FINRA Hands Out Fines to Morgan Stanley, UBS

FINRA has ordered Morgan Stanley to pay $2.3 million to investors for failing to properly oversee its brokers, resulting in the mismanagement of investor accounts. According to investors, Morgan Stanley’s stockbrokers also engaged in misconduct while handling their investments.

The case against Morgan Stanley went to arbitration, with several of its brokers being named in the suit. One of the brokers, Steven Mark Wyatt, has reportedly been a part of four cases, two of which have been resolved with no admission of liability. Although he no longer works with the company, two others who were named in the lawsuit are believed to still be a part of Morgan Stanley.

FINRA also recently levied a fine against UBS Financial Services to the tune of $2.5 million. The couple that brought suit claimed UBS was guilty of misconduct in selling Puerto Rico bonds and using a credit line to make further purchases of UBS bond funds.

Call a Los Angeles Stockbroker Fraud Attorney Today

If you believe your broker or brokerage firm has committed misconduct and you have suffered investment losses as a result, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles stockbroker attorney today for a consultation regarding your rights.

Producers Charged in $21 Million in Hollywood Ponzi Scheme

Two Hollywood producers have been arrested and are facing criminal charges resulting from an elaborate setup in which they received $21 million from investors to produce a film.

Michelle Kenen Seward and Dror Soref convinced investors to fund the production of a film entitled “Not Forgotten,” along with an unsecured investment. Both Seward and Doref convinced some investors to cash out annuities early or invest their life savings in a project that they were told would provide returns between 10 and 18 percent.

The scheme began in 2007 and ran through 2011. The film was completed and released in 2009. Following the completion of the film, Seward and Doref formed a new entity titled Windsor Pictures LLC, which other investors were told would be producing several more films. Investors were provided promissory notes and again told that they would receive between 10-18% returns on their investment. In 2011, Seward allegedly informed the victims of their Ponzi scheme that they would not be able to continue paying the same rate of return for those who invested in the film.

Investigators have allegedly found evidence that money that investor funds meant for Windsor Pictures was actually used to pay other investors of “Not Forgotten.” Neither Seward nor Doref are licensed to sell securities or provide investment advice.

Call a Los Angeles Ponzi Scheme Attorney Today

If you invested in “Not Forgotten,” Windsor Pictures LLC, or either Seward or Doref you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles Ponzi Scheme attorney today for a consultation regarding your rights.

 

 

 

 

The SEC filed fraud charges against five Arizona residents, because they deceived investors out of $18 million between 2006 and 2013. According to the SEC, Jason Mogler, James Hinkeldey, Casimer Polanchek, Brian Buckley and James Stevens convinced 225 investors that their money would be used to purchase foreclosed homes, buy and develop beachfront property in Mexico, and invest in various recycling facilities.

Instead of investing the money, the group used nearly 97 percent of the $18 million to fund their personal lifestyle, with the funds going toward travel, car and child support payments, clothes, entertainment and more.

According to the complaint filed by the SEC, the group engaged in fraudulent securities offerings through a series of limited liability companies all under the various defendants’ control, none of which were registered with the SEC, nor were they licensed to sell securities.

The group solicited investors by airing commercials on the radio, in magazines, on the Internet and even in person. They also ran a company known as the Arizona Investment Center, where potential investors signed up for webinars or seminars and were encouraged to invest in the group’s fraudulent schemes.

When the group failed to make promised payments on their promissory notes, they engaged in Ponzi-like payments to investors who threatened them with a lawsuit. Mogler is accused of stealing $10 million in investor funds while Polanchek, Hinkeldey, Buckley and Stevens are accused of stealing $2 million, $900,000, $500,000 and $200,000, respectively.

Call a Los Angeles Fraud Attorney Today

If you are a victim of this investment fraud, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles fraud attorney today for a consultation regarding your rights.

California Stockbroker, Sunil Sharma, Sentenced to 33 Months for Ponzi Scheme

A stockbroker in California was just sentenced in federal court to 33 months in prison for stealing more than $6 million from investors in a complicated scheme.

Sunil Sharma told investors that he was investing their money in conservative portfolios, but he actually was engaging in a risky day trading strategy that backfired. Sharma covered his tracks by telling investors that their accounts were performing well, even sending fraudulent statements to his customers. Unlike a traditional Ponzi scheme, in which investors are generally promised a much higher-than-average rate of return, Sharma’s scheme was harder to pinpoint because it did not offer aggressive returns.

Sharma initially set up his business, Gold Coast Holding, LLC, to trade options before telling his insurance clients that they could make better money by “day trading.” To convince his clients to invest, Sharma told potential investors that their money would be in a diversified portfolio, spread over several markets, and managed by Goldman Sachs – none of which was true. Sharma’s scheme completely collapsed in January.

