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A hedge fund is an alternative investment vehicle that is comprised of an underlying pool of securities. Generally speaking, it is typically available to sophisticated investors – generally institutions or wealthy individuals.

Similar to a mutual fund, a hedge fund may invest in a number of securities, but there are several differences. First, hedge funds are not subject to SEC regulation like mutual funds. Because of this, hedge funds have access to invest in a wider range of securities, including more sophisticated – and sometimes risky – investments. Hedge funds may also invest in derivatives, such as futures or options, or other private placements, interest rate swaps and much more.

Another major difference between hedge fund investments and mutual fund investments is that if you try to get your money out of a hedge fund, the hedge fund manager can deny your request. If you are considering investing in a hedge fund, it is also important to note that the hedge fund manager is not under any obligation to tell you what the fund is invested in.

Hedge funds often contain quite a bit of very hard to understand information that may require a broker’s assistance, and just like any other investment, losing money in a hedge fund does not mean you have a case. If your loss doesn’t match your risk tolerance or if your broker failed to provide a full disclosure of the risks of your hedge fund, this may amount to hedge fund fraud and more.

Call a Los Angeles Securities Attorney Today

If your broker hedge fund failed to disclose material facts regarding your hedge fund investments, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles securities attorney for a consultation today.

The Securities & Exchange Commission (SEC) is suing a California attorney in Los Angeles federal court over his alleged involvement with an accused fraudster in taking $6 million from investors by promising high returns on prime bank instruments that never existed. The attorney faces charges of selling unregistered securities, securities fraud, and aiding and abetting his partner’s crime.

According to the SEC, Jilbert Tahmazian was part of a two-man scheme in 2009 and 2010 that solicited funds from at least four investors, telling the investors that they would make between 15-30% a week in interest on what proved to be fictitious securities. Instead, Tahmazian took a cut and passed the rest on to his partner, Vahak Awadisian. Awadisian was charged in 2013 of carrying out a similar scam in Alabama. The company name the pair operated under was called Magnet Investment Group, LLC.

The complaint states the pair met in 2009, when Awaidisian leased office space near Tahmazian. It was there they hatched their plan to lure investors into “management agreement contracts” promising impossibly high returns on financial instruments that didn’t exist.

Over the course of several months, Tahmazian transferred over $6 million to Awadisian, keeping approximately $100,000 in fees. One of the investors sued in 2011, and holding that Tahmazian breached his fiduciary duty by transferring the investor’s funds.

Call a Los Angeles Investment Fraud Attorney Today

If you invested with Tahmazian, Awadisian, or their company, Magnet Investment Group, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles investment fraud attorney for a consultation today.

If you maintain an investment portfolio, it is likely that you have a securities broker handling the trades made on your behalf. As a general matter, before making any trades for you, your broker must get your authorization before making each trade. If your broker makes a trade without obtaining your authorization, you may have a claim for unauthorized trading.

When Can an Investor Waive Authorization?

You can waive the per-trade authorization requirement by giving the broker written permission to buy and sell securities on your behalf, but this sort of discretionary trading still has its limits. Any transaction made on your behalf by a broker or brokerage firm must still fall within the realm of “suitable investments.” A suitable investment is one that is consistent with your investor profile, which includes stated tolerance and investment objectives, as well as your age, net worth, financial situation, and liquidity needs, among other factors.

When Can You Recover a Loss due to Unauthorized Broker Trading?

Potential losses can be recovered on your behalf for any of the following reasons:

• Failure to obtain written permission prior to trading on your behalf
• Unsuitable trades made on your behalf that are inconsistent with your investor profile
• Trades made outside the scope of the authority given.

In order to avoid waiving any claims that you may have, it is important that you act promptly if you suspect stockbroker misconduct.

Call a Los Angeles Investment Fraud Attorney Today

If a broker or brokerage firm made an unauthorized trade, or if they made an unsuitable investment in your account, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles investment fraud attorney for a consultation today.

Nimble Storage Inc. Hid Falling Sales

California-based Nimble Storage Inc., a data storage company, is accused of failing to keep shareholders informed about their difficulties keeping up with its larger competitors, causing a drop in the stock price once the information became public. As a result, a proposed investor class action lawsuit was filed in California federal court.

The plaintiff seeking class certification alleges that the company’s executives released information via news releases and analyst phone calls that exaggerated the company’s success transitioning from small and medium-sized IT organizations as customers to larger ones. The subsequent quarterly results fell short of expectations, and the statements had the effect of creating an “unrealistically positive assessment of Nimble storage…causing the company’s securities to be overvalued and artificially inflated,” according to the complaint.

Nimble’s strategy to introduce products aimed at landing large-scale companies backfired when their larger competitors slashed prices to maintain their market share, resulting in lower sales than Nimble anticipated. At the same time, the company lost some of its smaller customers that were at the core of Nimble’s old business strategy. Because of this, the complaint alleges that executives knew that their statements were false or misleading.

Once the news broke, shares dropped the next day from $21.39 per share to $10.05 per share, a 51 percent decrease.

Call a Los Angeles Securities Fraud Attorney Today

If you own stock in Nimble Storage Inc., you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles securities fraud attorney for a consultation today.

The Securities and Exchange Commission (SEC) requires almost all securities to be registered with the SEC. This helps the agency reduce the opportunity and ability for a broker or the company seeking an investment to commit fraud. Not all securities require registration with the SEC, however – these are known as Regulation D securities.

Regulation D securities are named for the rules promulgated by the SEC allowing smaller companies to raise capital through the sale of equity or debt securities without registration; however, these securities can only be sold to certain accredited investors.

How Do I Qualify as an Investor?

