Category: Investment Misrepresentation

Ex-NFL Player Merrill Robertson Guilty of Investment Fraud

Ex-NFL Player Merrill Robertson Guilty of Investment Fraud

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Former National Football League (NFL) player Merrill Robertson has been sentenced to 40 years in jail by a Virginia federal judge for his role in an investment fraud scheme. Prosecutors said the sentence is 15 years more than they sought.

Last year Merrill Robertson was charged with wire fraud, bank fraud, and conspiracy for his role in a scheme that used his company, Cavalier Union Investment, to bilk elderly investors out of money.

Robertson Used Money as Slush Fund

Prosecutors in the trial said that Robertson and his partners rerouted cash from elderly investors to fund their personal lifestyles. In 2010, Robertson formed Cavalier with co-conspirator Sherman C. Vaughn Jr., claiming that the company was a leading investment firm that invested in restaurants, real estate, and alternative energy.

According to the SEC, the two men raised money from senior citizens and a circle of investors associated with Roberton’s time at the University of Virginia, including former football coaches, donors, alumni, and employees of the school. Before Robertson played for the Minnesota Vikings and the Philadelphia Eagles, he was a student-athlete at the University of Virginia, home of the Virginia Cavaliers.

The SEC said that the pair told investors that Cavalier ran several investment-related divisions and employed experienced investment advisers, which was not the case. The two allegedly used $6 million of investor money to pay for personal cars, vacations, homes, and more.

Shortly after the two formed Cavalier it became functionally insolvent. To hide financial issues, Robertson and Vaughn sent out false account statements and paid some investors with new investor money, a tactic used in Ponzi schemes.

Pair Created False Company to Get More Money

In addition to the investments solicited for Cavalier Union Investment, Robertson and Vaughn also created a fake water-bottling company called Drops Inc., soliciting their largest investor for $2 million. According to the SEC, they faked financial statements showing increased revenue and produced falsified bank records showing that Cavalier had $11 million in the bank, when it did not.

SEC Also Sues Robertson for Investment Fraud

In a parallel action, the SEC sued Robertson and Vaughn on similar allegations. That case was put on hold during the criminal case proceedings.

Are You a Victim of Investment Fraud?

If you lost money investing with Merrill Robertson or have been the victim of an investment fraud scheme, contact a qualified investment fraud attorney today.

Call a Securities Fraud Attorney Today

If you are looking for an 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 can 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.

$3.5M Fine for UBS Overcharge Claims

$3.5M Fine for UBS Overcharge Claims

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The U.S. Securities and Exchange Commission has fined UBS Financial Services Inc. $3.5 million, settling UBS overcharge claims. The case against UBS claims the bank overcharged retirees and charities for mutual funds. According to filings, the 15,250 customers collectively paid $18.5 million in excessive costs.

UBS Misleads Customers

From January 2010 through June 2015, the SEC claims that UBS misled customers, not disclosing information that could have effected customers’ investment decisions.

According to the SEC, UBS did not tell customers that they were eligible for less expensive mutual funds shares or that UBS would make more money off of the more expensive fund shares. UBS also allegedly did not disclose that customers’ purchases of the more expensive share classes would negatively impact the overall return on their investments, especially when related to the different fee structures for less expensive fund share classes.

UBS Takes Settlement Action

Under the settlement agreement, UBS issued payments with interest to affected customers and converted eligible customers to the mutual fund share class with the lowest expenses for which they are eligible. This was done at no cost to customers.

As of publishing, 970 customers had not cashed or deposited their payments, or changed their addresses. The SEC said that UBS will continue attempts to find these customers.

UBS Repeat Regulatory Offender

In the past three years, UBS has paid several SEC fines for violation of securities laws. In January 2015, the firm settled a $14.4 million sanction from the SEC for operating dark pools and providing an unfair advantage to high-frequency traders.

In October of that same year, UBS agreed to pay $20 million to settle SEC claims regarding misleading statements when offering structured notes to retail investors. And most recently, the SEC announced a $15 million settlement with UBS AG over allegations that the bank failed to properly train staff regarding complex financial products sold to retail investors. Moreover, within the last several years, the SEC, FINRA, and Puerto Rico securities regulators collectively have levied approximately $40 million in penalties and fines on UBS relating to UBS’s

recommendations and sales of over-concentrated positions in Puerto Rico bond funds, improperly recommending loans that were collateralized by the risky Puerto Rico funds, and improper supervision over Puerto Rico brokers who sold the risky Puerto Rico bond funds.

