Fraud and Misrepresentation - Russell L. Forkey

Negligent Misrepresentations and Omissions of Material Facts – South Florida FINRA Arbitration and Litigation Attorney

Russell L. Forkey — Sat, 26 Feb 2022 16:54:14 GMT

The below referenced FINRA Enforcement Action provides examples of what would constitute a negligent misrepresentations and omissions in any offering. In this particular circumstance, it related to the offering of notes of the parent company of WestPark Capital.

WestPark Capital, Inc. (CRD #39914, Los Angeles, California) and Richard Alyn Rappaport (CRD #1885122, Los Angeles, California) November 22, 2021 – An AWC was issued in which the firm was censured, fined $250,000, ordered to offer rescission to customers who invested in notes of the firm’s parent company and have not yet been repaid the full amount of their outstanding principal investment that totaled $1,777,316, required to review and revise, as necessary, its policies, procedures, processes, controls and systems concerning FINRA Rule 3170, and required to extend the time during which it will comply with the requirements of FINRA Rule 3170 for an additional six months. Rappaport was fined $30,000, suspended from associating with any FINRA member in all capacities for four months and suspended from associating with any FINRA in any principal capacity for 15 months. The suspensions are to run concurrently. Without admitting or denying the findings, the firm and Rappaport consented to the sanctions and to the entry of findings that they made negligent misrepresentations and omissions of material facts in offering documents provided to customers in connection with the sale of promissory notes issued by the firm’s parent company. The findings stated that the offering documents failed to disclose that the parent company had defaulted on a $1 million line of credit and had defaulted on successive forbearance agreements with a bank, or that the bank had sued the parent company and Rappaport. Similarly, the offering documents failed to disclose that the parent company had net operating losses each year from 2012 through 2016. In addition, the firm sent prospective investors a misleading historical analysis document, created by Rappaport, that claimed to show investors what they would have received as a return on the notes if the notes had been purchased in 2006 and held through 2010. In fact, the return displayed did not explain that the calculation was based upon hypothetical returns from distinct investments and not any actual return from the notes. The firm, through Rappaport and other firm representatives, also represented to prospective investors that they would be entitled to share in pro-rata distributions of equity and profits from the firm. In fact, the noteholders were entitled to share in pro-rata distributions of equity and profits from the parent company, not the firm, which at times had higher profits and greater equity producing opportunities than the parent company. Moreover, the firm, through Rappaport and other firm representatives, failed to disclose material conflicts of interest. The firm and Rappaport failed to disclose to prospective investors that Rappaport had sole discretion as to whether the parent company’s subsidiaries would make distributions to the parent. By virtue of the foregoing, the firm acted in contravention of Sections 17(a)(2) and (3) of the Securities Act of 1933. The findings also stated that the firm and Rappaport failed to supervise the parent company offerings. The firm, acting through Rappaport, failed to take reasonable steps to ensure that firm representatives who solicited investments in the notes understood the terms of the notes. The firm and Rappaport did not provide reasonable training to registered representatives about the notes and did not respond reasonably to questions from customers that raised red flags that customers lacked accurate information about the notes. The findings also included that the firm violated FINRA Rule 3170 (the “Taping Rule”). The firm’s recording system allowed representatives, at their discretion, to end recording at any time, including before a call was complete. The firm became aware that a representative who sold the parent company offerings terminated at least three recordings before the calls were completed, including a recording of a call with a noteholder, yet the firm did not take any action to ensure that the representative at issue, or other firm representatives, recorded future calls in their entirety. In addition, the firm’s special written procedures concerning the Taping Rule were not reasonably designed. The special written procedures for supervisory review of calls provided no meaningful guidance regarding the review process, frequency of review, or methods of escalating information identified during review. The firm also failed to enforce the provision in its special written procedures requiring the firm to test its taping system to ensure that recordings were properly made and retained. As a result, the firm failed to detect that recordings were deleted prematurely. The suspension in all capacities is in effect from December 20, 2021, through April19, 2022, and the suspension in any principal capacity is in effect from December 20, 2021, through March 19, 2023. (FINRA Case #2017054381603)

SEC Halts Ponzi Scheme Targeting Seniors and Small Business Owners – Neil Burkholz and Frank Bianco.

Russell L. Forkey — Wed, 20 Nov 2019 17:14:55 GMT

The Securities and Exchange Commission recently announced that it has filed an emergency action and obtained a temporary restraining order and asset freeze against two individuals and two companies they control in connection with an alleged $6 million Ponzi scheme that defrauded at least 55 investors, many of whom are senior citizens or small business owners.

According to the SEC’s complaint, Neil Burkholz of Boca Raton, Florida, and Frank Bianco, of Pembroke Pines, Florida, through their companies Palm Financial Management LLC and Shore Management Systems LLC, solicited investors by falsely representing that their proprietary options trading strategies were highly profitable. In reality, as alleged in the complaint, defendants invested less than half of investor funds, and those investments resulted in near-total losses. The complaint alleges that defendants misappropriated the remaining funds by using them to repay other investors and by transferring approximately $880,000 of investor funds to themselves and their spouses for personal use. According to the SEC’s complaint, the defendants sent false reports to investors to conceal their fraudulent conduct and give the investors the false impression they were generating positive returns.

The SEC’s complaint, filed in federal court in Miami, Florida on Nov. 14, and unsealed Monday, Nov. 18, charges the defendants with securities fraud and seeks certain emergency relief, as well as permanent injunctions, return of allegedly ill-gotten gains with prejudgment interest, and civil penalties. The complaint names Burkholz’s wife, Rhoda Burkholz, and Bianco’s wife, Suzanne Bianco, as relief defendants.

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.

Fraudulent and Misleading Legal Opinion Letters – South Florida Fraud and Misrepresentation Litigation and Arbitration Attorney

Russell L. Forkey — Sun, 17 Nov 2019 16:41:34 GMT

Recently, the Securities and Exchange Commission charged a South Florida attorney with aiding and abetting, through the issuance of fraudulent opinion letters, a previously-charged $322 million fraud allegedly perpetrated by a now bankrupt Florida-based cash advance company, 1 Global Capital LLC, its former CEO, and its former CFO on 3,600 retail investors. The SEC also previously charged an unregistered broker for his allegedly unlawful sale of 1 Global securities.

