Investment Advisor

Cherry-Picking or Illicit Stock Allocation – South Florida Securities Misrepresentation and Breach of Fiduciary Duty FINRA Arbitration, State and Federal Litigation Attorney

Published on: May 19, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. Charles J. Dushek, et al., Civil Action No. 13-cv-3669 (N.D. Ill., filed May 16, 2013)

SEC Charges Chicago-Area Father and Son Conducting Cherry-Picking Scheme At Investment Firm

The Securities and Exchange Commission (“Commission”) filed a civil injunctive complaint on May 16, 2013, in the United States District Court for the Northern District of Illinois relating to a fraudulent cherry-picking scheme conducted by Charles J. Dushek (Dushek Sr.) of Warrenville, Illinois and his son Charles S. Dushek (Dushek Jr.) of Wheaton, Illinois. The Commission charged Dushek Sr., Dushek Jr., and their Lisle, Illinois-based investment advisory firm, Capital Management Associates, Inc. (CMA), with securities fraud, among other violations of the securities laws, for defrauding CMA clients in a cherry picking scheme that garnered the Dusheks nearly $2 million in illicit profits.

Investment Strategy – Florida Common Stock and Bond FINRA Arbitration and Litigation Attorney

Published on: May 14, 2013 | By Russell L. Forkey, P.A.

Investment Strategy – Florida Common Stock and Bond FINRA Arbitration and Litigation Attorney:

An “Investment Strategy” is nothing more than a plan to allocate assets among various investment classes such as stocks, bonds, cash or cash equivalents, commodities and real estate. An investment strategy should be based on an investor’s outlook on such things as interest rates, inflation, economic growth while, at the same time, taking into consideration the investor’s age, tolerance for risk, amount of investable capital, and time horizon.

If a stockbroker or investment advisor has formulated an investment strategy for you, it is imperative that the investments and strategy recommend to you are suitable to meet your investment objectives. If, as an investor, you feel that this is not the case, it is time to seek legal assistance.

Michael Bozora, Timothy Redpath, Capital Solutions Distributors, LLC and Capital Solutions Management, LP – Florida Investment Fund Fraud and Mismanagement FINRA Arbitration and Litigation Attorney

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

Securities and Exchange Commission v. True North Finance Corp., et al., Civil Action No. 10-cv-3995 (D. Minn., filed Sept. 21, 2010)

Final Judgments Entered Against Distributor and Investment Adviser

The Securities and Exchange Commission recently announced that a Minnesota federal court entered final judgments by consent against Michael Bozora, Timothy Redpath, Capital Solutions Distributors, LLC (CSD) and Capital Solutions Management, LP (CSM), in a civil injunctive action filed by the Commission on September 21, 2010. Among other things, the judgments order Bozora to pay over $500,000 in disgorgement of ill-gotten gains, Redpath to pay over $600,000 of ill-gotten gains, CSD to pay over $2.8 million of ill-gotten gains, and CSM to pay over $1.3 million of ill-gotten gains, plus pre-judgment interest and civil penalties against each of these Defendants.

South Florida Investment Advisor Misappropriation State and Federal Litigation Attorney

Published on: March 24, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. Timothy J. Roth, et al., Civil Action No. 11-cv-02079 (C.D. Ill.)

The Securities and Exchange Commission recently announced that on March 21, 2013, the Honorable Michael M. Mihm of the United States District Court for the Central District of Illinois entered a judgment against Timothy J. Roth (“Roth”), a former investment adviser who misappropriated millions of dollars from the accounts of his advisory clients. The judgment permanently enjoins Roth from violating the antifraud provisions of the federal securities laws. Roth consented to the judgment. In addition, the Court entered an order granting the Commission’s motion to dismiss its monetary claims against Roth based on Roth’s conviction in a parallel criminal proceeding that included an order requiring him to pay restitution of over $16 million to his victims.

