New York Securities Lawyers Blog

The broker-dealer LPL, Linsco Private Ledger, has been in the news a lot recently - for all the wrong reasons. LPL was even recently featured in The New York Times for its frequent "tangles" with state and federal regulators.

LPL is the nation's fourth largest brokerage firm, with more than 13,000 brokers who currently service over 4 million customers. LPL attracts brokers from other brokerage firms by reportedly paying a higher percentage of the commissions generated directly to the broker - roughly 80% at LPL versus as low as 15-25% elsewhere. While this model can be very lucrative for well-minded brokers, this model can also attract deceitful brokers who do not have their clients' best interests in mind and seek to skirt the law.

LPL's network of brokers is very spread out by brokerage firm standards, with many brokers operating out of an office of only one or two individuals - versus other brokerage firms which may have up to several hundred brokers under one roof.

The law requires that LPL supervise its brokers in remote and small offices as if they were under the main office's roof. For LPL, this can make supervision over these brokers very challenging, and oftentimes ineffective. In just the past year and a half, LPL was penalized by regulators in five different states for failing to supervise its brokers properly.

Mr. William Galvin, the Massachusetts secretary of the commonwealth, indicated to the New York Times that in a recent investigation, "[w]hat we really saw was a complete lack of supervision."

Several of these investigations reportedly stem from the sale of Real Estate Investment Trusts (REITs) to unsophisticated investors. Unsophisticated investors may not be aware of the risks inherent to REIT investments such as illiquidity and substantial loss of principle. They may also not be aware that REITs generally pay a high commission to the broker and the brokerage firm who sold it.

Unscrupulous brokers may sell REITs as safe, income producing investments to unsuspecting, unsophisticated investors for whom they are not appropriate, in order to get the higher commission.

The attorneys at Malecki Law engage in securities litigation and arbitration in forums such as FINRA, where they have handled many cases involving firms' failures to supervise their registered representatives. If you believe you have lost money as a result of questionable conduct by your broker, please contact an attorney at Malecki Law to determine if you may be able to recover some or all of your losses.

Securities attorney Jenice Malecki spoke recently with Wealth Management at wsj.com's Caitlin Nish about what makes a strong investor claim against a broker and the steps that lead up to brokers having to defend themselves in arbitration.

To watch the video click here.

Investors who have lost money because of bad advice, unsuitable investment recommendations and misconduct by their financial advisor may seek to recover their losses through arbitration.

Arbitration is known as an "alternative dispute resolution" process. Rather than file a lawsuit in court in front of a judge and jury, an investor can sue their financial advisor in arbitration in front of a panel of one to three neutral people, known as "arbitrators." These arbitrators will hear the evidence and reach a decision regarding the claim.

Most securities arbitrations take place under the rules of the Financial Industry Regulatory Authority (FINRA), as virtually all brokerage firms require members to arbitrate customer complaints upon the customer's request and then create customer agreements containing arbitration clauses.

Chances are that if you have a brokerage account, you have already agreed to arbitrate your claims. You may even be bound to do so.

Whether you choose arbitration or are required to participate in it, most arbitration uses rules and procedures similar to those used by the courts to resolve claims. During the proceedings, the arbitrators will determine what evidence is heard and then will consider all evidence presented to reach a decision. An investor usually receives the arbitrators decision about if and how much they won within thirty days of the close of the arbitration proceeding.

If your investment losses are putting you on the road to arbitration, it makes sense for you to contact an attorney with experience handling such securities claims, such as those here at Malecki Law for a free consultation.

It has been reported that New York based Citigroup has agreed to pay $730 million to settle claims that it misled investors with respect to nearly 50 bond and preferred stock offerings over a period of more than 24 months between 2006 and 2008. The investors' claims were said to be based on misleading statements from the bank over Citigroup's exposure to mortgage backed securities, its loss reserves, and the credit quality of some of its held assets.

