Barry Kornfeld Sold Millions Worth of Woodbridge Loans

Barry Kornfeld Sold Millions Worth of Woodbridge Loans

Florida broker Barry Kornfeld, who was barred from the securities industry, sold millions of dollars of defunct Woodbridge loans to clients through his company First Financial Tax Group.

The company, which claimed to specialize in real estate loans, advertised that investments in First Position Commercial Mortgages yielded 5%. Kornfeld sold the Woodbridge loans as guaranteed promissory loans, promising that if Woodbridge defaulted, the investors would be paid first because of their position as a note holder.

Since Woodbridge filed Chapter 11 bankruptcy, the company has stopped paying investor distributions and First Financial Tax Group has announced it will be closing. According to the SEC’s filing, some of Kornfeld’s clients had invested close to $1 million in Woodbridge loans.

Kornfeld Previously Banned from Securities Industry

Kornfeld was barred from the securities industry in 2010 by the U.S. Securities and Exchange Commission (SEC) for selling unsuitable collateralized mortgage obligations (CMOs) to clients while working at Brookstreet Securities Corp.

Before the credit crisis, Kornfeld sold high-risk CMOs. According to the SEC, Kornfeld falsely told clients that the CMOs were safe, secure investments that were suitable for low-risk investment profiles. When in fact, the investments were only appropriate for investors with high-risk investment profiles.

In June 2007 Brookstreet failed to meet margin calls for the CMOs and then failed to meet net-capital requirements, essentially deeming the CMOs worthless.

Woodbridge Files for Chapter 11 Bankruptcy

The Woodbridge Group of Companies recently filed for Chapter 11 bankruptcy and has stopped paying investor distributions. The company blames increasing costs, including litigation and compliance expenses, as a reason for its bankruptcy.

Based in Sherman Oaks, California, the company raised more than $1 billion from investors and is currently under SEC investigation. In October, the regulator said it was investigating the company to determine whether it was operating as a fraud.

According to a statement made by the company in the wake of filing for bankruptcy, Woodbridge has a $100 million dollar commitment from investor Hankey Capital and intends to recapitalize $750 million in debt.

The company so far has declined to comment about working with Barry Kornfeld or acknowledge if it was aware that Kornfeld had been previously barred from the securities industry.

Are You a Victim of Stockbroker Misconduct?

If you lost money as a result of investments made with Barry Kornfeld or are a victim of stockbroker misconduct, contact a qualified securities fraud attorney today.

Call a Securities Fraud Attorney Today

If you are looking for an attorney to review your rights and options, the securities 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 AngelesNew YorkWest Palm Beach and Miami, our securities fraud attorneys represent clients nationwide and can 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.

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Tweed Financial Services Advisor Misled Investors

Tweed Financial Services Advisor Misled Investors About Fund

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 AngelesNew YorkWest 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.

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Juno Drivers File Suit for Securities Fraud

Juno Drivers File Securities Fraud Suit

Three Juno drivers have filed a federal class action lawsuit against New York-based ride-hail service Juno. The drivers are filing for breach of contract, false advertising, and securities fraud.

Juno Drivers Misled by Equity Program

The Juno drivers allege the company lured away high-performing drivers from competing companies Uber and Lyft with the promise of equity in the company. In April, when Juno was acquired by New York-based Gett, the equity program was dissolved.

As part of the acquisition deal, drivers were informed that those who had Juno shares were to be cashed out. As reported by Recode, drivers were receiving on average around $100 – regardless of how many shares they held. One driver reportedly had more than 6,000 shares.

The suit filed alleges that Juno used the equity program to lure drivers to the company with intentions to sell the company when an offer came its way. In addition to the equity program, Juno paid drivers $50 to be on the platform, even before drivers were carrying riders. When the company launched, riders were given deep discounts and drivers were only charged 10 percent commission. The result was an unsustainable business model.

In response to the suit from the Juno drivers, the company states that it was considering changes to the equity program prior to the acquisition by Gett. Gett acquired Juno for $200 million, including the company’s assets and its founding team.

Have You Been a Victim of Securities Fraud?

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

Call a Securities Fraud Attorney Today

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

With offices in Los AngelesNew YorkWest Palm Beach and Miami, our securities fraud lawyers may be able to help you recover your investment losses.

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

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Securities Fraud Municipal Bond Case

Town Supervisor Convicted in Securities Fraud Municipal Bond Case

First Conviction in Securities Fraud Municipal Bond Case 

A Ramapo, New Jersey town supervisor has been convicted in a securities fraud municipal bond case related to the financing of a controversial stadium. The conviction marks the first conviction for securities fraud in connection with municipal bonds.

Ramapo Town Supervisor Christopher St. Lawrence lied to investigators about the town’s finances, covering the town’s problems.  The fraud at issue related to the issuance of $25 million in municipal bonds to pay for construction of a minor league baseball stadium. The stadium cost $58 million.

