Firm News - Russell L. Forkey

Understanding your stockbroker’s fiduciary duty

Russell L. Forkey — Mon, 24 Aug 2020 16:41:19 GMT

When your stockbroker takes your money to invest on your behalf, he or she must follow certain rules and regulations. Investments have regular ups and downs as the market fluctuates. Therefore, you may have to look very closely at your portfolio’s performance, along with charges and fees, to determine that your stockbroker has done anything wrong. The bottom line is that your broker owes you a fiduciary duty.

What is a fiduciary duty?

You may have heard the term fiduciary duty used in many different contexts. Many people who act in a role where other people entrust them with their assets or funds must abide by a fiduciary duty. Examples include trustees of a trust, the personal representative of a probated estate and officers of a corporation. All of these people owe a duty of loyalty and care to the people or entities they represent. They are supposed to act in a reasonable manner on behalf of the entity, treating the assets the way the owner would treat them.

Duties depend on the type of account

When looking at your stockbroker’s fiduciary duty, you must look at the type of account they are handling for you. The three main types of accounts include:

Discretionary – A discretionary account gives your account executive, or broker, broad fiduciary powers. Although he or she must keep you apprised of market changes and transactions, along with the risks and benefits involved, they do not need your authorization to take action. They must manage the account responsibly and according to the objectives you agreed upon.

Non-discretionary – A non-discretionary account allows the customer to make decisions about purchases and sales. The broker must act in the customer’s interest up to closing the transaction by making sound and honest recommendations, relay any risks involved, comply with the customer’s orders in a timely way and not engage in any self-dealing or misrepresentation. Once the deal is closed, the broker no longer owes a duty to the customer.

Hybrid – With a hybrid account, the account executive takes control of a non-discretionary account. When they do this, they must apply the same fiduciary duty as if the account had started out as discretionary.

Stockbroker misconduct can take many different forms resulting in misrepresentation and fraud. Some actions may even rise to the level of a criminal offense. If you suspect your stockbroker is not abiding by his or her fiduciary duties to you, consult with a legal professional to discuss your options.

Insider trading has a negative impact on all investors

Russell L. Forkey — Wed, 19 Aug 2020 16:35:13 GMT

Insider trading happens when a person makes a trade based on information that is not available to the public. Trading can be based on an event that is likely to either increase or decrease the price of a company’s stock. For example, a better than expected quarterly performance would likely make stock options more valuable. Trading on this type of information before it’s made public provides investors and brokers with an unfair advantage. That’s why it’s important to take steps to level the playing field.

The rewards are small for a big risk

People who engage in insider trading often suffer from a type of tunnel vision. When a broker makes trades in the hundreds of millions of dollars per year, an insider trade involving a few thousand dollars doesn’t seem like a big deal. Years ago, lifestyle guru Martha Stewart was convicted of insider trading. The illegal trading amounted to $45,000. Peanuts for someone with a net worth in the millions. Nonetheless, she still had to pay significant fines and serve a prison term.

Holding parties accountable

It doesn’t matter whether insider trading involves pennies or jaw-dropping amounts of money. It’s against the law and hurts investors who operate above board. The Securities and Exchange Commission (SEC) tends to focus on high profile cases. While insider trading can hurt the bottom line of large companies, it’s often individual investors who place their trust in a broker who suffer the greatest amount of harm.

You don’t have to wait for the SEC to act if you’ve experienced a significant financial loss as the result of insider trading. A skilled professional with experience handling matters involving broker misconduct and securities litigation can help you explore your legal options.

Look out for signs of churning

Russell L. Forkey — Tue, 18 Aug 2020 18:03:44 GMT

Your broker earns a commission or collects a fee every time they trade a stock. This can tempt some unethical brokers to engage in “churning.” Churning happens when a broker makes several small trades to help them earn extra income from commissions and fees. Churning is solely for the benefit of the broker. It does nothing to help your investments. It can even lead to you losing your hard-earned money.

That said, it’s the job of your broker to make trades. Depending on the type of investments you have, making a high-volume of trades may even be advantageous. However, you should still take note of signs of churning. Recognizing the warning signs can let you know whether you’re being taken advantage of or whether your broker is operating above board.

Times when you should be skeptical

Take particular note if:

You’ve noticed your broker making more trades than is normal
Your broker telling you to buy a large number of securities suddenly
Your broker refusing to explain the strategy behind their trades

To prevail on a churning claim, you must prove that your broker had control of your investments. You must also show that the number of trades was excessive. Keep in mind that what be excessive in one context may be the standard way of doing business in another.

If you believe your broker is engaging in churning, you have no obligation to continue using the broker’s services. If churning has caused you to lose money, you may have legal options. You should discuss your situation with a skilled legal professional.

Final Judgment Entered Against William C. Conway, Jr. and Steve Schrag in the Total Amount of $771,350 for Fraud and Deceit.

Russell L. Forkey — Sun, 24 May 2020 23:45:54 GMT

On September 19 2019, William C. Conway, Jr., originally of Fort Lauderdale, Florida, and Steven Schrag, originally of Bartlesville, Oklahoma, had a final judgment entered against them, jointly and severally, in the total amount of $771,350 for fraud and deceit in the case styled Michael Conville, Joseph Gilmore and Beacon Construction Group, Inc. v. William C. Conway, Jr. , Steve Schrag et al, Case No. 12-33381, filed in the Circuit Court of Broward County, Florida.

The final judgment was based upon a unanimous jury verdict which found Willian C. Conway, Jr. and Steven Schrag, among other defendants, guilty of fraud in the inducement, negligent misrepresentation in the inducement and conspiracy to defraud. The judgment was predicated upon an alleged gold (precious metals scam) which originated in Africa.

Contact Us: With extensive courtroom, arbitration and mediation experience and an in-depth understanding of elder abuse, exploitation and securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

At the Boca Raton Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.