Before the settlement can be finalized, it must be approved by the US District Court in Manhattan. If approved, it would be the second largest financial crisis related settlement to date - trailing only Bank of America's $2.43 billion settlement related to its purchase of Merrill Lynch. According to the Wall Street Journal, Citigroup claimed to have done nothing wrong and stated that it settled to avoid the trouble and costs of extended litigation.

This is just one more of many such settlements that have resulted from the financial crisis, totaling billions of dollars that have been returned to investors. Just last year, it was reported that Citigroup paid $590 million to settle allegations by investors that it misled shareholders about other problems in 2007 and 2008. Wachovia and Bank of America, among others, have also been reported to have recently reached settlements in excess of $500 million with investors.

The events underlying cases such as this one, brought on behalf of classes of investors are large, striking examples of how banks mislead investors on the grandest scale. However, class actions are not the only avenue investors have to recover their losses.

Misled and defrauded investors have the option to opt out of large class actions and pursue their claims independently. While joining a class action may seem like the easy way for a victimized investor to recoup their losses, class actions have been criticized for returning less to individual victims than could have been obtained had each investor brought their own individual case.

Investors who have suffered losses and wish to get back as much of their losses as possible, should call the securities fraud attorneys at Malecki Law for a free consultation to explore their rights.

The Wall Street Journal reported on March 4, 2013 that Sallie Mae sold $1.1 billion of securities backed by private student loans, noting that demand for the offering was fifteen times that. Related to this offering, the Wall Street Journal noted that a new platform was being rolled out by SecondMarket Holdings Inc. that would enable lenders to directly issue student-loan securities to investors.

The potential problem with the securitization of student loans is the increase in default by borrowers on the underlying student loans. The Federal Reserve Bank of New York has stated that 31% of people paying back student loans were late on their payments by 90 days or more, an increase from 24% in 2008, as reported by the Wall Street Journal article.

Investors who are offered or are considering investing in student loan backed securities should keep in mind the spike in pre-recession investing in mortgage-backed securities that was then followed by massive defaults on payments of those underlying mortgages, which in some ways deepened the scale and effect of the 2008 recession. While student loan backed securities may lead to greater yields, these investments would most likely also include increased risk of loss. Investors should remain wary of including this investment in their portfolio, especially given the tough employment market and increase in late payments.

Often times, investments are marketed and sold without complete disclosure about the risks attributable to those investments, or are simply recommended to the wrong sort of investor. The stripping of or failing to provide complete risk disclosures may be deemed securities fraud, and depending on the investor, such a recommendation may be deemed an unsuitable investment. Financial Industry Regulatory Authority (FINRA) Rules require that under certain circumstances, recommendations must also be suitable when made to institutional customers.

The attorneys at Malecki Law specialize in securities litigation and arbitration in forums such as FINRA. If you believe you have lost money as a result of inappropriately marketed or unsuitable investments, please contact an attorney at Malecki Law to determine if you may be able to recover some of your losses.

On February 6, 2013, the Financial Industry Regulatory Authority (FINRA) announced that a public customer was awarded an award of full rescission against Wachovia Securities, LLC, doing business as Wells Fargo Advisors, LLC ("Wells Fargo") for the entirety of Fannie Mae Preferred shares recommended by Wells Fargo. By awarding full rescission, the arbitrator required Wells Fargo to repurchase the Fannie Mae Preferred shares at the same price they were sold to the customer. The arbitration award is attached here.

According to the award, the arbitrator found that Wells Fargo was liable for negligence, negligent supervision, fraud and breach of contract as a result of the sale of the Fannie Mae Preferred shares. Billions of dollars of Fannie Mae Preferred shares were sold by broker-dealers like Wells Fargo to investors before the U.S. Government placed Fannie Mae in conservatorship and stopped payments of preferred dividends to investors, but after we believe such broker-dealers were aware that those preferred shares were much riskier than how they were promoted to investors.

