False and Misleading Sales Material

Florida Insurance News and Enforcement Actions – Florida Insurance Fraud, Mismanagement and Breach of Fiduciary Duty Litigation and Arbitration Attorney

Published on: October 26, 2013 | By Russell L. Forkey, P.A.

The Florida Department of Insurance:

The mandate of the Florida Department of Insurance is to ensure that insurance companies licensed to do business in Florida are financially viable, operating within the laws and regulations governing the insurance industry; and offering insurance policy products at fair and adequate rates which do not unfairly discriminate against the buying public.

As part of its responsibility, the Florida Department of Insurance may elect to bring an enforcement action against those companies and licensed agents who it believes may be operating in violation of the laws and regulations governing the insurance industry.

Pyramid Scheme – Florida Fraud and Misrepresentation State and Federal Court Litigation Attorney

Published on: October 18, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. CKB Holdings Ltd., et al., Civil Action No. 13-5584 (E.D.N.Y., filed October 9, 2013)

SEC Halts $20 Million Pyramid Scheme Targeting Asian-American Community

The Securities and Exchange Commission recently announced charges and asset freezes against the operators and promoters of a worldwide pyramid scheme targeting members of the Asian-American community. The perpetrators of the scheme falsely promised exponential, risk-free returns to investors in a venture that purportedly sold Internet-based children’s educational courses.

“EB-5” Private Placement and Other Investment Abuses – Florida Private Placement and Other Investment Abuses Fraud and Misrepresentation FINRA Arbitration and Litigation Attorney

Published on: October 2, 2013 | By Russell L. Forkey, P.A.

Investment Scams That Exploit The Immigrant Investor Program:

Recently, the United States Securities and Exchange Commission’s Office of Investor Education and Advocacy and the United States Citizenship and Immigration Services (USCIS) jointly issued an Investor Alert to warn individual investors about fraudulent investment scams that exploit the Immigrant Investor Program, also known as “EB-5.”

The EB-5 program provides certain foreign investors who can demonstrate that their investments are creating jobs in this country, with a potential avenue to lawful permanent residency in the United States. Business owners apply to USCIS to be designated as “regional centers” for the EB-5 program. These regional centers offer investment opportunities in “new commercial enterprises” that may involve securities offerings. Through EB-5, a foreign investor who invests a certain amount of money that is placed at risk, and creates or preserves a minimum number of jobs in the United States, is eligible to apply for conditional lawful permanent residency. Toward the end of the two-year period of conditional residency, the foreign investor is eligible to apply to have the conditions on their lawful permanent residency removed, if he or she can establish that the job creation requirements have been met. Foreign investors who invest through EB-5, however, are not guaranteed a visa or to become lawful permanent residents of the United States. For more details, read the EB-5 Immigrant Investor section of USCIS’s website at www.uscis.gov.

Chan Tze Ngon – Florida Reverse Merger Fraud, Misrepresentation and Breach of Contract Litigation and FINRA Arbitration Attorney

Published on: September 27, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. Chan Tze Ngon and Jiang Xiangyuan, Civil Action No. 13-cv-6828 (S.D.N.Y.)

The Securities and Exchange Commission recently charged the former CEO of an education services provider based in China with stealing tens of millions of dollars from investors in a U.S. public offering, and charged another executive with illegally dumping his stock in the company after he helped steal valuable company assets.

The SEC alleges that ChinaCast Education Corporation’s former CEO and chairman of the board Chan Tze Ngon illicitly transferred $41 million out of the $43.8 million raised from investors to a purported subsidiary in which he secretly held a controlling 50 percent ownership stake. From there, Chan transferred investor funds to another entity outside ChinaCast’s control. Chan also secretly pledged $30.4 million of ChinaCast’s cash deposits to secure the debts of entities unrelated to ChinaCast. None of the transactions were disclosed in the periodic and other reports signed by Chan and filed with the SEC.

Ronald Walblay, RyHolland Fielder, Inc. and Energy Securities Inc. – South Florida Oil and Gas Limited Partnership Fraud, Mismanagement and Unregistered Securities FINRA Arbitration and Litigation Attorney

Published on: September 27, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. Ronald E. Walblay, Energy Securities, Inc., and RyHolland Fielder, Inc., Civil Action No. 9:13-cv-80978 (S.D. FL.)

The Securities and Exchange Commission recently charged the owner of two Florida-based companies with defrauding investors in five oil and gas offerings by misrepresenting such key facts as the amount of available reserves, the use of investor funds, and his past success in the oil and gas industry.

