Articles Posted in Securities Fraud & Unsuitable Investments

exclamation-point-icon-1444386The investment fraud attorneys at Malecki Law announce the firm’s investigation into potential securities law claims against broker-dealers relating to the improper sale of natural gas and oil linked structured notes and similar products to investors.

Malecki Law is interested in hearing from investors who purchased structured notes issued by well-known financial institutions, including Bank of America Merrill Lynch (NYSE: BAC), Citigroup (NYSE: C), Credit Suisse (NYSE: CS), Goldman Sachs (NYSE: GS), JP Morgan Chase (NYSE: JPM), Morgan Stanley (NYSE: MS), UBS (NYSE: UBS), and Barclays (NYSE: BCS).

These investment products, often bearing such names as “Phoenix,” “Plus,” “Enhanced Return,” “Principal Protected,” “Bullish,” “Leveraged Upside” or “Accelerated Return,” were reportedly marketed to investors as a way to make significant returns and income from the rising price of oil.  In addition to promises of increased gains, investments like these are frequently also sold to investors with assurances that their potential losses would be limited and their initial investment would be protected.

However, the steep declines in the price of oil over the past 12-18 months have cost investors in these products deeply, according to reports.  The Wall Street Journal recently reported that the market for these and similar structured notes linked to the price of oil and other energy related assets totals at least $1.3 billion for 2015 alone.  There were more than 300 such products issued – nearly one per day – in 2015, per the WSJ.

Despite the enormous volume of structured notes sold to investors by large firms, products like these frequently have no secondary market, meaning that they are illiquid.  This makes it very difficult for investors to sell after they made their initial investment.  Occasionally, investors may be able to get out of illiquid investments, but more often they are forced to sell at a significant discount, thereby incurring large losses.  For example, one HSBC-Morgan Stanley note reportedly was issued to investors at $10 and is now valued on paper at roughly $7.23 but will only sell for $7.02, as of last week – a roughly 30% decline.

Unfortunately, the complexity of many structured products frequently hides significant risk factors.  These risk factors apparently came to fruition for investors in one recent structured note issued by Barclays in April of 2014.  As reported by Bloomberg, the largest deal of 2014, a $104.6 million issuance from Barclays, lost 42 percent of its value.  In total, $437.1 million in structured notes matured in the first 10 months of 2015.  Out of that pool, investors lost a staggering 44%, or roughly $194.3 million, according to reports.

As a general matter, these investments are too risky and unsuitable for retirees or other investors who are in the market for conservative investments because of their complexity, illiquidity, and hidden risks.  Yet, large Wall Street firms continue to create complex products and sell them to their customers –generating large commissions and fees for themselves – without regard to the devastating losses their customers may suffer.

Investors are not without hope, however.  Those who suffered losses in oil linked structured notes and related products may have a claim against the firm that sold them and could be entitled to reimbursement for their losses.

Investors are encouraged to contact the investment fraud attorneys at Malecki Law for a free, no obligation consultation and case evaluation at (212) 943-1233.

United Development Funding (“UDF”) has come under fire in recent months – being accused of operating like a “Ponzi scheme.”  It has allegedly disclosed that since April 2014, it has been under SEC investigation.

UDF operates several publicly-traded and non-traded Real Estate Investment Trusts (REITs) along with other real estate related companies, according to reports.  UDF reportedly operates in a manner that is different from traditional REITs – in that its assets are not real estate holdings, but rather development loans that it originates.

The UDF fund family is reportedly comprised of four public companies – United Mortgage Trust (non-traded), UDF III (non-traded), UDF IV (publicly traded symbol: UDF), and UDF V (non-traded).

The publicly traded UDF IV has declined in value from upwards of $18 per share to roughly $7 per share in only a few short months.  This means that those who invested in this public fund may have suffered losses of more than 50% seemingly overnight.  Meanwhile, those investors in the non-traded UDF III, UDF V, and United Mortgage Trust may find themselves with highly illiquid investments and potentially heavy losses.

If you or a family member invested in United Development Funding, you should contact our offices to explore your legal rights and options.  You can contact the investment fraud lawyers at Malecki Law for a free consultation and case evaluation at (212) 943-1233.