According to the SEC’s complaint, filed in federal district court in Miami, Jan D. Atlas, while a partner at a Fort Lauderdale-based law firm that was acting as outside counsel to 1 Global, drafted two opinion letters in which he knowingly falsified or omitted important facts and offered the opinion that 1 Global’s notes likely were not securities. The complaint alleges that 1 Global used the opinion letters to falsely represent to a network of external sales agents that its notes were not securities and that its offering did not have to be registered with the SEC. 1 Global then allegedly induced thousands of retail investors to invest hundreds of millions of dollars in its notes. According to the complaint, Atlas received a percentage of the commissions generated on the sale of 1 Global’s notes, which totaled more than $600,000.

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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.

Scott Stacy Phelps and James Michael Harper – Oil and Gas Fraud and Misrepresentation – South Florida Oil and Gas Litigation and Arbitration Attorney

Russell L. Forkey — Mon, 03 Sep 2018 14:53:46 GMT

SEC Charges Two Kentucky Men in Oil-And-Gas Offering Fraud

SEC v. Scott Stacy Phelps and James Michael Harper, United States District Court for the Western District of Kentucky (Bowling Green), Case No. 1:18-cv-122

On August 30, 2018, the Securities and Exchange Commission charged two Bowling Green, Kentucky-area men with defrauding investors in oil-and-gas securities offerings. The SEC’s complaint, filed in federal court in Bowling Green, Kentucky, alleges that Scott Stacy Phelps and James Michael Harper raised approximately $611,000 by selling securities to nine investors between February 2015 and March 2016. Although they told prospective investors that the investment proceeds would be used to drill for oil in Kentucky, the main goal of the offering was to enrich Phelps and Harper. They spent the vast majority of the investor funds on themselves and their families, paying themselves generous six-figure salaries, and using the investor funds for rent, vacations, consumer goods, dating and adult websites, entertainment, golf, and hotels. They used a small amount to drill two wells. Neither well was commercially viable. Despite knowing this, the complaint alleges that Defendants continued soliciting additional funds from investors, purportedly to drill for oil in both wells.

The SEC’s complaint charges Phelps and Harper with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks permanent injunctions, disgorgement, prejudgment interest, and civil money penalties.

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The Promissory Note Scheme – South Florida High Yield Promissory Note Scheme Arbitration and Litigation Attorney

Russell L. Forkey — Sat, 18 Aug 2018 15:37:17 GMT

Securities and Exchange Commission v. Rudden, et al., No. 18-cv-01842 (D. Colo. filed July 19, 2018)

The Securities and Exchange Commission recently announced the unsealing of fraud charges against a group of companies and their principal who allegedly bilked at least 150 investors in a $55 million Ponzi scheme. The SEC obtained an emergency asset freeze and other relief.

According to the SEC’s complaint, Daniel B. Rudden and a group of companies operating under the name Financial Visions, which issued promissory notes to fund its operations in short-term financing for funeral services and related expenses, defrauded as many as 150 investors after promising them annual returns of 12% or more. The complaint alleges that since 2010 or 2011, Rudden used new investor funds to pay interest and redemptions to existing investors and concealed the Financial Visions companies’ true financial performance and condition. The complaint also alleges that Rudden continued to represent the business as successful to existing and prospective investors when he knew that he was running a Ponzi scheme.

The SEC’s complaint, filed under seal in federal court in Denver, Colorado on July 20, 2018, and unsealed yesterday, charges Rudden and the Financial Visions companies with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks permanent injunctions, disgorgement plus prejudgment interest, and penalties. The SEC also named three entities as relief defendants, which the SEC alleges were controlled by Rudden and received investor funds from the alleged Ponzi scheme.

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John C. Maccoll – High Pressure Sales Primarily Directed at Elder and Retired Clients – South Florida FINRA Arbitration Attorney

Russell L. Forkey — Sat, 18 Aug 2018 15:20:19 GMT

Securities and Exchange Commission v. John C. Maccoll, No. 2:18-cv-12473-SFC-DRG (E.D. Michigan filed August 9, 2018)

The Securities and Exchange Commission recently charged a former registered representative with defrauding his brokerage customers out of nearly $4 million in a long-running investment scam.

According to the SEC’s complaint, John C. Maccoll, who was affiliated with the Birmingham, Michigan branch of a nationwide registered broker dealer and investment adviser, used high pressure sales tactics to solicit at least 15 of his retail brokerage customers to invest in what he described as a highly-sought-after private fund investment. Most of the injured customers were elderly and retired and invested through their retirement accounts. Maccoll told his customers that the purported fund investment would allow them to diversify their portfolios, receive annual investment returns as high as 20%, and give them investment growth potential that was better than the growth they received in their brokerage accounts. As alleged in the complaint, Maccoll’s statements to his customers were false – he did not invest the customers’ money but stole it for his own personal use. In total, the customers invested nearly $4 million in the fraudulent scheme. To conceal the scheme, Maccoll allegedly instructed his customers not to tell others about the purported fund investment, provided some of his customers with fake account statements reflecting fictitious returns, and paid over $400,000 in Ponzi-like payments to certain of the customers to keep the scheme alive.

The U.S. Attorney’s Office for the Eastern District of Michigan today filed criminal charges against Maccoll.

The SEC’s complaint, filed in federal district court in the Eastern District of Michigan, charges Maccoll with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC is seeking a judgment ordering Maccoll to disgorge his ill-gotten gains with prejudgment interest, and to pay civil penalties.

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Avalon FA Ltd. – South Florida Stock Fraud and Misrepresentation Litigation Attorney

Russell L. Forkey — Tue, 14 Mar 2017 02:47:33 GMT

The Securities and Exchange Commission recently announced fraud charges against a Ukraine-based trading firm accused of manipulating the U.S. markets hundreds of thousands of times and the New York-based brokerage firm and CEO who allegedly helped make it possible.

The SEC’s complaint alleges that Avalon FA Ltd touted itself to traders as a destination to engage in layering, a scheme in which orders are placed but later canceled after tricking others into buying or selling stocks at artificial prices, resulting in illicit profits. Avalon allegedly made more than $21 million in the layering scheme involving U.S. stocks during a five-year period. According to the SEC’s complaint, Avalon also made more than $7 million in illicit profits through a cross-market manipulation scheme in which the firm bought and sold U.S. stocks at a loss in order to manipulate the prices of the stock and its corresponding options so that it could then profitably trade at artificial prices. Avalon allegedly used traders in Eastern Europe and Asia to conduct its trading, and the firm kept a portion of the profits and collected commissions from the traders.

