Articles Tagged with SEC

AdobeStock_198259345-300x200Stoltmann Law Offices is interested in speaking to those investors who may have been recommended Premium Point Investments, LP by their investment advisor. The Securities and Exchange Commission (SEC) announced that it has charged the New York-based company with inflating the value of private funds it advised by over $200 million. The SEC also charged Premium Point’s CEO Anilesh Ahuja and Amin Majidi, a former partner and portfolio manager at the firm, in the same complaint. According to the complaint, Premium Point described itself as focused on investment opportunities in securities, mortgages, loans, real property, and consumer receivables. The SEC alleged that it ran a scheme from at least September 2015 through March 2016 by inflating the value of its portfolio to hide the poor performance. The fund also allegedly engaged in secret deal where, in exchange for sending trades to a broker-dealer, Premium Point received inflated broker quotes for certain mortgage-backed securities (MBS). Premium also allegedly used mid-point valuations that further inflated the value of securities. This was all done by the fund and its heads to make the holdings appear more attractive to potential investors, and to discourage clients from withdrawing funds. The SEC sued Premium Point in May of this year. Premium Point Investments offerings include the following:

Premium Point Credit Fund, LP

Premium Point ERISA Offshore Mortgage Credit Fund, LTD

AdobeStock_41845221-300x212Stoltmann Law Offices is interested in speaking to those investors who may have suffered losses with Beverly Hills Wealth Management (BHWM) broker Margaret Mulligan Black (aka Margaret Mulligan Scott). Ms. Black recently entered into a cease-and-desist order with the Securities and Exchange Commission (SEC). The cease-and-desist order claims that Black withheld prepaid, unearned advisory fees totaling $131,000 from 63 departing clients who requested terminating their advisory relationship with BHWM despite representations made in its Form ADV brochures and advisory agreements. Specifically, Black and the firm refused to recognize clients’ e-mails and mailed requests as proper termination notices. They instead demanded that the clients send written requests with a “wet signature.” Between March 2013 and April 2018, BHWM and Black continually omitted material facts and made false and misleading statements regarding BHWM’s financial condition in its Firm Brochures. The firm failed to disclose that it was unable to repay its loans during this entire time. BHWM had borrowed $700,000 in order to keep the firm afloat. The firm also owes an additional $75,000 in unpaid interest. These are against securities laws.
Margaret Mulligan Black, according to publicly available records with the Financial Industry Regulatory Authority (FINRA), is not currently registered as a broker. She was previously registered with Calton & Associates, Mutual Securities, Purshe Kaplan Sterling Investments and Morgan Stanley from 1979 until 2008, all in Beverly Hills, California. Beverly Hills Wealth Management may be liable for any losses sustained, because the firm had a duty to reasonably supervise Ms. Black while she was registered there. We take cases on a contingency fee basis only.

AdobeStock_194438920-300x200On June 5th, 2018, the Securities and Exchange Commission (SEC) filed a complaint against Essex Capital Corporation and Ralph T. Iannelli. From 2014 until 2017, Essex, and Iannelli, the company’s president and founder, allegedly perpetrated an $80 million, ponzi-type securities fraud scheme. According to the complaint, “Iannelli attracted investments through the sale of promissory notes that paid a high rate of return-typically 8.5% per annum. Those investor returns were supposedly based on the strength of Essex’s equipment leasing model, in which Essex’s lease portfolio would generate sufficient income to fully offset its borrowing costs and obligations to noteholders, leaving Essex with a profit of its own. Between 2014 and 2017, Iannelli raised over $80 million from approximately 70 promissory note investors. Unbeknownst to the investors, however, the representations Iannelli made about their investments were materially false and misleading.” Also during this time period, Iannelli siphoned millions of dollars out of the company in the form of bonuses and personal loans to give to himself.

Many of the customers Iannelli solicited were friends of his in the Santa Barbara, California community. Essex, whose headquarters are in Santa Barbara, California, and was purported to operate as a lease financing business, sustained a $32 million operating loss during the aforementioned years. This was according to the company’s own financial statements, and was due, in part, to the fact that Essex used the bulk of its revenue to pay back original investors and banks, instead of using it to purchase income-generating equipment. In 2014 alone, Essex raised over $20 million from its promissory note investors and limited partnership investors, and borrowed $6 million from banks, but only spent $2.3 million of its incoming funds to purchase equipment. Essex paid back more than $25 million of its funds to the banks and investors, and suffered a net operating loss of over $2 million. This trend continued until 2017.

Essex and Iannelli continued to raise new investor funds, and “resorted to a pattern of ponzi-like payments, for a total amount of at least $1.5 million since 2014.” According to the SEC Complaint, two investment advisory firms were responsible for attracting investors to the Essex fraud. These firms are referred to by the SEC anonymously as “Investment Adviser A” out of Santa Barbara, California, and “Investment Adviser B” out of New York, New York. Although the SEC alleges that Essex Capital and Iannelli made material misrepresentations to these investment advisers about Essex’s business, as fiduciaries under the law, these investment advisers had an iron-clad legal duty to perform adequate due diligence into these offerings prior to recommending any of them to their fiduciary clients.

