Private Placements / Direct Investments

New Issue – Florida Securities and Investment Loss FINRA Arbitration and Litigation Attorney

Published on: September 22, 2013 | By Russell L. Forkey, P.A.

New Issue – South Florida Common and Preferred Stock and Bond Investment Loss – FINRA Arbitration and Litigation Attorney:

A “New Issue” is a stock or bond being offered to the investing public for the first time, the distribution of which is covered by various Securities and Exchange Commission (SEC) rules and regulations. New issues may be initial public offerings by previously private companies or additional stock or bond issues by companies already public and often listed on an exchange. New public offerings must be registered with the SEC. Private placements avoid SEC registration but are subject to its own set of SEC rules and regulations.

Please keep in mind that the above information is being provided for educational purposes only. It is not designed to be complete in all material respects. 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.

Fraudulent Promissory Note Offering – South Florida Securities and Investment Fraud FINRA Arbitration and Litigation Attorney

Published on: September 10, 2013 | By Russell L. Forkey, P.A.

SEC Files Civil Injunctive Action Against Alleged Perpetrator and Unregistered Broker in Fraudulent Promissory Note Offering

Recently, the Securities and Exchange Commission filed a civil injunctive action in the United States District Court for the District of Colorado against Brian G. Elrod for allegedly conducting a fraudulent offering of promissory notes for which Nova Dean Pack acted as an unregistered broker. Elrod and Pack reside in Buffalo Creek, Colorado and Highland, California, respectively.

The Complaint alleges that, from at least March 2009 through November 2009, Elrod and Pack raised approximately $2 million from 12 investors who invested in high-yield promissory notes issued by CFS Holding Company LLC (“CFS”), a Colorado company owned and managed by Elrod. According to the Complaint, Elrod told investors that their investments were secured and guaranteed and would generate annual returns ranging from 12% to 24%. According to the Complaint, Elrod further represented to investors that the proceeds from their promissory notes would be used to expand a group of financial services companies owned and managed by Elrod. The Complaint alleges that the foregoing representations, among others, were false and misleading when made, and that Elrod, rather than use investor money for legitimate business purposes, improperly used most of the investor funds to make substantial payments to himself and family members and to pay for personal expenses, to pay Pack significant commissions for referring investors, and to make interest payments back to investors. According to the Complaint, the CFS note offering was not registered with the Commission, and Pack was not an associated person of a registered broker or dealer at the time he participated in the CFS note offering.

Prime Bank Investment Fraud – South Florida Securities and Investment Fraud Litigation and FINRA Arbitration Attorney

Published on: September 9, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. Bernard H. Butts, Jr., Fotios Geivelis, Jr., also known as Frank Anastasio, Worldwide Funding III Limited LLC, Douglas J. Anisky, Sidney Banner, Express Commercial Capital LLC, James Baggs (Defendants), Bernard H. Butts, Jr. PA, Butts Holding Corporation, Margaret A. Hering, Global Worldwide Funding Ventures, Inc., and PW Consulting Group LLC (Relief Defendants), Civil Action No. 13-23115-CIV-MARTINEZ-MCALILEY (Southern District of Florida)

SEC Halts Florida-Based Prime Bank Investment Scheme

The Securities and Exchange Commission recently announced that it has obtained an emergency court order to halt a prime bank investment scheme by a Miami attorney and others who have promised investors exorbitant returns to be derived from a program based on the trading of bank instruments.

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.

Preliminary Prospectus (Official Statement) – South Florida Fraudulent and Misleading Offering Document FINRA Arbitration and Litigation Attorney

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

Preliminary Prospectus, Preliminary Offering Document, Preliminary Official Statement – South Florida Fraud, Misrepresentation and Omission FINRA Arbitration and Litigation Attorney:

A preliminary prospectus also known as a “red herring” is the first document released by an underwriter of a new issue to prospective investors. The document offers financial details and other information about the issue but does not contain all of the information that will appear in the final prospectus, and parts of the document may be changed before the final prospectus is issued.