Call a Los Angeles Stockbroker Fraud Attorney Today

If you invested with Sunil Sharma or Gold Coast Holdings, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles stockbroker lawyer today for a consultation regarding your rights.

 

 

 

 

Messaging Apps Being Used in Pump and Dump Scheme

As technology continues to improve and new methods for communication become widespread, scammers will continue to find new ways to convince potential investors to invest in their fraudulent schemes. In this latest incident, perpetrators used the popular messaging platform WhatsApp to convince unwitting investors to purchase stock in Avra, a digital currency technology creator.

What is a “Pump and Dump” Scheme?

A “pump and dump” scheme is a form of stock fraud that involves artificially inflating the price of a stock by disseminating false information designed to lure investors into buying stock, which is usually priced quite low. A successful pump and dump occurs when unwitting investors purchase the stock, thus driving the price of the stock up. At some point after the stock has been artificially inflated, the perpetrators sell their stock at the inflated price for a profit and leave investors holding the bag.

The Recent “Pump and Dump” Scheme

In this instance, scammers used WhatsApp to convince users to buy Avra stock before dumping their shares at a higher price, according to FINRA. Some app users received messages purporting to come from employees of well-known brokerage firms stating that the stock price was going to “double in the next few days.”

The scammers in this case acted fairly quickly. On the morning of Aug. 21, the shares were sold for 17 cents at 10:20 a.m. By 11:00 a.m., the price jumped more than 500% percent to 94 cents per share. By 11:20 a.m., the shares dropped to 30 cents, indicating that the scammers sold their stake, flooded the market and drove the price back down, all within the span of one hour.

Call a Los Angeles Stockbroker Attorney Today

If you have received a similar message or purchased stock in what turned out to be a “pump and dump” scheme, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles stockbroker lawyer today for a consultation regarding your rights.

 

Hiring the Right Los Angeles International Investment Attorney

Many individuals or a businesses located outside of the United States invest their money through bank or brokerage firm located in the United States or a U.S. division of a European or Latin American bank or brokerage firm. If you have lost money in such investments and believe you were misled or that your money was mishandled, you may wish to consult with a Los Angeles-based attorney who can advise you of your rights and the best way to handle your dispute with the bank or brokerage firm.

What Should You Consider When Consulting with or Hiring an Attorney

You should consider the following factors when consulting with or hiring an international investment attorney:

• Confidentiality – many investors from outside the United Stated choose to invest in the U.S. or through offshore entities in order to keep their financial affairs private and confidential. Make sure your attorney understands your need for confidentiality in order to protect you both personally and professionally.

• Communication – many U.S. attorneys are willing to travel to meet with you about your investment dispute. In addition, the use of e-mail, Skype, and quality long-distance phone service can make communicating with your U.S. attorney very easy.

• Effective Representation – if you have a problem with your investments or believe you are the victim of investment fraud you should look for a lawyer who has experience representing investors against banks and brokerage firms in both court and arbitration proceedings.

Call a Los Angeles International Investment Attorney Today

Make sure you have the confidence not only to invest safely in the U.S., but also to know that your assets are being protected. Contact an experienced Los Angeles international investment attorney today for a consultation regarding any investment problems that you have.

Investing in Regulation D Securities

The Securities and Exchange Commission requires most securities offered for sale to be registered with the SEC. Under Regulation D, however, certain exemptions allow for the sale of unregistered securities. These securities are also known as “private placements.”

What is the Purpose of Regulation D Securities?

Regulation D offerings are intended to provide small companies with access to capital markets. Those small companies sometimes cannot afford the costs and expenses necessary to meet the requirements of securities that are registered with the SEC. Many hedge funds also are private placements. It can be much more difficult to obtain detailed information about the finances of companies that issue private placement securities, as the reporting requirements are much lower than the requirements for registered securities.

Who Can Be Sold Regulation D Securities?

Regulation D offerings generally are more risky than registered securities because they do not involve the same level of reporting requirements that exist with registered securities. As a result, Regulation D securities can only be sold to accredited investors. An accredited investor must have an income of $200,000 or more annually or have a net worth in excess of $1 million. Regulators have determined that investors who meet these financial thresholds generally are more financially sophisticated and better able to understand and appreciate the risks of private placement securities.

What is the Responsibility of Your Broker or Brokerage Firm?

As with all securities recommendations, your broker must disclose both the benefits and risks of a private placement investment. And they are not permitted to recommend these risky investments to investors with conservative investment objectives. Many brokerage firms have sold private placements that later turned out to be fraudulent or part of a Ponzi scheme.

 Call a Los Angeles Stockbroker Attorney Today

If you invested in a Regulation D, private placement security and suffered an investment loss, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles stockbroker attorney today for a consultation to discuss your rights and obligations.