An investor is accredited if one or more categories below apply:

• A person with assets worth more than $1 million or an income of $200,000 annually
• A bank, insurance company or small business investment company
• A trust with assets of more than $5 million and not formed by the securities being offered
• A charitable organization with assets exceeding $5 million

(Note:  the SEC currently is reviewing changes to the accredited investor qualifications.)

Sadly, brokers often improperly sell Regulation D securities to unaccredited investors and even with accredited investors, brokers often improperly sell the securities – often times via online or mail solicitation. Some of these securities turn out to be fraudulent investments and Ponzi schemes, costing you your entire investment.

Call a Los Angeles Securities Fraud Attorney Today

If you have questions about how Regulation D/private placement investments work, or if you have suffered investment losses as a result of a Regulation D security, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles securities fraud attorney for a consultation today.

California-based Qualcomm, Inc. is facing a derivative lawsuit filed by one of its shareholders for allegedly turning a blind eye to the company’s weakening sales and a Foreign Corrupt Practices Act (FCPA) investigation.

The lawsuit accuses company CEO, Steven Mollenkopf, and the rest of the board and top executives of being overly optimistic regarding the status of the company. Qualcomm shares took a hit after allegations of an investigation of bribery of Chinese officials came to light – shares dropped from approximately $71 per share in January 2015 to roughly $45 a year later.

In addition, last month, Qualcomm informed investors that $100 million in revenue was being deferred after LG Electronics Inc. took the company to arbitration over previous royalty overpayments and future royalty rates.

Qualcomm’s troubles began earlier, however, as a failure to maintain a proper system of controls led the U.S. Department of Justice to launch an investigation in 2012 and a spate of civil suits followed. An internal review revealed that as much as $250,000 in gifts or benefits were provided to several individuals associated with Chinese companies. In April 2014, the SEC recommended a civil suit be filed against Qualcomm for violations of the anti-bribery provisions of the FCPA.

The case currently is pending in California federal court.

Call a Los Angeles Securities Fraud Lawyer Today

If you invested with Qualcomm, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles securities fraud lawyer for a consultation today.

Morgan Stanley and Broker Anna Khai

A FINRA arbitration panel awarded $825,000 to two Morgan Stanley Smith Barney, LLC clients after the panel found that Morgan Stanley’s “hiring process was not sufficient to vet the financial advisor who was the cause of the losses incurred by the Claimants.”

The broker, Anna Khai (aka Anna Khatchatrian), borrowed money from her clients and solicited Morgan Stanley customers to invest in non-approved investments and used the firm’s equipment and premises to conduct these transactions. The $825,000 award is a combination of $660,000 in compensatory damages and an additional $165,000 in punitive damages plus interest.

FINRA rules require brokerage firms to investigate the character, business reputation, qualification and job experience prior to hiring a broker – essentially, a firm has an obligation to perform due diligence before making a hiring decision.

Because the firm failed to meet its obligation before hiring Ms. Khai, it was held responsible for the broker’s actions.

Call a Los Angeles Securities Fraud Attorney Today

If you invested with Anna Khai, you may have certain legal rights that require your immediate attention. Contact an for a experienced Los Angeles securities fraud attorney consultation today.

If you are an individual or business located outside of the U.S. and are considering investing your money in the United States, there are several steps you need to take to make sure your investments are handled properly. A qualified Los Angeles-based attorney can advise of you of your rights and responsibilities.

Prospective individuals or businesses may wish to take into account the following when consulting with or hiring an international investment attorney, including:

• Confidentiality – the safety of your assets is a reason many investors from abroad choose to invest in the U.S. Make sure your attorney understands your need for confidentiality to protect you both personally and professionally.
• Communication – your attorney should be able to communicate with you long distance and in a way to limit the need for your travel.
• Effective Representation – There also may come a time when you need to hire an attorney after something has gone wrong or you have suffered a loss on your investment. In that unfortunate circumstance, your attorney should be able to zealously advocate for you in court or in arbitration proceedings.

Call a Los Angeles International Investment Attorney Today

Make sure you have the confidence to not only safely invest in the U.S. but that you are prepared for any eventuality. Contact an experienced Los Angeles international investment attorney today for a consultation of your various options.

A class action lawsuit is an efficient method to resolve large-scale legal disputes. Rather than filing hundreds – or even thousands – of individual lawsuits, a class action permits one or several plaintiffs to pursue a single lawsuit and to represent the interests of all similarly harmed parties.  Class actions also help ensure consistent results, instead of an entire spectrum of varying outcomes if hundreds or thousands of individual cases were litigated.

If you have suffered financial loss or damages, you may be considering filing a lawsuit, or if a class action has already been filed, remaining part of the class or opting out of the class action. You should consider the following before making your decision:

What Are Your Damages?

If the amount of your damages is relatively small, it may not make sense to pursue an individual claim. Under such circumstances, you may want to consult with a securities fraud attorney and file your case as a class action.

The Complexity and Size of Your Case

The number of issues present and potential size of your claim can help determine whether individual litigation or arbitration is the correct path for you. Alternatively, your case could form the basis for a class action that would pursue claims on behalf of you and others in the same position as you. If so, you may qualify to be the lead plaintiff in a class action.

Does a Class Action Lawsuit Already Exist?

If a class action already exists, you ultimately should be provided with an “opt-out” period within which you must decide whether (1) to remain part of the class, through which you would be bound by the results of the class action or (2) to pursue your own lawsuit or individual arbitration claim.

Call a Los Angeles Securities Fraud Attorney Today

If you have suffered damages or financial loss, you may have certain legal rights that require your immediate attention. If you have questions about how class actions work, contact an experienced Los Angeles securities fraud lawyer for a consultation today.