News of Interest to Seniors - Russell L. Forkey

FAQ – Liquidation of Investment Funds – South Florida FINRA Arbitration and Commercial Litigation Attorney

Russell L. Forkey — Sun, 27 Feb 2022 19:32:53 GMT

The following post provides a general summary of what every investor needs to know about the liquidation of an investment fund. Please keep in mind that this information is being provided for educational purposes only and is not designed to be complete in all material respects. If you have any questions concerning this subject matter, you should contact a qualified professional.

What is a fund liquidation?

A fund liquidation occurs when a fund closes down its operations completely, sells off its assets and generally distributes substantially all of its assets in cash to its shareholders. Fund liquidations may occur for a variety of reasons, including poor performance, a decline in assets under management, lack of investor interest, and more. A liquidation is different than a merger where one fund acquires the assets of another fund. In a merger, shareholders in the “acquired” fund receive shares of the new, “acquiring” fund rather than the proceeds from selling off fund assets. During a liquidation, all fund assets are distributed to shareholders.

Who makes the decision to liquidate a fund?

The requirements for liquidating a particular fund generally depend on state corporate or trust law, on the fund’s charter documents, or both. To liquidate, most funds will require a vote by the fund’s board of directors or trustees. In some cases, a vote by the fund’s shareholders will also be necessary. Shareholders may or may not have a say in finalizing the decision to liquidate a fund.

How will I be notified that my fund is liquidating?

If it is necessary to obtain a shareholder vote to approve a liquidation, the fund will have to call a shareholder meeting and seek to obtain the required number of votes. As a shareholder, you will receive a proxy statement informing you of when and where the shareholder meeting is taking place. The timing of this notice to shareholders about a vote is governed by state law and may provide funds some flexibility (for example, requiring notice not less than 10 days and not more than 90 days before a shareholder meeting). Once a fund liquidation has been approved, the notice shareholders receive may depend on both state law and the fund’s charter documents. Some states require that a written notice of liquidation be sent to shareholders, while others do not. A fund’s charter documents may also address providing notice to shareholders. For mutual funds, the approval of a liquidation would generally be considered a material event that would be disclosed to shareholders in a “sticker”–a supplement to a previously sent prospectus or summary prospectus. Funds with shares that trade on an exchange, such as exchange-traded funds (ETFs), generally announce the liquidation through a press release. The notice that shareholders receive regarding a liquidation will generally include relevant information like the date that the fund will stop accepting new purchases of fund shares, the date that the fund will suspend redemptions (if applicable), and the date on or after which all remaining assets will be distributed pro rata (the “liquidation date,” sometimes also called the closing date or cessation date). The timing and type of notice you receive regarding a liquidation will vary from fund to fund.

What do I need to do?

At some point during the liquidation process, many funds stop accepting new purchases of fund shares. If you are making regular contributions to the fund, you may have to stop those contributions by a particular date in advance of the fund closing. In certain cases, funds may also suspend redemptions as part of the liquidation process. Some funds might give you the option to exchange your fund shares into a different fund within the same fund family prior to liquidation. If you own shares of a mutual fund, you can choose to redeem your shares at net asset value at any time prior to the date that the fund suspends redemptions—although sometimes suspension may happen immediately upon the approval of a liquidation. If you own shares of an ETF, you can sell your shares any time before the fund stops trading. After the liquidation date, any remaining fund assets will generally be sold by the fund managers, and the proceeds will be distributed to the remaining fund shareholders. If you still own shares on the liquidation date, you will receive your share of the fund’s assets in this way. The price you receive may differ from the fund’s prior net asset value or trading price. The timing of converting assets to cash or cash equivalents and paying shareholders will vary from fund to fund and may take more time—sometimes months or even years–if the fund has significant investments in less liquid assets. If you still own shares on the liquidation date, you will receive your share of proceeds from the fund’s remaining assets.

Boca Raton, Florida – Elder Financial Abuse FINRA Arbitration and Litigation Attorney

Russell L. Forkey — Sun, 23 Aug 2015 14:42:37 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/

Daryl Richard Lemon (CRD #2473133, Los Angeles, California) submitted an AWC in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Lemon consented to the sanction and to the entry of findings that he executed 1,236 transactions in an elderly customer’s discount brokerage account maintained at another broker-dealer without providing prior written notice, or any notice at all, to his member firm. The findings stated that Lemon periodically charged the customer amounts that he characterized as “advisory fees.” (FINRA Case #2013036632201).

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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.

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.

Retirement and Senior Financial Abuse Litigation and Arbitration Attorney

Russell L. Forkey — Tue, 09 Jun 2015 02:47:57 GMT

South Florida Retirement and Senior Financial Abuse Litigation and Arbitration Attorney

How You Can Help Others Who May Have Diminished Financial Capacity

You may have a parent or other loved one with diminished financial capacity, or who you worry may face that issue in the future. If so, consider the following steps to help.

Have an open conversation about investments and other financial matters sooner rather than later. Even if it feels awkward, it is important to have an honest conversation about finances. Ask your loved one to consider taking the steps outlined above. Even if he or she does not want to take these steps, ask your relative or friend to consider how he or she wants to maintain control of his or her finances in the future. Explain that advance planning is a way to make sure that a trusted person makes decisions if he or she no longer can.
Help your relative or friend with managing finances. You may also offer to take a more active role in helping your loved one manage his or her financial accounts. Be alert both to mistakes that your loved one may make in managing finances and to any signs of elder financial abuse. It can be hard to tell whether actions are the result of confusion or of financial exploitation. For example, if you find that a loved one has paid the same bill twice by mistake, you should help him or her fix the error. But beware that multiple or unusual payments could also be a sign of financial exploitation, so don’t rule out that possibility without looking into it. Be on guard for any sudden changes in investments that seem out of keeping with the loved one’s longstanding goals, values and investment style. These changes may have come about because of confusion or may be a sign of financial exploitation.
If your family member or friend has named you to manage money or property, understand your responsibilities and how you can protect your loved one from financial exploitation. For example, your loved one may have named you as an agent under a power of attorney or a trustee under a revocable living trust. Read the Consumer Financial Protection Bureau’s Managing Someone Else’s Money guides. They walk you through your duties, tell you how to watch out for financial exploitation and scams, and tell you where you can go for help.

