Smart-Beta ETFs Raise Billions in Assets

Smart-Beta ETFs Raise Billions in Assets

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As the stock market climbed this year, smart-beta ETFs have attracted billions in new assets. To date, these funds, which combine the low costs of indexing with rules-based investing, have seen $37.6 billion in net new cash.

Of the funds categorized by Morningstar Inc.—called “strategic beta”—the 10 largest have attracted $15.5 billion this year. Several are single-factor funds, such as Vanguard Value ETF (VTV), which has seen an estimated $4.3 billion in net new money, and others are complex smart-beta funds. Complex smart-beta funds are funds that use multiple factors or invest in several asset classes, and they have also attracted plenty of new money. First Trust Nasdaq Bank ETF (FTXO), for example, has seen $1 billion in net new cash. The fund uses three price factors to pick bank stocks.

For all new ETFs, the growth is dependent on getting and keeping new assets by attracting institutional investors, such as advisers, as well as long-term individual investors.

Investing in Smart-Beta ETFs Involves Risk

However, there is a risk with investing in ETFs. Multifactor smart beta funds that strive to reduce risk will generally produce lower returns than more aggressive funds and can be a tougher sell. Volatility-linked, exchange-traded products are meant to be used as short-term holdings that degrade significantly over time and should not be used as part of a long-term buy-and-hold investment strategy.

There have been several recent cases reported of brokers and brokerage firms recommending ETFs and ETNs to the detriment of the customer. As a result, FINRA has issued several regulatory notices to remind firms of their obligations when selling these securities.

Have You Lost Money in ETFs?

If you have lost money investing in ETFs or believe you have been the victim of stockbroker misconduct, you may have certain legal rights that require your immediate attention.

Call an Investment Fraud Attorney Today

If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.

With offices in Los Angeles, New York, West Palm Beach and Miami, our investment fraud attorneys represent clients nationwide and may be able to help you recover your investment losses.

Contact an investment fraud attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

TD Ameritrade ETF Platform Expanded, Will Charge Fees in 90 Days

TD Ameritrade ETF Platform Expanded, Will Charge Fees in 90 Days

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TD Ameritrade ETFs Removed from Platform

TD Ameritrade has announced that it will expand the number of exchange-traded funds (ETFs) offered to 296 and also remove some ETFs from its no-transaction-fee platform. The firm said that the Vanguard and iShares Core ETFs would no longer be available without a transaction fee, beginning November 20.

At first, the firm said the ETFs would be removed in 30 days, but industry criticism from several notable executives resulted in a change of course. Responding to the feedback from upset brokers, TD Ameritrade is instead tripling the amount of time it will allow advisers to continue trading Vanguard and iShares Core ETFs for free, pushing the new date to January 19, 2018. The decision comes just one week after the initial announcement.

Financial Advisers Upset About TD Ameritrade ETF Program

A number of securities professionals have been outspoken about TD Ameritrade’s announcement, including Michael Kitces, partner and director of research at Pinnacle Advisory Group and co-founder of the XY Planning Network. Kitces says that charging fees to trade the Vanguard and iShares Core ETFs would be hard on younger investors who regularly make smaller investments and would need to rebalance existing portfolios with new funds.

Though TD Ameritrade acknowledged negative feedback about the change, Tom Nally, president of TD Ameritrade Institutional, notes that critics are overlooking the advantages of other ETFs, such as State Street SPDR ETFs, that have been added to the TD’s platform.

“These are the lowest-cost broad index-tracking ETFs,” he said. “The domestic funds are 18% cheaper than Vanguard’s, and on the international front they are 33% cheaper than Vanguard’s, which we think will be attractive to advisers and their clients.”

TD Ameritrade ETF Commission-Free Offering Triples

Along with this announcement, TD Ameritrade expanded its commission-free ETF platform, nearly tripling the offerings from 100 to 296. Effective October 17, 2017, independent registered investment advisor (RIA) clients and individual investors now have access to one of the largest selections of commission-free ETFs in the industry, as well as the most non-proprietary, commission-free ETFs.

In a release circulated by the firm, the participating ETF providers are AGFiQ QuantShares, First Trust Portfolios, iShares ETFs, J.P. Morgan Asset Management, PowerShares (Invesco), ProShares, State Street Global Advisors and WisdomTree.