Have You Lost Money Investing with UBS?

If you believe you have lost money investing with UBS or 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 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 an securities fraud attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

Adviser to Spurs Star Gets Time for Investment Fraud

Adviser to Spurs Star Guilty of Investment Fraud

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Former financial adviser to San Antonio Spurs star Tim Duncan has admitted to investment fraud. Venture capitalist and former financial adviser Charles A. Banks IV pleaded guilty in April to one count of wire fraud.

Basketball Star Loses Millions to Fraud

Banks accepted the charges of fraud for duping the athlete into investing in a sportswear company he controlled, defrauding the basketball star of millions. The adviser, sentenced by a Texas federal judge, will serve four years in prison and pay $7.5 million in restitution.

Federal prosecutors say that Banks manipulated Duncan into guaranteeing payment of a $6 million debt related to a merchandising business.

Banks could begin to serve his time as early as August. The U.S. Department of Justice said in a statement that after his release he will have to serve three years’ probation.

Have You Been a Victim of Investment 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 an Investment 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. may be able to help you recover your investment losses.

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

EB-5 Investors File Suit Against California Attorney

EB-5 Investor Lawsuit Filed Against California Attorney

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A group of Chinese nationals have filed an EB-5 investor lawsuit in a California state court against a California attorney and her father. The claim states that the Chinese nationals were “victims of a fraudulent scheme” that promised them visas in exchange for investments in the EB-5 program.

The claim, filed by Yeqing Xia, Rui Zhang, Song Yao Li and Ting Li, alleges that the plaintiffs were solicited in 2011 to apply to the EB-5 visa program by attorney Victoria Chan and her father. To qualify, they each handed over more than $500,000, not including attorneys’ fees.

The four plaintiffs are among more than 100 Chinese nationals allegedly solicited in the EB-5 investor scheme.

EB-5 Investors Caught in $50M Scam

The attorney, Victoria Chan, and her father, Tat Chan, have been accused by the FBI of exploiting the EB-5 immigrant investor program. Federal authorities allege that the Chans stole millions of dollars from investors, spending the money on personal property purchases and expenses. The allegations suggest that the Chans defrauded EB-5 investors of $50 million over the course of nearly a decade.

Government prosecutors have filed nine property forfeiture actions against the Chans. According to Law360, the nine properties involved in the forfeiture actions total more than $30 million. One of them is a commercial property in the City of Industry worth more than $3 million and a $707 million parcel of land in Rancho Cucamonga.

The government also accuses the Chans of redirecting business funds for personal gain. Their business was registered as the California Investment Immigration Fund LLC (CIIF).

Fraudulent CIIF Scheme

According to documents filed, the Chans launched their EB-5 scheme nine years ago. Victoria Chan submitted a request to designate her organization, the California Immigration Investment Fund (CIIF), as a regional center to the United States Citizenship and Immigration Services office. The request was approved.

U.S. operations for the company were run by Victoria Chan out of the San Gabriel Hilton Hotel while her father Tat led the Chinese side in Guangzhou, a city in southern China.

According to the FBI affidavit, the CIIF had at least 14 affiliating companies and service providers. In reality, the CIIF regional center was staffed with high schoolers who were paid to pose as full-time employees.

In addition, FBI agents found that supposed developments were not actually in progress, and to date, nothing had been built. Despite this, some of the CIIF investors seemingly obtained visas and green cards. The investigation is ongoing.

The EB-5 Program

The EB-5 visa program offers green cards to foreign citizens who invest in American businesses. The program centers around a “regional center,” which acts as an intermediary between the developers and investors. In exchange for investments, EB-5 investors are promised U.S. visas and green cards.

Typically, regional centers charge developers between 5 and 8 percent of the total capital raised, charging each investor an administrative fee of $25,000 to $60,000 on top of the $500,000 minimum commitment they are making to the project.

Are You Caught in an EB-5 Investor Scam?  

If you invested with the Chans or think you may be involved in an EB-5 investor scam, you may have certain legal rights that require your immediate attention.

Call an Investment 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 more than $100 million from for clients for wrongful actions.

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

Theranos blood tests.

Theranos Investors Are Misled

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In the latest attack on the California health technology company, Theranos investors, led by Silicon Valley financier Robert Coleman, have accused the company’s executives of violating securities laws by hiding information that its blood testing product had failed to perform as promised.