A jury in a White Plains federal court convicted the 65-year-old supervisor on 20 counts of conspiracy, securities fraud and wire fraud. He was acquitted of one count each of securities fraud and wire fraud.

Call a Securities Fraud Attorney Today

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

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

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Oracle Investment Research

Oracle Investment Research Exec Charged by SEC

The U.S. Securities and Exchange Commission (SEC) issued a settlement order last week in the case of an Oracle Investment Research executive who was charged with misleading clients. 

The Hawaii-based investment adviser, Laurence I. Balter, will pay over $550,000 to end the SEC case.  The securities regulator claimed that Balter defrauded his clients by cherry-picking profitable trades for himself, misrepresenting his management fees, and straying from his fund’s investment policies.

Under the settlement terms, Laurence I. Balter of Oracle Investment Research will pay the SEC almost $490,000 in disgorgement along with a $50,000 civil penalty and more than $10,000 in interest.

Oracle Investment Research Exec Mislead Clients

The Oracle Investment Research case of Laurence I. Balter dates back to October of 2016 when the SEC first announced fraud charges against the investment adviser.  The charges accused him of “cherry-picking” profitable trades for his own account rather than a client’s accounts, while also misleading clients about fees and investments risks.

Jina L. Choi, Director of the SEC’s San Francisco Regional Office stated at the time of the announcement of the charges in October, “We allege that Balter reaped more than a half-million dollars in ill-gotten gains by siphoning winning trades from his clients and withdrawing more than his fair share of management fees.”

Balter, through his firm Oracle Investment Research, purchased equities and options in an omnibus account, then waited to allocate the trades until after they were executed. By doing so, Balter knew which trades were profitable. He then allocated profitable trades to his own accounts and unprofitable trades to his client accounts.

In addition to this, Balter lied to clients regarding fees charged. The SEC alleges that despite telling clients that they would not pay advisory fees and fund management fees, Balter charged the clients for the fees anyway.

He also allegedly made trades that deviated from several fundamental investment limitations, ultimately resulting in a non-diversified portfolio that resulted in significant investor losses.

Did You Invest with Oracle Investment Research?

If you invested with Laurence I. Balter and/or his Hawaii-based firm Oracle Investment Research, and believe that you have been the victim of fraud, contact a qualified securities fraud attorney today.

Call an Investment Fraud Attorney Today

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

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

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Wells Fargo Broker Barred by FINRA Over Improper Transfers.

FINRA Barred a Wells Fargo Broker

Wells Fargo Broker Barred by FINRA Over Improper Transfers

A former Wells Fargo broker has consented to sanctions from the Financial Industry Regulatory Authority (FINRA), banning him from the securities industry after he transferred client money to his own accounts to pay credit card bills. Scott Polish of Mentor, Ohio consented to the settlement with FINRA after admitting he made transfers from the accounts of elderly clients and used the proceeds for himself

Protect Yourself from Stockbroker Misconduct

Brokers like Scott Polish, although rare, do exist. There are several steps in an attempt to avoid becoming the victim of a similar scheme. Below are three steps that can help you avoid stockbroker misconduct.

  • Receive and Review StatementsFor starters, make sure you receive and review your monthly account statements, and pay particular attention to securities purchases and sales and to withdrawals from your account. Make a point to ask questions about trades or activity that seems out of the ordinary.
  • Trade Authorization Next, never allow your broker to make trades on your behalf without your permission. If your broker is required to obtain your permission before any trade, the likelihood of being victimized is reduced drastically.
  • Contact an AttorneyFinally, if you suspect your broker of committing fraud, consider closing your account and contacting an experienced securities fraud attorney.

Did You Invest with Wells Fargo Broker Scott Polish?

If you invested with Scott Polish or someone like him, and believe that you have been the victim of a similar kind of fraud, contact an experienced securities fraud attorney today.

Call a Securities Fraud Attorney Today
If you are looking for an attorney to review your rights and options, the securities lawyers at Dimond Kaplan & Rothstein, P.A. have recovered over $100 million from banks and brokerages firms for their wrongful actions.

With offices in Los Angeles, they have helped stockbroker fraud victims throughout Bel Air, Santa Barbara, Newport Beach and Laguna Beach.

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Stock trading screen ticker.

Former Jeffries Trader Facing Retrial for Securities Fraud

Federal prosecutors are attempting to convict former Jeffries trader Jesse Litvak for the second time with securities fraud charges after his original 2014 conviction was overturned on appeal to the Second Circuit.

Litvak was convicted for letting bond buyers and sellers think his firm was making less than it actually was on certain transactions, which led to a $2 million profit for the firm. His conviction was overturned in December, as the court tossed charges that he defrauded the Treasury Department’s Troubled Asset Relief Program (TARP), setting up the current retrial on charges that he broke criminal securities laws when dealing with asset managers.

Litvak’s trades involved the now-infamous residential mortgage-backed securities – home loans that were bundled together and sold to investors. According to the U.S. Attorney’s Office, only broker-dealers knew the true prices of the residential mortgage-backed securities bonds, while buyers and sellers relied on what their broker-dealers told them.

