Category: Stockbroker Misconduct

NYC Financial Adviser Pleads to $1.6M Trust Theft

NYC Financial Adviser Pleads to $1.6M Trust Theft

dkradmin

The Manhattan district attorney announced recently that a former New York-based financial adviser will spend more than two years in prison after admitting that he committed trust theft.  The adviser, Brian Keenan, formerly of Train, Babcock Advisors LLC, took $1.6 million out of three trusts that he oversaw.

From 2007 and 2012, Keenan used a checking account set up in his own name and the name of one of the trust beneficiaries to withdraw funds from the trusts for personal use. The beneficiary had not been given access to the account.

Civil Suits Filed in California

Keenan’s client Delia Foster had set up trusts for her nephew and his two children, relying on Keenan and his firm to manage the assets. According to civil suits filed in California state court, Keenan had been managing Foster’s assets since the 1990s.

In 2013, when Foster discovered the assets had been removed from the trust accounts, she sued both Keenan and Train, Babcock Advisors.

Adviser Pleads Guilty

Keenan, 60, pled guilty in New York Supreme Court to one count of grand larceny for diverting the funds from trusts set up by of one of his clients. Keenan will receive a sentence of two years and four months to seven years in exchange for his plea.

Sentencing for the former adviser is scheduled for December 2017.

Have You Lost Money to Stockbroker Misconduct?

If you 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 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.

 

Palmetto Investments & Advisor Estate Settle For $4.6M

Palmetto Investments & Advisor Estate Settle For $4.6M

dkradmin

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.

Tweed Financial Services Advisor Misled Investors

Tweed Financial Services Advisor Misled Investors About Fund

dkradmin

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

dkradmin

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.

WealthCFO Advisor Charged with Stealing and Identity Fraud

WealthCFO Advisor Charged with Stealing and Identity Fraud

dkradmin

The U.S. Securities and Exchange Commission (SEC) recently brought fraud charges against a former New York investment advisor of the firm WealthCFO, now living in Egypt, and his operations manager, and accused them of stealing approximately $378,000 from seven clients.

The SEC’s complaint alleges that investment advisor Tarek D. Bahgat of Williamsville, N.Y. misappropriated money from clients, including senior citizens. Bahgat obtained internet bill-paying privileges that allowed him to impersonate his clients in telephone calls triggering money transfers. The money transferred from client accounts was directed to Bahgat’s personal accounts or those of his firm, WealthCFO.

Investment Advisor Had Accomplice

The SEC complaint also says that Lauramarie Colangelo, the firm’s operations manager, was an accomplice in the scheme, posing as a client of Bahgat’s during a call with a broker-dealer.

The SEC seeks permanent injunctions and civil penalties, as well as disgorgement plus interest. The complaint also names WealthCFO as a relief defendant for the purpose of disgorging illicit proceeds, plus interest.

Have You Lost Money to an Investment Advisor?

If you believe you have been the victim of investment fraud or believe your investment advisor is not acting in your best interest, 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.

Leonard Vincent Lombardo Charged for Real Estate Scam

Leonard Vincent Lombardo Charged for Real Estate Scam

dkradmin

The U.S. Securities and Exchange Commission (SEC) has charged former broker Leonard Vincent Lombardo for allegedly defrauding over 100 investors in a $6 million real estate investment scheme. The charges also include his company, The Leonard Vincent Group, and his business partner.

Real Estate Scheme Involved Distressed Assets

According to the SEC’s complaint, Lombardo defrauded investors with false claims, saying their money would be invested in distressed real estate with high returns. Some investors allegedly were told that their investments had increased by more than 50% in a matter of months when the investments actually had no earnings.

Lombardo allegedly invested only a fraction of the money in real estate and used the rest of it to support business ventures in the e-cigarette industry and personal expenses such as car payments, marina fees, and visits to tanning salons.