In our opinion, Fannie Mae Preferred shares were often endorsed as a safe investment by brokers and broker-dealers, especially given that Fannie Mae was considered a quasi-governmental entity. However, as early as February 2008, we believe many broker-dealers were well aware of Fannie Mae's exposure to real estate liabilities. On March 10, 2008, Barron's reported that Fannie Mae's solvency would be tested by a growing number of mortgage defaults and falling home prices. Despite these in-house understandings of the risky nature of Fannie Mae Preferred shares, many broker-dealers continued to promote the investment as safe, and provided their brokers with research material to further promotion of the shares. Like many other broker-dealers, Wells Fargo, recommended the Fannie Mae Preferred shares to investors who sought safe investments, according to the award.

The arbitrator in the February 6, 2013 award made a point of describing how the broker was not at fault. The broker acted based on research she was provided by Wells Fargo, so Wells Fargo was found solely liable for the investor's losses. Essentially, the award states that Wells Fargo caused the recommendation of unsuitable investments to the investors.

If you believe you have lost money as a result of Fannie Mae Preferred shares, or because of some other investment, please contact an attorney at Malecki Law to determine if you may be able to recover some of your losses.

As recently reported by InvestmentNews, the estimated value of common stock in real estate investment trust (or REIT) of Wells Timberland REIT, Inc. fell to $6.56 per share. Given the illiquidity of the trust, finding that price in the market may prove difficult. That figure marks a 35% plunge in value since the REIT premiered in 2006 at $10 per share. Unfortunately, such incidents are all too common in a post-bubble real estate industry continuing to face adversity. Many of these incidents have caused substantial losses to investors who invested some or all of their savings in these ventures at the recommendation of their financial advisor.

The trust in question is controlled by Wells Real Estate Funds, an industry giant which has over $11 billion invested in real estate worldwide. Wells management has committed $37 million in preferred equity to this REIT alone, yet the trust currently appears to accrue annual dividends of a mere 1%. In October of 2011, redemption of trust shares was suspended until a new share value could be determined. Beginning next month, shareholders are apparently supposed to have the option of redemption, which will garner 95% of each share's estimated value, or $6.23.

REITs in many instances can be considered to be high-risk endeavors: appealing for their potential for high gains due to their interest rates, but with equal if not unwarranted potential for resolute failure, and a possible lack of accountability toward investors. Too often, financials advisors describe high-risk investment products like REITs as safe, secured or guaranteed, typically to get the higher commission that these riskier investments pay. Misrepresenting the risk of an investment to a customer like that is against the law and rules under which these professionals work.

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 real estate investment trusts, contact the securities 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. Information on a selection of funds and companies currently under investigation by Malecki Law can be found below. Our pursuit of excellence is constant, but our opportunities to make lasting positive change to the securities industry begin and end with determined clients who seek justice.

The Financial Industry Regulatory Authority ("FINRA"), issued a news release on June 4, 2012 announcing that a FINRA hearing panel fined Brookstone Securities $1 million for the fraudulent sales of Collateralized Mortgage Obligations to elderly investors. In addition, FINRA ordered restitution from the firm and the individuals involved and permanently barred the firm's Owner/CEO and one of the firm's brokers from the securities industry. The firm's Chief Compliance Officer was suspended by FINRA for two years.

FINRA found that from 2005-2007, Brookstone, through its employees, "made fraudulent misrepresentations and omissions to elderly and unsophisticated customers regarding the risks associated with investing in CMOs." Many of the alleged defrauded customers were senior citizens, including two women who were recently widowed. The customers allegedly feared losing their assets and relied on Brookville to keep their retirement funds safe. However, CMOs were apparently actually high-risk investments that were unsuitable for senior investors seeking income and principal protection.

Unfortunately, all too often brokers sell high-risk investment products like CMOs to elderly investors as safe, secured or guaranteed, typically to get the higher commission that these riskier investments pay. Misrepresenting the risk of an investment to a customer like that is against the law and rules under which these professionals work.