If you’ve been asked by a loved one or friend to help out with his or her finances, here are some things you can do to help.

Help with ongoing financial responsibilities. You may need to take on immediate tasks, such as helping to pay bills, arranging for benefit claims, preparing tax returns, or helping with investment decisions.

Review their investment portfolio. This might be a good time to help reevaluate the person’s portfolio in light of his or her financial and medical situation. Does the person expect a big increase in health care, personal care or other costs as a result of his or her illness or disability? If so, will he or she have enough cash or liquid assets on hand to cover those costs? (Liquid investments are assets that the owner can sell readily and without paying a hefty fee to get money when it is needed.) These can be complex questions and you may wish to discuss them with a financial professional. Keep in mind that buying and selling investments on behalf of a loved one requires legal authority, through a power of attorney, a trust or similar arrangement.
Assess the riskiness of their investment portfolio. All investments involve some level of risk. But do the investments present the right level of risk at this stage of the person’s life? If not, you may wish to consider contacting a registered investment adviser representative or registered broker-dealer representative for help.
Contact their investment professional. If your loved one has a financial professional and has authorized that person to speak with you, make the professional aware of your loved one’s condition. This is critical so that the financial professional can make recommendations appropriate to the client’s financial needs and can watch for signs of declining financial skills or potential abuse.

Your financial professional, or that of your loved one, may raise topics discussed in this article. Financial services firms are paying increasing attention to improving communications on this subject. If a financial professional does not raise these topics, however, you should feel free to raise them yourself.

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Senior and Retirement Financial Exploitation and Financial Fraud Attorney

Russell L. Forkey — Tue, 09 Jun 2015 02:15:46 GMT

South Florida Senior and Retirement Financial Exploitation and Financial Fraud Litigation and Arbitration Attorney:

What is diminished financial capacity?

“Diminished financial capacity” is a term used to describe a decline in a person’s ability to manage money and financial assets to serve his or her best interests, including the inability to understand the consequences of investment decisions. While the inability to manage one’s money is clearly a problem in itself, when people of any age lose the capability to manage their finances, they may also become more vulnerable to investment fraud and other forms of financial abuse.

Preparing for Your Own Financial Future: Hope for the Best, But Plan for the Worst.

Losing the ability to manage your finances may be something you’d rather not think about. We often think about our financial capabilities, like our ability to drive, as an important measure of our independence. But planning ahead may help you stay in control of your finances, even if diminished financial capacity becomes a serious problem. Taking the steps listed below now may help avoid or minimize problems for you and your family.

Organize your important documents. Organize and store important documents in a safe, easily accessible location. That way, they are readily available in an emergency. Give copies to trusted loved ones or let them know where to find the documents. Typically, the following documents will be most relevant to your finances:

Bank and brokerage statements and account information. Make a list of your accounts with account numbers. Keep a separate list of online bank and brokerage passwords and PINs and keep the lists in a safe place. In addition, make a list of the locations of your safe-deposit boxes, including where the keys to the safe-deposit boxes are located. Also, keep your recent bank and brokerage statements available, as well as information about how to get those statements online if you access them electronically.
Mortgage and credit information. Make a list of your debts and regular payments, with account numbers and names of the financial institutions that issued the loans or credit cards.
Insurance policies
Pension and other retirement benefit summaries
Social Security payment information
Contact information for financial and medical professionals, such as doctors, lawyers, accountants, and securities professionals.
Provide your financial professionals with trusted emergency contacts. If you have a financial professional, such as a broker or investment adviser, provide that person with emergency or alternate contact information in case he or she cannot contact you or suspects something is wrong. You may wish to discuss with your financial professional what you would consider to be an “emergency,” and specify when he or she may contact someone on your behalf. Discuss what information can be shared with your emergency contact. For example, you might provide your financial professional with a simple written instruction, such as: “Please call my son Mark at (222) 555-5555 if: (i) you are unable to reach me and there appears to be unusual activity regarding my account; (ii) you are unable to reach me for two weeks irrespective of any unusual account activity; or (iii) if you think I am confused or acting strangely.” Providing an emergency contact generally will not enable the person to make investment decisions on your behalf – so be sure to take other steps if you want someone else to manage your accounts if you cannot.
Consider creating a durable financial power of attorney. A financial power of attorney gives someone the legal authority to make financial decisions for you if you cannot. That person is called your agent. The document is called “durable” because it remains in effect even if you become incapacitated. You retain the ability to change it or cancel it as long as you are still able to make decisions. A financial power of attorney differs from a health care power of attorney, which only covers health care decisions. You may want to consult with a lawyer to determine whether a durable financial power of attorney is right for you. After signing a durable financial power of attorney, you can still manage your money and property as long as you have the ability to make decisions. Also, it is important to remember that you always have the option to change who you choose to act as your appointed representative and the individuals you allow to access your financial information. As you are essentially giving financial decision-making authority to your agent, it is critical that he or she be someone you can trust.
Think about involving a trusted relative, friend, or professional. Besides listing them as emergency contacts, you may wish to give a trusted relative, friend, or professional an overview of your finances (even if you don’t want to share all the details). For example, you might ask your broker or bank to send duplicate statements to your daughter or accountant. You might also consider asking a trusted friend or relative to join you on periodic visits to your financial professional. This would give someone you trust a sense of your financial situation and with whom you’ve been doing business. If you choose to involve a relative or friend, it is very important it is someone you are sure you can trust. Consider discussing the selection of the person with a number of other trusted friends or relatives.
Keep things up to date. Be sure that if something changes (for example, you open a new account) you keep your information as current as possible. Also, your trusted contact may change over time. Keep your financial professionals informed of changes regarding who has authority to review your account or whom they should contact in case of an emergency.
Speak up if something goes wrong. If you ever think someone is taking advantage of you, or that you’ve been the victim of a fraud, speak up. Sadly, sometimes even financial professionals and people we know commit financial crimes. There’s no shame in being a victim, and the sooner you let someone know about it, the better chance there is of putting an end to it. Contact information for reporting abuse appears at the end of this document.