The SEC filed an emergency against Roth on March 21, 2011. On that same day, the Court issued an order freezing Roth’s assets and those of several companies he controlled. On March 31, 2013, the Court appointed a Receiver over Roth’s assets and those of the companies he controlled. The SEC’s complaint alleged that Roth worked for Comprehensive Capital Management, Inc. (“Comprehensive”), a New Jersey-based registered investment adviser. The SEC’s complaint alleged that from October 2010 through February 2011, Roth stole more than $6 million worth of mutual fund shares from several deferred compensation plans (“Plans”) for whom he provided investment advice. Roth’s theft of client assets was later determined to have been over $16 million. The SEC alleged that Roth, who worked out of Comprehensive’s office near Urbana, Illinois, secretly caused his victims’ mutual fund shares to be transferred to an account under his control, even though no such transfer had been requested or authorized by the clients. The SEC alleges that after selling the clients’ shares, Roth funneled the cash proceeds to various accounts and companies under his control or for his benefit. According to the SEC’s complaint, at the time he was engaging in his scheme, Roth did not tell the clients about the transfers. As a result of his conduct, the SEC’s complaint charged Roth with violations of Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, and with aiding and abetting violations of Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940, and Rule 206(4)-2 thereunder.

Gregg D. Caplitz and Onsite Strategic Management – Boca Raton, Florida Investment Advisor Fraud and Mismanagement Litigation and FINRA Arbitration Attorney

Published on: March 19, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. Gregg D. Caplitz, et al., Civil Action No. 1:13-cv-10612-MLW (D.Mass.)

SEC OBTAINS ASSET FREEZE AGAINST MASSACHUSETTS-BASED INVESTMENT ADVISER STEALING MONEY FROM CLIENTS

The Securities and Exchange Commission recently announced an asset freeze against a Massachusetts-based investment adviser charged with stealing money from clients who were given the false impression they were investing in a hedge fund.

Howard Brett Berger and Michelle Berger – Florida Common and Preferred Stock Fraud, Mismanagement and Breach of Contract FINRA Arbitration and Litigation Attorney

Published on: February 20, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. Howard Brett Berger and Michelle Berger, CV-12 4728 (E.D. N.Y. September 21, 2012)

SEC Obtains Judgment Against Investment Adviser In Connection With Cherry-Picking Scheme

The United States Securities and Exchange Commission (“Commission”) announced that on January 15, 2013, a final judgment was entered by consent against Howard B. Berger (“Berger”), permanently enjoining him from future violations of Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder, and Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 (“Advisers Act”) and Rule 206(4)-8 thereunder, in the civil action entitled Securities and Exchange Commission v. Howard B. Berger, et al., Civil Action Number CV-12 4728, in the United States District Court for the Eastern District of New York. The Commission filed its complaint against Berger on September 21, 2012, charging Berger with securities fraud and investment adviser fraud. Berger was a founder and manager of Professional Traders Management, LLC and Professional Offshore Traders Management, LLC, which managed and acted as investment advisers for hedge funds Professional Traders Fund, LLC (“PTF”) and Professional Offshore Opportunity Fund (“POOF”).

Delsa U. Thomas, The D. Christopher Capital Group, LLC and The Solomon Fund LP – Florida Investment Advisor Ponzi Scheme and Investment Fraud and Mismanagement FINRA Arbitration and Litigation Attorney

Published on: February 20, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. Delsa U. Thomas, et al., Civ. Action No. 3:13-cv-00739-L (N.D. Tex., Dallas Division, filed February 14, 2013)

SEC Sues Dallas Investment Adviser Principal for Conducting a Fraudulent High-Yield Investment Scheme

The Securities and Exchange Commission recently charged a Dallas investment adviser principal with defrauding investors out of $2.3 million in a high-yield investment scheme. The Commission’s complaint, filed in Dallas federal court, alleges that Delsa U. Thomas, The D. Christopher Capital Group, LLC (“DCCMG”), and The Solomon Fund LP, lied to investors about the safety and potential returns of the investments. For example, the complaint alleges that Thomas promised that $1 million in investor funds would remain safely invested in U.S. Treasury securities and would yield 650 percent returns in 35 banking days, supposedly from profits in Thomas’s high-yield investment program. While Thomas did purchase U.S. Treasury securities, she immediately margined those securities, commingled the margin proceeds with other investor funds, and sent the funds to a foreign intermediary, none of which was disclosed to investors. According to the Commission, Thomas used other investor funds to make Ponzi payments to investors in earlier investment programs she had sold, and for personal expenses. Finally, the complaint alleges that DCCMG was improperly registered with the Commission as an investment adviser, a violation that Thomas aided and abetted.

Timothy J. Roth – Florida Investment Advisor Fraud, Misrepresentation and Mismanagement FINRA Arbitration and Litigation Attorney

Published on: February 11, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. Timothy J. Roth, et al., Civil Action No. 11-cv-02079 (C.D. Ill.)