FAQ Relating to Margin – South and Central Florida FINRA Arbitration Attorney

Russell L. Forkey — Sun, 26 Jan 2020 20:42:19 GMT

Understanding Margin –

Margin is borrowing money from your broker to buy a security and using your investment as collateral. Investors generally use margin to increase their purchasing power so that they can own more securities without fully paying for it. The amount owed to the broker is called the debit balance. Through the use of leverage, investors attempt to magnify gains on actual cash or collateral deposited into their accounts. But at the same time, the use oft margin exposes investors to the potential for higher losses. Another reason for borrowing money from brokers is the feature involving a no-repayment-date loan. This feature is generally not available through other types of lending institutions, including banks. The no-repayment feature, although very attractive, can be fraught with danger. The investor should be made aware that if the value of securities on deposit with the broker declines substantially, the broker will require additional funds or collateral to protect the loan.

There are 2 primary types of margin requirements: initial and maintenance.

Initial/Reg T requirements:

An initial margin requirement is the amount of funds required to satisfy a purchase or short sale of a security in a margin account. The initial margin requirement is currently 50% of the purchase price for most securities, and it is known as the Reg T or the Fed requirement, which is set by the Federal Reserve Board. In addition, most firms have minimum requirements that must be met when initially opening a margin position, which may vary from firm to firm.

Maintenance requirements:

Ongoing margin requirements after the purchase is complete are known as maintenance requirements, which require that you maintain a certain level of equity in your margin account. Maintenance requirements are set by the NYSE, FINRA, and/or the brokerage firm.

Understand How Margin Works:

Let’s say you buy a stock for $50 and the price of the stock rises to $75. If you bought the stock in a cash account and paid for it in full, you’ll earn a 50 percent return on your investment. But if you bought the stock on margin – paying $25 in cash and borrowing $25 from your broker – you’ll earn a 100 percent return on the money you invested. Of course, you’ll still owe your firm $25 plus interest.

The downside to using margin is that if the stock price decreases, substantial losses can mount quickly. For example, let’s say the stock you bought for $50 falls to $25. If you fully paid for the stock, you’ll lose 50 percent of your money. But if you bought on margin, you’ll lose 100 percent, and you still must come up with the interest you owe on the loan.

In volatile markets, investors who put up an initial margin payment for a stock may, from time to time, be required to provide additional cash if the price of the stock falls. Some investors have been shocked to find out that the brokerage firm has the right to sell their securities that were bought on margin – without any notification and potentially at a substantial loss to the investor. If your broker sells your stock after the price has plummeted, then you’ve lost out on the chance to recoup your losses if the market bounces back.

Who Should Use Margin:

Investors who generally use margin are those who are aggressive and who fully understand the risks as well as rewards in using leverage. Conservative investors for the most part shy away from the use of margin because of the risks associated with its use. Some of these risks are set forth below.

Risks:

Margin accounts can be very risky and they are not suitable for everyone. Before opening a margin account, you should fully understand that:

You can lose more money than you have invested;
You may have to deposit additional cash or securities in your account on short notice to cover market losses;
You may be forced to sell some or all of your securities when falling stock prices reduce the value of your securities; and
Your brokerage firm may sell some or all of your securities without consulting you to pay off the loan it made to you.

You can protect yourself by knowing how a margin account works and what happens if the price of the stock purchased on margin declines. Know that your firm charges you interest for borrowing money and how that will affect the total return on your investments. Be sure to ask your broker whether it makes sense for you to trade on margin in light of your financial resources, investment objectives, and tolerance for risk. Importantly, read the margin agreement and make sure that you understand all of its terms.

Please keep in mind that this information is being provided for educational purposes. It is not designed to be complete in all material respects. If you have any questions relative to the contents of this post you should contact a qualified professional.

Contact Us:

With extensive courtroom, arbitration and mediation experience and an in-depth understanding of elder abuse, exploitation, commercial litigation and securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks, brokerage firms or U.S. companies. Contact us to arrange your free initial consultation.

FAQ: Do Florida Courts Have Jurisdiction Over A Non-Resident Who Is Alleged to Be Involved In A Conspiracy Against A Florida Resident? South and Central Florida Commercial Litigation Attorney

Russell L. Forkey — Sun, 05 Jan 2020 15:32:00 GMT

To answer the above question, the reader should first review Florida Statute 48.193, which is titled “Acts subjecting persons to jurisdiction of the Courts of this state.” The elements required for pleading a civil conspiracy in Florida are (1) a conspiracy between two or more parties, (2) to do an unlawful act or to do a lawful act by unlawful means, (3) the doing of some overt act in furtherance of the conspiracy, and (4) damage to the plaintiff as a result of the acts, performed in furtherance of the conspiracy. Under Florida law, civil conspiracy is a derivative of the underlying claims which form the basis of the conspiracy. The gist of a civil conspiracy is not the conspiracy itself but the civil wrong which is done through the conspiracy which results in injury to the Plaintiff. There is no independent action for civil conspiracy. Thus, generally an actionable conspiracy requires an actionable underlying tort or wrong. An act which does not constitute a basis for a cause of action against one person cannot be made the basis for a civil action for conspiracy. However, there is an exception to the rule where the plaintiff can show some peculiar power of coercion posses by the conspirators by virtue of their combination, which power an individual would not possess.

For purposes of this discussion, we will assume that the elements set forth above to allege a civil conspiracy exist. A series of Florida cases have found personal jurisdiction over non-resident defendants engaged in conspiracies that include tortious or statutorily-prohibited actions as against Florida residents. For example, telephonic, electronic or written communications into Florida, by a non-resident, may form the basis for personal jurisdiction if the alleged cause of action arises from the communications. In addressing allegations that a non-resident defendant committed a tort in Florida though acts and communications directed into the state from outside of Florida, the appropriate inquiry is whether the tort as alleged occurred in Florida and not whether the alleged tort actually occurred.

As can be seen from the above discussion, it is important to examine all of the facts underlying the cause of action alleged as to each defendant. When dealing with a non-resident defendant, it is especially important to allege, in the complaint, all of the specific acts, of the non-resident defendant, that were committed in furtherance of the conspiracy so that the court may properly determine the issue of jurisdiction.

Contact Us: With extensive courtroom, arbitration and mediation experience and an in-depth understanding of elder abuse, exploitation, commercial litigation and securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks, brokerage firms or U.S. companies. Contact us to arrange your free initial consultation.