Litvak is accused of padding his costs, keeping investors clueless. Litvak’s attorney stated that he had no obligation to act in the best interests of the companies he sold distressed residential mortgage-backed securities to, likening his statements to what a salesman might say on a used car lot.

His attorney also argued that the asset managers on the other side of the trades were sophisticated investors who have access to proprietary computer programs and teams of researchers to help them make trading decisions.

In at least one instance, a former client found out about the alleged secret profit margins “padded” by Litvak upon receiving an accidental email containing an internal spreadsheet.

Call a Los Angeles Securities Fraud Attorney Today

If you invested through Jeffries trader Jesse Litvak, or have suffered a loss after purchasing residential mortgage-backed securities, 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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Image showcasing a computer being used for financial work.

What is Churning, and How Do I Avoid It?

In most brokerage accounts you are charged a commission each time you buy or sell a security (stocks, bonds, etc.). Churning occurs when a stockbroker buys or sells securities in your account for the primary purpose of generating a commission, rather than because the trade makes financial sense for the investor. Doing so violates securities industry rules, brokerage firm rules, and legal obligations owed to the investor. In short, brokers churn accounts in order to put extra income in their pockets, at the expense of the investor.

The commissions generated from excessive trading can make it difficult for an investment portfolio to be profitable, and contravenes the principle that the investors’ interests should first.

According to FINRA, “A member or an associated person must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile. A customer’s investment profile includes, but is not limited to, the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, risk tolerance, and any other information the customer may disclose to the member or associated person in connection with such recommendation.”

Tips to avoid churning of your portfolio:

  • Maintain control over your portfolio and require your authorization before any transaction.
  • Review each trade confirmation and your monthly account statements and seek and independent review of your account if you see frequent buys and sells of securities.
  • Consider using a fee-based account instead of a commission-based account.

Call a Los Angeles Securities Lawyer Today

If you believe you have been a victim of churning, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles securities lawyer as soon as possible to discuss your rights.

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Business man with briefcase going up a staircase.

SEC Accuses California Adviser of Athlete Fraud

The U.S. Securities & Exchange Commission has frozen the assets of a former investment adviser in California after the adviser allegedly funneled $33 million from NFL and MLB players to help prop up his failing ticket reservation business.

According to the lawsuit filed by the SEC, Ash Narayan, a former investment adviser at RGT Capital Management, bilked clients including San Francisco Giants pitcher Jake Peavy and Denver Broncos quarterback Mark Sanchez, among others, by shifting their funds to his ticket business, The Ticket Reserve Inc. Narayan failed to tell his investors of his interest in the company, and in many cases, did not obtain their authorization prior to doing so.

Narayan allegedly used his and the athletes’ mutual religious faith to induce the athletes to invest with him. He also misrepresented himself as a certified professional accountant in order to gain his clients’ trust. In addition to the millions that went to his ailing company, he also took more than $1.8 million in “finder’s fees” from client funds, later characterizing these fees as loans. In order to hide the fact that his business was failing, Narayan made Ponzi-style payments to clients.

In May, Ticket Reserve shareholders filed a derivative lawsuit on behalf of the company claiming company executives breached their fiduciary duty to the company by wasting corporate assets and taking on loans that only could be repaid by issuing equity-diluting stocks and options.

The SEC lawsuit also named The Ticket Reserve Inc.’s CEO Richard Harmon and COO John Kaptrosky in the suit.

Call a Los Angeles Securities Fraud Attorney Today

If you invested with Ash Narayan or The Ticket Reserve Inc., 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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Understanding Securities Fraud

What is Securities Fraud?

Securities fraud is any type of deception used that is intended to induce an investor to make a trade on the basis of false or misleading information. The term is used interchangeably with investment fraud and stock fraud. Fraudsters target both unsophisticated investors and experienced, savvy investors.

The Different Types of Securities Fraud

Securities or investment fraud scams come in all shapes and sizes. Some common forms include insider trading, internet fraud, Ponzi schemes, and stock price manipulation.

How to Avoid Securities Fraud

Before you invest, make sure you do your homework. Do not be bashful about asking as many questions as you need to in order to fully understand what you’re getting involved with. Scammers rely on you not investigating before giving them your money. If the solicitor is someone whom you don’t know, look into their background and their license to sell securities. Are they registered and licensed to sell what they are promoting? You can find out who is soliciting you and what they are offering by using online tools, such as FINRA’s BrokerCheck and general Google searches.

If you cannot find enough information about an investment, you should get a second opinion from a qualified professional. Finally, if someone is pressuring you to invest without giving you the chance to perform your due diligence, or by guaranteeing significant rates of return or offering a free seminar with some incentive for your participation, these should all raise red flags.

Remember: when it comes to investing, if it sounds too good to be true, it probably is. 

Were You a Victim of Securities Fraud?

If you suffered investment losses because your broker or brokerage firm committed securities fraud, 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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