The expanded program includes ETFs that cover 77 Morningstar categories and include extremely low-cost ETFs in 15 core investment strategies. TD Ameritrade began offering commission-free trading in ETFs in 2010.

ETFs Often Misunderstood by Stockbrokers

There have been several controversies related to retail investments in ETFs. The Financial Industry Regulatory Authority Inc. (FINRA) recently ordered Wells Fargo to pay more than $3.4 million in restitution to customers affected by unsuitable recommendations of volatility-linked ETFs.

FINRA has found a lack of supervision and broker misunderstanding to be leading causes of ETF investor losses.

In related TD Ameritrade news, Dimond Kaplan &Rothstein, P.A. is pursuing FINRA arbitration claims against TD Ameritrade on behalf of an elderly investor who suffered stock option investment losses as a result of services rendered through third-party investment advisor Sheaff Brock.

The TD Ameritrade customer got to Sheaff Brock through TD Ameritrade’s AdvisorDirect program and suffered significant losses in a risky put income options strategy.

Did You Lose Money as a Result of TD Ameritrade ETFs?

If you believe you have lost money in ETFs trades, you may have certain legal rights that require your immediate attention.

Call an Investment Fraud Attorney Today

If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.

With offices in Los Angeles, New York, West Palm Beach and Miami, our investment fraud attorneys represent clients nationwide and may be able to help you recover your investment losses.

Contact an investment fraud attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

Penny Stock Pump-and-Dump Scheme Results in $13.7M Fine

Penny Stock Pump-and-Dump Scheme Results in $13.7M Fine

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A California federal judge has ordered an attorney accused by the U.S. Securities and Exchange Commission (SEC) of acquiring millions from investors in a penny stock pump-and-dump scheme to pay $13.7 million. The $13.7 million is alleged to be the attorney’s profits from the scheme plus interest. The attorney didn’t appear in court to contest the charges.

Attorney Sued in Penny Stock Pump-And-Dump Scheme

Attorney Marcus A. Luna was sued by the SEC in 2016 for profiting from price increases of worthless, unregistered securities for companies Umax Group Corp. and Azure Holding Group Corp.

Luna used a series of shell companies and brokerage accounts to hide his control of the two companies, which were touted as being run by his co-conspirator Norrell Walker. According to the SEC, Luna and Walker were listed as the majority shareholders of Umax and Azure.

Walker ran an unregistered stock promotion company with several locations where operators cold-called customers and tried to convince them to buy the stocks. When investors agreed to buy the stocks, Walker would notify Luna, who would fill the orders with his shares through an offshore brokerage.

Luna and Walker artificially inflated the prices of the stock of two companies. Once Walker and his sales force stopped promoting Umax and Azure stock, the share prices and volume plummeted for both companies.

In addition to the pump-and-dump scheme, Walker’s telemarketers were paid double-digit commissions. According to the SEC, the total amount of hidden commissions was about $2.8 million.

Attorney Also Guilty of Wire Fraud and Prior Scams

Luna was arrested and pled guilty to a wire fraud charge over the same scheme and is currently awaiting sentencing. He has been suspended from the bar.

Prior to this case, the SEC claims that Luna was previously ordered to pay $7 million and barred from participating in penny stock offerings in 2014 for his role in a similar fraud scheme. To date, he hasn’t paid that fine.

Have You Lost Money to Securities Fraud?

If you believe you have been the victim of securities or other investment schemes, you may have certain legal rights that require your immediate attention.

Call an Investment Fraud Attorney Today

If you are looking for a securities fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.

With offices in Los Angeles, New York, West Palm Beach and Miami, our securities fraud attorneys represent clients nationwide and may be able to help you recover your investment losses.

Contact a securities fraud attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

Palmetto Investments & Advisor Estate Settle For $4.6M

Palmetto Investments & Advisor Estate Settle For $4.6M

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The U.S. Securities and Exchange Commission (SEC) has reached a $4.6 million final judgment to settle with the estate of a Michigan-based investment advisor who defrauded 100 investors with an “extreme day trading” investment program.

The judgment requires the estate of investment advisor Vincent James Saviano and his company, Palmetto Investments LLC, to pay $4.4 million in disgorgement and nearly $150,000 in interest.