The SEC’s complaint also describes fraud charges against Avalon’s named owner Nathan Fayyer and Sergey Pustelnik, who allegedly kept his controlling interest in Avalon undisclosed and embedded himself at Lek Securities as a registered representative, using his position to facilitate the schemes.

The SEC further alleges that Lek Securities and its owner Samuel Lek made the schemes possible by providing Avalon with access to the U.S. markets, approving the cross-market trading scheme, and improving its trading technology to assist Avalon’s trading. According to the SEC’s complaint, Lek Securities also relaxed its layering controls after Avalon complained. Avalon was the highest-producing customer for Lek Securities in terms of trading commissions, fees, and rebates generated.

After filing its complaint in U.S. District Court for the Southern District of New York, the SEC obtained an emergency court order freezing Avalon’s assets held in its account at Lek Securities as well as freezing and repatriating funds that Avalon has transferred overseas.

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Richard G. Cody – Boca Raton, Florida Elder Financial Abuse and Breach of Fiduciary Duty Litigation and Arbitration Attorney

Russell L. Forkey — Fri, 16 Dec 2016 21:01:49 GMT

Richard G. Cody – South Florida, including Boca Raton, Boynton Beach, Lake Worth and West Palm Beach, Elder Financial Abuse and Breach of Fiduciary Duty Litigation and Arbitration Attorney Russell L. Forkey, Esq.

Securities and Exchange Commission v. Richard G. Cody, et al., Civil Action No. 16-cv-12510-FDS (D. Mass., filed Dec. 12, 2016)

SEC Charges Investment Adviser with Defrauding Massachusetts Retirees

The Securities and Exchange Commission recently announced that it filed a complaint in federal court in Boston charging investment adviser and broker representative Richard G. Cody, a former resident of Massachusetts and current resident of New Jersey, with defrauding his retired clients. The Commission has asked the court to consider whether to impose certain preliminary relief against Cody and his company, Boston Investment Partners, LLC, including an asset freeze.

The SEC’s complaint alleges that Cody defrauded at least three of his retired clients over a twelve-year period by concealing the fact that their retirement accounts had suffered extensive losses. According to the SEC’s complaint, the clients did not know that their accounts had lost substantial value and were being rapidly depleted. Cody concealed these losses by leading the clients to believe that their investments were maintaining steady value and that the clients were living off income from their investments. By 2014, two of the retirees’ accounts had essentially run out of funds. Cody allegedly continued to hide that the retirees’ money was gone by making wire transfers of monthly deposits to the retirees’ bank accounts and sending the clients fabricated tax forms. The SEC alleges that these deceptive acts caused Cody’s clients to believe that their retirement savings were secure when, in fact, they were not.

The SEC’s complaint alleges that Cody violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 and seeks disgorgement of ill-gotten gains plus interest and penalties as well as permanent injunctive relief. The SEC also seeks a court-ordered asset freeze against Cody and Boston Investment Partners, which was named as a relief defendant, a temporary restraining order, and a detailed accounting of Cody’s assets.

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Ross McLellan – South Florida Unauthorized and Fraudulent Mark-Up FINRA Arbitration and Litigation Attorney

Russell L. Forkey — Thu, 19 May 2016 00:49:19 GMT

Ross McLellan – South Florida Unauthorized and Fraudulent Mark-Up FINRA Arbitration and Litigation Attorney

Securities and Exchange Commission v. Ross McLellan, Civil Action No. 16-cv-10874 (D. Mass. filed May 13, 2016)

SEC Charges Former Executive of Massachusetts-Based State Street Corporation with Defrauding Investors

The Securities and Exchange Commission recently announced fraud charges against Ross McLellan, a former executive of Massachusetts-based State Street Corporation, for engaging in a scheme to defraud investors who were customers of State Street’s Transition Management line of business.

According to the SEC’s complaint filed in federal court in Boston, Massachusetts, State Street Corporation, a publicly-traded financial holding company based in Boston, and its affiliates provide transition management services, which are offered to large investment clients such as pension funds or endowments who need to buy and sell large quantities of securities when the client may be changing fund managers or investment strategies. The SEC alleges that McLellan defrauded State Street Transition Management customers by charging hidden and unauthorized mark-ups (or amounts added to the cost of the service) on trading in U.S. and European securities.

According to the SEC’s complaint:

McLellan, along with co-schemers, developed and orchestrated a deliberate strategy to charge Transition Management customers hidden mark-ups on certain transactions. Among other things, State Street employees, under the supervision of McLellan, made misrepresentations concerning pricing in connection with certain transition engagements. These misrepresentations were made in a variety of communications to customers, including false trading statements, pre-trade estimates, and post-trade reporting.
When McLellan and co-schemers were ultimately confronted by a customer that had detected some of the hidden mark-ups, McLellan aided and abetted others at State Street who made materially false and misleading statements to that customer to conceal the scheme. Among other things, in or about August 2011, McLellan directed others at State Street to misleadingly characterize the hidden mark-ups as a “fat finger error” and as “inadvertent commissions.”
In addition to identifying customers to overcharge, McLellan oversaw the practice of taking hidden mark-ups, and directed others at State Street to engage in fraudulent acts and practices in furtherance of the scheme.
By engaging in the misconduct directly, and by directing subordinates to mislead customers and/or conceal mark-ups as part of this scheme to defraud, McLellan and co-schemers generated approximately $20 million in additional revenue for State Street.

The SEC’s complaint charges McLellan with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint also charges McLellan with aiding and abetting violations by others at State Street of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC’s Complaint seeks as relief a permanent injunction prohibiting future violations of these statutes, disgorgement of ill-gotten gains plus prejudgment interest, and civil monetary penalties.

On April 5, 2016, the U.S. Attorney’s Office for the District of Massachusetts announced parallel criminal charges against McLellan and another individual not charged in the SEC’s complaint. The United Kingdom’s Financial Conduct Authority, on January 31, 2014, found that State Street deliberately overcharged six customers a total of $20,169,603 and imposed a financial penalty of £22,885,000.