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 reverse convertible notes, contact the securities fraud lawyers at Malecki Law for a free consultation and case evaluation at (212) 943-1233.

Tonight, June 5, 2012, on the 6 O'Clock Evening News on CBS 2 New York, the lawsuit filed by Malecki Law on behalf of forty-three investors in the alleged Ponzi scheme run by Robert Van Zandt will be featured.

This past December, Malecki Law announced the filing of a civil arbitration complaint with the Financial Industry Regulatory Authority against MetLife Securities for more than $4 million on behalf of twenty-four investors. In March, Malecki Law announced that the complaint had been amended to include additional nineteen investors totaling roughly $9.2 million in claims.

The attorneys at Malecki Law continue to take calls and anticipate either adding future victims to the existing claim or commencing a second action, if necessary. We urge anyone with knowledge about the Van Zandt Agency or MetLife Securities supervision (or lack thereof) over the office to contact us. Investors or employees with knowledge of the events at the Van Zandt Agency who seek further information or want to explore their rights should contact Malecki Law by e-mail or phone. Malecki Law has a uniquely diverse background with significant experience representing clients in securities and investment fraud issues and is "AV Rated" by Martindale-Hubbell. Malecki Law hosts a website providing information and resources dedicated to the securities industry: www.AboutSecuritiesLaw.com. Please contact Jenice L. Malecki, Esq., MALECKI LAW, 11 Broadway, Suite 715, New York, NY 10004, Telephone: (212) 943-1233, Facsimile: (212) 943-1238, E-Mail: Jenice@MaleckiLaw.com.

On Thursday May 17, 2012, the New York Attorney General Eric Schneiderman issued a press release announcing the filing of a summons and complaint to recover funds for investors. The filing coincided with an earlier press release disclosing that Mr. Robert (Bob) H. Van Zandt had been indicted and arrested for criminal charges stemming from some of the same activity that formed the factual basis for the civil filing.

The New York Attorney General's civil filing noted that Mr. Van Zandt issued promissory notes totaling over $35 million to over 250 investors, most of whom were unsophisticated and invested the bulk of their life savings in the scheme. The filing alleged that these promissory notes were securities sales that were not properly registered with the requisite governmental offices in New York State and, while stated to be suitable for self-directed IRAs, were at best "highly speculative."

The civil filing also alleged that while the Van Zandt Agency, by Mr. Van Zandt, sold the promissory notes with the understanding that the money collected would be used to fund real estate purchases and real estate development, in reality bank loans were used to fund certain purchases and construction, while other projects were never even commenced. The civil filing further alleged that no investors received security in the form of mortgages or otherwise, and that the money was converted for personal use or used to pay interest claims of other investors, essentially a Ponzi scheme.

Malecki Law already represents a very large group of investors against MetLife Securities, Inc. in a $9.5 million arbitration proceeding before the Financial Industry Regulatory Authority (FINRA) and is investigating bringing other actions against other broker-dealers for their possible role in dealing with Mr. Van Zandt and the Van Zandt Agency. Any investor who has questions concerning any investment made with Mr. Van Zandt or the Van Zandt Agency should contact an attorney at Malecki Law to discuss whether they may qualify for such a claim.

The New York Attorney General Eric T. Schneiderman announced today the unsealing of a 35-count indictment of and the arrest of Robert H. Van Zandt, a Bronx tax preparer who for years sold promissory notes in alleged real estate investments "guaranteeing" high rates of interest return. He sold these promissory notes out of his tax preparation business, the Van Zandt Agency, while he was licensed by various broker-dealers to sell securities.