Colman and other investors accuse Theranos CEO Elizabeth Holmes and COO Ramesh Balwani of misleading the public and investors long after they knew they couldn’t deliver on their plans to run hundreds of tests on a single drop of blood.

They, along with other investors, claimed they were persuaded to invest after promises were made that the company’s technology would revolutionize the way blood tests are run. Theranos even reached a deal with Walgreens to perform blood tests in certain locations – a deal that has since been cancelled.

After media reports surfaced that the FDA did not approve the company’s specialized blood tubes, the company was forced to discontinue their use. Further sanctions came from the Centers for Medicare and Medicaid over allegedly shoddy lab practices, leading to a 2-year ban on lab ownership by Holmes, among other sanctions.

Several other proposed class actions are now pending against Theranos and Walgreens around the country, including a suit in Delaware by an investment fund seeking to rescind its stock purchase agreement based on Theranos’ allegedly fraudulent misrepresentations.

The company’s valuation has dropped from $9 billion in 2014 to around $800 million, a decrease of 90%.

Call a Los Angeles Securities Fraud Attorney Today

If you invested with Theranos, 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.

Los Angeles Securities Attorney: Are Mutual Funds Right For Me?

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Before you invest, it is important that you know what you are investing in. Any good stockbroker should be able to explain not only what you are investing in, but also the positives and potential negatives of any investment. In fact, brokers are obligated to provide you with a balanced presentation regarding recommended investments.

In a nutshell, a mutual fund is an investment vehicle that invests in and holds a basket of securities, such as stocks and bonds. Generally speaking, shareholders contribute the money used for investment, and the fund is professionally managed. The various securities that make up the mutual fund are known as “the portfolio,” and investors can buy or sell shares in the portfolio.

The Advantages of Investing in a Mutual Fund from a Los Angeles Securities Attorney

Mutual funds are popular among investors because of they typically offer a diversified portfolio of securities. One positive aspect of diversification is that if one of the stocks or bonds drops in value, the fund shares often maintain some price stability because the fund is comprised of many securities. Another advantage is that many mutual funds offer low minimum investments, making a mutual fund an attractive investment for someone looking to invest without large amounts of capital. In addition, mutual funds generally can be sold without much difficulty.

The Disadvantages of Investing in a Mutual Fund from a Los Angeles Securities Attorney

Investments carry risk. Even if your fund is diversified to mitigate risk, you could lose some or all of your money if the securities held in the fund drop in value. Market conditions also can play a factor. Importantly, just because a fund did well in the past does not guarantee its future performance. You also should be aware of the securities that comprise the fund: the more volatile they are, the greater the investment risk is.

Call a Los Angeles Securities Attorney Today

If you invested in a mutual fund and suffered significant losses or were not made aware of the risks of investing, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles securities attorney today for a consultation to discuss your rights and options.

Which Types of Annuities Should You Invest In?

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When it comes to investing, your stockbroker may encourage you to think about annuities as a part of your investment portfolio. Annuities can be a great investment if you find one suited to your current and future needs.

The Two Types of Annuities

Understanding how different types of annuities work can save you a lot of trouble down the line, so we have provided you with the two types of annuities to invest in along with a description of each.

1. Deferred Annuity: A deferred annuity invests your money for a period of time before allowing you to begin taking withdrawals, generally in retirement.

2. Immediate Annuity: An immediate annuity provides for payments shortly after making your initial investment.

There are benefits to both types, and your broker can help you determine which one is best for you. For example, a deferred annuity, if managed properly, should continue to grow during the investment period and provide larger payments. Immediate annuities might be better suited for those closer to retiring, who need access to cash at an earlier stage.

Within these two types are several subcategories, and understanding the differences can be critical. For example, annuities can either be fixed (setting interest levels for payment at one rate), variable (your payment amount may be tied to the performance of underlying investments) or a combination of both.

Your stockbroker should advise you fully of the risks before any investment, and make sure that the type of annuity is in line with your goals. If you live on a fixed income, for example, investing in a variable annuity may be troublesome if it fails to perform as expected, or if you are given bad advice about the nature of the investment.

Were You Not Fully Informed on the Different Types of Annuities?

If you invested in an annuity and suffered a loss because you were not given the right information about your investment, or if your investment did not fit your risk profile, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles investment attorney as soon as possible to discuss your rights.