If You Are a Florida Resident and You Want to Bring a Claim Against a Non-Resident, What Acts Would Subject the Non-Resident to the Jurisdiction of the Florida Court System? South and Central Florida Commercial Litigation Attorney

Russell L. Forkey — Sun, 05 Jan 2020 14:51:09 GMT

If You Are A Florida Resident And You Want To Bring A Claim Against A Non-Resident, What Acts Would Subject The Non-Resident To The Jurisdiction Of The Florida Court System? South and Central Florida Commercial Litigation Attorney.

In certain circumstances, the answer to this question is easy to discern. One need look no further than the provisions of Florida Statute § 48.193. It is for that reason that we have set forth the provisions of the statue in its current entirety below. The provisions of the statute are clear. If a non-resident does certain enumerated things in Florida, Florida courts have jurisdiction to hear your claim. However, many times, because of the unique facts of your case, it might not be that easy to determine whether Florida is the correct jurisdiction. As a result of this many non-resident defendants contest the issue of jurisdiction, the cases that deal with the provisions and legal interpretations of the statute are voluminous. Thus, if you want to make a claim against a non-resident, the specific facts of your case should be analyzed by a qualified professional so that the pros and cons of making a claim in Florida can be discussed with you so that you can make a informed decision as to where you might want to bring your action.

48.193 Acts subjecting person to jurisdiction of courts of state.—
(1)(a) A person, whether or not a citizen or resident of this state, who personally or through an agent does any of the acts enumerated in this subsection thereby submits himself or herself and, if he or she is a natural person, his or her personal representative to the jurisdiction of the courts of this state for any cause of action arising from any of the following acts:
1. Operating, conducting, engaging in, or carrying on a business or business venture in this state or having an office or agency in this state.
2. Committing a tortious act within this state.
3. Owning, using, possessing, or holding a mortgage or other lien on any real property within this state.
4. Contracting to insure a person, property, or risk located within this state at the time of contracting.
5. With respect to a proceeding for alimony, child support, or division of property in connection with an action to dissolve a marriage or with respect to an independent action for support of dependents, maintaining a matrimonial domicile in this state at the time of the commencement of this action or, if the defendant resided in this state preceding the commencement of the action, whether cohabiting during that time or not. This paragraph does not change the residency requirement for filing an action for dissolution of marriage.
6. Causing injury to persons or property within this state arising out of an act or omission by the defendant outside this state, if, at or about the time of the injury, either:
a. The defendant was engaged in solicitation or service activities within this state; or
b. Products, materials, or things processed, serviced, or manufactured by the defendant anywhere were used or consumed within this state in the ordinary course of commerce, trade, or use.
7. Breaching a contract in this state by failing to perform acts required by the contract to be performed in this state.
8. With respect to a proceeding for paternity, engaging in the act of sexual intercourse within this state with respect to which a child may have been conceived.
9. Entering into a contract that complies with s. 685.102.
(b) Notwithstanding any other provision of this subsection, an order issued, or a penalty or fine imposed, by an agency of another state is not enforceable against any person or entity incorporated or having its principal place of business in this state if the other state does not provide a mandatory right of review of the agency decision in a state court of competent jurisdiction.
(2) A defendant who is engaged in substantial and not isolated activity within this state, whether such activity is wholly interstate, intrastate, or otherwise, is subject to the jurisdiction of the courts of this state, whether or not the claim arises from that activity.
(3) Service of process upon any person who is subject to the jurisdiction of the courts of this state as provided in this section may be made by personally serving the process upon the defendant outside this state, as provided in s. 48.194. The service shall have the same effect as if it had been personally served within this state.
(4) If a defendant in his or her pleadings demands affirmative relief on causes of action unrelated to the transaction forming the basis of the plaintiff’s claim, the defendant shall thereafter in that action be subject to the jurisdiction of the court for any cause of action, regardless of its basis, which the plaintiff may by amendment assert against the defendant.

Contact Us:
With extensive courtroom, arbitration and mediation experience and an in-depth understanding of elder abuse, exploitation, commercial litigation and securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks, brokerage firms or U.S. companies. Contact us to arrange your free initial consultation.

The Florida Uniform Fraudulent Transfer Act – How Can the Act Help You in Collecting on Your Judgment – South Florida and Central Florida Judgment Collection Attorney

Russell L. Forkey — Sat, 04 Jan 2020 18:19:11 GMT

The Florida Uniform Fraudulent Transfer Act – How Can the Act Help You in Collecting on Your Judgment – South and Central Florida Judgment (Including Out-of-State Judgments) Collection Attorney.

The Florida Uniform Fraudulent Transfer Act (“FUFTA”) is contained in Florida Statute §§ 726.101 – 201 FUFTA provides creditors (judgment holders) with various forms of relief to avoid a debtor’s (defendant’s) fraudulent transfer of assets or funds. A creditor (a plaintiff) may avoid a debtor’s transfer where the creditor shows that the transfer was made with actual intent to hinder, delay, or defraud. To that end, FUFTA provides a non-exhaustive litany of factors – referred to as “badges of fraud” – to consider when determining whether a debtor’s transfer is fraudulent as to the creditor:

The transfer or obligation was to an insider.
The debtor retained possession or control of the property transferred after the transfer.
The transfer or obligation was disclosed or concealed.
Before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit.
The transfer was of substantially all of the debtor’s assets.
The debtor removed or concealed assets.
The value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred.
The debtor was insolvent or became insolvent shortly after the transfer was made or the obligation incurred.
. The transfer occurred shortly before or shortly after a substantial debt was incurred.
The debtor transferred the essential assets of the business to a lienor who transferred the assets to an insider of the debtor.

The court may additionally consider any other factor it deems relevant and should look to the totality of the circumstances in determining actual fraud. The existence of badges of fraud creates a prima facie case and raises a rebuttable presumption that the transaction is void.