Malecki Law takes a proactive and informed approach to the financial news of today: actively engaging in fact-finding analysis on prospective cases from around the world. Our thorough knowledge of securities law’s history and fine points makes us ideal consultants for investors who have suffered losses due to misadvice from their broker or other financial counsel.

 

The securities and investment fraud attorneys at Malecki Law are interested in hearing from investors in MainStay Investments’ Cushing series Master Limited Partnerships (MLPs) and Energy Equity mutual funds.  MainStay Investments is a subsidiary of New York Life Insurance Company.

Among the MainStay Cushing portfolio of funds, a number of them declined between 33% and 57% in 2015 year to date, per Morningstar.  These funds include:

  • MainStay Cushing® Royalty Energy Inc A (CURAX)
  • MainStay Cushing® Royalty Energy Inc I (CURZX)
  • MainStay Cushing® Royalty Energy Inc Inv (CURNX)
  • MainStay Cushing® Royalty Energy Inc C (CURCX)
  • MainStay Cushing® MLP Premier I (CSHZX)
  • MainStay Cushing® MLP Premier A (CSHAX)
  • MainStay Cushing® MLP Premier Investor (CSHNX)
  • MainStay Cushing® MLP Premier C (CSHCX)

For example, CURCX, a fund that reportedly manages more than $61.2 million in assets, has had its net asset value decline significantly in the past year, from approximately $9.06 NAV in January 2015 to approximately $3.23 in January 2016, according to recent reported pricing data provided by Morningstar.  According to Morningstar data, CSHZX, a master limited partnership, is reported to manage more than 1.15 billion in assets and suffered a price decline of approximately 50% over the past year, down to approximately $10.72 in January 2016 from approximately $21.03 in January 2015.

These MainStay Cushing funds were said to have been marketed to investors and sold by financial advisors at brokerages such as Cetera Advisors LLC, Mid Atlantic Capital Corp., JPMorgan, Ameriprise Brokerage, Raymond James, RBC Wealth Management, Morgan Stanley, and Securities America Inc.

Investments in these or other MainStay Cushing funds have proven to be risky, and only suitable to certain investors.  If you were promised good returns with safety to your principal over a short investment horizon, yet were not informed of the many risks associated with energy sector investments, you may have a claim premised on suitability.

Given that MLPs and other energy sector funds are non-traditional products and typically focus on one sector with significant historical volatility, great care should be taken by an advisor to ensure that the investment is appropriate for the investor in light of their specific risk tolerance, investment objectives and other factors.  When a product is sold to an investor, despite being unsuitable for that investor, the financial advisor’s firm may be liable to the investor for those recommendations.

Investors who lost money in these investments at the recommendation of their financial advisor may be entitled to recover their losses from the brokerage house who sold it to them.  If you or a family member invested in MainStay Cushing funds, you should contact the attorneys at Malecki Law for a free consultation and to explore your legal rights and options.

Malecki Law takes a proactive and informed approach to the financial news of today: actively engaging in fact-finding analysis on prospective cases from around the world. Our thorough knowledge of securities law’s history and fine points makes us ideal consultants for investors who have suffered losses due to misadvice from their broker or other financial counsel.

The securities and investment fraud attorneys at Malecki Law are interested in hearing from investors in Tortoise Capital Advisors and explore their potential options for recovering their losses.

The Kansas-based Tortoise Capital Advisors is a “privately owned investment manager . . . that primarily provides its services to high net worth individuals . . . and caters to corporations, pooled investment vehicles, investment companies, and pension and profit sharing plans . . . typically invest[ing] in [the] energy and infrastructure sector,” per Bloomberg Business.
Among Tortoise’s portfolio of funds, a number of them declined between 17% and 36% in 2015 alone, per Morningstar.

