Securities and Securities Fraud

Sean Robert Stropp, Karl Spicer, Ricardo Garcia and PMCO Services, Inc. – Florida Precious Metals Fraud and Misrepresentation Litigation and Arbitration Attorney

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

South Florida Precious Metals Fraud, Misrepresentation and Breach of Fiduciary Duty Litigation and Arbitration Attorney:

The Manhattan District Attorney’s Office recently announced that three Florida men who operated an investment scheme through a precious metals company have been indicted in New York City on charges they defrauded scores of investors out of millions of dollars.

Manhattan District Attorney Cyrus Vance said Tuesday Sean Robert Stropp, Karl Spicer, Ricardo Garcia and PMCO Services Inc. were charged with grand larceny and violation of the Martin Act among other charges.

Short-Term Bond Fund – South Florida Sock and Bond Investment Loss FINRA Arbitration and Litigation Attorney

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

Short-Term Bond and Common Stock Investment Loss – South Florida FINRA Arbitration and Litigation Attorney:

A Short-Term Bond Fund is a bond mutual fund which invests in short-to-intermediate term bonds. Such bonds typically mature in 3 to 5 years and pay higher yields than the shortest maturity bonds of 1 year or less, which are held by ultra–short term bond funds. Short-term bond funds also usually pay higher yields than money market mutual funds, which buy short-term commercial paper maturing in 90 days or less. Short-term bond funds, while yielding less than long-terms bond funds, are also much less volatile, meaning that their value falls less when interest rates rise and rises less when interest rates fall.

Please keep in mind that the above information is being provided for educational purposes only. However, the focus on this article, especially based on the fact that it appears that higher interest rates are on the horizon, is that the duration of the bond and rising interest rates probably will have an adverse effect on the value of the bond. Notwithstanding the foregoing, this post is not designed to be complete in all material respects. Thus it should not be relied upon as providing legal or investment advice. If you have any questions concerning the contents of this post, please contact a qualified professional.

Philip Falcone and Harbinger Capital Partners – Florida Investment and Securities Mismanagement and Breach of Fiduciary Duty FINRA Arbitration and Litigation Attorney

Published on: August 21, 2013 | By Russell L. Forkey, P.A.

Philip Falcone and Harbinger Capital Agree to Settlement:

The Securities and Exchange Commission (“Commission”) recently announced that New York-based hedge fund adviser Philip A. Falcone and his advisory firm Harbinger Capital Partners have agreed to a settlement in which they must pay more than $18 million and admit wrongdoing. Falcone also agreed to be barred from the securities industry for at least five years.

The SEC filed enforcement actions in June 2012 alleging that Falcone improperly used $113 million in fund assets to pay his personal taxes, secretly favored certain customer redemption requests at the expense of other investors, and conducted an improper “short squeeze” in bonds issued by a Canadian manufacturing company. In the settlement papers filed in court today, Falcone and Harbinger admit to multiple acts of misconduct that harmed investors and interfered with the normal functioning of the securities markets.

Blake Richards – South Florida Retirement Funds Misappropriation and Theft FINRA Arbitration and Litigation Attorney

Published on: August 21, 2013 | By Russell L. Forkey, P.A.

South Florida Retirement and Elder Care Misappropriation and Theft FINRA Arbitration and Litigation Attorney:

Securities and Exchange Commission v. Blake Richards, Civil Action No. 1:13-CV-1729 (N.D. Ga.)

Federal Court Permanently Enjoins Atlanta-Area Registered Representative Blake Richards from Securities Fraud Violations

Florida Microcap and Penny Stock Fraud and Investment Loss FINRA Arbitration and Litigation Attorney

Published on: August 15, 2013 | By Russell L. Forkey, P.A.

South Florida Microcap and Penny Stock Fraud and Investment Loss FINRA Arbitration and Litigation Attorney:

The Securities and Exchange Commission (“Commission”) recently announced that it charged two microcap companies, their CEOs, and one penny stock promoter for spearheading illegal kickback schemes. The Commission also charged two other microcap companies, their CEOs, and four other promoters with arranging the payment of bribes to hype the companies in which they had a stake in order to create a false sense of market activity and illegally generate stock sales.

The Commission’s complaints recently filed in U.S. District Court for the Southern District of Florida charged the following penny stock companies and officers:

Javier Martin-Artajo and Julien Grout – Florida Securities and Investment Loss FINRA Arbitration and Litigation Attorney

Published on: August 15, 2013 | By Russell L. Forkey, P.A.

The Securities and Exchange Commission Charges Two J.P. Morgan Traders with Fraudulently Overvaluing Investments To Conceal Losses

The Securities and Exchange Commission (“Commission”) recently charged two former traders at JPMorgan Chase & Co. with fraudulently overvaluing investments in order to hide massive losses in a portfolio they managed.

The SEC alleges that Javier Martin-Artajo and Julien Grout were required to mark the portfolio’s investments at fair value in accordance with U.S. generally accepted accounting principles and JPMorgan’s internal accounting policy. But when the portfolio began experiencing mounting losses in early 2012, Martin-Artajo and Grout schemed to deliberately mismark hundreds of positions by maximizing their value instead of marking them at the mid-market prices that would reveal the losses. Their mismarking scheme caused JPMorgan’s reported first quarter income before income tax expense to be overstated by $660 million.

Cash Basis of Accounting, Accrual Method of Accounting and Modified Cash Basis of Accounting – Florida Breach of Contract, Breach of Fiduciary Duty, Fraud and Accounting Negligence Litigation Attorney

Published on: August 15, 2013 | By Russell L. Forkey, P.A.