Palmetto Investments Found to Be Fraudulent

The judgement comes three years after Saviano was found dead from an apparent suicide shortly after he confessed his fraud to several investors. After the confession, the SEC filed a suit against Saviano’s estate and Palmetto Investments. The SEC complaint states that Saviano touted success of the Palmetto investment program despite its massive trading losses and his use of investor money to fund his gambling habit.

Palmetto Investments Dupes More Than 100 Investors

According to the 2014 complaint, Saviano and Palmetto Investments started pitching investors in 2010, selling stakes in the “Palmetto Investment Portfolio,” which purported to make money through the “extreme” day trading of stocks.

To build investor confidence Saviano told investors in both oral and written communications that the fund had a historical track record of monthly returns ranging from 5 to 10 percent. He sent reports showing consistent gains in account balances, while assuring investors that a registered investment adviser was advising the fund.

Using this scheme Saviano and Palmetto were able to scam 100 investors, raising at least $1.96 million. According to the SEC, Saviano’s trading lost money in all but five months between 2011 and 2013. By the end of September 2014, the SEC alleged, Saviano had lost more than 80 percent of investors’ funds.

Funds Will Come from Receiver’s Efforts

In 2014, when the SEC filed suit, the court froze the assets of Saviano’s estate and Palmetto Investments, approving the appointment of a receiver over Palmetto. According to the SEC, the receiver’s efforts have included liquidating Palmetto’s assets and distributing more than $1 million of recovered money to eligible investors.

Did You Lose Money to Investment Fraud?

If you believe you have been the victim of investment fraud, you may have certain legal rights that require your immediate attention.

Call an Investment Fraud Attorney Today

If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.

With offices in Los Angeles, New York, West Palm Beach and Miami, our investment fraud attorneys represent clients nationwide and may be able to help you recover your investment losses.

Contact an investment fraud attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

RBC Unit Aided $45M ATM Ponzi Scheme

RBC Unit Aided $45M ATM Ponzi Scheme

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Investors Claim Scheme Lasted 15 Years

A putative class action was filed in New York Federal court recently against a Royal Bank of Canada subsidiary and a senior executive, accusing them of aiding a 15-year ATM Ponzi scheme. The scheme allegedly defrauded investors out of $45 million.

The suit alleges that Patrick Brian Fitzwilliam, Senior Vice President of City National Bank NA,  who managed the bank’s Woodland Hills, California, branch, aided now-imprisoned fraudsters Joel Gillis, 77, and Edward Wishner, 78 by moving stolen investor funds to and from fraudulent accounts held with the bank under the name Nationwide Automatic Systems Inc. (NASI).

The suit says that Fitzwilliam personally oversaw the NASI account and that CNB’s involvement in and knowledge of the Ponzi scheme occurred through Fitzwilliam’s servicing of the account. Fitzwilliam and the bank allegedly vouched for the integrity of the ATM Ponzi scheme to investors, who in turn funneled millions into the company, and helped Gillis and Wishner cover negative bank balances.

NASI Operates Ponzi Scheme through ATMs

According to the suit, Gillis and Wishner told investors they would receive 50 cents per transaction on the ATMs, yielding a guaranteed 20 percent annual return. The ATMs were purchased by investors at the cost of either $12,000 or $19,800 per machine and payments per transaction, were made with money taken in from newer investors.

For eight years, from 2006 through 2014, approximately $400 million dollars of investors’ money flowed into and out of NASI’s accounts at the bank, generating substantial service fees and profits for City National Bank.

Fitzwilliam and Wife Were Complicit in NASI Ponzi Scheme

During that time, the suit claims that activity from NASI’s accounts generated substantial compensation for Fitzwilliam. Though he knew that the company had legitimate ATM transaction revenue from only 250 real ATMs and not the thousands of ATMs that the fraudsters touted to investors, he allegedly sent potential investors promotional letters, actively misrepresenting the status of the investment scheme.

In 2006, Fitzwilliam and his wife, Betty Saleh Fitzwilliam, invested thousands of dollars into NASI, but cashed out most of their investment when they saw the scheme was on the verge of collapse. The couple took more than $250,000 in ill-gotten gains plus another $60,000 from NASI less than a month before the bank terminated the company as a client in 2014. Betty Fitzwilliam is not named as a defendant in the suit.

SEC Takes Action Against NASI in 2014

The U.S. Securities and Exchange Commission sued NASI in 2014 and placed it in receivership. Shortly after, Wishner and Gillis pled guilty to conspiracy, mail fraud, and wire fraud charges for running the scheme, resulting in 9 and 10-year federal prison sentences, respectively.