FUFTA also allows a creditor to avoid a debtor’s transfer that is constructively fraudulent. In order to establish a prima facie case for avoidance based on constructive fraud, the creditor must show that the debtor did not receive reasonable value for the transfer and either (1) the debtor was engaged or was about to engage in a business or transaction for which the debtor’s remaining assets were unreasonably small in relation, (2) the debtor intended to, believed, or reasonably should have believed that it would incur debt beyond what it could pay as the debt became due, or (3) the debtor was insolvent at the time of the transfer.

Please keep in mind that this article is for informational purposes only. It is not designed to be complete in all material respects. Moreover, there may be facts specific to your situation that would have to be considered to determine whether or not a fraudulent transfer has taken place. Thus, if you have any questions relative to this post, please feel free to contact us.

Contact Us:
With extensive courtroom, arbitration and mediation experience and an in-depth understanding of elder abuse, exploitation, commercial litigation and securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks, brokerage firms or U.S. companies. Contact us to arrange your free initial consultation.

Can a Florida Court Obtain Jurisdiction Over a Non-Florida Limited Liability Company to Enforce a Charging Lien Against a Florida Resident’s Membership Interest? South Florida Commercial Litigation and Collection Attorney

Russell L. Forkey — Sat, 04 Jan 2020 16:02:45 GMT

Can a Florida Court Obtain Jurisdiction Over a Non-Florida Limited Liability Company to Enforce a Charging Lien Against a Florida Resident’s Membership Interest? South Florida Commercial Litigation and Collection Attorney?

If you are reading this article, you are likely a judgment creditor attempting to recover, on your judgment, against an individual or entity that is resident in Florida or that has moved to Florida in order to attempt to avoid paying you.. The Florida LLC Act provides a mechanism to have the court enter a charging order against the judgment debtor’s membership interest in a limited liability company or, under limited circumstances, to order that the member’s interest be foreclosed to satisfy the judgment. One argument that is generally raised by the judgment debtor, concerning non-Florida limited liability companies, is that a Florida court may only exercise jurisdiction over property of a judgment debtor located within the court’s jurisdictional territory. As a result, the judgment debtor argues that because a foreign limited liability is located outside the State of Florida, Florida courts do not have jurisdiction to enforce the judgment against those entities. However, a membership interest in a limited liability company, including foreign limited liability companies, is intangible personal property which accompanies the person of the owner. Therefore, because the member’s interest resides with the Judgment debtor in Florida, the membership interests are located in Florida and are properly subject to in rem jurisdiction in the State of Florida.

Please keep in mind that this article is for informational purposes only. It is not designed to be complete in all material respects. Moreover, there may be facts specific to your situation that would have to be considered to determine whether or not Florida courts would have jurisdiction to enforce your judgment against a foreign limited liability company. Thus, if you have any questions relative to this post, please feel free to contact us.

Investment Advisor – Fraud and Breach of Fiduciary Duties.

Russell L. Forkey — Sun, 17 Nov 2019 16:23:17 GMT

True investment advisers have fiduciary obligations that they owe to their clients. As such, they have an obligation to make full and fair disclosure to clients and prospective clients concerning their material conflicts of interest, including conflicts arising from financial incentives, and to act consistently with those disclosures. This principle is reflected in Form ADV, which reminds advisers of their general obligation to fully disclose material facts relating to their advisory business and specifically requires disclosure concerning the compensation and fees that advisers and their supervised persons receive, including from asset-based charges and service fees.

The chance of a conflict of interest arising increases based upon the number of rolls that a professional assumes in dealing with a client. This is especially true for attorneys. Some attorneys attempt to provide estate and tax planning advice to clients and then offer investments to those clients through broker/dealer or investment advisory firms with which they are associated. When does the attorney’s legal advice end and his investment activities commence? This is a question that is difficult to answer. Every factual situation will be different. If you have any questions concerning an investment that you have made based upon the recommendation of your attorney/advisor, please feel free to contact us.

Contact Us:
With extensive courtroom, arbitration and mediation experience and an in-depth understanding of elder abuse, exploitation and securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

Express Warranty Under the Florida Uniform Commercial Code – West Palm Beach Litigation and Arbitration Attorney

Russell L. Forkey — Sun, 10 Nov 2019 16:25:13 GMT

The State of Florida has adopted its own version of the Uniform Commercial Code (UCC). The UCC, for most people including some lawyers, is not a easy statute to understand. Thus, if you believe that you have a claim under the UCC, prudence would suggest that you contact a qualified professional to represent your interests. For example, to state a claim for breach of an express warranty under the Florida UCC, the complainant must allege and prove (1) the sale of goods;(2) the express warranty; (3) breach of the warranty; (4) notice to the seller of the breach; and, (5) the injuries sustained by the buyer as a result of the breach of the express warranty.

Please keep in mind that the above information is being provided for educational purposes only. It is not designed to be complete in all material respects. If you have any questions relative to the contents of this post, you should contact a qualified professional.

Contact Us:

With extensive courtroom, arbitration and mediation experience and an in-depth understanding of elder abuse, exploitation and securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

At the Boca Raton Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.

Phony Certificates of Deposit(s) – South Florida Banking and Fraud Litigation and Arbitration Attorney

Russell L. Forkey — Sat, 02 Nov 2019 13:28:03 GMT

The purpose of this post is to raise investor awareness concerning phony Certificates of Deposits (CDs) promoted through internet advertising and “spoofed” websites – websites that mimic the actual sites of legitimate financial instructions. Investors should be extremely cautious when purchasing CDs from sites found only though internet searches. Please keep in mind that this information is being provided for educational purposes only. It is not designed to be complete in all material respects. Thus, if you have any questions concerning the contents hereof, you should contact a qualified attorney.

“Spoofed” websites – often using URL addresses similar to those of legitimate firms’ websites, or using legitimate-sounding names and URLs – may be used to trick investors into buying bogus CDs. Spoofed websites selling fake CDs often have red flags of fraud. They may:

• Offer interest rates higher than you can find at any other financial institution, with no penalties for early withdrawals;
• Promote only CDs and no other financial products, such as banking or brokerage accounts, loans, or commercial banking services;
• Require high minimum deposits, often $200,000 or more;
• Direct potential investors to wire funds to an account located outside the U.S., or to a U.S.-based account that has a different name than the financial institution claiming to sell the CD;
• Claim that the spoofed financial institution is a Federal Deposit Insurance Corporation (FDIC) member and that deposits are FDIC-insured; and
• Identify “clearing partners” that they claim are registered with the SEC.