These include Tortoise MLPs – Tortoise MLP & Pipeline C (TORCX), Tortoise MLP & Pipeline Investor (TORTX), Tortoise MLP & Pipeline Instl (TORIX) – and Tortoise Equity Funds – Tortoise North American Energy Indep C (TNPCX), Tortoise North American Energy Indep Inv (TNPTX), Tortoise North American Engy Indep Instl (TNPIX), Tortoise Select Opportunity C (TOPCX), Tortoise Select Opportunity Investor (TOPTX), and Tortoise Select Opportunity Instl (TOPIX).  For example, TORCX, a fund that reportedly manages more than $1.23 billion in assets, has declined significantly in share price from its previous high of $19.52 in August 2014 according to recent quotes. The fund reportedly trades at just over $9 per share – a decline of more than 50% in less than 18 months. TORTX and TORIX have also seemingly mirrored this performance.

Tortoise funds were said to have been marketed to investors and sold by financial advisors at brokerages such as Mid Atlantic Capital Corp, Morgan Stanley, Pershing FundCenter, Shareholders Services Group, JPMorgan, Fidelity Institutional, FundsNetwork, MSSB Retail Fund, Raymond James, CommonWealth Universe, RBC Wealth Management, Mid Atlantic Capital Group, MSWM Brokerage, and Securities America Inc.

Investors who bought this fund or other Tortoise funds upon promises of good returns and safety of principal a short time ago find themselves questioning how so much money could have been lost so quickly, contrary to the assurances received from the advisor who sold them the product. However, all may not be lost. Investors who lost money in these investments at the recommendation of their financial advisor may be entitled to recover their losses from the brokerage house who sold it to them.

One of the main issues facing financial advisors who sell funds and master-limited partnerships is suitability. Given that MLPs are non-traditional products and typically focus on one sector and one sector only (often energy in the case of MLPs), great care should be taken by an advisor to be sure that the investment is appropriate for the investor in light of their risk tolerance, investment objectives and other factors. When a product is sold to an investor, despite being unsuitable (or inappropriate) for that investor, the financial advisor’s firm may be liable to the investor for their losses.

If you or a family member invested in Tortoise Funds, you should contact our offices to explore your legal rights and options. You can contact the investment fraud lawyers at Malecki Law for a free consultation and case evaluation at (212) 943-1233.

Malecki Law takes a proactive and informed approach to the financial news of today: actively engaging in fact-finding analysis on prospective cases from around the world. Our thorough knowledge of securities law’s history and fine points makes us ideal consultants for investors who have suffered losses due to misadvice from their broker or other financial counsel.

The investment and securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints about Wells Fargo stockbroker Gregg D. Lazarescu.

According to his BrokerCheck report maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Lazarescu has been the subject of at least two customer complaints while registered with his prior firm Morgan Stanley.
In addition to Wells Fargo and Morgan Stanley, FINRA reports that Mr. Lazarescu was registered with MetLife, Chemical Investment Services Corp., Citicorp Investment Services, and Chase Investment Services Corp.

Industry records indicate that in 2004, a customer made allegations of unsuitability and misrepresentation against Mr. Lazarescu in connection with a mutual fund purchase. This claim was settled for $100,000, per his FINRA BrokerCheck Report.

In 2009, Mr. Lazarescu was reportedly the subject of another customer complaint. FINRA records indicate that the allegations in this matter involved the unauthorized purchase of an auction rate security in a client account. Per BrokerCheck, this case was settled for $50,000 in connection with FINRA Regulatory Notice 09-12.

Investors who have been given unsuitable investment recommendations by their financial advisor or stockbroker may have the right to sue to recover some or all of their losses.

Financial advisors and stockbrokers are under the obligation to make only suitable recommendations to their customers. They must consider things such as investment objective and risk tolerance, as well as the customers’ age and other important factors before recommending an investment. When a customer makes an unsuitable investment at the recommendation of their financial advisor, that investor may be entitled to have the firm reimburse them for their losses or in some cases even compensate them for the lost profits they should have made had the money been properly invested.

If you or a family member lost money entrusted to Gregg Lazarescu or Wells Fargo and want to explore your rights, you are encouraged to contact the securities and investment fraud lawyers at Malecki Law for a free consultation and case evaluation at (212) 943-1233.

Malecki Law has successfully brought securities actions on behalf of investors who suffered losses as a result of unscrupulous actions taken in their securities accounts, recovering millions of dollars for their clients.