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Gregory Jones – South Florida Fraudulent Offering Documents Litigation and Arbitration Attorney

Russell L. Forkey — Thu, 24 Mar 2016 23:50:50 GMT

Gregory Jones – South Florida Fraudulent Offering Documents Litigation and Arbitration Attorney

Securities and Exchange Commission v. Gregory G. Jones., Civil Action No. 4:15-CV-438-A (NDTX)

Court Orders Nearly $2 Million Judgment from Attorney Who Defrauded Investors

The Securities and Exchange Commission recently announced that a federal court has ordered a nearly $2 million judgment from an attorney who admitted to defrauding investors in two fraudulent schemes. The Honorable John McBryde, District Judge of the United States District Court for the Northern District of Texas, entered a final judgment on March 22, 2016 against Southlake, Texas attorney Gregory G. Jones. The final judgment orders Jones to disgorge $1,125,000, plus prejudgment interest of $51,534, and to pay a civil penalty of $600,000.

Jones admitted in 2015 to raising approximately $645,000 by selling securities issued by Aquaphex Total Water Solutions, LLC, a company he controlled that purported to recycle fracking water through a filtration process. Jones provided investors with fraudulent offering documents stating that Aquaphex’s principals had invested $2 million in the company when they had not put any cash into the company. Jones’s offering documents also misrepresented that Aquaphex was expected “to be acquired by an oil services company within five years at a projected value of $21B,” that projected investment returns would exceed 115 percent per year, and that investors were guaranteed to at least double their investment within five years. None of these claims had a reasonable basis in fact, since Aquaphex had no customers, no contracts to provide water-filtration services, and no revenues. Separately, in 2009, Jones represented a small group of investors that invested approximately $6 million in an entity called Edwards Exploration. Jones failed to disclose to the investors that Edwards Exploration paid Jones approximately $480,000 from the principal amount invested.

In its latest order, the court determined that Jones’s violations in the Aquaphex scheme involved “fraud, deceit, manipulation” and that he “acted intentionally” in duping investors. The court specifically observed that Jones’s testimony or presentation was not “credible,” and that the court was not “impressed with Jones’s demeanor for truthfulness while he was on the stand.”

The court previously enjoined Jones and Aquaphex from violating anti-fraud provisions of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 and Section 17(a) of the Securities Act of 1933, and from violating registration provisions of Sections 5(a) and (c) of the Securities Act.

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iShopNoMarkup.com, Inc. – South Florida Fraudulent Unregistered Offering of Securities FINRA Arbitration and Litigation Attorney

Russell L. Forkey — Sun, 27 Sep 2015 15:35:21 GMT

iShopNoMarkup.com, Inc. – South Florida Fraudulent Unregistered Offering of Securities – FINRA Arbitration and Litigation Attorney

Securities and Exchange Commission v. iShopNoMarkup.com, Inc., Civil Action No. 04-CV-4057 (E.D.N.Y.)

Court Imposes Over $5 Million in Monetary Relief, an Officer and Director Bar, and Permanent Injunctions Against Former Chairman of a Failed Internet Startup Who Committed Securities Fraud and IIIegally Sold Unregistered Securities

On Thursday, September 3, 2015, United States District Court Judge Denis R. Hurley of the United States District Court for the Eastern District of New York issued an order and judgment imposing relief against Defendant Anthony Knight, the former Chairman of failed Long Island-based internet startup, iShopNoMarkup.com, Inc. The Commission’s complaint alleged that from the fall of 1999 until the summer of 2000, iShop, Knight and others conducted an unregistered offering of securities and fraudulent scheme that defrauded over 350 investors who invested approximately $2.3 million. On October 14, 2014, a federal jury found Knight liable for violating Sections 5 and 17(a) of the Securities Act of 1933 (“Securities Act”) and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder.

Judge Hurley ordered Knight to pay $2.3 million in disgorgement, over $2.5 million of prejudgment interest, and a $330,000 civil penalty. Pursuant to Section 21(d) of the Exchange Act, the Court also barred Knight from serving as an officer or director of a public company, and enjoined Knight from committing any further violations of Sections 5 and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.

Anthony Knight, a/k/a Ali Haghighi, age 49, was at the time of the conduct a resident of Great Neck, New York, and is currently a resident of San Diego, California.

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Typical Precious Metals Telemarketing Sales Script – Boca Raton, Florida Investment Fraud and Securities Misrepresentation Attorney

Russell L. Forkey — Sun, 08 Feb 2015 15:58:59 GMT

South Florida, including Boca Raton, West Palm Beach and Fort Lauderdale, Precious Metals and Securities Fraud and Misrepresentation Attorney:

The below script gives the reader a flavor of what might be said in a typical unsolicited call from a precious metals telemarketer. However, please keep in mind that this is a generic example. Many varaiations of this exist as do materials which have been prepared to assist the telemarkerter in over comming any objection or negitative question that you might have.

TYPICAL TELEMARKETING PRECIOUS METALS SCRIPT

Hello _________________, my name is ________________ and I’m a Senior

Account Executive with _____________________________, our license number is TC __________________, my TP license number is _________________

(insert salesperson’s license number). I’m glad I was able to reach you.

The reason for the call is that I’m in the process of sending you a special marketing report on the gold/silver/palladium/cooper/platinum market. Now ________________, have you ever invested in precious metals before?

Do this: grab a pen and paper, jot down my name and you can contact me toll free (888) __________. Let me know when you’re ready. (Give name and phone number).

Right now, my company believes that silver/gold/palladium/cooper/platinum is poised to rise in price over the next 6 months. Now follow me closely on this.

First-you still have that pen, right? (Excellent). Draw a dollar sign, and beside it draw an arrow pointing down. Got it? (Great).

Now, the U.S. dollar has fallen in value over the past few years and, as a result, silver/gold/palladium/cooper/platinum has risen to multi-year highs….and because of their relationship, as the dollar loses value, these metals gain value. Do you follow me? Additionally, top analysts round the globe feel that we are entering a time similar to the seventies when paper assets fell out of favor in place of hard assets. With the twin deficits growing to historic proportions, it’s been anticipated that in the next few years, we will experience a massive slide in the value of the U.S. Dollar. So what do you think is going to happen to the price of metal as the U.S. dollar continues to take its blows? Absolutely! In fact, most of the leading analysts are calling for $__/oz. Silver/gold/palladium/cooper/platinum by years end!

Second, there is a major supply and demand imbalance in silver/gold/palladium/cooper/platinum. With countries like China and India growing at the fastest rate in history, the demand in metals continues to increase, what do you think will happen to the price? Exactly! It is just that simple.

