Brokers to Face $97 Million in Oil Securities Claims

Two men who helped sell interests in oil securities in a bankrupt oil company in California face $97 million in oil securities claims with charges of fiduciary duty, constructive fraud, and negligence.

Behrooz Sarafraz and Alfred Lopez were sued in 2013 after $97 million in securities of Tri-Valley Corporation were sold. Approximately $95 million of the securities were sold through unlicensed brokers who were paid commissions unlawfully.

Sarafraz and Lopez worked together and were aware of the alleged misconduct, according to attorneys for investors. The two men marketed and sold Opus investments, which were special investments sold in $1 million increments but then broken down into smaller parts via aggregators.

The U.S. Securities and Exchange Commission (SEC) investigated Sarafraz for the oil securities claims, resulting in a judgment finding that he violated securities laws in connection with his sale of Opus investments.

Call a Los Angeles Securities Fraud Attorney Today

If you invested with Behrooz Sarafraz, Alfred Lopez, or in Tri-Valley Corporation, you may have certain legal rights that require your immediate attention.

Contact an experienced Los Angeles securities fraud attorney today for a consultation to discuss your rights and options.

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California Sues Morgan Stanley Over Alleged Securities Violations

California Attorney General, Kamala Harris, has filed a lawsuit against Morgan Stanley, claiming the financial services corporation violated provisions of the False Claims Act and securities laws by concealing the risks of mortgage-backed securities purchased by California state pension funds.

According to the lawsuit, the California Public Employees Retirement System and California State Teachers Retirement System lost hundreds of millions of dollars during the financial crisis on mortgage-backed securities along with “structured investment vehicles” – many of which were underwater.

The complaint alleges that between 2004 and 2007, Morgan Stanley and certain affiliates purchased loans from originators, who then pressured Morgan Stanley to purchase additional loans for securitization. Although Morgan Stanley performed due diligence, it lowered its underwriting standards in order to accommodate investments that once were believed to be too risky to bundle into the securities.

Attorney General Harris claimed that Morgan Stanley used exaggerated appraisals that overstated the values or properties securing the mortgages and was involved in efforts to “move” rating agencies to give the investment a high rating.

Morgan Stanley countered that the securities at issue were marketed and sold to sophisticated investors, and the performance of the mortgage loans was consistent with the sector as a whole. The company has already paid billions to settle claims brought by other investors and agencies, including $3.2 billion in February to settle claims brought by the U.S. Department of Justice and the state of New York, and just one week after the bank agreed to pay $63 million to settle claims with the FDIC to end claims it misrepresented residential mortgage-backed securities sold to three failed banks.

Did You Suffer From Securities Violations Due to Morgan Stanley?

If you are a part of the California Public Employees Retirement System or the California State Teachers Retirement System, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles securities fraud lawyer today for a consultation to discuss your rights and options.

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