Malecki Law currently represents a large group of investors who purchased promissory notes totaling almost $10 million in aggregate from Mr. Van Zandt in an arbitration before the Financial Industry Regulatory Authority ("FINRA"), the independent regulator of securities companies. The arbitration is pending against MetLife Securities, Inc., a broker-dealer who employed Mr. Van Zandt during a period in his career. While investors purchased the promissory notes directly from Robert Van Zandt and through the Van Zandt Agency, he was then licensed by MetLife Securities, Inc. to sell securities, and MetLife was required to perform certain supervisory and audit duties as a result of that employment relationship.

Malecki Law is also investigating the potential for other actions against other broker-dealers arising from Mr. Van Zandt's alleged real estate investments.

Broker-dealers owe heightened audit and supervisory duties of these off-site and often unregistered offices because promissory note fraud and other Ponzi-like frauds and schemes have become common. Under FINRA Rules, SEC guidance and prevailing industry standards, broker-dealers have affirmative duties to oversee and supervise the conduct of their associated persons, both inside and outside of their offices.

Specifically, firms have been repeatedly advised, both through FINRA Rules, NASD Rules and FINRA/NASD Notices to Members, to beware of certain improper or fraudulent activities which are regularly conducted and can have devastating effects on customers. Notice to Members 98-38 specifically outlined that geographically diverse offices present supervisory risks and potential problems in detecting faulty sales practices.

FINRA has, itself, has recently fined firms for lax supervisory performance, or inadequate systems for detecting potential fraud. Mr. Van Zandt, through the Van Zandt Agency, operated a tax preparation business, creating the sort of environment that would require heightened supervision.

The New York Attorney General noted in their press release that the fraud continued through at least 2011 and involved at least $4.6 million. We believe it was a larger scheme. Investors who believe they purchased similar investments through Mr. Van Zandt or any other employee at the Van Zandt Agency should immediately contact an attorney at Malecki Law to see if they qualify for an action against a broker-dealer who licensed and employed these individuals during the relevant time period.

Malecki Law announces the filing of an Amended Statement of Claim against MetLife Securities in connection with the real estate investments solicited by Robert H. Van Zandt of The Van Zandt Agency in the Bronx, NY as part of an alleged Ponzi scheme currently under investigation by the New York State Attorney General's Office.

This past December, Malecki Law announced the filing of a civil arbitration complaint with the Financial Industry Regulatory Authority against MetLife Securities for more than $4 million on behalf of twenty-four investors. The attorneys at Malecki Law continue to take calls and anticipate either adding future victims to the existing claim or commencing a second action, if necessary.

In the following months, many more investors contacted the attorneys at Malecki Law requesting to be part of that action. So, on March 5, 2012, Malecki Law amended their complaint with FINRA to add an additional nineteen investors to the action. In total, Malecki Law's forty-three clients have suffered losses of over $9.2 million as a result of their investments through Mr. Van Zandt and the Van Zandt Agency.

We urge anyone with knowledge about the Van Zandt Agency or MetLife Securities supervision (or lack thereof) over the office to contact us. Investors or employees with knowledge of the events at the Van Zandt Agency who seek further information or want to explore their rights should contact Malecki Law by e-mail or phone. Malecki Law has a uniquely diverse background with significant experience representing clients in securities and investment fraud issues and is "AV Rated" by Martindale-Hubbell. Malecki Law hosts a website providing information and resources dedicated to the securities industry: www.AboutSecuritiesLaw.com. Please contact Jenice L. Malecki, Esq., MALECKI LAW, 11 Broadway, Suite 715, New York, NY 10004, Telephone: (212) 943-1233, Facsimile: (212) 943-1238, E-Mail: Jenice@MaleckiLaw.com.

We recently posted about the Behringer Harvard family of REITs and the devastation that these funds have had on investors' portfolios. Some investors have now begun to seek answers. Investment News reports that a 70 year old woman who has seen her share in Behringer Harvard Short-Term Opportunity Fund drop 96% has recently filed a letter with the Financial Industry Regulatory Authority (FINRA) to complain about her investment.

