investments

BROKER REPORT: Cambria’s Robert H. Potter, Discharged and Barred

September 24, 2015 | Malecki Law Team

The investment fraud attorneys at Malecki Law are interested in hearing from investors who have complaints regarding former stockbroker Robert H. Potter. According to his BrokerCheck report maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Potter has been permanently barred by FINRA. He has also reportedly been the subject of no less than three customer complaints.

Mr. Potter has reportedly been barred by FINRA for his failure to cooperate with an investigation into allegations that Mr. Potter comingled customer funds with his own personal funds. Per FINRA, Mr. Potter was discharged from Cambria Capital in August 2015, after the firm questioned the validity of certain transactions involving Mr. Potter and his customers.

In 1997, Mr. Potter was the subject of a customer complaint alleging unauthorized, excessive trading, per FINRA. FINRA records indicate that the customer recovered more than $66,000 as a result of their complaint.

Leveraged ETFs Remain a Risky Investment, Not Suitable for Most Individual Investors

September 8, 2015 | Malecki Law Team

Investors who have been watching the recent financial news know that securities markets have become very volatile over the past month. Increased volatility in the markets makes leveraged products like Exchange Traded Funds (EFTs) and Exchange Traded Notes particularly risky for most individuals investors, as noted in a recent Wall Street Journal article published on September 4, 2015.

These securities products incorporate borrowed money (termed leverage in the securities industry), which has the effect of amplifying gains and losses tied to baskets of securities that are often concentrated in one industry or commodity.

Malecki Law has written about these products in the past, noting that broker-dealer firms such as Stifel, Nicolaus & Co., Inc. and Century Securities Associates Inc. were fined by the Financial Industry Regulatory Authority (FINRA) for making unsuitable recommendations to investors.

BROKER REPORT: Customer Complaints Against Financial Adivisor Jared Cohen

September 8, 2015 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Jared Cohen. Mr. Cohen is reportedly registered with Ameriprise Financial Services, Inc., based out of Armonk, NY. He has also recently been registered with IDS Life Insurance Company, according to industry records.

According to BrokerCheck, as maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Cohen has been the subject of two customer complaints in the past six years. Mr. Cohen has been the subject of complaint alleging misrepresentations of investment risk and over-concentration in non-traded Real Estate Investment Trusts (“REITs”), as well as misrepresentations surrounding the sale of preferred stock recommendations, per FINRA records.

Of these customer disputes, FINRA records indicate that one customer initiated a FINRA arbitration and recovered $25,000 in a settlement with Ameriprise.

Adam F. Coblin Is No Longer A Registered Broker and Financial Advisor and Has Been the Subject of Ten Customer Complaints

August 28, 2015 | Malecki Law Team

The securities fraud attorneys at Malecki Law are interested in hearing from investors with complaints involving Adam F. Coblin. Per his BrokerCheck Report, maintained by the Financial Industry Regulatory Authority (“FINRA”), Mr. Coblin is currently not a registered stock broker or investment advisor. He was previously registered with the Gilford Securities Incorporated in New York.

Mr. Coblin’s BrokerCheck Report indicates that he has been the subject of at least ten customer complaints. At the center of several of these complaints was unsuitable investments leading to huge financial losses, negligence in handling customer accounts, unauthorized sales. In 2013, Adam Coblin resigned from Gilford Securities while he was being reviewed for customer complaints involving unsuitable investments, activity and negligence.

According to BrokerCheck, there are numerous customer disputes in the past, dating from 2012 to 1995, involving Mr. Coblin which have been settled by awarding damages of $910,000, $3,000, $107,500 and $32,000. He has also been registered with the GMS Group LLC, Spencer Clarke LLC, Broadband Capital Management LLC, Dalton Kent Securities Group, Bluestone Capital Partners, Gruntal & Co., Prudential Securities Inc., Oppenheimer & Co., Merill Lynch, Pierce, Fenner & Smith Co., Bear Stearns & Co.

Seven Complaints Against Broker and Financial Advisor Jeffrey A. Fladell

August 28, 2015 | Jenice L. Malecki, Esq.

