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Los Angeles False Claims Actions

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Los Angeles False Claims Actions

Businesses and other entities sometimes defraud state and federal governments by filing false claims in order to pocket money. These can include fraudulent Medicare claims, improper tax deductions, or excessive billing for goods and services sold or provided to the government. As an employee, you may have discovered sensitive information regarding your employer’s fraudulent activity, but are not sure what your rights or responsibilities are.

In California, the Attorney General is permitted to bring an action for damages and penalties against any person or business that knowingly makes a false statement to avoid paying money owed to the State or to obtain money from the State.

The California False Claims Act

The California False Claims Act’s qui tam provision permits a whistleblower to file a claim under seal to allow the Attorney General to investigate and decide how to intervene or prosecute. If the claim is successful, the whistleblower may be eligible to be paid a portion of the money that the government recovers from the wrongdoer.

Call a Los Angeles Whistleblower Attorney Today

The California False Claims Act is a complex statute. If you believe you have information relevant to your employer’s fraudulent activity or false claims, you should contact a Los Angeles whistleblower attorney today for a consultation to discuss your legal rights.

Common Types of Credit Derivatives

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A credit derivative is a financial instrument that transfers credit risk from an underlying entity or entities without transferring the underlying asset itself. The most common types of credit derivatives include:

  • Credit Default Swaps
  • Total Return Swaps
  • Credit Linked Notes

What is a Credit Default Swap?

A credit default swap can be comprised of several different forms, but the general notion is that two parties enter into an agreement where one party pays the other a regular, fixed payment, and the other party makes a payment if a specific credit event occurs, such a default or bankruptcy.

What is a Total Return Swap?

A total return swap is a method of transferring the market risk and credit risk of an underlying asset. This generally involves an agreement between two parties to swap recurring payments over a period of time.

What are Credit Linked Notes?

Credit linked notes, also known as credit default notes, is a fixed rate or floating rate note where the principal and/or coupon payments are tied to a credit or basket of credits. If there is no credit event, everything will be paid in full. If there is an event, the payment of the principal, and possibly the coupons, will be reduced.
Call a Los Angeles Stock Attorney Today

In addition to the above-mentioned credit derivatives, there are several more types available to investors. If you have been misled into investing in an unsuitable credit derivative, contact a Los Angeles stock attorney today for a consultation to discuss your legal rights.

Investing in Bonds

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Investing in Bonds

As an investor, you may have heard that bonds are a safe place to put your money, even if you aren’t entirely sure what a bond is. A bond is a form of debt, but you serve as the bank. You loan money to a company or a public entity, such as a city or the government, and the borrower promises to pay you back in full, plus interest. A city might sell a bond to raise money to fix roads, or the federal government might do the same to finance debts.

The Advantages of Investing in Bonds

Bonds are generally perceived as a safe source of steady income, as opposed to the fluctuating stock market. But not all bonds are created equally. Some are considered to be very safe, while others can be extremely risky. Depending on your risk tolerance as an investor, you may be more willing to invest in bonds depending on your age and goals.

The Disadvantages of Investing in Bonds

Bonds are not always a sure thing, and many come with greater risks. Higher-risk bonds usually come with higher interest payments to compensate you for the greater risk that you are taking. The risk of bonds often is based on the “creditworthiness” of the borrower, i.e., the bond issuer, which means the likelihood that the borrower will be able to make the interest payments to you and repay the principal that you have loaned to the borrower. This is why bonds with the highest risks are known as “high yield” or even “junk” bonds. On the other end of the investment spectrum are “investment-grade” bonds, known for their relative safety.
Call a Los Angeles Stock Attorney Today

If you have had a problem collecting payment on a bond or believe you have been deceived regarding the creditworthiness of a bond issuer, contact a Los Angeles bond and stock attorney today for a consultation to discuss your legal rights.

Tips for Avoiding Consumer Fraud

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Tips for Avoiding Consumer Fraud

Companies and scam artists commit all types of fraud on a daily basis to trick you into investing your money in improper investment products. Fraudsters contact potential investors by email, U.S. mail, the internet or telephone. They could be selling you a defective product, or failing to disclose certain important financial terms.

What To Do

Being able to identify these questionable practices can help you to avoid becoming a victim of consumer or investment fraud. The following are some tips to keep in mind:

  • Research the background of the person with whom you are dealing.
  • Be cautious about wiring money.
  • Check with another professional before investing.
  • Do not provide personal or financial information to someone you don’t know.
  • Do not agree to deposit a third-party’s check and then wire money back to the third party.