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Boca Raton, Florida Senior, Retirement and Elder Financial Abuse and Financial Exploitation Attorney

Russell L. Forkey — Sun, 08 Feb 2015 17:10:47 GMT

Boca Raton, Florida Senior, Retirement and Elder Financial Abuse and Financial Exploitation Attorney:

Social Media and Investing – Tips for Seniors:

More and more older Americans are using social media every day, including to help guide investment decisions. Whether it is to research particular stocks, to find background information on financial professionals, to gather up-to-date news, or to discuss the markets with others, social media – web-based platforms that allow interactive communication, such as Facebook, YouTube, Twitter, LinkedIn, bulletin boards, and chat rooms – has become an important investing tool. While social media can provide many benefits, it also presents opportunities for fraudsters targeting older Americans. As a result, seniors need to proceed with caution when using social media as part of their investment process. The following tips can help.

Tips to Help Avoid Investment Fraud Online:

The key to avoiding investment scams on the Internet is to be an educated investor. Below are five tips to help seniors avoid securities fraud:

1. Look out for “Red Flags”:

Wherever you come across a recommendation for an investment on the Internet, the following “red flags” should cause you to use caution in making an investment decision:

It sounds too good to be true. Any investment that sounds too good to be true probably is. Be extremely wary of claims on the Internet that an investment will make “INCREDIBLE GAINS” or is a “BREAKOUT STOCK PICK.” Claims like these are hallmarks of extreme risk or outright fraud.

The promise of “guaranteed” returns with little or no risk. Every investment entails some level of risk, which is reflected in the rate of return you can expect to receive. Most fraudsters spend a lot of time trying to convince investors that extremely high returns are “guaranteed” or that the investment “can’t miss.” Don’t believe it.

Offers to invest outside the United States. You should carefully examine any unsolicited offer to invest outside of the United States. Many fraudsters set up operations outside the United States to make it more difficult for regulators to stop their fraudulent activity and recover their victims’ money. This is especially true in today’s investment environment. By way of example, land fraud in foreign countries is on the rise.

Pressure to buy RIGHT NOW. Don’t be pressured or rushed into buying an investment before you have a chance to think about – and investigate – the “opportunity.” Be especially skeptical of investments that are pitched as “once-in-a-lifetime” opportunities.

2. Be Wary of Unsolicited Offers:

Investment fraud criminals look for victims, including seniors, on the Internet. If you see a new post on your wall, a tweet mentioning you, a direct message, an e-mail, or any other unsolicited – meaning you didn’t ask for it and don’t know the sender – communication regarding a so-called investment opportunity, you should exercise extreme caution. An unsolicited sales pitch may be part of a fraudulent investment scheme

3. Look out for “Affinity Fraud”:

An investment pitch made through an online group of which you are a member, or on a chat room or bulletin board catering to an interest you have, may be an affinity fraud. Affinity fraud refers to investment scams that prey upon members of identifiable groups, often seniors, religious or ethnic communities, professional groups, or combinations of those groups. Even if you know the person making the investment offer, be sure to check out everything – no matter how trustworthy the person seems who brings the investment to your attention. Remember, the person making you the offer may not know that the investment is a scam.

4. Be Thoughtful About Privacy and Security Settings:

Seniors who use social media as a tool for investing should be mindful of the various features on these websites that can help protect privacy. Understand that unless you guard personal information, it may be available not only to your friends, but for anyone with access to the Internet – including fraudsters.

5. Ask Questions and Check Out the Answers:

Be skeptical. Never judge a person’s integrity, or the merits of an investment, without doing thorough research on both the person selling the investment and the investment itself. Investigate the investment thoroughly and check the truth of every statement you are told about the investment. You can check out many investments using the SEC’s EDGAR filing system or through your state’s securities regulator. You can check out registered brokers at the Financial Industry Regulatory Authority’s (FINRA) BrokerCheck website and registered investment advisers at the SEC’s Investment Adviser Public Disclosure website. Finally a simple internet search might be all that you need to do.

6. A Few Common Investment Scams Using Social Media and the Internet:

While fraudsters are constantly changing the way they approach victims on the Internet, there are a number of common scams of which you should be aware. Here are a few examples of the types of schemes you should be on the lookout for when using social media:

“Pump-and-Dumps” and Market Manipulations:

“Pump-and-dump” schemes involve the promoting of a company’s stock (typically small, so-called “microcap” companies) through false and misleading statements to the marketplace, in order to sell the cheaply purchased stock at a higher price. These false claims could be made on social media such as Facebook and Twitter, as well as on bulletin boards and chat rooms.

Fraud Using “Research Opinions,” Online Investment Newsletters, and Spam Blasts:

While legitimate online newsletters may contain useful information about investing, others are merely tools for fraud. Some companies pay online newsletters to “tout” or recommend their stocks. Touting isn’t illegal as long as the newsletters disclose who paid them, how much they’re getting paid, and the form of the payment, usually cash or stock. But fraudsters often lie about the payments they receive and their track records in recommending stocks.

High Yield Investment Programs:

The Internet is awash in so-called “high-yield investment programs” or “HYIPs.” These are unregistered investments typically run by unlicensed individuals – and they are often frauds. The hallmark of an HYIP scam is the promise of incredible returns (30 or 40 percent – or more) at little or no risk to the investor.

Internet-Based Offerings:

Offering frauds come in many different forms. Generally speaking, an offering fraud involves a security of some sort that is offered to the public, where the terms of the offer, such as the likelihood of a return, are materially misrepresented.

What Seniors Should Know About Professional Designations:

Some financial professionals use social media to attract new clients. These financial professionals may use designations such as “senior specialist” or “retirement advisor” to imply that they are experts at helping seniors with financial issues. Seniors should be aware that some of these titles require little or no training or education.