Third, we also look at global mishaps. We have war continuing in the Middle East, we have the threat of nuclear capability from Iran and Korea, and ongoing worries concerning Al-Qaeda’s next strike….All of these factors have created a frenzy of investors seeking a safe haven to invest in, and for thousands of years that safe haven has always been precious metals. _______________, if everyone is afraid of global political tensions and continuing to stockpile precious metals, how do you think this will affect the price? Absolutely! Does that make sense to you/

Now let me show you how our program works…..we use a (3) step approach. Follow me closely.

First, it takes advantage of long-term trends as well as short-term movements in the market. You want a firm that isn’t married to the market. If we find additional opportunities in the other markets we want to remain flexible so you, as our customer, can capitalize on those situations.

Second, it gives you the flexibility of utilizing fundamental and technical analysis.

Last, and most important, the commission is only 15% of the total metal value and paid only once for the lifetime of the account, meaning the metal you purchase can be bought and sold as many times as you choose with no additional commission. You will not be charged a fee until your agreement for services is returned signed and until your first investment is made. Now, we provide all of the research for you. Our job is to guide you through the market.

Now, ____________, of course I can’t guarantee you profits. So, ___________, because investments like these aren’t for everyone, let me ask you again….can you truly afford and risk and investment of $_____________, without changing your lifestyle? (Wait for answer, and re-qualify if necessary for suitability, interest, age, occupation, income, experience, etc…..) That’s great! Do you have any other questions right now about our Precious Metals Program?

Being what the mail is these days, you can assume that it will take two to three days to receive our information. What address do you want it sent to? My firm requires me to provide full disclosure to all considering parties. Will anyone else be involved in the decision making process? (Wait for answer).

After you review the program and materials, and I’ve answered all of your questions to your satisfaction and you truly understand how the program works, can you see yourself getting involved? That’s good enough for me! And don’t forget, write down any questions that you have and get back to me on my toll-free number (888) __________.

Now, I’ve explained the reasons but it’s important that I also explain exactly who we are because it’s important to know exactly whom you are dealing with, right? Besides, I wouldn’t take you aboard as a customer unless you knew the answer to that question. The firm I represent is _____________. We specialize in finding fundamental and technical situations throughout the precious metals markets. We don’t trade options or risky futures contracts. We deal only with tangible, physical assets- in this case, bars, bullion and coins. Do you understand me so far?

Great! My secretary is going to send you research material, news articles and some risk disclosures so you can fully understand the market we’re going into. Do you follow me?

Now, based on this information and potential opportunities that exist within this market- it made sense to you-what dollar amount could you work with?

Please jot down a couple of facts to correlate with the package I’m sending you. I want you to make a decision based on the facts and not emotion; does that make sense to you? Excellent!

One of the greatest advantages of trading in precious metals is the ability to use leverage. Are you currently utilizing leverage in the stock market, or do you typically buy and hold on a one to one basis? Follow me closely on this. THIS IS THE KEY!

We are discussing an investment of $______________- jot that down. Now with metal at $___ an ounce, on a one to one basis, you would only be able to purchase _______ounces.

However, with leverage factor of 2 ½ times, we have the ability to leverage _________ ounces of your metal. So you would be leveraging $________ in bullion. And that’s the beauty of it; we have the potential to make money on what we leverage, not the amount we invest. Do you follow me? Now, every time your metal moves $1 dollar, you make $_______ minus commission and fees. Does this make sense to you? Write that down. Great!

Some quick math….write down$25; below it write $18… what’s the difference? Exactly! It’s simple math.

What is $7 x _____(=# of ounces)? What do we get? Yes! A gross potential profit minus commission and fees. Any questions?

And once again, there are no guarantees, which is why we only recommend risk capital for this purchase. Is that clear? Great!

Pursuant to Florida Statutes, you may cancel the Agreement we have you sign within three (3) business days upon receipt of confirmation. Please understand that no purchases will be made, or any markets invested into, until the required 3 business days have passed.

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Refund and Recovery Scams – Boca Raton, Florida Fraud and Misrepresentation Attorney

Russell L. Forkey — Thu, 27 Nov 2014 19:25:55 GMT

Refund and Recovery Scams – Boca Raton, Florida Fraud and Misrepresentation Attorney

Refund and Recovery Scams Which Promise You That You Will Get Your Money Back:

Phone Scams:

Scam artists buy and sell “sucker lists” with the names of people who already have lost money to fraudulent promotions, many focusing on elder or retired individuals. These crooks may call you promising to recover the money you lost or the prize or merchandise you never received – for a fee in advance. That’s against the law. Under the Telemarketing Sales Rule, they cannot ask for – or accept – payment until seven business days after they deliver the money or other item they recovered to you. Recently, this scam targeted individuals that lost money in leveraged precious metals scams.

How the Scams Work:

Many consumers might not know that they have been scammed by a bogus prize promotion, phony charity drive, fraudulent business opportunity or other scam. But if you have unknowingly paid money to such a scam, chances are your name is on a “sucker list.” That list may include your address, phone numbers, and other information, like how much money you’ve spent responding to phony offers. Dishonest promoters buy and sell “sucker lists” on the theory that people who have been deceived once have a high likelihood of being scammed again.

These scammers lie when they promise that, for a fee or a donation to a specific charity, they will recover the money you lost, or the prize or product you never received. They use a variety of lies to add credibility to their pitch: some claim to represent companies or government agencies; some say they’re holding money for you; and others offer to file necessary complaint paperwork with government agencies on your behalf. Still others claim they can get your name at the top of a list for victim reimbursement.

The Federal Trade Commission (FTC), the nation’s consumer protection agency, says claims like these often are false. Although some federal and local government agencies and consumer organizations help people who have lost money, they don’t charge a fee. Nor do they guarantee to get your money back, or give special preference to anyone who files a formal complaint.

Seeing Through a Recovery Scam:

Here are some tips to help you avoid losing money to a recovery scam:

Don’t believe anyone who calls offering to recover money, merchandise, or prizes you never received if the caller says you have to pay a fee in advance. Under the Telemarketing Sales Rule, it’s against the law for someone to request or receive payment from you until seven business days after you have the money or other item in hand.

If someone claims to represent a government agency that will recover your lost money, merchandise, or prizes for a fee or a donation to a charity, report them immediately to the FTC. National, state, and local consumer protection agencies and nonprofit organizations do not charge for their services.

Before you use any company to recover either money or a prize, ask what specific services the company provides and the cost of each service. Check out the company with local government law enforcement and consumer agencies; ask whether other people have registered complaints about the business. You also can enter the company name into an online search engine to look for complaints.