Lombardo Agrees to Settle Case 

Lombardo, along with his company The Leonard Vincent Group, and its CFO Brian Hudlin, have agreed to settlements that are subject to court approval. He and his firm have agreed to disgorge $5.88 million to investors. Hudlin, without admitting or denying the SEC’s allegations, has agreed to pay a $40,000 penalty.

In a parallel criminal case, Lombardo pled guilty to investment fraud charges brought by the U.S. Attorney’s Office for the Eastern District of New York in June 2017.

Lombardo Barred from Securities Industry for Over 20 Years

Lombardo has been barred from the securities industry for more than two decades. The advisor once worked at Stratton Oakmont, the infamous brokerage firm that was the basis for Martin Scorsese movie “The Wolf of Wall Street,” which FINRA expelled from the industry in 1998.

Did You Lose Money to Broker Leonard Vincent Lombardo?

If you 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.

Blazer Capital Management Advisor Pays Settlement

Blazer Capital Management Advisor Pays Settlement

dkradmin

A financial advisor and the founder of Blazer Capital Management will pay more than $1.9 million to resolve allegations that he defrauded clients, including some professional athletes. The allegations, brought by the U.S. Securities and Exchange Commission (SEC), claim the advisor used $2.35 million dollars of client money without permission, and lied to agency investigators about it.

The claims state that Pittsburgh-based adviser Louis Martin Blazer III used funds from the accounts of several clients to make investments in a pair of movies and other ventures. To conceal his actions, he diverted client’s funds to other accounts and falsified documents.

The SEC accused Blazer of taking a total of $2.35 million from five clients without authorization, using $790,000 of these funds to pay others in the group in a “Ponzi-like” scheme.

Advisor to Pay $1.9M for Defrauding Athletes

Judge J. Paul Oetken signed off on a final judgment to end the claims brought by the SEC. Under the deal, Blazer agreed to settle without admitting or denying the charges. He will pay $1,558,647 in disgorgement, $220,051.57 in prejudgment interest, and a $150,000 civil penalty for a total settlement of $1,928,698.57.

The final judgment comes approximately 15 months after the SEC filed a complaint against Blazer in the Southern District of New York and simultaneously announced a partial settlement related to the alleged scheme.

Are You a Victim of 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.

 

Athlete Overcharged $1.2M by Investment Advisor

Athlete Overcharged $1.2M by Investment Advisor

dkradmin

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against an investment advisor in California federal court on accusations of deceiving a professional athlete client and his wife in relation to inflated management fees of more than $1 million.

The SEC claims that the advisor, Jeremy Drake, charged the unnamed athlete and his wife 1 percent in management fees but told the couple the fee was between 0.15 percent and 0.2 percent. The fee difference resulted in a payment to Drake of $1.2 million more than what he represented to his client.

In order to conceal the discrepancies, Drake falsified documents and created a fake persona to supply false evidence to corroborate his claims. When Drake was confronted by the athlete’s wife, he told her that reporting the issue to the brokerage firm would create bad publicity for the couple. The athlete’s wife refused and came forward resulting in the termination of Drake.

SEC Seeks Disgorgement of Funds

The SEC claims for violating the Investment Advisers Act and seeking disgorgement of all the funds Drake earned from his alleged misconduct. Of the $1.5 million Drake received, the SEC alleges that $900,000 came from incentive-based compensation related to the fees paid by his clients.

Are You a Victim of Broker Misconduct?

If you believe you have been the victim of broker misconduct or 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.

Lattanzio Denied Motion to Dismiss Indictment

Lattanzio Denied Motion to Dismiss Indictment

dkradmin

A motion by Nicholas Lattanzio to dismiss his indictment has been denied by a New Jersey federal judge. U.S. District Judge Kevin McNulty has ruled that FBI agents’ failure to preserve evidence did not warrant tossing out criminal charges against the hedge fund owner. Lattanzio filed the motion claiming prejudice and bad faith on behalf of the government.

Hedge Fund Owner Caught in Scheme

The defendant is accused of stealing $4 million from investors to bankroll an expensive lifestyle.