In some cases, a financial professional may need to study and pass several rigorous exams-after working in a designated field for several years-to receive a particular designation. In other cases, it may be relatively easy in terms of time and effort to receive a “senior” designation, even for an individual with no relevant experience. We encourage you to always look beyond a financial professional’s designation and determine whether he or she can provide the type of financial services or product you need. You should thoroughly evaluate the background of anyone with whom you intend to do business-before you hand over your hard-earned cash.

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10 Ways for Seniors to Protect Themselves From Fraud – South Florida Senior and Retirement Financial Abuse and Exploitation Attorney

Russell L. Forkey — Thu, 27 Nov 2014 19:36:54 GMT

10 Ways for Seniors to Protect Themselves From Fraud – South Florida Senior and Retirement Financial Abuse and Exploitation Attorney:

Know who you’re dealing with.

Try to find a seller’s physical address (not a P.O. Box) and phone number. With internet phone services and other web-based technologies, it’s tough to tell where someone is calling from. Do an online search for the company name and website, and look for reviews. If people report negative experiences, you’ll have to decide if the offer is worth the risk. After all, a deal is good only if you get a product that actually works as promised.

Know that wiring money is like sending cash.

Con artists often insist that people wire money, especially overseas, because it’s nearly impossible to reverse the transaction or trace the money. Don’t wire money to strangers, to sellers who insist on wire transfers for payment, or to anyone who claims to be a relative or friend in an emergency and wants to keep the request a secret.

Read your monthly statements.

Scammers steal account information and then run up charges or commit crimes in your name. Dishonest merchants bill you for monthly “membership fees” and other goods or services without your authorization. If you see charges you don’t recognize or didn’t okay, contact your bank, card issuer, or other creditor immediately.

After a disaster, give only to established charities.

In the aftermath of a disaster, give to an established charity, rather than one that has sprung up overnight. Pop-up charities probably don’t have the infrastructure to get help to the affected areas or people, and they could be collecting the money to finance illegal activity.

Talk to your doctor before you buy health products or treatments.

Ask about research that supports a product’s claims – and possible risks or side effects. In addition, buy prescription drugs only from licensed U.S. pharmacies. Otherwise, you could end up with products that are fake, expired, or mislabeled – in short, products that could be dangerous to your health. Learn more about buying health products online.

Remember there’s no sure thing in investing.

If someone contacts you with low-risk, high-return investment opportunities, stay away. When you hear pitches that insist you act now, that guarantee big profits, that promise little or no financial risk, or that demand that you send cash immediately, report them at ftc.gov.

What Not to Do.

Don’t send money to someone you don’t know. Not to an online seller you’ve never heard of – or an online love interest who asks for money. It’s best to do business with sites you know and trust. If you buy items through an online auction, consider using a payment option that provides protection, like a credit card.

If you think you’ve found a good deal, but you aren’t familiar with the company, check it out. Type the company or product name into your favorite search engine with terms like “review,” “complaint,” or “scam.” See what comes up – on the first page of results as well as on the later pages.

Never pay fees first for the promise of a big pay-off later – whether it’s for a loan, a job, a grant or a so-called prize.

Don’t agree to deposit a check and wire money back. By law, banks have to make funds from deposited checks available within days, but uncovering a fake check can take weeks. You’re responsible for the checks you deposit: If a check turns out to be a fake, you’re responsible for paying back the bank. No matter how convincing the story, someone who overpays with a check is almost certainly a scam artist.

Don’t reply to messages asking for personal or financial information. It doesn’t matter whether the message comes as an email, a phone call, a text message, or an ad. Don’t click on links or call phone numbers included in the message, either. It’s called phishing. The crooks behind these messages are trying to trick you into revealing sensitive information. If you got a message like this and you are concerned about your account status, call the number on your credit or debit card – or your statement – and check on it.

Don’t play a foreign lottery. It’s illegal to play a foreign lottery. And yet messages that tout your chances of winning a foreign lottery, or messages that claim you’ve already won, can be tempting. Inevitably, you have to pay “taxes,” “fees,” or “customs duties” to collect your prize. If you must send money to collect, you haven’t won anything. And if you send any money, you will lose it. You won’t get any money back, either, regardless of promises or guarantees.

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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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Luciano Andres Battioli – Boca Raton, Florida Account Executive Conversion and Theft FINRA Arbitration and Litigation Attorney

Russell L. Forkey — Sun, 05 Oct 2014 13:37:44 GMT

Luciano Andres Battioli – Boca Raton, Florida Account Executive Conversion and Theft FINRA Arbitration and Litigation Attorney

September 2014 Disciplinary and Other FINRA Actions

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

Luciano Andres Battioli (CRD #6229734, Huntington Beach, California) submitted a Letter of Acceptance, Waiver and Consent in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Battioli consented to the sanction and to the entry of findings that he converted funds belonging to customers of his member firm’s affiliate bank, and forged and falsified bank documents. (FINRA Case #2013039521501)

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.

South Florida Elder and Retirement Financial Abuse and Exploitation FINRA Arbitration and Litigation Attorney

Russell L. Forkey — Mon, 15 Sep 2014 21:54:01 GMT

Fort Lauderdale, Boca Raton, Delray Beach, Lantana, Lake Worth and West Palm Beach, Florida Elder Financial Abuse and Exploitation Litigation and FINRA Arbitration Attorney:

SEC Charges Virginia-Based Broker With Stealing Funds From Elderly Customers

The Securities and Exchange Commission recently charged a broker based in Roanoke, Va., with defrauding elderly customers, including some who are legally blind, by stealing their funds for her personal use and falsifying their account statements to cover up her fraud.

According to the SEC’s complaint filed in U.S. District Court for the Western District of Virginia, Donna Jessee Tucker siphoned $730,289 from elderly customers and used the money to pay for such personal expenses as vacations, vehicles, clothes, and a country club membership. Tucker ensured that the customers received their monthly account statements electronically, knowing that they were unable or unwilling to access their statements in that format. The SEC further alleges that Tucker engaged in unauthorized trading and other financial transactions while making misrepresentations to customers about their investment accounts and forging brokerage, banking, and other documents.