Be Skeptical and Ask Questions:

If you are considering an investment in CDs, conduct internet searches for the financial institution to see if you find any search results other than the website initially identified. Call the financial institution using a telephone number found somewhere other than the suspect website to determine the legitimacy of the investment opportunity.

If the website claims the CDs are FDIC insured, verify the financial institution by using the FDIC’s BankFind tool – https://research.fdic.gov/bankfind/ – or call the FDIC to verify at 877-ASKFDIC (877-275-3342). Make certain the name of the financial institution claiming to provide the CDs is exactly the same and not just similar to a firm verified by the FDIC.

If the website claims the CDs are offered by a credit union, verify the financial institution by using the National Credit Union Administration’s (NCUA) “Research a Credit Union” webpage – https://mapping.ncua.gov/ResearchCreditUnion.aspx – or call the NCUA’s Consumer Assistance Center at 800-755-1030.

If a website provides a name and a CRD number of a broker-dealer or an employee of a broker-dealer, use FINRA’s BrokerCheck to check whether the address provided in FINRA’s BrokerCheck matches the address provided on the website.

Contact Us:
With extensive courtroom, arbitration and mediation experience and an in-depth understanding of elder abuse, exploitation and securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

Ameriprise Financial Services, Inc. and David Bradley Tysk – Boca Raton, Florida Stock Broker Fraud and Breach of Fiduciary Duty Attorney

Russell L. Forkey — Sat, 22 Aug 2015 23:06:19 GMT

The Financial Industry Regulatory Authority, Inc. (FINRA) is a self-regulatory authority assigned the responsibility, by the Securities and Exchange Commission, to license, regulate and discipline securities broker/dealers and their employees, including account executives. In the event that FINRA elects to institute an enforcement action, firms and licensed individuals have the responsibility to reflect such action on their U-4 and/or U-5 filings, which can be viewed on the FINRA website under the broker-check section of the site or by viewing the monthly disciplinary information also provided on the FINRA site.

The monthly disciplinary information is referenced on the FINRA site generally in alphabetical order. This post relates to the following company or individuals. If the reader would like to review the entire FINRA release or the broker-check information concerning this matter, you can follow these highlighted links:

February 2015 Disciplinary and Other FINRA Actions

Broker Check: http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/

Ameriprise Financial Services, Inc. (CRD® #6363, Minneapolis, Minnesota)and David Bradley Tysk (CRD #1782289, Eden Prairie, Minnesota). The firm was censured and fined $100,000. Tysk was fined $50,000 and suspended from association with any FINRA® member in any capacity for three months. The sanctions were based on findings that Tysk altered computer notes of customer contacts after the customer complained about the suitability of a recommendation. The findings stated that Tysk knew or should have known the importance of customer-related notes in the event of complaints. Tysk’s concealed alterations of his notes did not comply with the clear import of the document-retention policies in the firm›s code of conduct. Tysk failed to inform the firm of the alterations when he provided a copy of the notes to be produced in discovery during an arbitration proceeding. The customer became suspicious of the notes and requested further discovery to determine whether the notes had been altered after he lodged his complaint with the firm. The firm and Tysk opposed the requests.

To review the complete FINRA release relative to the subject matter, please follow the above link.

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With extensive courtroom, arbitration and mediation experience and an in-depth understanding of elder abuse, exploitation and securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

H.D. Vest Investment Securities – South Florida Customer Protection and Negligent Supervision FINRA Arbitration and Litigation Attorney

Russell L. Forkey — Thu, 12 Mar 2015 02:32:50 GMT

South Florida Customer Protection and Negligent Supervision FINRA Arbitration and Litigation Attorney:

SEC Charges Texas-Based Brokerage Firm With Violating Supervisory and Customer Protection Rules:

The Securities and Exchange Commission recently charged an Irving, Texas-based brokerage firm with violating key customer protection rules after failing to adequately supervise registered representatives who misappropriated customer funds.

H.D. Vest Investment Securities agreed to settle the charges by paying a financial penalty and retaining an independent compliance consultant to improve its supervisory controls.

According to the SEC’s order instituting a settled administrative proceeding, H.D. Vest has more than 4,500 registered representatives typically working as independent contractors who also operate tax businesses outside of their securities businesses. H.D. Vest failed to have proper policies and procedures in place to monitor its representatives’ outside business activities, and as a result some representatives used their outside businesses to defraud brokerage customers in such ways as transferring or depositing customer brokerage funds into their outside business accounts.

The SEC’s order further finds that H.D. Vest did not follow customer protection rules in the wake of the wrongdoing by its representatives. Under these rules to protect customer funds and securities in the possession of broker-dealers, H.D. Vest was required to make certain calculations and, if necessary, deposit funds into a reserve account for the benefit of customers who were harmed by the representatives’ misconduct. H.D. Vest neither made the calculations nor maintained a reserve account.

The SEC’s order finds that H.D. Vest violated the supervision requirements of Section 15(b)(4)(E) of the Securities Exchange Act of 1934 as well as the customer protection rules found in Section 15(c)(3) of the Exchange Act and in Rule 15c3-3. H.D. Vest also violated the document preservation requirements in Section 17(a) of the Exchange Act and in Rule 17a-4(b)(4). H.D. Vest consented without admitting or denying the findings in the SEC’s order to cease and desist from committing these violations and pay a $225,000 penalty. The representatives involved in the misconduct have since been the subject of criminal, civil, or FINRA enforcement actions.