Lattanzio, 58, of Montclair, was arrested by FBI agents and charged with three counts of wire fraud and two counts of securities fraud. Prosecutors say that Lattanzio orchestrated a large-scale advance fee scheme out of his Black Diamond Capital Appreciation Fund, promising loans and deals in exchange for millions of dollars. Instead of investing the money, Lattanzio purchased a million-dollar home in Montclair, New Jersey and spent thousands of dollars on jewelry, vacations, and a luxury car.

Lattanzio is facing a maximum prison term of 20 years for each fraud count. We will continue to report as the case unfolds.

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.

Federal Regulators Focus on Bad Actor Brokers

Federal Regulators Focus on Bad Actor Brokers

dkradmin

U.S. Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) officials have announced that they will focus their attention on broker-dealers in high-risk areas. Both securities regulators hope to crack down on bad actor brokers – brokers who don’t act in the investor’s best interest – and are encouraging firms to help, in hopes of protecting investors.

FINRA President and CEO, Robert Cook, said of FINRA’s programs in a speech recently: “One of their most important purposes is to protect investors from bad actors: those who seek to evade regulatory requirements and harm investors for their own personal gain.”

Three Ways to Regulate Bad Actor Brokers

Cook highlighted three ways that FINRA is enforcing its regulations to protect investors from bad actor brokers, announcing that increased regulation will be done through more exams and enforcement.

Licensing and Registration

To qualify as a broker, a person must pass a series of exams that test knowledge regarding the operation of the markets, the securities industry, and its regulation. The exams are followed by a series of continuing education programs and further exams throughout the broker’s career.

In addition to passing a series of examinations, a broker must also be associated with a broker-dealer firm, which is responsible for supervising the broker. Brokerage firms also must be registered with the SEC and approved by FINRA to operate. Brokerage firms are subject to scrutiny, including a vetting process, operational requirements, and required standards for capital and supervision.

Monitoring and Examinations

For brokers and brokerage firms that meet the regulatory standards and qualifications, FINRA assigns a regulatory coordinator who oversees the firm’s business activities. Brokerage firms are assessed regularly based on core business areas, such as customer dealings, financial integrity, and operations. Non-routine examinations are triggered by customer complaints about bad actor brokers – an area where FINRA is dedicating more resources for regulation.

Discipline and Restitution

In addition to regulatory systems, FINRA has increased surveillance efforts designed to fight against potential fraud or market manipulation. Within FINRA, The Office of Fraud Detection and Market Intelligence (OFDMI) is a specialized central repository that works to gather and evaluate information about misconduct at both the broker and broker-dealer level.

In cases where actions of a firm or an individual pose harm to investors, FINRA intervenes in multiple ways – from requiring brokers to retake examinations to reporting misconduct to law enforcement agencies.

In 2016 alone, 1,434 disciplinary actions were filed against registered individual brokers and firms. And the agency has ordered some $124 million in restitution to investors who have been victims of bad actor brokers and their brokerage firms. Of course, such orders do not necessarily mean that defrauded investors are paid that money. Brokers and brokerage firms only can pay that money if they are able to do so. Many the brokers cannot make the payments and many of the brokerage firms have gone out of business and cannot make any payments to investors.

Bad Actor Broker Regulation In Question

A core issue is whether U.S. regulators and the securities industry are doing enough to protect investors. As seasoned investment fraud and stockbroker misconduct lawyers, Dimond Kaplan & Rothstein’s attorneys see many, many cases of investor abuse, so we firmly believe that regulators are not doing enough to protect investors. In fact, a recent study shows that the percentage of brokers engaged in misconduct is much higher than reported by FINRA. Perhaps the new focus by the agencies will help eliminate some of the misconduct and keep more investors safe.

Did You Lose Money with a Bad Actor Broker?

If you have been a victim of a bad actor broker or are suspicious that your broker is not acting in your best interest, 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 investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerages 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 attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.