The SEC’s investigation resulted from a broker-dealer examination of the firm where Tucker worked that was conducted by the SEC’s Philadelphia Regional Office.

In a parallel action, the U.S. Attorney’s Office for the Western District of Virginia announced criminal charges against Tucker.

Tucker has agreed to settle the SEC’s charges and disgorge the $730,289 in ill-gotten gains either in the criminal case or the civil case. She consented to the entry of an order permanently enjoining her from violating Section 17(a) of the Securities Act of 1933 as well as Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The settlement is subject to court approval.

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Boiler Room and Securities Fraud and Misrepresentation – Boca Raton, West Palm Beach and Fort Lauderdale, Florida Litigation and Arbitration Attorney

Russell L. Forkey — Mon, 15 Sep 2014 21:22:04 GMT

Boiler Room and Securities Fraud and Misrepresentation Litigation and Arbitration Attorney – West Palm Beach, Boca Raton and Fort Lauderdale, Florida.

Securities and Exchange Commission v. DDBO Consulting, Inc., et al., Civil Action No. 0:14-cv-61685-MGC (S.D. F.L.)

Securities and Exchange Commission v. CalPacific Equity Group, LLC, et al., Civil Action No. 2:14-cv-05754-JFW-AGR (C.D. C.A.)

SEC Charges Ddbo Consulting, Inc., Calpacific Equity Group, LLC, and Principals with Fraud and Registration Violations

The Securities and Exchange Commission (Commission) recently announced that on July 24, 2014, it filed civil actions in U.S. District Court against individuals and companies behind a boiler room scheme that hyped a company whose new technology was purportedly to be used in the Super Bowl. The SEC previously charged the operators of the scheme based in the South Florida and Los Angeles areas. Seniors and other investors were pressured into purchasing stock in Thought Development Inc. (TDI), an unaffiliated Miami Beach-based company that stated its signature invention is a laser-line system that generates a green line on a football field for a first-down marker visible not only on television but also to players, officials, and fans in the stadium.

The SEC charged four executives who helped make the scheme possible and three companies they operate – DDBO Consulting, Inc., DBBG Consulting, Inc., and CalPacific Equity Group, LLC. Approximately $1.7 million was raised through these companies from more than 110 investors who were told that an initial public offering (IPO) in TDI was imminent and that their money would be used to develop the ground-breaking technology. Instead, the SEC alleges that the IPO was not forthcoming as promised, and at least 50 percent of the offering proceeds were merely retained by these companies or paid to sales agents through undisclosed commissions and fees. Certain executives, their sales agents and their companies lured investors by misrepresenting that TDI’s technology was about to be used by the National Football League (NFL). One investor even made an additional $75,000 investment on top of an initial $2,500 investment after being told that NFL Commissioner Roger Goodell purchased TDI’s technology for use in the 2013 Super Bowl. In fact, there was no such arrangement.

In addition to the their companies, the SEC’s complaints charge brothers Dean R. Baker of Coral Springs, Fla., and Daniel R. Baker of Valley Village, Calif., along with Bret A. Grove of Delray Beach, Fla., and Demosthenes Dritsas of Newhall, Calif. The SEC’s complaints allege violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 as well as Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5. The defendants all agreed to settle the SEC’s charges. In parallel actions, the U.S. Attorney’s Office for the Central District of California announced criminal charges against Daniel Baker and Dritsas, and the U.S. Attorney’s Office for the Southern District of Florida announced criminal charges against Dean Baker and Grove.

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Investment Advisory Conflict of Interest – West Palm Beach, Florida Investment Advisor Conflict of Interest Attorney

Russell L. Forkey — Tue, 02 Sep 2014 16:04:09 GMT

South Florida, including West Palm Beach and Boca Raton Investment Advisor Conflict of Interest FINRA Arbitration and Litigation Attorney:

Houston-Based Investment Advisory Firm and Co-Owners Charged With Failing to Disclose Conflict of Interest to Clients

The Securities and Exchange Commission recently announced fraud charges against a Houston-based investment advisory firm accused of recommending that clients invest in particular mutual funds without disclosing a key conflict of interest: the firm was in turn receiving compensation from the broker offering the funds.

An SEC Enforcement Division investigation found that Robare Group Ltd. received a percentage of every dollar that its clients invested in certain mutual funds through an undisclosed compensation agreement with the brokerage firm. Therefore, unbeknownst to investors, Robare Group and its co-owners Mark L. Robare and Jack L. Jones Jr. had an incentive to recommend these funds to clients over other investment opportunities and generate additional revenue for the firm. Robare Group ultimately received approximately $440,000 in such payments from the brokerage firm during an eight-year period.

“Payments to investment advisers for recommending certain types of investments may taint their ability to provide impartial advice to their clients,” said Marshall S. Sprung, co-chief of the SEC Enforcement Division’s Asset Management Unit. “By failing to fully disclose its agreements with the brokerage firm, Robare Group deprived its clients of important information they were entitled to receive.”

The Asset Management Unit has undertaken an enforcement initiative to shed more light on undisclosed compensation arrangements between investment advisers and brokers. For example, the SEC previously charged an Oregon-based investment adviser for failing to disclose revenue sharing payments and other conflicts of interest to clients.

According to the SEC’s order instituting administrative proceedings against Robare Group and its co-owners, the firm revised its Form ADV in December 2011 to disclose the compensation agreement, but this and later disclosures falsely stated that the firm did not receive any economic benefit from a non-client for providing investment advice. The disclosures also were inadequate because they stated that Robare Group may receive compensation from the broker when in fact the firm was definitively receiving payments.

The SEC Enforcement Division further alleges that Robare Group and the broker entered into a new agreement in late 2012 that provided similar payments. But it wasn’t until June 2013 that the firm disclosed the conflict of interest associated with its arrangement with the broker, and even then it failed to disclose the incentive to recommend buying and holding certain mutual funds through the broker’s platform or the magnitude of the conflict. Robare reviewed and approved the Forms ADV, and Jones reviewed and signed all but one of the filings.