Cash Basis of Accounting, Accrual Method of Accounting and Modified Cash Basis: South Florida Accounting Negligence and Breach of Contract Commerical Litigation Attorney, Russell L. Forkey, Esq.

The Cash Basis accounting method recognizes revenues when cash is received and recognizes expenses when cash is paid out. In contrast, the Accrual Method of accounting recognizes revenues when goods or services are sold and recognizes expenses when obligations are incurred. A third method, called Modified Cash Basis uses accrual accounting for long-term assets and is the basis usually referred to when the term cash basis is used.

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.

Steven B. Heinz and S.B. Heinz & Associates, Inc. – Florida Financial Planning and Insurance Fraud, Misrepresentation and Breach of Fiduciary Duty FINRA Arbitration and Litigation Attorney

Published on: August 13, 2013 | By Russell L. Forkey, P.A.

SEC Obtains Asset Freeze and Other Relief in $4 Million Offering Fraud

Recently, the Securities and Exchange Commission (“Commission”) obtained a temporary restraining order and an emergency asset freeze in a $4 million offering fraud and Ponzi scheme orchestrated by Steven B. Heinz (Heinz) and his company S.B. Heinz & Associates, Inc. (S.B. Heinz), a financial planning and insurance agency located in Provo, Utah.

The complaint alleges that since January 1, 2012, Heinz acted as an investment adviser and solicited nearly $4 million from more than fifteen former clients, family members, and friends to enable him, through his company S.B. Heinz, to execute rapid buy and sell orders of futures contracts. The complaint further alleges that investor funds are being used to falsely create the appearance of a successful investment business although S.B. Heinz has actually lost approximately $1.5 million executing Heinz’s high risk futures contract trading activities. In addition, the complaint alleges that Heinz pays “returns” to earlier investors using new investor funds, used investor funds for his own personal purposes and that S.B. Heinz used investor funds to pay business expenses, including the salary for its secretary and its office rent.

Hedge Fund Scheme Targeting Fellow Military – South Florida Hedge Fund and Investment Fraud and Misrepresentation FINRA Arbitration and Litigation Attorney

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

SEC Halts Ex-Marine’s Hedge Fund Fraud Targeting Fellow Military

The Securities and Exchange Commission (the” Commission”) recently obtained an emergency court order to halt a hedge fund investment scheme by a former Marine living in the Chicago area who has been masquerading as a successful trader to defraud fellow veterans, current military, and other investors.

The SEC alleges that Clayton A. Cohn and his hedge fund management firm Market Action Advisors raised nearly $1.8 million from investors through a hedge fund he managed. Cohn lied to investors about his success as a trader, the performance of the hedge fund, his use of investor proceeds, and his personal stake in the hedge fund. Cohn only invested less than half of the money raised from investors and instead used more than $400,000 for such personal expenses as a Hollywood mansion, luxury automobile, and extravagant tabs at high-end nightclubs. He used his lavish lifestyle to carefully contrive the image of a successful trader and investor, when in reality he lost nearly all of the money invested through the hedge fund. In order to cover up his fraud and continue raising money from investors, Cohn generated phony hedge fund account statements showing annual returns exceeding 200 percent.

Bank Of America N.A., Banc of America Mortgage Securities, Inc., and Merrill Lynch, Pierce, Fenner & Smith, Inc. – Florida Residential Mortgage-Backed Securities – South Florida Material Misrepresentation FINRA Arbitration and Litigation Attorney

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

SEC Charges Bank of America Entities with Material Misrepresentations and Omissions in Connection with an RMBS Offering

Recently, the Securities and Exchange Commission (“Commission”) filed a civil injunctive action against Bank of America, N.A. (BANA), Banc of America Mortgage Securities, Inc. (BOAMS), and Merrill Lynch, Pierce, Fenner & Smith, Inc. f/k/a Banc of America Securities LLC (BAS) (collectively the Bank of America Entities). The Commission alleges that the Bank of America Entities made material misrepresentations and omissions in connection with the sale of residential mortgage-backed securities known as BOAMS 2008-A. Specifically, the complaint alleges that the Bank of America Entities failed to disclose the disproportionate concentration of wholesale loans (72% by unpaid principal balance) underlying BOAMS 2008-A as compared to prior BOAMS offerings. The complaint also alleges that the Bank of America Entities failed to disclose known risks associated with the high concentration of wholesale loans in BOAMS 2008-A including higher likelihood that the loans would be subject to material underwriting errors, become severely delinquent, fail early in the life of the loan, or prepay. The complaint further alleges that the Bank of America entities violated Regulation S-K and subpart Regulation AB of the Securities Act by failing to disclose the material characteristics of the pool of loans underlying BOAMS 2008-A. The complaint also alleges that the Bank of America Entities made material misrepresentations and omissions in its public filings and in the loan tapes it provided to investors and rating agencies that the loans in BOAMS 2008-A complied with BANA’s underwriting standards when a material amount did not. Finally, the complaint alleges that BOAMS and BAS violated Section 5(b)(1) of the Securities Act by failing to file with the Commission certain loan tapes that it provided only to select investors.

The Commission’s complaint, filed in the United States District Court for the Western District of North Carolina, charges the Bank of America Entities with violating the antifraud provisions of the federal securities laws. The complaint alleges that each violated Sections 17(a)(2) and 17(a)(3) of the Securities Act. The complaint also alleges that BAS and BOAMS violated Section 5(b)(1) of the Securities Act. The complaint seeks against each of the Bank of America Entities a permanent injunction, disgorgement with prejudgment interest and civil monetary penalties pursuant Section 20(d) of the Securities Act.