Don’t give out your credit card or checking account numbers in an attempt to recover money you have lost or a prize you never received.

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Investment Scams – South Florida Securities and Investment Fraud and Misrepresentation FINRA Arbitration and Litigation Attorney:

Russell L. Forkey — Wed, 19 Nov 2014 16:47:39 GMT

Boca Raton and Delray Beach, Florida – Investment Scam, Investment Fraud, Misrepresentation and Elder Financial Abuse FINRA Arbitration and Litigation Attorney:

When it comes to making an intelligent investment decision, nothing is fool-proof. However, there are some basic sales tactics that should turn your “red light” on. Some of the most common include:

The “Phantom Riches” Tactic: Here the salesperson dangles the prospect of wealth, enticing you with something you want but can’t have. “These gas wells are guaranteed to produce $6,800 a month in income.”

The “Source Credibility” Tactic: Here the salesperson tries to build credibility by claiming to be a reputable expert. “Believe me, as a senior vice president of XYZ Firm, I would never sell an investment that doesn’t produce.”

The “Social Consensus” Tactic: Here the salesperson leads you to believe that other savvy investors have already invested. “This is how ___ got his start. I know it’s a lot of money, but I’m in-and so is my mom and half her church-and it’s worth every dime.”

The “Reciprocity” Tactic: The salesperson offers to do a small favor for you in return for a big favor. “I’ll give you a break on my commission if you buy now-half off.”

The “Scarcity” Tactic: The salesperson creates a false sense of urgency by claiming limited supply. “There are only two units left, so I’d sign today if I were you.”

If these tactics look familiar, it’s because legitimate marketers use them, too. However, when we are not prepared to resist them, these tactics can work subliminally. Little wonder that victims often say to regulators or their attorneys after they have been scammed, “I don’t know what I was thinking” or “it really caught me off guard.” Recently, we have seen a lot of this in precious metals scams. That’s why an important part of resisting these common persuasion tactics is to understand them before encountering them.

What are some Red Flags of Fraud:

Guarantees: Be suspect of anyone who guarantees that an investment will perform a certain way. All investments carry some degree of risk.

Unregistered products: Many investment scams involve unlicensed individuals selling unregistered securities-ranging from stocks, bonds, notes, hedge funds, oil or gas deals, or fictitious instruments, such as prime bank investments.

Overly consistent returns: Any investment that consistently goes up month after month-or that provides remarkably steady returns regardless of market conditions-should raise suspicions, especially during turbulent times. Even the most stable investments can experience hiccups once in a while.

Complex strategies: Avoid anyone who credits a highly complex investing technique for unusual success. Legitimate professionals should be able to explain clearly what they are doing. It is critical that you fully understand any investment you’re seriously considering-including what it is, what the risks are and how the investment makes money.

Missing documentation: If someone tries to sell you a security with no documentation-that is, no prospectus in the case of a stock or mutual fund, and no offering circular in the case of a bond-he or she may be selling unregistered securities. The same is true of stocks without stock symbols.

Account discrepancies: Unauthorized trades, missing funds or other problems with your account statements could be the result of a genuine error-or they could indicate churning or fraud. Keep an eye on your account statements to make sure account activity is consistent with your instructions, and be sure you know who holds your assets. For instance, is the investment adviser also the custodian of your assets? Or is there an independent third-party custodian? It can be easier for fraud to occur if an adviser is also the custodian of the assets and keeper of the accounts.

A pushy salesperson: No reputable investment professional should push you to make an immediate decision about an investment, or tell you that you’ve got to “act now.” If someone pressures you to decide on a stock sale or purchase, steer clear. Even if no fraud is taking place, this type of pressuring is inappropriate.

If you don’t feel comfortable in talking to the person that has contacted you and you can’t get off the phone, just hang up. The only thing that is going to happen is that you will more than likely save yourself money.

With extensive courtroom, arbitration and mediation experience and an in-depth understanding of elder and senior 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.

Fraudulent Day Trading Scheme – Boca Raton, Florida Fraud and Misrepresentation FINRA Arbitration and Litigation Attorney

Russell L. Forkey — Wed, 19 Nov 2014 16:03:43 GMT

Boca Raton, Florida – Fraudulent Day Trading Scheme FINRA Arbitration and Litigation Attorney:

SEC Charges Unregistered Broker in Tampa Area With Stealing From Investors in Fraudulent Day Trading Scheme

The Securities and Exchange Commission recently charged an unregistered broker living outside Tampa, Fla., with stealing investor funds as part of a fraudulent day trading scheme.

The SEC alleges that Albert J. Scipione and his business partner solicited investors to establish accounts at their company called Traders Café for the purposes of day trading, which entails the rapid buying and selling of stocks throughout the day in hope that the stock values continue climbing or falling for the seconds to minutes they own them so they can lock in quick profits. Scipione touted Traders Café’s software trading platform and made a series of false misrepresentations to investors about low commissions and fees, high trading leverage, and safety of their assets. More than $500,000 was raised from investors who were assured that funds invested with Traders Café would be segregated and used only for day trading or other specific business purposes. However, many customers encountered technical service problems that prevented them from trading at all, and Scipione and his business partner squandered nearly all of the money in investor accounts for their personal use. Meanwhile, Traders Café was never registered with the SEC as a broker-dealer as required under the federal securities laws.

The SEC previously charged Scipione’s business partner Matthew P. Ionno, who agreed to settle the case and has been barred from the securities industry. Financial penalties will be decided by the court at a later date.

In a parallel action, the U.S. Attorney’s Office for the Middle District of Florida today announced that Scipione has pleaded guilty to criminal charges. The U.S. Attorney’s Office previously brought a criminal case against Ionno.

According to the SEC’s complaint filed against Scipione in federal court in Tampa, customers across the country deposited approximately $367,000 with Traders Café from December 2012 to October 2013 with the intention of opening day trading accounts. Traders Café also received approximately $150,000 from an investor who invested directly in Traders Café’s business. Customers encountered problems with Traders Café from the outset, and many of them cancelled their accounts and requested refunds of their remaining account balances. Scipione and Ionno tried to cover up their fraudulent scheme by offering excuses and delays for why customers could not get refunds. Eventually less than $1,200 remained in Traders Café’s accounts primarily due to the repeated misuse of investor funds by Scipione and Ionno.