The securities fraud team at Malecki Law is interested in investigating possible claims on behalf of investors who have complaints regarding broker and investment advisor Jeffrey A. Fladell. Registered with RBC Capital Markets, Fladell has been the subject of multiple investigations, customer disputes and settlements since 1987, according to Financial Industry’s Regulatory Authority (FINRA’s) BrokerCheck.

In 2014, there was a customer complaint reported against Fladell for alleged unsuitable investments and overconcentration in municipal bonds which was adverse to their investment objectives, and the claimant was granted $75,000 in damages. In another customer complaint involving similar securities misconduct allegations, the customer dispute was settled for $1,000,000 in 2013. Previous complaints registered with FINRA against Fladell involve allegations of unsuitability, overconcentration and misrepresentation dating back to 1987.

In 1992, National Association of Securities Dealers (NASD) subjected him to a statutory disqualification as a result of his guilty plea to one misdemeanor count of submitting a false document to the IRS in connection with his income tax return. Fladell was previously registered with J.B. Hanauer & Co, Halpert and Company, Travelers Equities Sales, Swanton Securities, Hermes Securities and Bernard Schnitzer.

Senior-Aged Investors and other Conservative Investors Likely at Risk in Current Low-Yield Environment

August 26, 2015 | Malecki Law Team

The recent market correction has caused many people to worry about the performance of their securities accounts. Senior-aged investors (and other conservative investors) are particularly at risk for losses in their accounts if they were inappropriately invested too heavily in equities and other alternative investments.

The Op-Ed published in the Wall Street Journal on August 24, 2015 notes that the low-yield bond environment has enticed some investors to “climb on the bandwagon of rising share prices.” Brokers may be similarly tempted to recommend risky stocks to their conservative investors, and to recommend concentrated levels of stocks. However, what may be suitable for a middle-aged investor may not be suitable for an senior-aged investor.

Suitability is an important investor-specific inquiry both the broker and broker-dealer must perform to ensure the investments that are recommended are appropriate given the age, relative wealth, experience and risk tolerance of each investor, among other factors. A broker’s unsuitable recommendations could be especially problematic for those investors seeking stability and safety of principal, including senior-aged investors who rely on their securities portfolios to generate income.

Citigroup Affiliates Charged With Defrauding Investors Settle with SEC For $180 Million

August 18, 2015 | Jenice L. Malecki, Esq.

The Securities and Exchange Commission (SEC) announced this week that two Citigroup Affiliates, Citigroup Global Markets Inc. (CGMI) and Citigroup Alternative Investments LLC (CAI), agreed to pay $180 million to settle charges of defrauding investors with false and misleading claims. According to allegations, these Citigroup affiliates had claimed that their hedge funds, Falcon fund and ASTA/MAT, were low-risk products safe for traditional bond investors, however, these funds collapsed during the financial crisis.

According to SEC’s investigations, the above mentioned Citigroup affiliates raised almost $3 billion from 4,000 investors by making false and misleading representations for their hedge funds. They are reported as having continued to claim that these funds were low-risk and made false assurances about liquidity even as the funds started collapsing. The investigation also revealed that CAI raised $110 million in additional investments even when the fund was in dire situation and Citigroup employees presented the funds to investors in a manner that was at odds with the fine print in the written and marketing materials provided to investors. The Citigroup affiliates consented to settle without admitting or denying the findings that they willfully violated Sections 17(a)(2) and (3) of the Securities Act of 1933, GCMI willfully violated Section 206(2) of the Investment Advisers Act of 1940, and CAI willfully violated Section 206(4) of the Advisers Act and Rules 206(4)-7 and 206(4)-8. The firms have also consented to censure and will cease and desist from future violations.

Malecki Law takes a proactive and informed approach to national and international financial news of today. This represents a classic case of Securities Fraud where investors are misled into investing in unsuitable products. SEC holds investment firms and brokers accountable for looking out for investors’ best interests and the team at Malecki Law represents and guides investors who have been victimized by false claims, false assurances and misrepresentations. For a comprehensive list of kinds of Securities Fraud please click here and contact us if you feel you have suffered similar losses.