The SEC’s Enforcement Division alleges that Robare Group and Robare willfully violated Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, and Jones aided and abetted these violations. The Enforcement Division further alleges that Robare Group, Robare, and Jones each willfully violated Section 207 of the Advisers Act.

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Chimera Energy – IPO, Penny Stock and Microcap Fraud and Misrepresentation South Florida FINRA Arbitration and Litigation Attorney

Russell L. Forkey — Sat, 16 Aug 2014 14:31:42 GMT

Microcap, Penny Stock and IPO Fraud and Misrepresentation Pump and Dump Scheme Litigation and Arbitration Attorney:

SEC Announces Charges in Houston-Based Scheme Touting Technology to End Fracking

The Securities and Exchange Commission recently announced charges against a Houston-based penny stock company and four individuals behind a pump-and-dump scheme that misled investors to believe the company was on the brink of developing revolutionary technology to enable environmentally friendly oil-and-gas production.

The SEC alleges that Andrew I. Farmer orchestrated the scheme by creating a shell company called Chimera Energy, secretly obtaining control of all shares issued in an initial public offering (IPO) in late 2011, and launching an aggressive promotional campaign midway through 2012 to hype the stock to investors. Chimera Energy issued around three dozen press releases in a two-month period about its supposed licensing and development of technology to extract shale oil without the perceived environmental impact of hydraulic fracturing known as fracking. However, Chimera Energy did not actually license or even possess the technology it touted and had not achieved the claimed results in commercially developing it. While the stock was being pumped by the false claims, entities controlled by Farmer dumped more than 6 million shares on the public markets for illicit proceeds of more than $4.5 million.

The SEC suspended trading in Chimera Energy stock in 2012 and prevented Farmer and his associates from dumping additional shares or misleading new investors into their scheme.

In addition to Chimera Energy and Farmer, the SEC’s complaint charges a pair of figurehead CEOs installed by Farmer. The SEC alleges that Charles E. Grob Jr. and Baldemar Rios approved the misleading press releases and operated Chimera Energy at the minimum level necessary to lend the company a veneer of legitimacy while concealing Farmer’s involvement altogether. The SEC’s complaint also charges Carolyn Austin with helping Farmer profit from his scheme by dumping shares of Chimera Energy stock in the midst of the promotional efforts.

According to the SEC’s complaint filed in federal court in Houston, Farmer obtained control of all 5 million shares of Chimera Energy stock issued in the IPO by disguising his ownership through the use of nominee shareholders. Farmer’s name and the nature of his control over the company were not disclosed to investors in any of Chimera Energy’s public filings. Following the IPO, Farmer directed the press release barrage along with an Internet advertising campaign designed to increase investor awareness of Chimera Energy’s claims. The initial press release issued by the company on July 30, 2012, sported the headline: CHMR Unveils Breakthrough Shale Oil Extraction Method to Safely and Effectively Replace Hydraulic Fracturing.

The SEC alleges that Chimera Energy disclosed in public filings that an entity named China Inland had granted the company an “exclusive license to develop and commercialize cutting edge technologies related to Non-Hydraulic Extraction.” The technology that China Inland purportedly licensed to Chimera Energy was described as an “environmentally friendly oil & gas extraction procedure for shale to replace hydraulic fracturing.” The SEC’s investigation found that the purported acquisition of a license to develop such technology and the license agreement itself are entirely fictitious. No legitimate entity known as China Inland even exists.

The SEC’s complaint charges Chimera Energy, Farmer, Grob, Rios, and Austin with securities fraud, registration violations, and reporting violations. The SEC seeks permanent injunctions, disgorgement with prejudgment interest and financial penalties, penny stock bars, and officer-and-director bars.

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John Thornes – South Florida Elder and Retirement Financial Abuse, Fraud and Breach of Fiduciary Duty FINRA Arbitration and Litigation Attorney

Russell L. Forkey — Mon, 04 Aug 2014 19:07:39 GMT

Boca Raton, Boynton Beach, Lake Worth, Delray Beach and Deerfield Beach, Florida Elder and Retirement Financial Abuse, Fraud and Breach of Fiduciary Duty FINRA Arbitration and Litigation Attorney:

Securities and Exchange Commission v. John Thornes, Defendant, and Christopher Burnell, Kyle Larick, and Doreen Thornes, Relief Defendants, Civil Action No. 14-cv-06088 (C.D. Cal.)

SEC Charges California-Based Broker with Stealing Money from Accounts

The Securities and Exchange Commission recently charged a California-based broker with stealing $4.4 million from two trust brokerage accounts at his firm and diverting it to a pair of friends for uses ranging from gambling to chartering a private jet.

The SEC alleges that John T. Thornes of Redlands, Calif., formerly the sole owner of Thornes & Associates, Inc., diverted funds out of a brokerage account for a trust established for the health and welfare of an 80-year-old dementia patient who has been living at home for several years with 24-hour nurse care. Thornes also siphoned money out of a brokerage account for a trust set up to fund college scholarships for local high school graduates.

According to the SEC’s complaint filed in U.S. District Court for the Central District of California, Thornes stole money from the two accounts from November 2010 to April 2013 primarily to benefit two of his friends, Christopher Burnell of Highland, Calif., and Kyle Larick of Redlands, Calif. Thornes has tried to pass off the payouts as loans, however there were no loan documents, no stated interest, and no collateral for the funds given. None of the money was ever repaid.

The SEC alleges that Thornes deceived his own mother with respect to the educational trust. She served as trustee, and he periodically asked her to sign blank checks that he then used in his misappropriation scheme. Thornes never informed his mother about trades he made, and he converted the brokerage account to a margin account even though it was designated as a low or minimal-risk tolerance account. He used the margin debt in his scheme and later sold securities from those accounts to avoid the margin calls. Thornes did the same thing with the brokerage account for the elderly dementia patient.

According to the SEC’s complaint, after Thornes liberally transferred money from the brokerage accounts to his friends, they used it to charter a private jet, buy a luxury car, and purchase a vacation home. Burnell also used the funds to gamble at a nearby casino or pay gambling debts. Thornes paid his mother about $84,000 in excess trustee fees.