The SEC’s complaint against Scipione alleges that he violated Section 17(a) of the Securities Act of 1933 as well as Section 15(a) and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The SEC seeks disgorgement of ill-gotten gains, financial penalties, and permanent injunctive relief to enjoin Scipione from future violations of the federal securities laws.

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Boca Raton, Florida Misappropriation and Theft Litigation and Arbitration Attorney

Russell L. Forkey — Sun, 19 Oct 2014 02:00:09 GMT

Boca Raton, Florida Misappropriation and Theft Litigation and Arbitration Attorney:

Securities and Exchange Commission v. Dennis F. Wright, Civil Action No. 1:14-cv-01896-SHR (M.D. Pa)

Final Judgment and Administrative Order Entered Against Pennsylvania-Based Registered Representative Who Stole Funds from Customers

The Securities and Exchange Commission (the “Commission”) recently announced that the United States District Court for the Middle District of Pennsylvania entered a final judgment by consent in a previously filed enforcement action against defendant Dennis F. Wright, a former registered representative based in Lewistown, Pennsylvania. The final judgment permanently enjoins Wright from violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Wright is also ordered to disgorge his ill-gotten gains of $1,533,416.33 and prejudgment interest thereon of $490,618.77, which will be deemed satisfied by the entry of an order of restitution in a parallel criminal case.

According to the Commission’s complaint filed on September 30, 2014, Wright misappropriated more than $1.5 million from at least 28 customers. Wright fraudulently induced his customers to redeem securities held in their securities accounts, including variable annuities and mutual funds, by falsely representing that he would invest the proceeds from the redemptions in a managed account that held other securities that yielded higher returns than their existing securities accounts. Instead, Wright deposited his customers’ funds in a bank account he controlled and from which he misappropriated the funds in order to pay his personal expenses as well as to fund customer withdrawals. Wright concealed his fraud by providing his customers with falsified account statements purportedly showing that they had purchased and owned interests in the non-existent managed accounts with appreciating balances.

On October 16, 2014, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b)(6) of the Securities and Exchange Act and Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions (“”Order”) against Wright. The Order permanently bars Wright from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization; and also bars him from participating in any offering of a penny stock. Wright consented to the issuance of the Order.

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Anthony Coronati and Bidtoask LLC. – Boca Raton, Florida Investment and Advertising

Russell L. Forkey — Sun, 19 Oct 2014 01:38:43 GMT

Boca Raton, Florida Investment and Advertising Fraud and Misrepresentation FINRA Arbitration and Litigation Attorney:

SEC Charges Staten Island Man With Conducting Fraudulent Offerings and Stealing Investor Funds

The Securities and Exchange Commission trecently charged the operator of an online stock recommendation business with conducting several fraudulent securities offerings and siphoning some of the money raised from investors for a Caribbean vacation and plastic surgery.

An SEC investigation found that Anthony Coronati, who lives on Staten Island, initially held himself out as an investment adviser to a hedge fund that he claimed would invest in equity securities. But the hedge fund was fictitious and Coronati used investor money for other purposes. When the money began drying up, he went on to defraud investors in additional schemes involving his New Jersey-based company Bidtoask LLC. Coronati and Bidtoask sold membership interests in the company for the purpose of investing in promising technology companies that had yet to hold initial public offerings (IPOs). Investors were told that Bidtoask would invest directly in pre-IPO Facebook shares without charging any fees, commissions, or markups to investors. However, Bidtoask’s Facebook-related investments actually did require the payment of significant fees that Coronati and Bidtoask concealed from investors. Bidtoask did not even own the shares of other technology companies in which it was supposedly investing, and these companies were not actually in the process of an IPO.

Coronati and Bidtoask have agreed to settle the SEC’s charges. Coronati must pay back $400,000 in funds stolen from investors, and the money will be deposited into a Fair Fund for distribution to victims of the fraud schemes. Coronati also agreed to be permanently barred from the securities industry.

Coronati, who operates the website BidToAsk.com that offers stock recommendations to subscribers, was the subject of a subpoena enforcement action filed by the SEC late last yearwhen he failed to produce documents or appear for scheduled testimony during the SEC’s investigation. As a result of his continued failure to comply with SEC subpoenas in spite of a court order, Coronati was held in contempt of court and arrested earlier this year.

According to the SEC’s order instituting a settled administrative proceeding, Coronati conducted his schemes from at least 2009 to 2013. As the various schemes unraveled, he faced increasing concerns from investors. Coronati placated certain investors by making Ponzi-like payments to them using other investors’ money, and he sent a phony account statement to at least one investor purporting a position in the fake hedge fund that was worth more than $120,000. The account statement also purported that the fictitious hedge fund was more than 80 percent invested in well-known public companies such as Apple. Meanwhile, Coronati used investor funds to pay business expenses and such personal expenses as the Caribbean vacation and plastic surgery, and he also used investor money to purchase securities in a personal brokerage account he held in his own name.

The SEC’s order finds that Coronati and Bidtoask violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. Coronati additionally violated Sections 206(1), 206(2), 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8. Without admitting or denying the findings, Coronati and Bidtoask consented to the SEC’s order requiring them to cease and desist from further violations of those provisions of the securities laws and SEC rules. Information about the Fair Fund will be available at: www.sec.gov/litigation/fairfundlist.htm.

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Oscar F. Villarreal – Boca Raton, Florida Investment and Investment Advisor Fraud Litigation and Arbitration Attorney

Russell L. Forkey — Sun, 05 Oct 2014 12:34:45 GMT

Securities and Exchange Commission v. Oscar F. Villarreal, Civil Action No. 14-cv-01891

Former Cleveland-Area Investment Promoter Oscar F. Villarreal Indicted

On September 16, 2014, the United States Attorney for the Northern District of Ohio obtained a Grand Jury indictment charging Oscar F. Villarreal with ten counts of wire fraud, seven counts of money laundering, one count of securities fraud, and one count of investment adviser fraud.

The Indictment’s allegations are based on the same conduct underlying the Commission’s August 26, 2014 Complaint against Villarreal filed in the United States District Court for the Northern District of Ohio.