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Persaud – Boca Raton, Florida Ponzi Scheme Litigation and FINRA Arbitration Attorney

Russell L. Forkey — Thu, 24 Apr 2014 23:11:35 GMT

South Florida Securities and Investment Fraud, Misrepresentation and Breach of Fiduciary Duty FINRA Arbitration and Litigation Attorney:

Securities and Exchange Commission v. Persaud, Civil Action No. 12-cv-932-Orl-28GJK

District Court Enters Final Judgment Against Defendant Gurudeo Persaud

The Commission announced that on January 29, 2014, the United States District Court for the Middle District of Florida granted the Commission’s Motion for Summary Judgment on the Commission’s claims against Defendant Gurudeo Persaud under Sections 5 and 17(a) of the Securities Act of 1933 (“Securities Act”) and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 (“Exchange Act”). The Court imposed injunctions prohibiting Persaud from violating these provisions of the Securities Act and the Exchange Act, and ordered him to pay disgorgement and civil penalties.

On April 18, 2014, the Court entered a Final Judgment by consent against Defendant Persaud on the remaining claims in the Commission’s Complaint against him. The Court enjoined Persaud from violations of Sections 206(1), (2), and (4) and Rules 206(4)-(8)(a)(1) and (2) of the Investment Advisors Act of 1940 (“Investment Advisers Act”), and ordered him to pay disgorgement of $121,660 and prejudgment interest in the amount of $5,266.94, for a total of $126,926.94. The Commission dismissed its civil penalty claim against Persaud, who pled guilty to charges in a parallel criminal case, was ordered to pay restitution of $948,340 to his victims, and is currently serving a three-year prison sentence.

To review of copy of the of the origianl notice relative to Mr. Persaud, please follow the highlighted link. /2012/06/south-florida-broker—dealer-fraud-and-misrepresentation-attorney.shtml

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At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.

SEC Charges China Affiliates of Big Four Accounting Firms with Violating U.S. Securities Laws – Florida Securities and Investment FINRA Arbitration and Litigation Attorney

Russell L. Forkey — Wed, 05 Dec 2012 02:17:59 GMT

SEC Charges China Affiliates of Big Four Accounting Firms with Violating U.S. Securities Laws in Refusing to Produce Documents

The Securities and Exchange Commission recently began administrative proceedings against the China affiliates of each of the Big Four accounting firms and another large U.S. accounting firm for refusing to produce audit work papers and other documents related to China-based companies under investigation by the SEC for potential accounting fraud against U.S. investors.

The SEC charged the following firms with violating the Securities Exchange Act and the Sarbanes-Oxley Act, which requires foreign public accounting firms to provide the SEC upon request with audit work papers involving any company trading on U.S. markets:

BDO China Dahua Co. Ltd
Deloitte Touche Tohmatsu Certified Public Accountants Ltd
Ernst & Young Hua Ming LLP
KPMG Huazhen (Special General Partnership)
PricewaterhouseCoopers Zhong Tian CPAs Limited

According to the SEC’s order instituting the proceedings, SEC investigators have been making efforts for the past several months to obtain documents from these firms. The audit materials are being sought as part of SEC investigations into potential wrongdoing by nine China-based companies whose securities are publicly traded in the U.S. The audit firms have refused to cooperate in the investigations.

“Only with access to work papers of foreign public accounting firms can the SEC test the quality of the underlying audits and protect investors from the dangers of accounting fraud,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “Firms that conduct audits knowing they cannot comply with laws requiring access to these work papers face serious sanctions.”

An administrative law judge will schedule a hearing and determine the appropriate remedial sanction against the firms. The order requires the administrative law judge to issue an initial decision no later than 300 days from the date of service of the order.

The SEC has launched an initiative to address concerns arising from reverse mergers and foreign issuers. Through the work of a Cross Border Working Group, the agency has deregistered the securities of nearly 50 companies and filed fraud cases against more than 40 foreign issuers and executives. The SEC’s Enforcement Division has taken a series of actions against China-based audit firms. Earlier this year, the SEC announced an enforcement action against Shanghai-based Deloitte Touche Tomatsu for refusing to produce documents for an SEC investigation into one of its China-based clients. That proceeding is ongoing. The SEC previously filed a subpoena enforcement action in federal court against the firm for failing to produce documents in response to a subpoena pertaining to its longtime client Longtop Financial Technologies Limited. In the separate administrative proceeding against Longtop, an administrative law judge found that Longtop was delinquent in its reporting obligations and ordered Longtop’s securities registration to be revoked.

“U.S. investors should be able to rely on the quality of audited financial statements,” said Kara Brockmeyer, co-head of the SEC’s Cross Border Working Group. “Our Working Group’s actions demonstrate how the SEC is proactively identifying emerging risks to protect U.S. investors from accounting fraud.”

Contact Us:

With extensive courtroom, arbitration and mediation experience and an in-depth understanding of securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

Maureen Ann Burke (CRD# 1323987, Registered Representative, Chelsea Massachusetts)

Russell L. Forkey — Fri, 24 Feb 2012 05:17:00 GMT

Theft and Unauthorized Activity FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.

February, 2012:

Maureen Ann Burke (CRD #1323987, Registered Rep., Chelsea, Massachusetts) submitted a Letter of Acceptance, Waiver and Consent in which she was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Burke consented to the described sanction and to the entry of findings that as a senior claims analyst at her member firm’s affiliate, she was responsible for, among other things, processing surrenders, loans, and dividend withdrawals on non-variable life insurance policies. The findings stated that Burke processed numerous unauthorized surrenders, loans and dividend withdrawals on life insurance policies, totaling approximately $18,208, without the knowledge or permission of her firm’s affiliate. Her firm’s affiliate owned the policies because the original policy owners abandoned the policies and Burke then caused the funds from the unauthorized transactions to be wire transferred to a bank account over which she had access and control, without the knowledge or permission of her firm’s affiliate. The findings also stated that Burke processed a $240 unauthorized disbursement in a customer’s life insurance policy without the customer’s knowledge or permission, and caused the funds to be wire-transferred to the bank account, which Burke’s relative owned, and to which she had access and control, without the customer’s knowledge or permission. (FINRA Case #2010024265301).

SEC Enforcement Actions – January, 2012

Russell L. Forkey — Wed, 01 Feb 2012 13:13:00 GMT

Securities and Investment Fraud, Misrepresentation and Statutory Violation Litigation and FINRA Arbitration Attorney, Russell L. Forkey, Esq.