The shares of BH Short-Term Opportunity Fund have dropped to $.40 from $6.48 just one year ago, and from the $10 per share they were offered at just six years ago. Since the BH Short-Term Opportunity Fund had $130 million in total assets, it is clear that this investor is not alone. Many firms, such as Capital Financial Services, Inc. sold these products to senior citizens.

Since REITs can deliver regular income of up to 7-8% a year, they are attractive to seniors who live off the income generated by their investments. Since these products offer high commission, they are very attractive to the brokers who sell these products. However, all too often, the risks involved with investing in REITs are hidden from investors by their brokers, and these same seniors can see their entire life's savings disappear in the blink of an eye. Downplaying and failing to fully disclose the risks of an investment to a client is illegal, and investors who have suffered losses as a result may have the right to recover their entire loss.

It is the right of any and all investors who believe they may have suffered losses to contact our offices to explore their legal rights and options. If you or a family member suffered losses in Behringer Harvard REITs, contact the securities fraud lawyers at Malecki Law for a free consultation and case evaluation.

Recently in the news have been stories about the devastation that the Behringer Harvard family of Real Estate Investments Trusts (REITs) has had on investors' portfolios. It was reported by Investment News that the value of the popular Behringer Harvard Opportunity REIT I is down 46% from its value this time a year ago, with prices down to just over $4 per share. The value of the Behringer Harvard REIT I has also seen substantial declines as well.

Unfortunately for many investors, a quick recovery does not appear to be in store. According to Investment News, Mr. Robert Aisner (Behringer Harvard's Chief Executive) "said in an interview ... that since the REIT is shedding assets, its valuation will go down in the long run." That is bad news for investors.

Investors who bought into this fund , believing it to be a safe investment, are now seeing substantial portions of their savings disappear. Too often, investors in REITs do not fully understand the risks of investing in these illiquid and oftentimes speculative products. These products often require investors to "lock in" their money for a set time period and are difficult if not impossible to sell in the interim, even amid sharp declines in value. For more information on the risks of REITs and other investments, click here.

Because of the inherent risks involved, it is not unlikely to see investors suffer substantial losses. However, brokers and other retailers of REITs far too often sell these to clients as safe, income-producing investments and substantially downplay the risks. These tactics are illegal and against the FINRA rules, and investors who are the victims of such practices may be entitled to recovery for all of their losses.

It is the right of any and all investors who believe they may have suffered losses to contact our offices to explore their legal rights and options. If you or a family member suffered losses in Behringer Harvard REITs, contact the securities fraud lawyers at Malecki Law for a free consultation and case evaluation.

It has been difficult to not hear about the recent events surrounding MF Global Holdings Ltd and former Senator and New Jersey Governor, John Corzine. However, many investors do not really understand what happened or why. A recent article in Forbes Online titled "MF Global: Were the Risks Clear?" helps to break down just how these events transpired. The article details how overexposure to European sovereign debt (government bonds) leveraged by using borrowed money (called "margin") coupled with declines in the value of those bonds caused the downfall of the fund.

The almost overnight collapse of such a prominent and public investment fund as MF Global has brought many issues to light, and the Forbes article characterizes this "as the latest reminder to investors that it's important - and sometimes very difficult - to understand the entire spectrum of risk they're exposed to." These events also raise many questions that should be asked by investors, such as "Do I really understand how my advisor is managing my savings?" and "Have the risks in my portfolio been adequately explained to me?".

Many investors in MF Global have said that they did not understand what their money was being invested into, but rather trusted that the firm would do the right thing by them. One investor cited by the article said on his blog that "I am supposed to know the difference between an ethical operator and one that is not. The truth is that it often is very difficult to tell them apart." This has unfortunately come to be a fairly common sentiment by many individual investors, in reference to their personal broker and the funds they invested in.

In the present day, individual investors as well as large institutions and investment funds can all be equally at risk of the volatility in the European markets, like MF Global was. Investments directly in European bonds and others with exposure to the European markets may not be appropriate for conservative investors, including senior citizens and retirees, especially if these investments were made on margin. Individuals with these investments may have already lost or may be at risk of losing large portions or possibly all of their investments.