At the same time, the receiver sued Fitzwilliam, his wife, and the bank in June 2016, asserting similar claims of enabling the 15-year Ponzi scheme.

Since the SEC suit against NASI in 2014, two putative class actions have been filed against the bank and Fitzwilliam in California state court. In September 2016, a group of approximately 40 individual California-based investors also sued the bank and Fitzwilliam over their losses. Three of the four suits filed – the individual investors’ suit, one of the two putative class actions and the receiver’s action – are currently pending in California state courts.

The other putative class action was tossed by a state judge under the anti-SLAPP statute. The plaintiffs in that action have since appealed the judge’s ruling.

Plaintiffs Seek to Certify Class

The plaintiffs seek to certify a class of approximately 500-600 investors from 36 states outside of California who invested in the company between 2009 and 2014. Those investors do not believe the pending California class actions adequately protect out-of-state victims.

Did You Lose Money to a Ponzi Scheme?

If you believe you have been the victim of a Ponzi scheme or other investment scheme, you may have certain legal rights that require your immediate attention.

Call an Investment Fraud Attorney Today

If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions, including financial institutions that assisted Ponzi schemers.

With offices in Los Angeles, New York, West Palm Beach and Miami, our investment fraud attorneys represent clients nationwide and may be able to help you recover your investment losses.

Contact an investment fraud attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

 

SEC Gets $18M Judgment Malom Group Scam

SEC Gets $18M Judgment in Malom Group Scam

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Two Swiss residents have been held liable by a Las Vegas federal judge for an $18 million investment scheme dubbed Malom – an acronym for “Make a Lot of Money”. In December 2013 the U.S. Securities and Exchange Commission (SEC) filed a complaint against Martin Schlaepfer and Hans-Jurg Lips, the principals of the investment scheme, alongside four others, for duping more than 30 investors into investing $11 million into Malom Group AG, a “sham company” in Switzerland.

Malom Group Scam Generates Criminal Case

Criminal prosecutors similarly charged the six defendants in the Malom Group scam in December 2013 with fraud and conspiracy, saying they promised high rates of return using fake documents showing sizable deposit balances at prominent European banks.

Judgements Include Pay Back of Hefty Sums

The U.S. District judge entered judgments against Schlaepfer and Lips, making them jointly liable for $10.6 million of disgorgement, $2.1 million of interest, and a $5.5 million civil penalty.

Micelli, a disbarred lawyer, is currently serving a five-year sentence after he pled guilty to conspiracy to commit wire fraud and securities fraud. Finn is awaiting transfer to the United States from Canada, according to a Nevada Justice Department spokesman.

The judge also entered judgments against two other scheme participants, James C. Warras and Anthony B. Brandel, finding their December 2015 conviction by a criminal jury entitled the SEC to a final judgment. The criminal case resulted in the sentencing of Warras and Brandel to 87 months each in August 2016.

Have You Been a Victim of an Investment Scheme?

If you believe you have been the victim of an investment scheme, you may have certain legal rights that require your immediate attention.

Call an Investment Fraud Attorney Today

If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.

With offices in Los Angeles, New York, West Palm Beach and Miami, our investment fraud attorneys represent clients nationwide and may be able to help you recover your investment losses.

Contact an investment fraud attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

Founder Arrested in NanoSave Patent Scheme

Founder Arrested in NanoSave Patent Scheme

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Patent Scheme Results in $3m Fine

The SEC has sued the men and two of their companies for a patent scheme that duped dozens of investors. The men, Rockey “Roc” Hatfield and Steve Lovern, fooled investors into paying $3 million for penny stocks and shares of absurd patents that never made it past the application stage.

Hatfield Has History as Recidivist Offender

According to the complaint, the SEC called Hatfield “a prolific recidivist offender” with a history of legal trouble that started in the early 1990’s. Hatfield ran two companies, N1 Technologies Inc. and NanoSave Technologies Inc., that used false press releases and unregistered sales agents to convince investors to buy fractional shares of patents for a variety of nanotechnologies that supposedly would be licensed or sold.