The SEC’s Complaint alleges that from March 2009 through December 2010, Villarreal conducted a fraudulent offering, known as Fund III, which raised $9.2 million from 46 investors. According to the complaint, Villarreal told investors that their money was to be used to make private equity investments in companies in the petroleum, steel, and other industries in Mexico. Villarreal lied to these investors about the success of a previous fund he operated, lied in saying that he used their money to purchase and profitably operate a Mexican pipeline manufacturer, and lied by telling investors that Fund III had ownership interests in several U.S. and Mexican drilling companies. Villarreal instead used $7.4 million of Fund III assets to trade in publicly traded securities in a brokerage account-contrary to his representations to investors-and sustained heavy losses, and also stole $5.8 million for himself. By November 2011, Fund III was essentially insolvent.

The Commission’s complaint also alleges that, between August 2010 and March 2011, Villarreal conducted a second fraudulent offering, known as the Standard Asset Management Fund I, (“SAM Fund”), which raised $9 million from 11 investors, six of whom had previously invested in Fund III. According to the complaint, Villarreal told these investors that the SAM Fund would invest in companies listed on the Mexican stock exchange. Villarreal made numerous misrepresentations to these investors. Among other things, Villarreal repeated his earlier lies about Fund II and Fund III’s purported acquisition and profitable operation of a Mexican pipeline manufacturer, he stole at least $327,000 of SAM Fund assets, and Villarreal’s trading was a massive failure, resulting in an 83% loss for the SAM Fund.

The complaint also alleges that Villarreal defrauded the SAM Fund investors between March 2012 and May 2012 by offering to “exchange” limited partnership units he claimed he owned in Fund III for the SAM Fund investors’ limited partnership units in the SAM Fund. Eight SAM Fund investors accepted Villarreal’s offer and exchanged their SAM Fund units, which they had purchased for a total of $3.1 million. Villarreal, however, lied about the number of Fund III limited partnership units he owned and the value of the Fund III units. Villarreal did not disclose to these investors that the Fund III limited partnership units were worthless.

The SEC’s Complaint alleges that Villarreal violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. The Commission’s complaint seeks a permanent injunction, disgorgement of ill-gotten gains plus prejudgment interest, and civil penalties.

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Patrick G. Rooney, John R. Rooney and Positron Corporation – Boca Raton, Florida Market Manipulation and Investment Fraud Litigation and Arbitration Attorney

Russell L. Forkey — Sun, 05 Oct 2014 12:14:29 GMT

Patrick G. Rooney, John R. Rooney and Positron Corporation – Boca Raton, Florida Market Manipulation and Investment Fraud Litigation and Arbitration Attorney

SEC v. Patrick G. Rooney, John R. Rooney, and Positron Corporation, Civil Action No. 9:14-cv-81224-KAM (U.S. District Court for the Southern District of Florida)

The Securities and Exchange Commission announced that on September 30, 2014 it filed a civil injunctive action charging Positron Corporation, a microcap company based in Westmont, Ill., Patrick G. Rooney of Oak Brook, Ill., the company’s then-CEO, and John R. Rooney of Jupiter, Fla., a penny stock promoter, for orchestrating a market manipulation scheme involving the company’s stock.

According to the SEC’s complaint filed in the United States District Court for the Southern District of Florida, Positron Corporation, Patrick Rooney, and John Rooney, engaged in market manipulation fraud in which they made an inducement payment to a stock promoter who would purchase shares of Positron in the open market ahead of planned press releases to help them manipulate the stock. The SEC alleges that the scheme was designed to generate the appearance of market activity in the company’s stock to induce investors to purchase the stock and artificially increase the trading price and volume.

The SEC’s complaint alleges that the defendants violated Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and 10b-5(c). The SEC is seeking permanent injunctions and civil money penalties against all three defendants, as well as penny stock bars against both Patrick and John Rooney and an officer-and-director bar against Patrick Rooney.

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Annuity and Insurance Fraud and Misrepresentation – Boca Raton, West Palm Beach and Fort Lauderdale, Florida Litigation and Arbitration Attorney

Russell L. Forkey — Sat, 27 Sep 2014 11:39:03 GMT

Annuity and Insurance Fraud and Misrepresentation – Elder Financial Abuse and Exploitation Litigation and Arbitration Attorney:

SEC Charges Four Insurance Agents in Securities Fraud Targeting Elderly Investors

The Securities and Exchange Commission recently announced charges against four insurance agents for unlawfully selling securities in what turned out to be a multi-million dollar offering fraud targeting elderly investors.

The SEC previously charged a Colorado man who allegedly orchestrated the scheme and recruited active insurance agents to help him solicit investors in Colorado and several other states. The scheme raised approximately $4.3 million during a nearly 18-month period. The SEC’s investigation further found that the four insurance agents charged today solicited funds without registering with the SEC as a broker-dealer as required under the federal securities laws.

“When individuals act as a broker and sell securities to the public, they must comply with registration, supervision, and compliance requirements that exist to protect investors,” said Julie K. Lutz, Director of the SEC’s Denver Regional Office. “These insurance agents improperly operated outside of that regulatory framework and thereby placed their clients at risk.”

According to the SEC’s order instituting administrative proceedings, the scheme primarily targeted retired annuity holders by using insurance agents to sell interests in a company called Arete LLC, which was controlled by the Colorado man orchestrating the scheme: Gary Snisky. The insurance agents told investors that their funds would be used by Snisky to purchase government-backed agency bonds at a discount. However, Snisky did not purchase bonds or conduct any such trading, and he misappropriated approximately $2.8 million of investor funds to pay commissions and make personal mortgage payments.

The SEC’s Enforcement Division alleges that the following three brokers raised approximately $1.5 million for Snisky and received almost $90,000 in commissions:

Kenneth C. Meissner of Fair Oaks Branch, Texas
James Doug Scott of Perkasie, Penn.
Mark S. “Mike” Tomich of Belmont, Mich.

The other insurance agent – David C. Sorrells of Linden, Texas – entered into a cooperation agreement with the SEC. Without admitting or denying the findings, Sorrells consented to an order finding that he violated Section 15(a) of the Securities Exchange Act of 1934. He agreed to be barred from the securities industry, cease and desist from future violations of Section 15(a), and pay disgorgement of $207,213.34. He also is subject to an additional financial penalty. The settlement reflects substantial assistance that Sorrells provided in the SEC’s investigation.

The SEC’s Enforcement Division alleges that Meissner, Scott, and Tomich violated Section 15(a) of the Exchange Act, and is seeking disgorgement, penalties, and securities industry bars in the matter, which will be litigated before an administrative law judge. The SEC’s case against Snisky, filed in November 2013, is still pending in federal court in Colorado.

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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.