Thornes has agreed to settle the charges and consented to the entry of a final judgment ordering him to pay disgorgement of $4,366,790, prejudgment interest of $278,540, and a penalty of $4,366,790. Without admitting or denying the SEC’s allegations, he agreed to be permanently enjoined from future violations of Section 17(a) of the Securities Act of 1933 as well as Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. Thornes also has agreed to consent to a collateral industry bar and a penny stock bar.

The SEC’s complaint also names Thornes’ friends Burnell and Larick as well as his mother Doreen Thornes as relief defendants for the purposes of recovering any illicit funds in their possession.

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CP Capital Securities, Inc. – Hollywood, Florida Improper Markup Corporate Bond FINRA Arbitration and Litigation Attorney

Russell L. Forkey — Sun, 03 Aug 2014 01:43:44 GMT

Hollywood, Dania, Fort Lauderdale, Pompano Beach and Deerfield Beach, Florida Improper Markup Corporate Bond FINRA Arbitration and Litigation Attorney:

July 2014 Disciplinary and Other FINRA Actions

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

CP Capital Securities, Inc. submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured, fined $5,000 and ordered to pay $1,676.92, plus interest, in restitution to customers. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it bought corporate bonds from customers and failed to buy such bonds at a price that was fiar, taking into consideration all relevant circumstances, including market conditions with respect to each bond at the time of the transaction, the expense involved and that the firm was entitled to a profit. To see a full copy of the release relative to this matter, please follow the above highlighted link. FINRA Case No. 2013035996801.

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Robert G. Bard – South Florida Securities and Bank Fraud and Misrepresentation FINRA Arbitration and Litigation Attorney

Russell L. Forkey — Sat, 02 Aug 2014 01:33:59 GMT

Boca Raton, Delray Beach, Boynton Beach, Lake Worth and West Palm Beach, Florida Investment Advisor Securities and Bank Fraud and Misrepresentation FINRA Arbitration and Litigation Attorney:

Securities and Exchange Commission v. Robert Glenn Bard, et al., Civil Action No. 1:09-cv-1473 (M.D. Pa.)

Pennsylvania-Based Investment Adviser Charged in SEC and Criminal Actions Receives Prison Sentence

A Pennsylvania-based investment adviser who was charged with fraud in an SEC enforcement action and later by criminal authorities has received a prison sentence of more than 21 years.

Robert G. Bard of Warfordsburg, Pa., was sentenced on July 31 by Sylvia H. Rambo of the U.S. District Court for the Middle District of Pennsylvania. Bard had been found guilty by a jury and convicted of 21 counts of securities fraud, mail fraud, wire fraud, bank fraud, and making false statements for defrauding his investment advisory clients between December 2004 and August 2009. Judge Rambo sentenced Bard to 262 months imprisonment and ordered him to pay $4.2 million in restitution to 66 victims.

The criminal case, filed by the U.S. Attorney’s Office for the Middle District of Pennsylvania on July 18, 2012, arose out of the same facts that were the subject of a civil injunctive action filed by the SEC on July 30, 2009. The Commission’s complaint alleged that defendant Bard, an investment adviser, and his solely-owned company Vision Specialist Group LLC had violated the federal securities laws through fraudulent misrepresentations regarding client investments, account performance and advisory fees, and by Bard’s creation of false client account statements, and forgery of client documents. On May 23, 2012, after granting summary judgment for the Commission, the U.S. District Court for the Middle District of Pennsylvania entered a final judgment against Bard and Vision Specialist Group finding both violated § 17(a) of the Securities Act of 1933, § 10(b) of the Exchange Act of 1934, and Rule 10b-5 thereunder, and §§ 206(1) and 206(2) of the Investment Advisers Act of 1940. In that judgment, the court also entered permanent injunctions for violations of those provisions, and held Bard and Vision Specialist Group jointly and severally liable for disgorgement, prejudgment interest, and civil penalties totaling $3,003,039.

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Registration of Dealers, Associated Persons and Investment Advisers in Florida – South Florida Securities Attorney

Russell L. Forkey — Fri, 01 Aug 2014 11:33:53 GMT

Registration of Dealers, Associated Persons, and Investment Advisers in the State of Florida – South Florida Securities Attorney:

Chaper 517.12 Fla.Stat. labeled Registration of dealers, associated persons, and investment advisers provides in relevant part that:

(1) No dealer, associated person, or issuer of securities shall sell or offer for sale any securities in or from offices in this state, or sell securities to persons in this state from offices outside this state, by mail or otherwise, unless the person has been registered with the Department of Financial Regulation (“office”) pursuant to the provisions of this section. The office shall not register any person as an associated person of a dealer unless the dealer with which the applicant seeks registration is lawfully registered with the office pursuant to this chapter.

(2) The registration requirements of this section do not apply to the issuers of securities exempted by s. 517.051(1)-(8) and (10).

(3) Except as otherwise provided in s. 517.061(11)(a)4., (13), (16), (17), or (19), the registration requirements of this section do not apply in a transaction exempted by s. 517.061(1)-(12), (14), and (15).

(4) No investment adviser or associated person of an investment adviser or federal covered adviser shall engage in business from offices in this state, or render investment advice to persons of this state, by mail or otherwise, unless the federal covered adviser has made a notice-filing with the office pursuant to s. 517.1201 or the investment adviser is registered pursuant to the provisions of this chapter and associated persons of the federal covered adviser or investment adviser have been registered with the office pursuant to this section. The office shall not register any person or an associated person of a federal covered adviser or an investment adviser unless the federal covered adviser or investment adviser with which the applicant seeks registration is in compliance with the notice-filing requirements of s. 517.1201 or is lawfully registered with the office pursuant to this chapter. A dealer or associated person who is registered pursuant to this section may render investment advice upon notification to and approval from the office.

(5) No dealer or investment adviser shall conduct business from a branch office within this state unless the branch office is notice-filed with the office pursuant to s. 517.1202.

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, it should not be relied upon as legal or investment advice. If the reader has any questions concerning the contents of this post, you should contact a qualified professional.