It is the right of any and all investors who believe they may have suffered losses to contact our offices to explore their legal rights and options. If you or a family member suffered losses in unsuitable or risky investments, such as those in European debt, contact the securities fraud lawyers at Malecki Law for a free consultation and case evaluation.

Malecki Law announces the filing of a civil arbitration complaint in excess of $4 million, plus punitive damages, against MetLife Securities, Inc. The case is being filed with the Financial Industry Regulatory Authority ("FINRA") today for alleged improper supervision and selling away, relating to an alleged Ponzi scheme that devastated a Bronx community. The complaint alleges that the firm failed to properly supervise and maintain the compliance of one of their registered representatives, Mr. Robert H. Van Zandt, in violation of federal and state securities laws, as well as financial industry rules and regulations. Robert H. Van Zandt is apparently already under investigation by the New York State Attorney General's Office. "I believe there are a lot of victims out there who don't know what is going on, nor their rights under the rules and regulations of the securities industry," securities fraud attorney Jenice Malecki indicates.

In November of this year FINRA and the U.S. Securities and Exchange Commission jointly released Regulatory Notice 11-54 stressing the importance of supervision over registered representatives. Shortly before the release of Regulatory Notice 11-54, FINRA filed a regulatory action against Merrill Lynch and fined the firm $1 million for failing to properly supervise a registered representative and catch a Ponzi scheme that he was running out of a San Antonio, Texas branch office that victimized clients and non-clients of Merrill Lynch, all to which Merrill Lynch was responsible for its failure to supervise.

The complaint filed by Malecki Law relates to the alleged conduct of Robert H. Van Zandt of the Van Zandt Agency, who is believed to have sold unregistered securities in the form of promissory notes that were represented to prospective investors as part of a secured real estate investment, which appears improperly set up and not secured at all. It is alleged that these notes were part of yet another "Ponzi" scheme in what Ms. Malecki opines to be "an era filled with ponzi schemes for which the industry should closely monitor to avoid harm to unwitting victims," this alleged ponzi scheme one run through a series of shell companies including Burke and Grace Avenue Corp.

According to his FINRA Broker Check Report, Robert H. Van Zandt was a registered representative with MetLife Securities, Inc. from December of 2004 through February of 2007. During that time, it is alleged that despite its duties to properly supervise Mr. Van Zandt, MetLife Securities allowed him and others to sell unregistered securities in connection with the operation of this Ponzi scheme for the entirety of his tenure with the firm.

It is alleged that Mr. Van Zandt used his status in the close-knit Bronx community to earn the trust of his clients, and ultimately, solicited hundreds of investors, defrauding them of over $20 million. According to the complaint filed with FINRA, Investors were solicited to invest in the scheme while they were having their tax returns done at the Van Zandt Agency and were lured into verbally and through prominently placed brochures promising essentially "guaranteed" returns of 9-12% annually, without appropriate registration, disclaimers, or any earmarks of supervision over this conduct. It is believed that these investors, many of whom invested their IRA's, proceeds from inheritances, and life savings, have lost substantially all, if not all, of their investment.

Investors or employees with knowledge of the events at the Van Zandt Agency who seek further information or want to explore their rights should contact Malecki Law by e-mail or phone. Malecki Law has a uniquely diverse background with significant experience representing clients in securities and investment fraud issues and is "AV Rated" by Martindale-Hubbell. Malecki Law hosts a website providing information and resources dedicated to the securities industry: www.AboutSecuritiesLaw.com. Please contact Jenice L. Malecki, Esq., MALECKI LAW, 11 Broadway, Suite 715, New York, NY 10004, Telephone: (212) 943-1233, Facsimile: (212) 943-1238, E-Mail: Jenice@MaleckiLaw.com.