Category: Investment Fraud

California Businessman is Hit with SEC Fraud Charges

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SEC fraud charges were filed against a Bakersfield businessman for allegedly using investor assets for personal use and then trying to cover it up once the SEC caught wind of his scam.

Daniel Nase raised money from investors through an unregistered offering of common stock in his company, BIC Real Estate Development Corp. Nase told investors that he would be using funds to invest in real estate and promissory notes. Instead, money raised through the offering was used to purchase real estate in his own name, his wife’s name, or their family trust – but not in BIC’s name.

Nase also used some of the capital to buy clothes, pay for vacations, student loans, and other personal expenses. Once Nase found out about the SEC’s investigation, he invested stolen assets back into the company to make it appear that he was increasing his equity stake in BIC.

Nase was not registered to sell securities or investments with the SEC or California state regulators. He has been charged with violating federal antifraud laws and securities registration provisions. The SEC is currently seeking to freeze his assets and obtain injunctive relief, along with a return of all money raised from his offering.

Want to Learn More about Daniel Nase’s SEC Fraud Charges?

If you invested in BIC and Daniel Nase and lost your investment, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles investment fraud attorney as soon as possible to discuss your rights.

FINRA Urges Stricter Supervision of Robo Advisors

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The Financial Industry Regulatory Authority (FINRA) issued a release urging firms that provide digital investment advice, including “robo advisors,” to implement tools to ensure that clients are being treated fairly as the demand for automated service continues to grow.

What are Robo Advisors?

Robo advisors involve automated portfolios that create an asset allocation and adjust holdings over time based on client preferences, which is determined based on a series of questions answered by the client in order to identify investment objectives, risk tolerance, and other priorities.

Although no new legal requirements or obligations were imposed by the regulatory agency, firms that dispense investment advice were reminded of a series of effective practices governing robo advisors.

How the SEC is Supervising Robo Advisors

For example, FINRA has suggested that firms keep an eye on the algorithms used in dispensing automated advice to ensure they do not stray from their intended use, including making sure the formulas are consistent with the firm’s approach to profiling investors, tax-loss harvesting, and account rebalancing, among other concerns.

FINRA also warned against potential conflicts of interest when constructing portfolios, if the firm provides both automated advice as well as access to actual financial advisers. The agency is also recommending that firms reevaluate their current methods to make sure that they are gathering enough information about their clients to understand their needs and risk tolerance.

Did You Suffer an Investment Loss due to a Robo Advisor?

If you suffered an investment loss based on the recommendation of a robo advisor, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles investment fraud attorney as soon as possible to discuss your rights.

 

California Man Sentenced to 40 Years in Oil and Gas Investment Scheme

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John Westine Jr. was convicted of orchestrating a fraudulent oil and gas investment scheme that took in more than $3 million across the nation from 240 investors. Westine was convicted of securities fraud, mail fraud, and conspiracy to launder funds. The Kentucky-based scam was supposed to be an investment in oil-producing wells throughout the state.

Kentucky’s Department of Financial Institutions (DFI) began receiving complaints in late 2012, at which time DFI began its investigation in conjunction with the U.S. Postal Service and the U.S. Attorney for the Eastern District of Kentucky.

Evidence presented at trial showed that Westine and his co-defendants raised money by misrepresenting and failing to disclose material facts about certain oil well investments; namely, representing that oil was being produced when it was not. Investors also were led to believe that the companies had been in the oil production business for decades.

Westine also failed to disclose that he previously served more than 20 years in prison for running a similar scheme in Ohio. In fact, he was on probation from his previous crime at the time he began orchestrating this scheme.

Westine’s co-defendant, Henry Ramer, was sentenced to 13 years on the same charges. He worked as a salesman and manager of two Los Angeles-based telemarketing sales operations. Westine’s half brother, Michael Hicks, was sentenced to three years for mail fraud. He opened bank accounts and deposited investor checks, then sent the money to his co-defendants in California.

Were you a Victim of an Investment Scheme?

Westine is not the first person to perpetrate such a investment scheme and will not be the last. If you were a victim of Westine’s scheme or a similar one, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles securities fraud attorney as soon as possible to discuss your rights.