputes against him, one of which is currently pending.


According to a recent Letter of Acceptance, Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA), Kevin Jedlicka allegedly violated securities laws. Mr. Jedlicka was previously registered through Chapin Davis. Allegedly, between January 30th, 2015 and January 22nd, 2016, he engaged in a pattern of unsuitable short-term trading of Class A mutual fund shares and Unit Investment Trusts (UITs) in customer accounts. This led to his suspension from the industry for six months. It was against securities laws and internal firm rules. UITs tend to be high-risk and illiquid investments that are not suitable for all investors, and a broker has a duty to only recommend and sell those securities that are suitable for the investor based on his age, net worth, investment objectives and investment sophistication. If he does not, his brokerage firm can be held liable for losses.

According to his online, FINRA BrokerCheck report, Mr. Jedlicka was previously registered with Alex Brown & Sons Inc., Global Financial Group, Dean Witter Reynolds, First Union Brokerage Services, Wells Fargo, Chapin, Davis in Baltimore, Maryland from October 2010 until July 2013, BB&T Securities, Chapin, Davis in Baltimore from January 2015 until February 2016 and Capital Portfolio Management. He is not currently registered as a broker.

AdobeStock_90383187-1-300x194Regulators have accused Yasuna Murakami and Avi Chiat, and their companies that the two managed, MC2 Capital Management and MC2 Canada Capital Management, of defrauding more than 50 investors by raising more than $15 million and then misappropriating funds in a ponzi-like fashion. According to the Securities and Exchange Commission (SEC), Murakami and Chiat allegedly defrauded more than 50 investors in three hedge funds run through their businesses. The hedge funds are MC2 Capital Partners LLC, MC2 Capital Value Partners and the MC2 Capital Canadian Opportunities Fund LLC. Allegedly, Murakami and Chiat lied to investors about the funds’ performance, falsified account statements, falsified tax documents, falsified performance letters and provided misleading communications to investors. They allegedly continually misled investors into believing they had invested in legitimate and profitable ventures, when, in reality, they engaged in unprofitable trading that lost more than 70% of the money raised for their first hedge fund in less than two years. The SEC further alleged that Murakami stole more than $8 million fro investors for almost a decade, and that he used $1.3 million of investor funds to make ponzi-like payments to earlier investors. He was arrested and accused of misappropriating millions of dollars from investors and engaging in a ponzi-like scheme by the Department of Justice. If you would like more information on how you can recover yours losses with Murakami and Chiat, and their companies, please call us today. We may be able to help you recover your losses on a contingency fee basis.

Stoltmann Law Offices is investigating James Tao and Donna Chen. Tao was a former registered broker with Sunbelt Securities. In December 2017, the Securities and Exchange Commission (SEC) brought a complaint against Tao, alleging that he committed fraud through a company that he owned, Presidio Venture Capital. His former partner, Donna Chen (also known as Donna Boyd), also had a complaint brought against her by the SEC. In January 2018, the SEC barred Tao from the industry. Allegedly, Tao and Chen raised $860,000 from investors to invest in their company, Presidio. The SEC alleged that Tao failed to disclose to investors that some of the companies that Presidio invested in had ties to Tao. Tao also used investor funds to increase his own stake in the company. Tao agreed to pay disgorgement of $155,000, interest of over $7,900 and a $150,000 penalty. Boyd agreed to pay $10,000. Tao was barred from the industry in 2016 by the Financial Industry Regulatory Authority (FINRA) after he allegedly failed to respond to an investigation against him.

Mr. Tao, according to his online FINRA BrokerCheck report, was previously registered with Electronic Trading Group in New York, New York from July 1999 until June 2001, Assent LLC in Geneva, Illinois from September 2004 until March 2006, Merrill Lynch in Houston, Texas from February 2011 until August 2012 and Sunbelt Securities in Houston from August 2012 until March 2016. He has one civil final dispute against him, and two regulatory. He has been permanently barred from the industry.

Ms. Chen was previously registered with Ameriprise in Houston from September 2005 until November 2011 and Sunbelt Securities in Houston from October 2011 until March 2016. She has one civil penalty against her, and three regulatory. She has also been permanently barred from the industry.

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