Former Investment Adviser Sentenced to 12 Years for Misappropriating Client Assets

The Securities and Exchange Commission recently announced that on January 31, 2013, the Honorable Michael M. Mihm of the United States District Court for the Central District of Illinois sentenced Timothy J. Roth to 151 months (12 years and 7 months) of incarceration followed by supervised release of 3 years and ordered Roth to pay $16,151,964 in restitution to his victims. Roth, a former investment adviser associated with Comprehensive Capital Management, Inc. (“Comprehensive”), pleaded guilty to one count of mail fraud and one count of money laundering in connection with his misappropriation of over $16 million worth of mutual funds from the accounts of eleven clients between 2004 and 2011. Roth, 56, of Stonington, Illinois, transferred the shares without the clients’ authorization into an account he controlled, sold them, and used the proceeds to form and support several companies he owned or controlled and to fund his own securities trading.

Kenneth A. Dachman – Miami, Florida Investment and Securities Fraud and Mismanagement Litigation and FINRA Arbitration Attorney

Published on: January 23, 2013 | By Russell L. Forkey, P.A.

Kenneth A. Dachman Sentenced to 10 Years in Prison and Ordered to Pay Over $4 Million in Restitution

The Securities and Exchange Commission (SEC) announced that on January 17, 2013, in a criminal action brought by the U.S. Attorney’s Office for the Northern District of Illinois, the Honorable James B. Zagel in the Northern District of Illinois sentenced Kenneth A. Dachman (Dachman) to 120 months in prison on 11 counts of wire fraud and ordered Dachman to pay more than $4 million in restitution to his victims. Judge Zagel also ordered Dachman to be placed on three years of supervised released following his prison sentence. [USA v. Kenneth A. Dachman, Case No. 1:11-CR-00504, USDC, N.D. Ill.].

Dachman was criminally charged for raising more than $4 million from investors for his now-defunct sleep disorder businesses, Central Sleep Diagnostics, LLC and Advanced Sleep Devices, LLC, which were located in the northern suburbs of Chicago. Between June 2008 and September 2010, Dachman fraudulently obtained funds from investors by misrepresenting the use of investor funds, the expected investment returns and risks involved in the investments, his business and academic background and the financial condition of his companies. The government established that Dachman misappropriated more than $2 million of commingled investor funds which he used for the benefit of himself and his family.

Raymond Y.H. Park – Cooper City, Florida Investment Advisor and Broker/Dealer Fraud, Mismanagement and Breach of Fiduciary Duty FINRA Arbitration and Litigation Attorney

Published on: January 23, 2013 | By Russell L. Forkey, P.A.

In the Matter of Raymond Y.H. Park

Recently, the Securities and Exchange Commission (the “Commission”) issued an Order Instituting Administrative Proceedings Pursuant to Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions (Order) against Raymond Y.H. Park. The Order finds that Park was the head trader for Tiger Asia Fund, L.P., and Tiger Asia Overseas Fund, Ltd., two private funds (the Funds), managed by Tiger Asia Management, LLC (TAM), an investment adviser registered with the Commission. The Order further finds that on December 14, 2012, a final judgment was entered by consent against Park, permanently enjoining him from future violations of Sections 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), 206(2) and 206(4) of the Advisers Act and Rule 206(4)-8 thereunder, in the civil action entitled SEC v. Tiger Asia Management, LLC, et al., 12 cv 07601 (DMC), in the United States District Court for the District of New Jersey.

The Order finds that the Commission’s Complaint in that action alleged that Park engaged in insider trading when TAM entered into wall crossing agreements during December 2008 and January 2009 for three private placements of Chinese bank stocks, subsequently violated the wall crossing agreements by short selling the stocks, and then covered the short positions with private placement shares purchased at a discount. The complaint further alleged that by trading after receiving the material nonpublic information concerning the private placements, Park breached a duty owed to the provider of the private placement information, the placement agents representing the sellers of the securities. The complaint also alleged that Park aided and abetted TAM, Tiger Asia Partners, LLC and Sung Kook Hwang, the portfolio manager of the Funds, in their violations of the Advisers Act. Park, at Hwang’s direction, placed trades in Chinese bank stocks at month’s end in November and December 2008 and January and February 2009 in an attempt to manipulate the price of those stocks to increase assets under management, which in turn would increase management fees during those four months.