The Securities and Exchange Commission periodically announces enforcement actions that have recently been filed by it. Periodically, we review these actions and provide selective information concerning what we feel relate to important issues or matters that have a wide alleged impact on investors. Please keep in mind that further review should be undertaken, by the reader, related to those matters in which a final judgment or consent decree has not been referenced.

January, 2012:

Securities and Exchange Commission v. Chalmer E. Detling, II, Esq., Civil Action No. 1:11 cv 4565, United States District Court, Northern District of Georgia, Atlanta Division

SEC CHARGES ATLANTA-BASED ATTORNEY WITH FRAUD IN THE OFFER AND SALE OF MUNICIPAL BONDS. Read More.

January, 2012:

Securities and Exchange Commission v. Charles A. Aiken, et al., Civil Action No. CA 5:11-1018, United States District Court, Southern District of West Virginia

SEC CHARGES CHARLES A. AIKEN AND AIKEN CONTINENTAL, L.L.C. WITH FRAUD IN THE OFFER AND SALE OF MUNICIPAL BONDS. Read More.

January, 2012:

SEC Charges Life Settlements Firm and Three Executives with Disclosure and Accounting Fraud

CEO and General Counsel Additionally Charged With Insider Trading

The Securities and Exchange Commission recently charged Texas-based financial services firm Life Partners Holdings Inc. and three of its senior executives for their involvement in a fraudulent disclosure and accounting scheme involving life settlements. Read More.

January, 2012:

In the Matter of William Echeverri

Recently, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions (Order) against William Echeverri. Echeverri, 40, is a resident of Park Ridge, NJ. The Order finds that Echeverri was a registered representative associated with broker-dealers registered with the Commission, and that on December 27, 2011, a final judgment was entered by consent against Echeverri, enjoining him from violating Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, in the civil action SEC v. William Echeverri, et al., Civil Action No. 2:11-cv-07314 (D.N.J.). Read More.

January, 2012:

Securities and Exchange Commission v. JBI, Inc., John Bordynuik and Ronald Baldwin, Jr., Civil Action No. 1:12-cv-10012, United States District Court, District of Massachusetts

SEC CHARGES COMPANY AND ITS OFFICERS WITH ACCOUNTING FRAUD. Read More.

January, 2012:

Securities and Exchange Commission v. Todd Farha, et al., Civil Action No. 8:12-cv-00047-SDM-MAP (M.D. Fla., January 9, 2012)

SEC BRINGS FRAUD AND INSIDER TRADING CHARGES AGAINST THREE FORMER WELLCARE EXECUTIVES. Read More.

January, 2012:

SEC v. Allen E. Weintraub and AWMS Acquisitions, Inc., d/b/a Sterling Global Holdings, Case No. 11-21549-CIV-HUCK/BANDSTRA (S.D.Fla.)

SEC WINS JUDGMENTS AGAINST ALLEN E. WEINTRAUB AND AWMS ACQUISITIONS, INC. FOR MAKING PHONY TENDER OFFERS FOR EASTMAN KODAK AND AMR. Read More.

January, 2012:

SEC v. Earl C. Arrowood and Parker H. “Pete” Petit, Civil Action No. 1:12-cv-00082-RWS

SEC Charges Earl C. Arrowood and Parker H. “Pete” Petit with Insider Trading. Read More.

January, 2012:

United States Securities Exchange Commission v. Imperiali, Inc., Daniel Imperato, Charles Fiscina, and Lawrence O’Donnell Civil Action No. 9:12-cv-80021 (S.D. Fla.)(January 9, 2012)

SEC Charges Issuer, Officers and Auditor with Fraud. Read More.

January, 2012:

SEC Charges UBS Global Asset Management for Pricing Violations in Mutual Fund Portfolios. Read More.

January, 2012:

SEC V. BANKATLANTIC BANCORP., INC. AND ALAN LEVAN (UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA, CASE NO. 0:12-CV60082, FILED JANUARY 18, 2012). Read More.

January, 2012:

SEC Obtains Emergency Relief Against St. Louis-Based Private Investment Funds after Charging Them and Their Principal with Fraud. Read More.

January, 2012:

SEC v. Spyridon Adondakis, Anthony Chiasson, Sandeep Goyal, Jon Horvath, Danny Kuo, Todd Newman, Jesse Tortora, Diamondback Capital Management, LLC, and Level Global Investors, L.P., Civil Action 12-CV-0409 (SDNY)(PGG)

SEC Charges Seven Fund Managers and Analysts In Insider Trading Scheme, and Also Charges Hedge Fund Firms Diamondback Capital and Level Global. Read More.

January, 2012:

The Securities and Exchange Commission recently announced that Diamondback Capital Management LLC has agreed to pay more than $9 million to settle insider-trading charges brought by the Commission on Jan. 18. The proposed settlement is subject to the approval of Judge Paul G. Gardephe of the U.S. District Court for the Southern District of New York. As part of the proposed settlement, the Stamford, Conn.-based hedge fund adviser also has submitted a statement of facts to the SEC and federal prosecutors, and entered into a non-prosecution agreement with the U.S. Attorney’s Office for the Southern District of New York. Read More.

January, 2012:

The Securities and Exchange Commission recently charged a Fort Lauderdale-based firm and its founder with conducting a fraudulent boiler room scheme in which they hyped stock in two thinly-traded penny stock companies while behind the scenes they sold the same stock themselves for illegal profits.

The SEC alleges that First Resource Group LLC and its principal David H. Stern employed telemarketers who fraudulently solicited brokers to purchase stock in TrinityCare Senior Living Inc. and Cytta Corporation. While recommending the securities in these two microcap companies, Stern sold First Resource’s shares of TrinityCare and Cytta stock unbeknownst to investors who were purchasing them – a practice known as scalping. As Stern was selling the stocks, he also purchased small amounts in order to create the false appearance of legitimate trading activity and induce investors to purchase shares in both companies. Read More.

January, 2012:

SEC v. Igors Nagaicevs, Case No. CV-12-0413 EDL (N.D. Cal. filed Jan. 26, 2012); In the Matter of Alchemy Ventures, Inc., KM Capital Management, LLC, Zanshin Enterprises, LLC, Mark H. Rogers, Steven D. Hotovec, Joshua A. Klein, Yisroel M. Wachs, Frank K. McDonald, and Douglas G. Frederick. Read More.