According to the indictment, products included ‘NanoSave N1 Organic,’ a drinkable motor oil, ‘Dynamicon Solar Kinetic Generator,’ an electric generator able to ‘power a small city,’ ‘NanoBolt Lithium Battery,’ a lithium tungsten battery, and ‘Viritron VDX,’ a ‘natural nanobot that could be programmed to deliver a knockout punch to a wide range of bacterial and viral infections.’

Investors Duped into NanoSave Patent Scheme

Investors were given an opportunity to buy 1 percent of a patent for $20,000 with the expectation that a fractional owner would receive a stream of payments from the sale or license of the patent by N1 or NanoSave to companies around the world.

However, the complaint alleges that no patents ever actually were issued by the U.S. Patent and Trademark Office. The SEC alleges that the scheme took in $2.5 million between 2015 and 2017. The Justice Department claims that the number is at least $3 million, dating back to 2012.

To date, Hatfield’s history with the law already includes two federal injunctions, a finding of contempt of court, a ban on working as a broker-dealer or investment adviser and from working with penny stocks, two state securities commission orders, and a criminal conviction.

Have You Lost Money in an Investment Scheme?

If you believe you have been the victim of investment fraud, you may have certain legal rights that require your immediate attention.

Call an Investment Fraud Attorney Today

If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.

With offices in Los Angeles, New York, West Palm Beach and Miami, our investment fraud attorneys represent clients nationwide and may be able to help you recover your investment losses.

Contact an investment fraud attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

CFTC Accuses Profit Management of $1.2M Ponzi Scheme

CFTC Accuses Profit Management of $1.2M Ponzi Scheme

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The U.S. Commodity Futures Trading Commission (CFTC) recently filed suit in New York federal court accusing a California husband and wife of running a Ponzi scheme. The couple’s company, Profit Management, received nearly $1.2 million from investors with the understanding that their money would be used to trade in futures through a commodities pool. The pool never made such trades.

The couple, Hasan Sarwar and Rachida Elfrimi of Rancho Cucamonga, allegedly defrauded more than 40 investors by falsely claiming that Profit Management’s commodities pool made a daily return of 5 to 7 percent. But the pool did not conduct any futures trades and earned no profits.

According to the CFTC’s allegations, investors’ money was placed in bank accounts belonging to Sarwar and Elfrimi. Sarwar used a little less than half of investors’ funds for trading in his own personal account — where all but about $5,800 was eaten up by bad trades and account fees — and for paying the couple’s business and personal expenses.

The rest went to Ponzi-style payments to early investors. To keep the scheme going, investors were sent false account statements showing how much money was being held in their names.

CTFC Seeks Permanent Injunction

The CFTC alleges that Profit Management and Sarwar and Elfrimi’s conduct violated the Commodity Exchange Act and other CFTC regulations. The agency seeks restitution, disgorgement, and civil monetary penalties, in addition to trading and registration bans and a permanent injunction against future violations.

Did You Loose Money to Profit Management? 

If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.

Call an Investment Fraud Attorney Today

With offices in Los Angeles, New York, West Palm Beach and Miami, our investment fraud attorneys represent clients nationwide and may be able to help you recover your investment losses.

Contact an investment fraud attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

 

Tweed Financial Services Advisor Misled Investors

Tweed Financial Services Advisor Misled Investors About Fund

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The U.S. Securities and Exchange Commission has filed a complaint in California federal court against an investment advisor from Tweed Financial Services Inc. According to the complaint, the advisor, Robert Russel Tweed, moved money without his clients’ knowledge to a mining project in Ghana and a struggling startup, squandering $1.7 million.

About Tweed Financial Services

In 2008, investment advisor Robert Russel Tweed, then owner of Tweed Financial Services Inc., formed the Athenian Fund LP with $1.7 million raised from 22 investors. The SEC complaint states that Tweed told investors that their money would be invested in PMI Quant Pool 1 LLC, an algorithm-based master fund for stock trading.

According to the complaint, Athenian Fund chose PMI because the algorithm-based fund could lower the volatility of investments. However, Tweed allegedly redirected the funds to Quantitative Analytics Master Fund (QAMF)—a company run by one of his friends—without telling investors.

In 2010, Tweed allegedly learned that $650,000 of his clients’ money was never invested in QAMF stock, but instead used to provide a one-year loan to a mining project in Ghana. When Tweed became aware of the loan, QAMF returned $924,460 of Athenian Fund’s capital to Tweed Financial Services.