The SEC alleges that Ronald Walblay of Delray Beach, Fla., perpetrated the fraud through RyHolland Fielder Inc., which has managed a number of oil and gas limited partnerships, and his former brokerage firm Energy Securities Inc., which sold the partnerships’ interests – none of which were registered with the SEC as required under the federal securities laws. Walblay raised at least $12 million from more than 195 U.S. and foreign investors by falsely touting in sales brochures that RyHolland Fielder offered millions of barrels of oil and natural gas reserves. Walblay also falsely touted in offering materials that investors could receive potential returns of up to 2,270 percent. Meanwhile, not a single investor had ever profited from any of the partnerships, and Walblay used a greater percentage of investor funds than was disclosed to pay salaries and marketing expenses for investor conferences.

Investment Overvaluation and Valuation Misstatement – South Florida Investment and Mismanagement Litigation and FINRA Arbitration Attorney

Published on: September 25, 2013 | By Russell L. Forkey, P.A.

JPMorgan Chase Agrees To Pay $200 Million and Admits Wrongdoing to Settle SEC Charges – Firm Must Pay $920 Million in Total Penalties in Global Settlement

The Securities and Exchange Commission (Commission) recently charged JPMorgan Chase & Co. with misstating financial results and lacking effective internal controls to detect and prevent its traders from fraudulently overvaluing investments to conceal hundreds of millions of dollars in trading losses.

The SEC previously charged two former JPMorgan traders with committing fraud to hide the massive losses in one of the trading portfolios in the firm”s chief investment office (CIO). The SEC”s subsequent action against JPMorgan faults its internal controls for failing to ensure that the traders were properly valuing the portfolio, and its senior management for failing to inform the firm”s audit committee about the severe breakdowns in CIO”s internal controls.

False and Misleading Radio and Television Broker/Dealer Advertising – South Florida Direct (Alternative) Investment and Private Placement Fraud FINRA Arbitration and Litigation Attorney

Published on: September 1, 2013 | By Russell L. Forkey, P.A.

Solicitation of Investment Clients by Broker/Dealers and Investment Objectives Through the Use of Radio and Television Programing – South Florida False and Misleading Advertising FINRA Arbitration and Litigation Attorney

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 and enforcement action, firms and licensed individuals have the responsibility to reflect such action of 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 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:

South Florida Selling Away, Approved and Unapproved Outside Business Activity and Negligent Supervision FINRA Arbitration and Litigation Attorney

Published on: September 1, 2013 | By Russell L. Forkey, P.A.

South Florida Selling Away, Approved, Unapproved Outside Business Activity and Negligent Supervision FINRA Arbitration and Litigation Attorney:

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 and enforcement action, firms and licensed individuals have the responsibility to reflect such action of 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 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:

Hedge Funds – Florida Hedge Fund Investment Loss and Mismanagement Litigation and Arbitration Attorney

Published on: August 30, 2013 | By Russell L. Forkey, P.A.

Hedge Funds – Investment Loss and Mismanagement Federal and State Litigation Attorney:

“Hedge fund” is a general, non-legal term used to describe private, unregistered investment pools that traditionally have been limited to sophisticated, wealthy investors. Hedge funds are not mutual funds and, as such, are not subject to the numerous regulations that apply to mutual funds for the protection of investors – including regulations requiring a certain degree of liquidity, regulations requiring that mutual fund shares be redeemable at any time, regulations protecting against conflicts of interest, regulations to assure fairness in the pricing of fund shares, disclosure regulations, regulations limiting the use of leverage, and more.

“Funds of hedge funds” are nvestment companies that invest in hedge funds. Some, but not all, register with the SEC and file semi-annual reports. They often have lower minimum investment thresholds than traditional, unregistered hedge funds and can sell their shares to a larger number of investors. Like hedge funds, funds of hedge funds are not mutual funds. Unlike open-end mutual funds, funds of hedge funds offer very limited rights of redemption. And, unlike ETFs, their shares are not typically listed on an exchange.

UBS – Collateralized Debt Obligation (CDO) – Florida Collateralized Debt Obligation Fraud and Market Manipulation FINRA Arbitration and Litigation Attorney

Published on: August 8, 2013 | By Russell L. Forkey, P.A.

Florida Collateralized Debt Obligation – FINRA Arbitration and Litigation Attorney:

Pool Identification – ACA ABS 2007-2:

UBS to Pay $50 Million to Settle SEC Charges of Misleading CDO Investors