Malecki Law takes a proactive and informed approach to the financial news of today: actively engaging in fact-finding analysis on prospective cases from around the world. Our thorough knowledge of securities law’s history and fine points makes us ideal consultants for investors who have suffered losses due to misadvice from their broker or other financial counsel.

Shares of OncoMed (OMED) plunged more than 40% today, January 25th, in the wake of a report concerning a pancreatic cancer drug the company had reportedly been working on.  According to Marketwatch, “an independent data safety monitoring board advised ‘of several findings regarding futility’ of a Phase 2 treatment of pancreatic cancer.’”

Investors who have lost money in OncoMed may be legally entitled to recover some or all of their losses and are encouraged to contact the attorneys at Malecki Law to explore their rights.

Unfortunately, issues like the one presently facing OncoMed can happen in the market.  Even more unfortunate is that often times financial advisors will improperly advise their clients to take large positions in advance of the release of a report concerning a company’s prized drug, like Tarextumab.

The hope would be that the report would be favorable and the company stock will yield large profits for the investor and big commissions for the broker.  However, this “all or nothing” strategy can be extremely risky for the investor.

Regrettably, brokers will frequently fail to properly advise their client of the extreme risks that may be involved in placing a big bet on one stock.  Instead brokers may encourage their client with only positive analysis and promises of big profits, saying it’s a “sure thing.”

Such large bets are typically not suitable for your average investor.   They are usually best reserved for highly sophisticated investors who have the ability to properly assess the investment risks and absorb the potentially enormous losses.  Frequently, these are wealthy hedge fund managers and the like.  Even for most of the very wealthy, these investments would likely not be suitable absent extremely high levels sophistication and investment experience.

If an investment is not suitable for a customer, the broker is not permitted to recommend that the customer invest – plain and simple.

But, if a broker makes an unsuitable investment recommendation to a customer, the customer may be legally entitled to recover all or some of their losses.

So, if you or a family member lost money in OncoMed at the recommendation of a financial advisor and want to explore your rights, you are encouraged to contact the securities and investment fraud lawyers at Malecki Law for a free consultation and case evaluation at (212) 943-1233.

Malecki Law has successfully brought securities actions on behalf of investors who suffered losses as a result of unscrupulous actions taken in their securities accounts, recovering millions of dollars for their clients.

Malecki Law takes a proactive and informed approach to the financial news of today: actively engaging in fact-finding analysis on prospective cases from around the world. Our thorough knowledge of securities law’s history and fine points makes us ideal consultants for investors who have suffered losses due to misadvice from their broker or other financial counsel.

The securities and investment fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against Florida stockbroker John T. Keyser. Mr. Keyser is reportedly registered with Dawson James Securities, Inc. in Boca Raton, Florida. Industry records indicate that Mr. Keyser has also recently been registered with Viewtrade Financial and SAL Financial Services.

According to BrokerCheck, as maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Keyser has been the subject of three customer complaints and a suspension of his license.

In 1998, Mr. Keyser reportedly had his FINRA (then NASD) license to sell securities suspended for failing to pay an arbitration award against him.

FINRA records indicate that in 2002, Mr. Keyser was the subject of a customer complaint for unauthorized trading while he was with SAL Securities.

In 2006, another customer complaint was filed against Mr. Keyser for failing to place a stoploss order while with Dawson James Securities, per BrokerCheck.

In 2010, a customer filed a claim alleging churning, intentional and negligent misrepresentation, unsuitability, breach of fiduciary duty and unauthorized trading in an account for whom Mr. Keyser was the broker of record at Dawson James, according to FINRA.

Unauthorized trading occurs when a broker executes trades in the customer’s “non-discretionary” account without the customer’s consent or prior authorization. In a non-discretionary account, the broker is supposed to speak with the customer prior to executing trades. On the other hand, when a broker has discretion over a customer’s account, the broker is free to trade in the account without speaking to the customer first. In this type of relationship, there is a fiduciary duty between the broker and customer.