Please keep in mind that the above information is being provided for educational purposes only. Thus, it is not designed to be complete in all material respects. Further, this post 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.

Johnny Clifton – Florida Oil and Gas Limited Partnership Fraud and Misrepresentation FINRA Arbitration and Litigation Attorney

Published on: July 17, 2013 | By Russell L. Forkey, P.A.

The Securities and Exchange Commission Sanctions Johnny Clifton for Antifraud and Failure to Supervise Violations

The Securities and Exchange Commission (Commission) recently announced that it barred Johnny Clifton, who was president, chief executive officer, and principal of MPG Financial, LLC, a former Commission-registered broker-dealer, from associating with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, entered a cease-and-desist order, and imposed a $150,000 third-tier civil money penalty. The Commission found that Clifton violated Sections 17(a)(1), 17(a)(2), and 17(a)(3) of the Securities Act of 1933 because he made material misrepresentations and omissions in the offer and sale of oil-and-gas limited partnership interests, and through those misrepresentations, omissions, and other misconduct he engaged in a fraudulent scheme and course of business that operated as a fraud on prospective investors. The Commission also found that Clifton violated Section 15(b) of the Securities Exchange Act of 1934 because he failed reasonably to supervise at least one MPG Financial sales representative with a view towards detecting and preventing the sales representative’s securities law violations. Concluding that it was in the public interest to impose a full collateral bar on Clifton, the Commission stated that “[h]is repeated and egregious misconduct evidences an unfitness to participate in the securities industry that goes beyond the professional capacity in which he was acting” and “demonstrates his unfitness to participate in the securities industry in any capacity.”

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Florida-Based Stock Promoter Charged with Lying to SEC Investigators – Florida Securities and Private Placement Fraud and Mismanagement Litigation Attorney

Published on: May 31, 2013 | By Russell L. Forkey, P.A.

The Securities and Exchange Commission recently announced that the subject of an enforcement inquiry in Florida has has been criminally charged for obstructing justice and lying to SEC investigators looking into his real estate securities offerings to investors.

The U.S. Attorney’s Office for the Southern District of Florida has filed criminal charges against former broker and securities fraud recidivist Robert J. Vitale, who lives in Lauderdale-by-the Sea. According to the criminal information filed in U.S. District Court for the Southern District of Florida, the SEC issued subpoenas to Vitale and his investment company Realty Acquisitions & Trust in order to identify investor funds and assets related to the securities offerings. The SEC investigators subpoenaed Vitale for all related bank records and took his sworn testimony.

The criminal information alleges that Vitale lied about the existence of two separate bank accounts that he did not disclose to the SEC. Specifically, Vitale deposited $100,000 into a bank account in Fort Lauderdale under the name of “B.L. Inc.” in the days preceding his testimony to SEC investigators in June 2012. Vitale then did not disclose the existence of the account to the SEC when asked under oath.

Restricted or Lettered Securities – Florida Security, Investment and Business State and Federal Court Litigation and AAA Arbitration Attorney

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

Restricted or Lettered Security – Florida Security, Investment and Business State and Federal Court Litigation and American Arbitration Association Attorney:

“Restricted” or “Lettered” Security generally describers a stock or bond that is not registered with the Securities and Exchange Commission. Consequently, these securities cannot be sold in the public market. When such a stock or bond is sold directly by the issuer to an investor, registration can be avoided if a letter of intent, called an investment letter is signed by the purchaser establishing, among other things, that the securities are being bought for investment purposes and not with a view to resale.

Normally, this investment letter requires the investor to acknowledge the fact that he or she has received sufficient information about the issuer to make an intelligent investment decision, understands that the investment involves varying degrees of risk (usually high risk) and that the investor realizes that he or she may loose their entire investment. From a practical investment standpoint, these types of investments are not appropriate for the average investor.