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Do CFPs Have to Register as an Investment Adviser in Florida – Delary, Deerfield Beach, Boca Raton and Boynton Beach, Florida FINRA Arbitration, Litigation and Elder Abuse Attorney

Russell L. Forkey — Fri, 01 Aug 2014 10:54:46 GMT

Do CFPs have to register as an Investment Adviser in Florida – Delray, Boynton Beach, Lantana, Boca Raton and West Palm Beach FINRA Arbitration, Litigation and Elder Abuse Attorney:

Any person who for compensation refers, solicits, offers, or negotiates for the purchase or sale of investment advisory services is required to be registered in Florida, regardless of their professional designation as a Investment Adviser and/or Associated Person of a broker/dealer.

Please keep in mind that this information is being provided for informational purposes only. It is not designed to be complete in all material respects. Thus, it should not be relied upon as legal or investment advise. If the reader has any questions relating to this post, you should contact a qualified professional.

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Elder and Retirement Financial Abuse – How To Spot Investment Fraud – South Florida FINRA Arbitration and Litigation Attorney

Russell L. Forkey — Sat, 26 Jul 2014 22:23:15 GMT

Boca Raton, Fort Lauderdale and West Palm Beach, Florida Elder and Retirement Financial Abuse FINRA Arbitration and Litigation Attorney:

Elder and retirees should think twice about investing if you spot any of these red flags of investment fraud:

Limited history of posts. Fraudsters can set up new accounts specifically designed to carry out their scam while concealing their true identities. Be skeptical of information from social media accounts that lack a history of prior postings or sending messages.
Pressure to buy or sell RIGHT NOW. Take the time to research the stock before you invest. Be skeptical of messages urging you to buy a hot stock before you “miss out” or to sell shares of a stock you own before the price goes down after negative news is announced. Be especially wary if the promoter claims the recommendation is based on “inside” or confidential information.
Unsolicited investment information or offers. Fraudsters may look for victims on social media sites, chat rooms, and bulletin boards. Exercise extreme caution regarding information provided in new posts on your wall, tweets, direct messages, e-mails, or other communications that solicit an investment or provide information about a particular stock if you do not personally know the sender (even if the sender appears connected to someone you know).
Unlicensed sellers. Federal and state securities laws require investment professionals and their firms who offer and sell investments to be licensed or registered. Many fraudulent investment schemes involve unlicensed individuals or unregistered firms. Check license and registration status by searching the SEC’s Investment Adviser Public Disclosure (IAPD) website or the Financial Industry Regulatory Authority (FINRA)’s BrokerCheck website.

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Microcap and Penny Stock Fraud – South Florida Securities Fraud and Misrepresentation FINRA Arbitration and Litigation Attorney

Russell L. Forkey — Wed, 16 Jul 2014 14:49:26 GMT

Fort Lauderdale, Boca Raton, Delray Beach, Lantana, West Palm Beach and Stuart, Florida Microcap and Penny Stock Fraud and Misrepresentation Litigation, FINRA Arbitration and Elder Abuse Attorney:

SEC Announces Charges in Scheme to Secretly Enable Lawbreakers to Run Microcap Company

The Securities and Exchange Commission recently announced fraud charges against four individuals and a microcap company for concealing from investors that two lawbreakers ran the company.

According to the SEC’s orders instituting administrative proceedings, the mission of Natural Blue Resources Inc. was to create, acquire, or otherwise invest in environmentally-friendly companies, including an initiative to locate, purify, and sell water recovered from underground aquifers in New Mexico and other areas with depleting water resources. What investors didn’t know was that two individuals with prior law violations – James E. Cohen and Joseph Corazzi – secretly controlled the operational and management decisions of Natural Blue while calling themselves outside “consultants.” This arrangement enabled them to be de facto officers of Natural Blue and personally profit from the company without disclosing their past brushes with the law to investors. Cohen, who lives in Windermere, Fla., was previously incarcerated for financial fraud. Corazzi, who resides in Albuquerque, N.M., was previously charged with violating federal securities laws and permanently barred from acting as an officer or director of a public company.

The SEC has suspended trading in Natural Blue stock. The other two individuals charged in the case are Toney Anaya and Erik Perry, who were former chief executive officers at Natural Blue. The SEC’s orders find that they misled investors by failing to disclose that Cohen and Corazzi were running the company in spite of their criminal or disciplinary histories.

Anaya, who is a former New Mexico governor and attorney general, and Perry each agreed to settle the charges. Anaya has cooperated extensively with the SEC’s investigation.

According to the SEC’s orders, Cohen and Corazzi created Natural Blue so they and other entities they controlled could receive money and stock from the company and profit by hundreds of thousands of dollars. While Natural Blue was ostensibly led by Anaya and subsequently Perry, management decisions made by Cohen and Corazzi resulted in no revenues or viable business operations for the company. Anaya and Perry each deferred to Cohen and Corazzi in derogation of their responsibilities. Natural Blue and Perry also made various material misrepresentations about the company, its contracts, and its anticipated revenue in a February 2011 press release as well as on a website and verbally to investors.

Anaya, who served as Natural Blue’s CEO from August 2009 to January 2011, has signed a cooperation agreement with the SEC in which he has consented to the entry of a cease-and-desist order without admitting or denying the charges. He will be barred from participating in any offering of a penny stock for at least five years. Any financial penalties will be determined at a later date.

Perry, who replaced Anaya and served as CEO until June 2011, agreed to settle the case by consenting to the entry of a cease-and-desist order without admitting or denying the charges. Perry, who previously resided in Massachusetts and currently lives in Bulgaria, agreed to pay a $150,000 penalty and be permanently barred from serving as an officer or director of a public company and from participating in any offerings of penny stock.

The SEC’s orders charge Natural Blue, Cohen, and Corazzi with violations of Section 17(a)(1) and (a)(3) of the Securities Act of 1933 as well as Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and 10b-5(c). The orders also charge Natural Blue with violations of Section 17(a)(2) for misrepresentations made to investors in press releases and public filings, and violations of Section 15(d) of the Exchange Act and Rules 15d-1 and 15d-13 by failing to make required SEC filings.

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