A problem (and securities law violation) arises when a broker who does not have discretion over a customer’s account begins trading without speaking to the customer. Frequently, unauthorized trades are executed by brokers to generate higher commissions for the broker or to invest the customer in riskier investments than would be appropriate for the customer, in our experience.

Our office has successfully represented many clients who have been the victims of unauthorized trading in recovering the losses suffered in their accounts. If you or a family member suffered losses with John T. Keyser and Dawson James Securities, you are encouraged to contact the securities and investment fraud lawyers at Malecki Law for a free consultation and case evaluation at (212) 943-1233.

Malecki Law has successfully brought securities actions on behalf of investors who suffered losses as a result of unscrupulous actions taken in their securities accounts, recovering millions of dollars for their clients.

Malecki Law takes a proactive and informed approach to the financial news of today: actively engaging in fact-finding analysis on prospective cases from around the world. Our thorough knowledge of securities law’s history and fine points makes us ideal consultants for investors who have suffered losses due to misadvice from their broker or other financial counsel.

The securities and investment fraud attorneys are interested in hearing from investors with complaints involving Scott Teich of Raymond James. Per his BrokerCheck Report, maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Teich is a registered stock broker with Raymond James, based out of Florida.

Mr. Teich’s BrokerCheck Report indicates that he has been the subject of at least six customer complaints. He has also reportedly been the subject of an “employment separation after allegations.”

In addition to Raymond James, Mr. Teich has also been registered with Gruntal & Co., First Colonial Securities, Paragon Capital Corp (which FINRA reports was “expelled” from FINRA in 2004).

In 1999, Mr. Teich was reportedly the subject of a customer complaint alleging “high-pressure sales tactics” and “misleading information.”

Shortly thereafter, Mr. Teich voluntarily resigned during an internal firm investigation, per FINRA records.

Two years later, in 2001, a customer of Mr. Teich’s complained about “speculative, risky and unsuitable investments” purchased in their account. That case was reportedly settled for $22,500.

BrokerCheck indicates that in 2005, Mr. Teich was the broker of record in a complaint concerning unsuitable variable annuities.

In 2008, Mr. Teich was again reported to be the subject of a customer complaint alleging improper activity in a client account. This time the allegations surrounded “unauthorized trades.”

In 2010, FINRA records indicate that Mr. Teich was the subject of a $300,000 customer complaint concerning “suitability, breach of contract, misrepresentation, negligence, breach of fiduciary duty, common law fraud, violation of Florida Statutes Chapter 517, [and] fraudulent inducement.”

Mr. Teich’s most recent reported customer complaint, in 2011, was related to auction rate securities and was settled for $25,000.

If you or a family member lost money with Scott Teich, you are encouraged to contact the securities and investment fraud lawyers at Malecki Law for a free consultation and case evaluation at (212) 943-1233.

Malecki Law has successfully brought securities actions on behalf of investors who suffered losses as a result of unscrupulous actions taken in their securities accounts, recovering millions of dollars for their clients.

Malecki Law takes a proactive and informed approach to the financial news of today: actively engaging in fact-finding analysis on prospective cases from around the world. Our thorough knowledge of securities law’s history and fine points makes us ideal consultants for investors who have suffered losses due to misadvice from their broker or other financial counsel.

The investment and securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints regarding Florida-based UBS stockbroker Brian J. Gold.

According to his BrokerCheck report maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Gold has been the subject of no less than five customer complaints and was discharged from Morgan Stanley DW in 2004.

In addition to UBS and Morgan Stanley, FINRA reports that Mr. Gold has also been registered with Merrill Lynch in Florida, Advest in Connecticut, and Prudential in New York City.

Per FINRA, Mr. Gold was discharged from Morgan Stanley, where he had worked from 2000 to 2004 “after allegations” and in the midst of a firm investigation into his conduct.

That same year, in 2004, a customer made allegations of unsuitability against Mr. Gold, which was reported on his FINRA BrokerCheck Report.

In 2006, Mr. Gold was again the subject of a customer complaint alleging unsuitability; according to FINRA records, this was settled for roughly 50% of the alleged damages.