Businesses also engage in deceptive advertising and promotions that can fail to disclose certain fees. Even if everything else is truthful, failing to do so is still illegal.

Call a Los Angeles Fraud Lawyer Today

If you believe you have been the victim of consumer fraud, contact an experienced Los Angeles fraud lawyer today for a consultation to discuss your legal rights.

Have You Been the Victim of a Ponzi Scheme?

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Have You Been the Victim of a Ponzi Scheme?

A Ponzi scheme is a fraudulent investment program where the perpetrator uses newer investors’ money to pay alleged “investment returns” to earlier investors. A typical Ponzi scheme lures investors with promises of above-market rates of return. The use of newer investors’ money to make alleged investment return payments to earlier investors gives the fraudulent appearance of a properly functioning and successfully performing investment strategy. A Ponzi scheme can continue as long as the fraudster is able to get new investors to invest into the scheme.

What to Look for in a Ponzi Scheme

Many Ponzi schemes have common characteristics. Some of the red flags of a potential Ponzi scheme include the following:

  • Above-market returns with supposedly little or no risk. Every investment carries some degree of risk, and the risk/reward paradigm dictates that higher yielding investments typically involve more risk. Be highly suspicious of any “guaranteed” investment opportunity.
  • Significant rate of return. Even where the investment is represented to be risky, the promised investment returns often are much greater than other risky investments.
  • Overly consistent returns. Investments tend to go up and down over time. Be skeptical about an investment that regularly generates positive returns regardless of overall market conditions. (Many Bernie Madoff investors failed to recognize or ignored this red flag.)
  • Unregistered investments. Ponzi schemes typically involve investments that are not registered with the SEC or with state regulators. While some unregistered investment are legitimate, registration is important because it provides investors with access to information about the company’s management, products, services, and finances.
  • Unlicensed sellers. Federal and state securities laws require investment professionals and firms to be licensed or registered. Many Ponzi schemes involve unlicensed individuals or unregistered firms.
  • Secretive, complex strategies. Avoid investments if you don’t understand them or if the seller refuses to provide full, intelligible disclosures about the investment strategy.
  • Sloppy or inaccurate paperwork. Account statement errors may be a sign that funds are not being invested as promised.
  • Difficulty receiving payments. Be suspicious if you don’t receive a payment or have difficulty cashing out. Ponzi scheme promoters sometimes try to prevent participants from cashing out by offering even higher returns for staying in the investment.
  • Representations of exclusivity. that not all investors have access to the investment. (Bernie Madoff used this technique to great success.)

 Call a Los Angeles Fraud Attorney Today

Many very savvy investors have been taken advantage of by unscrupulous Ponzi scheme promoters. Two of the most notorious and largest Ponzi schemes were Bernie Madoff and Allen Stanford, each of which involved the theft of billions of dollars from unsuspecting investors. If you made an investment only to find out that it was a Ponzi scheme, or if you believe you have invested in one, you should contact an experienced Los Angeles fraud attorney today for a free consultation to discuss your legal rights.

 

Misrepresenting the Risk of Collateralized Debt Obligations

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Misrepresenting the Risk of Collateralized Debt Obligations

A collateralized debt obligation (CDO) is a form of structured asset-backed security that may include mortgage-backed securities. CDOs are funded by investors who are then repaid in a prescribed order of priority according to the seniority of the investment, which is also known as a “tranche.”

The CDO collects money when payments are made on the loans that are held within the CDO, and then the CDO investors are paid based on the priority of the CDO tranche that they own. When some loans within the CDO default and the money collected by the CDO is insufficient to make payments to all CDO investors, those investors with the least seniority are paid back last, and sometimes not at all.

When Should You Invest in a CDO?

Generally speaking, investing in a CDO is safest if your seniority places you at the top of the payment priority, and becomes more risky depending on your prescribed tranche. You should be aware of the risks of such an investment, especially if your broker is selling you a junior tranche that generally is more risky than the more senior tranches.


Call a Los Angeles Securities Lawyer Today

Investors often rely on their broker or brokerage firm to provide sound advice when it comes to investing in CDOs. If your broker misrepresented or misled you regarding a collateralized debt obligation, and failed to properly advise you of the inherent risks of a CDO, you should contact an experienced Los Angeles securities lawyer for a free consultation to discuss your legal rights.