The complaint alleges that during this time, Tweed was collecting a monthly management fee based on a percentage of Athenian’s assets and a quarterly payment based on the fund’s performance.

The History of QAMF

According to the SEC, Quantitative Analytics Master Fund was managed by Richardson Performance Management and Investments Co. LLC, both operated by Eric Richardson.

Richardson pleaded guilty in 2012 to felony bank fraud charges and was sentenced to more than a year in prison, followed by supervised release, and ordered to pay civil penalties.

Tweed Financial Services Makes a Second Loan

After recovering $924,460 from QAMF, Tweed Financial Services made another loan of $200,000 to startup Teamwork Retail LLC. The company was run by another friend of Tweed and had filed for bankruptcy in 2013. According to SEC files, less than $2,000 has been recovered from that investment to date.

SEC Seeks Permanent Injunction

While Tweed did not lose the entirety of the $1.7 million, the SEC alleges that the private placement memorandum allowed preferential withdrawal rights to Athenian Funds principals and affiliates.

The complaint also alleges that Tweed only disclosed losses to investors in 2014, after he received a deficiency letter from California state regulators raising concerns over Athenian’s management. According to the SEC, Tweed told investors that he had been working diligently to recover the funds from the Ghana loan since 2012. He did not file a lawsuit to recover the funds invested by QAMF.

Prior to receiving the letter, Tweed gave investors the impression that the fund was thriving by using estimated financial reports based on loan agreements that included interest payments, rather than actual reports based on generally accepted accounting principles.

Did You Lose Money to Tweed Financial Services?

If you believe you have been the victim of stockbroker or brokerage misconduct, you may have certain legal rights that require your immediate attention.

Call an Investment Fraud Attorney Today

If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.

With offices in Los Angeles, New York, West Palm Beach and Miami, our investment fraud attorneys represent clients nationwide and may be able to help you recover your investment losses.

Contact an investment fraud attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

SEC Detects Alexander Capital Brokers Defrauding Customers

SEC Detects Alexander Capital Brokers Defrauding Customers

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The Securities and Exchange Commission (SEC) has charged three New York-based brokers from Alexander Capital L.P. with making unsuitable recommendations to investors that resulted in substantial customer investment losses and large broker commissions.

An SEC examination of Alexander Capital L.P. detected potential misconduct among certain brokers, and the ensuing investigation has led to the filing of an SEC complaint against William C. Gennity, Rocco Roveccio and Laurence M. Torres.

The SEC’s complaint alleges that brokers Gennity and Roveccio recommended investments to clients that involved frequent trading of securities without any reasonable belief that their customers would profit. The complaint also alleges that both brokers engaged in unauthorized trading, churned customer accounts, and concealed information from their customers including transaction costs associated with trading recommendations (commissions, markups, markdowns, postage, fees, and margin interest). According to the SEC, the customers lost $693,038. Gennity and Roveccio received approximately $280,000 and $206,000, respectively, in commissions and fees.

Andrew M. Calamari, Director of the SEC’s New York Regional Office and Co-Chair of the Enforcement Division’s Broker-Dealer Task Force, said, “As alleged in our complaint, Gennity and Roveccio each misled several customers by touting their ability to outperform the market while concealing that the cost to customers for this excessive in-and-out trading doomed any realistic possibility of these brokers making money for anyone other than themselves.”

The SEC has increased supervision and crackdown of broker misconduct within the last few years, filing complaints against bad actor brokers and those who don’t act in investors’ best interests.

Alexander Capital Broker Agrees to Pay to Settle Charges

The SEC’s findings state that Torres made unauthorized trades, engaged in churning and had no reasonable basis to believe that his recommendations of a high-cost pattern of frequent trading was suitable for customers. Without admitting or denying the findings, Laurence M. Torres agreed to pay more than $400,000 to settle the charges. He has agreed to be barred from the securities industry, and will pay a $160,000 penalty in addition to $225,359.36 in disgorgement, plus $25,748.02 in interest.

Did You Lose Money at Alexander Capital L.P.?

If you believe you have been the victim of stockbroker or brokerage misconduct, you may have certain legal rights that require your immediate attention.

Call an Investment Fraud Attorney Today

If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.

With offices in Los Angeles, New York, West Palm Beach and Miami, our investment fraud attorneys represent clients nationwide and may be able to help you recover your investment losses.

Contact an investment fraud attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.