Again in 2009, a customer of Mr. Gold complained regarding unsuitability, and FINRA records indicate the matter was settled for $150,000.

The next year, 2010, Mr. Gold was again the subject of a customer complaint alleging unsuitability, and this claim was reportedly settled for $125,000.

Finally, this past October 2015, Mr. Gold was the subject of a fifth customer complaint, again alleging unsuitability, per FINRA.

Unsuitability is especially dangerous for elderly and retirement age investors because unsuitable investments frequently involve the investor taking on more risk than they should.  When these risks manifest, large and devastating losses may be incurred.  The older an investor is at the time of the losses, the less time they have to recover those losses.  This is why it is imperative – and required – for brokers to understand their client’s risk tolerance and investment objective before making a recommendation.

If you or a family member lost money with Brian J. Gold, you are encouraged to contact the securities fraud lawyers at Malecki Law for a free consultation and case evaluation at (212) 943-1233.

Malecki Law has successfully brought securities actions on behalf of investors who suffered losses as a result of unscrupulous actions taken in their securities accounts, recovering millions of dollars for their clients.

Malecki Law takes a proactive and informed approach to the financial news of today: actively engaging in fact-finding analysis on prospective cases from around the world. Our thorough knowledge of securities law’s history and fine points makes us ideal consultants for investors who have suffered losses due to misadvice from their broker or other financial counsel.

Oil briefly dropped below $30 per barrel today.  For those who drive SUVs, this may feel like a blessing. However, for those who are heavily invested in Oil and Gas, it can be frightening.  People who invested in Oil and Gas at the recommendation of their financial advisor may be feeling anger and confusion, in addition to that fear – these investors rightfully want answers.

Aside from buying Oil and Gas futures directly, there are two frequently used products that investors use to invest in Oil and Gas – Master Limited Partnerships (MLPs) and Exchange Traded Funds (ETFs).

As we wrote here last year, investors lost millions as gas prices dropped at the beginning of 2015.  As prices have continued to slide over the past 12 months, losses have compounded.  This is terrible news for those whose financial advisors recommended that they invest in Oil and Gas, and then convinced them to stay in and “ride it out” on promises of a price recovery.

Unfortunately, MLPs can be very risky investments.  Normally reserved for sophisticated and high-net-worth individuals, these can be completely inappropriate for your normal “mom and pop” investors.  Unfortunately, some financial advisors sell them to their clients anyway, without fully disclosing the potentially devastating risks – as we highlighted here in 2014.

According to reports, a number of oil and gas MLPs have lost more than 60% in the past twelve months.  These include:

  • EMES     Emerge Energy Services LP           -88.88%
  • LNCO     LinnCo                                                -83.00%
  • LINE       Linn Energy LLC                              -81.69%
  • BBEP      BreitBurn Energy Partners LP      -80.39%
  • HCLP      Hi-Crush Partners LP                     -78.80%
  • MCEP    Mid-Con Energy Partners LP        -76.07%
  • EVEP      EV Energy Partners LP                  -75.15%
  • LGCY      Legacy Reserves LP                        -74.32%
  • MEMP   Memorial Production Ptrs LP       -73.48%
  • VNR       Vanguard Nat. Resources LLC      -73.23%
  • SDLP      Seadrill Partners LLC                     -64.67%
  • PAGP     Plains GP Holdings                         -63.98%
  • KMI        Kinder Morgan Inc                          -62.68%
  • ETE        Energy Transfer Equity LP            -61.01%

 

Investors who lost money in these investments at the recommendation of their financial advisor may be entitled to recover their losses.

It is the right of any and all investors who believe they may have suffered losses as a result of recommendations of their financial advisor to contact our offices to explore their legal rights and options. If you or a family member invested in Oil and Gas MLPs, contact the investment fraud lawyers at Malecki Law for a free consultation and case evaluation at (212) 943-1233.

Malecki Law takes a proactive and informed approach to the financial news of today: actively engaging in fact-finding analysis on prospective cases from around the world. Our thorough knowledge of securities law’s history and fine points makes us ideal consultants for investors who have suffered losses due to misadvice from their broker or other financial counsel.