Los Angeles Area Securities Employment Dispute Resolution

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Securities and investment industry employees and professionals often have performance-based compensation, such as bonuses or other compensation that is tied to business generation, trading desk P&L, or other work performance. Bonus disputes or compensation disputes can arise between securities employees and their brokerage firms or investment banks that require the help of an experienced attorney to resolve.

Instances of Securities Employment Issues

Common issues that arise in the securities field can include:

  • Compensation or bonus disputes
  • U4 or U5 expungement
  • Promissory note or loan disputes

If you left your job and did not receive the severance package or bonus to which you were entitled or promised, you may be able to pursue a claim to recover money that you believe you are owed. Further, if you believe customer dispute information or termination information incorrectly appears on either your U4 or U5, you may be able to have it expunged from your record or altered. Finally, there are instances in which you may be forgiven from certain forgivable loans or promissory notes.

Call a Los Angeles Securities Attorney Today

If you are involved in a bonus dispute or compensation dispute, wish to expunge something from your U4 or U5, or have grounds not to repay a promissory note or forgivable loan, contact an experienced Los Angeles securities attorney today for a consultation to discuss your legal rights.

Identifying Employee Benefits Violations Under ERISA

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Identifying Employee Benefits Violations Under ERISA

If you work for a company that offers benefits as part of your compensation package, the Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established pension plans in private industry to provide protection for individuals in these plans. Many business owners or managers are not properly qualified to evaluate pension plans, profit-sharing plans, or 401(k) plans, so they rely on investment professionals to do so. When an investment professional is in charge, they assume the legal duty to investigate and evaluate investments in the plan and how to handle the investments in a prudent manner.

What Actions are Considered Violations Under ERISA

Violations in a 401(k), pension, or profit-sharing plan include:

  • Failing to operate the plan prudently for the benefit of the participants
  • Failing to use the most cost-effective funds within a plan
  • Using plan assets to benefit only certain members of the plan
  • Failing to follow the plan terms.

Call a Los Angeles Securities Attorney Today

When your pension or profit-sharing plan or 401(k) is mismanaged or fails to use the most cost-effective funds, the plan can lose value your broker or your employer may be liable. You may have certain legal rights under ERISA as an employee. Contact an experienced Los Angeles securities attorney today to discuss these rights.

Shareholder Derivative Litigation and Shareholder Rights

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Corporate officers and directors of any company are required to act in the best interests of the company. At times, however, officers or directors put their own interests ahead of the company and ahead of the shareholders they are supposed to represent.

Conduct to Look Out For

You should be concerned if you notice that officers or directors act in one of the following manners, which are inconsistent with the company’s (and your) best interests:

  • Preferential stock treatment
  • Back-dated stock options or stock fraud
  • Preferred funding treatment in a proposed merger
  • Improper management or fraud
  • Any other action where a shareholder or the corporation suffers harm.

When those in charge act in a way that harms the company or the shareholder, a shareholder derivative lawsuit can be filed. This is a lawsuit filed on behalf of the shareholders to remedy the wrongs caused by corporate officers.
Call a Los Angeles Securities Lawyer Today

Not every unwise management decision is actionable. Corporate leadership generally has broad discretion in making business decisions. But when officers or directors act in a way that is contrary to the best interests of a corporation and its shareholders, you may have certain legal rights as a shareholder. Contact an experienced Los Angeles securities lawyer today to discuss your shareholder rights.

Dealing With Unregistered Brokers or Brokerage Firms

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Dealing With Unregistered Stockbrokers or Brokerage Firms

Most securities broker-dealers are required to register with the SEC and state securities regulators, as well as the Financial Industry Regulatory Authority. According to the SEC, a broker is defined broadly as any person engaged in the business of effecting transactions in securities for the accounts of others, including investment advisors, finders, those who operate platforms to trade securities, financing and even those who provide support services to registered broker-dealers, among many others. Similarly most securities must be registered with regulatory authorities in order to be sold to investors.

Potential Registration Warning Signs

  • Failed investments
  • Sales of unregistered securities
  • Negligence or broker misconduct
  • Stock fraud

Both state and federal securities laws exist to protect consumers from unlicensed activity. Certain situations can provide grounds for a securities registration class action, through which investors can seek to rescind any transactions involving unregistered securities or the unregistered brokers and firms selling the securities. FINRA arbitration claims also can be filed regarding the same wrongdoing.

Call a Los Angeles Stockbroker Fraud Attorney Today

If you believe you have dealt with an un licensed stock broker, brokerage firm, or security, you may have certain legal rights that require your immediate attention. You should contact an experienced Los Angeles stockbroker fraud attorney as soon as possible to discuss your rights.