AdobeStock_112465076-1-300x164Former Indianapolis, Indiana-based Merrill Lynch advisor Thomas J. Buck is to be sentenced next month after pleading guilty in January to one count of securities fraud. He may face up to 25 years in prison. Buck has agreed to pay a $5 million penalty as part of a separate settlement agreement with the U.S. Securities and Exchange Commission (SEC). Buck, according to federal investigators, defrauded clients by charging excessive commissions and intentionally failing to advise them of cheaper pricing options for his services. His criminal activity caused client to suffer losses of $2 million. He was fired by Merrill Lynch in 2015 due to “management’s loss of confidence.” He had been senior vice president of investments at Merrill Lynch.
According to his online, FINRA BrokerCheck report available to the public, Thomas J. Buck was previously registered with Merrill Lynch in Indianapolis, Indiana from December 1981 until April 2015 and RBC Capital Markets in Indianapolis from April 2015 until July 2015. He has 35 customer disputes against him, one of which is pending, one civil matter and one criminal pending charge. He has been permanently barred from the industry.
If you or someone you know has lost money with Mr. Buck, please call our securities law firm today to find out how you may be able to recover your losses in the FINRA arbitration forum on a contingency fee basis. Merrill may be liable for investment losses because the firm has a duty to reasonably supervise its brokers while they are employed with the firm.

AdobeStock_91053286-1-300x194Stoltmann Law Offices is investigating former broker Nicholas Genovese, who was charged by the Securities and Exchange Commission (SEC) with a brazen offering and investment adviser fraud. The SEC alleged that, since 2014, Genovese and his hedge fund, Willow Creek Investments LP raised more than $5.3 million from at least six investors by affirmatively misrepresenting his prior money-management, securities industry experience and size of operations. The SEC charged that Genovese falsely stated that his hedge fund’s investment adviser had $30-$39 billon of assets under management, that his firm had between 42 and 60 employees, when it actually had 10, and that his hedge fund had investment gains of 30-40 percent per year, when, in reality, it sustained losses. It was also alleged that Genovese lied about his education and prior work experience, and concealed his criminal past from investors. The U.S. Attorney’s Office for the Southern District of New York has filed parallel criminal charges against him. If you or someone you know lost money because of Nicholas Genovese and Willow Creek Investments, you may be able to recover those investments through the Financial Industry Regulatory Authority (FINRA) arbitration forum on a contingency fee basis.

AdobeStock_112465076-1-300x164According to the Wall Street Journal, the amount of penalties imposed by the SEC, FINRA and the CFTC have plummeted in the first half of 2017 in comparison to the first half of 2016. Regulators are on track for the lowest annual level of fines since at least 2010. Fine amounts have dropped from $1.4 billion in the first half of 2016 compared to $489 million for the first half of 2017. The deregulatory, hands off approach of the Trump administration is one major reason for this drop. SEC chairman Jay Clayton has previously expressed concern about the size of corporate fines, arguing they have hurt shareholders. Another reason is Wall Street’s successful lobbying of FINRA to reduce the size of the fines imposed. The seeds for the next bubble that devastate millions of investors are being planted.

WSJ FINRA SEC

AdobeStock_99700100-2-300x200The U.S. Securities and Exchange Commission (SEC) fined Barclays Plc $97 million for allegations that the bank falsely charged clients for services that were not being performed. Customers were overcharged nearly $50 million because of violations like imposing fees for due diligence that was never performed and collecting excess mutual fund fees by steering clients into more expensive share classes. The bank will pay a $30 million penalty and more than $60 million in disgorgement and prejudgment interest. If you were a client of Barclays, please call our securities law firm today at 312-332-4200 to find out how to reclaim your losses on a contingency fee basis. The call is free with no obligation.

AdobeStock_77502568-1-300x199David Humphrey, a former accountant with the U.S. Securities and Exchange Commission (SEC) was accused of illegally trading options while working there. He was employed with the agency for 16 years prior to the illegal trading. The SEC has strict securities trading rules for its employees, as many of them have access to non-public and market-making information. They are also banned from holding stock in companies directly regulated by the SEC and are required to get clearance prior to trading. Trading options is also banned for all SEC employees. Humphrey was charged with one criminal count of making a false written statement, after filing false government ethics forms that failed to disclose certain investments, according to a federal court filing. He is expected to settle related civil SEC charges, after he was caught trading options on his work computer for over a decade. He also traded options for his mother and a friend. He will also pay more than $100,000 in penalties and ill-gotten profits to settle the SEC civil case and will be barred from being an accountant.

The Securities and Exchange Commission (SEC) is investigating several alternative trading systems. It is looking for the “right balance between a principled regulatory approach and an aggressive and comprehensive enforcement effort,” Daniel Hawke, chief of the SEC’s market abuse unit, stated. The SEC will be focused on regulating “dark pools,” private exchanges or forums not accessible by the investing public and known for their complete lack of transparency. SEC chief Mary Jo White has said the agency will update its rules for dark pools in order to come down hard on illegal trading.

AdobeStock_33766885-1-300x200Yesterday, the Securities and Exchange Commission (SEC) announced that Morgan Stanley and Citigroup Global agreed to pay more than $2.96 million each to settle charges that they made false and misleading statements about CitiFX Alpha. CitiFix Alpha is a foreign exchange trading program that was sold to Morgan Stanley customers from August 2010 to July 2011, according to an SEC press release. Citigroup held a 49% ownership interest in Morgan Stanley and both firms were selling the foreign exchange trading program. The SEC stated that there were significant losses caused to investors because of the program’s past performance and risk metrics. There were also undisclosed leverage and markups. If you were a client of Morgan Stanley or Citigroup, you may be able to recover your losses if you were sold CitiFix Alpha Investments. The firms may be liable for your losses. To find out how to recover your money on a contingency fee basis, please call our law firm at 312-332-4200 to speak with an attorney for free. There is no obligation.

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