January, 2012:

SECURITIES AND EXCHANGE COMMISSION v. ROBERT CHIU (A/K/A CHI HUNG CHIU), Civil Action No. CV-12-00200-PHX-JWS (JWS) (D. Ariz.) (Filed Jan. 30, 2012)

SECURITIES AND EXCHANGE COMMISSION v. JAMES LI (A/K/A CHING HUA LI), THOMAS CHOW (A/K/A MAN KIT CHOW), ROGER KAO (A/K/A CHAO CHUN KAO), CHRISTOPHER LIU (A/K/A CHI LEI LIU), AND WAYNE A. PRATT, Civil Action No. CV-11-1712-PHX-SRB (SRB) (D. Ariz.) (Filed Aug. 30, 2011). Read More.

January, 2012:

SECURITIES AND EXCHANGE COMMISSION v. CHRISTOPHER T. VULLIEZ, ET AL. Civil Action No. 11-cv-3458 (RMB) (S.D.N.Y.)

SEC OBTAINS FINAL JUDGMENTS AGAI
NST INVESTMENT ADVISER CHRISTOPHER T. VULLIEZ AND AMPHOR ADVISORS, LLC. Read More.

Fraud and Social Media – The Onslaught Begins

Russell L. Forkey — Tue, 10 Jan 2012 09:34:37 GMT

January, 2012:

The Securities and Exchange Commission recently charged an Illinois-based investment adviser with offering to sell fictitious securities on LinkedIn. The SEC’s Division of Enforcement alleges that Anthony Fields of Lyons, Ill. offered more than $500 billion in fictitious securities through various social media websites. For example, he used LinkedIn discussions to promote fictitious “bank guarantees” and “medium-term notes.” The postings resulted in interest from multiple purported potential buyers.

“Fraudsters are quick to adapt to new technologies to exploit them for unlawful purposes,” said Robert B. Kaplan, Co-Chief of the SEC Enforcement Division’s Asset Management Unit. “Social media is no exception, and today’s enforcement action reflects our determination to pursue fraudulent activity on new and evolving platforms.”

According to the SEC’s order instituting administrative proceedings against Fields, he made multiple fraudulent offers through his two sole proprietorships – Anthony Fields & Associates (AFA) and Platinum Securities Brokers. Fields provided false and misleading information concerning AFA’s assets under management, clients, and operational history to the public through its website and in SEC filings. Fields also failed to maintain required books and records, did not implement adequate compliance policies and procedures, and held himself out to be a broker-dealer while he was not registered with the SEC.

“As investment advisers increasingly utilize social media to communicate with clients and potential clients, firms need to be mindful of the applicable standards governing those communications,” said Carlo di Florio, Director of the Office of Compliance Inspections and Examinations (OCIE).

Fake Check Scams – They Target Everyone, Including Me.

Russell L. Forkey — Sat, 24 Dec 2011 23:18:19 GMT

Fake Check Scams are alive and well. The people behind these scams are brazen in all aspects of their fraudulent conduct. Just to demonstrate how aggressive these people are, I have had these fraudsters attempt to pull the scam on me.

Here are a few tips for recognizing and avoiding fake check scams.

If someone you don’t know wants to pay you by check but wants you to wire some of the money back, beware! It’s a scam that could cost you thousands of dollars.

There are many variations of the fake check scam. It could start with someone offering to buy something you advertised, pay you to do work at home, give you an “advance” on a sweepstakes you’ve supposedly won, or pay the first installment on the millions that you’ll receive for agreeing to have money in a foreign country transferred to your bank account for safekeeping. Whatever the pitch, the person may sound quite believable.

Fake check scammers hunt for victims. They scan newspaper and online advertisements for people listing items for sale, and check postings on online job sites from people seeking employment. They place their own ads with phone numbers or email addresses for people to contact them. And they call or send emails or faxes to people randomly, knowing that some will take the bait.

They often claim to be in another country. The scammers say it’s too difficult and complicated to send you the money directly from their country, so they’ll arrange for someone in the U.S. to send you a check.

They tell you to wire money to them after you’ve deposited the check. If you’re selling something, they say they’ll pay you by having someone in the U.S. who owes them money send you a check. It will be for more than the sale price; you deposit the check, keep what you’re owed, and wire the rest to them. If it’s part of a work-at-home scheme, they may claim that you’ll be processing checks from their “clients.” You deposit the checks and then wire them the money minus your “pay.” Or they may send you a check for more than your pay “by mistake” and ask you to wire them the excess. In the sweepstakes and foreign money offer variations of the scam, they tell you to wire them money for taxes, customs, bonding, processing, legal fees, or other expenses that must be paid before you can get the rest of the money.

The checks are fake but they look real. In fact, they look so real that even bank tellers may be fooled. Some are phony cashiers checks, others look like they’re from legitimate business accounts. The companies whose names appear may be real, but someone has dummied up the checks without their knowledge.

You don’t have to wait long to use the money, but that doesn’t mean the check is good. Under federal law, banks have to make the funds you deposit available quickly – usually within one to five days, depending on the type of check. But just because you can withdraw the money doesn’t mean the check is good, even if it’s a cashier’s check. It can take weeks for the forgery to be discovered and the check to bounce.

You are responsible for the checks you deposit. That’s because you’re in the best position to determine the risk – you’re the one dealing directly with the person who is arranging for the check to be sent to you. When a check bounces, the bank deducts the amount that was originally credited to your account. If there isn’t enough to cover it, the bank may be able to take money from other accounts you have at that institution, or sue you to recover the funds. In some cases, law enforcement authorities could bring charges against the victims because it may look like they were involved in the scam and knew the check was counterfeit.

There is no legitimate reason for someone who is giving you money to ask you to wire money back. If a stranger wants to pay you for something, insist on a cashiers check for the exact amount, preferably from a local bank or a bank that has a branch in your area.

Don’t deposit it – report it! Report fake check scams to NCL’s Fraud Center, at www.fraud.org. That information will be transmitted to the appropriate law enforcement agencies.