This Week At Malecki Law: Attorneys Submit Letters to Members of the Congress to Advocate for Department of Labor’s Proposal Seeking to Hold Financial Advisors to a Higher Standard

July 24, 2015 | Jenice L. Malecki, Esq.

This week, the attorneys at Malecki Law sent letters to several United States Senate and House of Representatives members, urging them to support the Department of Labor’s (DOL) proposal to hold financial advisors to a higher standard and act in the best interest of retirement investors. These members of the Congress include the Honorable Charles E. Schumer, the Honorable Jerrold Nadler, and the Honorable Kirsten E. Gillibrand.

Millions of Americans have worked their whole life to build a retirement nest egg and count on their retirement savings to support them through their golden years. The DOL’s proposal addresses loopholes in the current rules that make it far too easy for some advisers to take advantage of these hard-working Americans and line their own pockets with retirement savings. Our system is so broken that brokers often can and do put their own interest in commissions above the interests of their clients, causing them to be in unsuitable products just so the broker could earn additional commissions.

When someone turns their life savings over to someone for advice, they believe their financial adviser is going to do what’s best for them. We have never heard a client recount a story of a financial advisor that told them that they are not fiduciaries, in fact, we hear just the opposite. We all see the advertisements on television that say the financial advisers are there to help us, but we need to know that financial advisers are obligated to put client interests first, as well as be able to receive that assurance in writing.

California based Luca International Charged by SEC with Oil and Gas Ponzi and Affinity Fraud

July 8, 2015 | Malecki Law Team

Another oil and gas venture domino falls. The Securities and Exchange Commissions (SEC) released a press release on July 6, 2015 announcing charges brought against Luca International, a California based oil and gas company, and Bingqing Yang, the company’s CEO. The SEC charged Luca and Ms. Yang with running an alleged $68 million Ponzi scheme and affinity fraud against the Chinese-American community in California and elsewhere.

The SEC alleged that Ms. Yang knew the company was failing, but misrepresented the projected returns of the company as 20-30% annually. Ms. Yang allegedly also commingled funds and diverted $2.4 million through a separate offshore entity to purchase a home and pay for personal expenses.

Ms. Yang allegedly relied on two tactics: affinity fraud and Chinese citizens who sought to immigrate to the United States through the EB-5 visa program, which grant green cards for making certain investments in U.S. companies. Other Luca employees were also reported to be implicated in the fraud. Additionally, the SEC’s press release noted that in a separate administrative action, Wisteria Global and one Hiroshi Fujigami settled charges that they acted as brokers for the Luca entities and were to disgorge ill-gotten gains of more than $1.1 million.

UBS Puerto Rico Brokers Expected to be Terminated Amid Significant UBS Closed-End Bond Fund Litigation

July 2, 2015 | Malecki Law Team

The Wall Street Journal reported on July 2, 2015 that many investors may suffer losses as a result of the attempts by Puerto Rico Electric Power Authority (PREPA) to restructure its debt with its creditors in order to avoid a default and other Puerto Rico economic woes.

While clearly many investors are and will continue to be harmed in this market, the pain is likely to be harder felt by two sets of victims of UBS’s closed-end bond funds that are tied to debt issued by PREPA, other utilities and Puerto Rico’s general obligation bonds.

We recently wrote regarding how the brokers who recommend products such as UBS’s closed-end funds may have also been given faulty information from the firm. Then, Reuters ran an article describing a taped meeting at UBS where leadership threatened the UBS Puerto Rico brokers to sell the closed-end funds at all costs despite growing concerns about the products. In one of the first arbitration awards to be announced in which UBS was ordered to pay $1 million to an investor related to the UBS closed-end bond funds, a Financial Industry Regulatory Authority (FINRA) arbitrator stated that a recommendation of the bond fund was unsuitable because it was “grossly overconcentrated… any proper UBS branch office or other review should have detected such obvious unsuitability.”