South Florida Arbitration & Litigation Lawyer Blog

Phony Certificates of Deposit(s) – South Florida Banking and Fraud Litigation and Arbitration Attorney

Published on: November 2, 2019 | By Russell L. Forkey, P.A.

The purpose of this post is to raise investor awareness concerning phony Certificates of Deposits (CDs) promoted through internet advertising and “spoofed” websites – websites that mimic the actual sites of legitimate financial instructions. Investors should be extremely cautious when purchasing CDs from sites found only though internet searches. 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, if you have any questions concerning the contents hereof, you should contact a qualified attorney.

“Spoofed” websites – often using URL addresses similar to those of legitimate firms’ websites, or using legitimate-sounding names and URLs – may be used to trick investors into buying bogus CDs. Spoofed websites selling fake CDs often have red flags of fraud. They may:

• Offer interest rates higher than you can find at any other financial institution, with no penalties for early withdrawals;

Justifiable Reliance – Orange County Florida Commercial Litigation and Arbitration Attorney

Published on: October 31, 2019 | By Russell L. Forkey, P.A.

In examining the concept of justifiable reliance, the Florida Supreme Court opined that the question is whether the recipient of a misrepresentation or omission is justified in relying upon its truth. For if the recipient “knows that it [the statement] or [omission] is false or its falsity is obvious to him/her, his/her reliance is improper, and there can be no cause of action for fraudulent misrepresentation. This is particularly important in circumstances where the misrepresentation or omission is subsequently referenced in a written contract. In such a circumstance, the Court has determined that notwithstanding oral misrepresentations prior to the making of a contract, a party cannot establish justifiable reliance and “may not recover in fraud for an alleged false statement when proper disclosure of the truth is subsequently revealed in a written agreement between the parties.

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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.

Fraud in the Inducement – South Florida Commercial Litigation and Arbitration Attorney

Published on: October 31, 2019 | By Russell L. Forkey, P.A.

In Florida, the essential elements to establish a claim for fraudulent inducement are: (1) a false statement of material fact; (2) the maker of the false statement knew or should have known of the falsity of the statement; (3) the maker intended that the false statement induce another’s reliance; and (4) the other party justifiably relied on the false statement to its detriment.

Please keep in mind that this information if being provided for educational purposes only and is not designed to be complete in all material respects. If you have any questions, you should contact a qualified attorney.

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Cold Calls for Oil and Gas Ventures – Unregistered Sales Agents – Boca Raton, Florida Litigation and Arbitration Attorney

Published on: September 3, 2018 | By Russell L. Forkey, P.A.

SEC Charges Unregistered Sales Agent for Improperly Soliciting Investments in Oil and Gas Ventures

Securities and Exchange Commission v. Chad Anthony Lewis, No. 18-cv-61869 (S.D. Fla. filed August 13, 2018)

On August 13, 2018, the Securities and Exchange Commission filed a civil injunctive action against Chad Anthony Lewis, a Kentucky resident for unlawfully acting as an unregistered broker and selling unregistered investments in two oil and gas companies based in Texas.

1 Global Capital, LLC and Carl Ruderman – Fraud in the Sale of Unregistered Securities – South Florida Securities and Commercial Litigation Attorney

Published on: September 3, 2018 | By Russell L. Forkey, P.A.

SEC Charges Florida Cash Advance Company, Former CEO with Defrauding Thousands of Retail Investors

Securities and Exchange Commission v. 1 Global Capital, LLC, Carl Ruderman, et al., No. 18-civ-61991 (S.D. Fla. filed August 23, 2018)

The Securities and Exchange Commission today announced charges against 1 Global Capital LLC and its former chief executive officer for allegedly defrauding at least 3,400 retail investors, more than one-third of whom invested their retirement funds. The Florida-based cash advance company and former CEO Carl Ruderman allegedly fraudulently raised more than $287 million since 2014 in unregistered securities sold through a network that included barred brokers.

Scott Stacy Phelps and James Michael Harper – Oil and Gas Fraud and Misrepresentation – South Florida Oil and Gas Litigation and Arbitration Attorney

Published on: September 3, 2018 | By Russell L. Forkey, P.A.

SEC Charges Two Kentucky Men in Oil-And-Gas Offering Fraud

SEC v. Scott Stacy Phelps and James Michael Harper, United States District Court for the Western District of Kentucky (Bowling Green), Case No. 1:18-cv-122

On August 30, 2018, the Securities and Exchange Commission charged two Bowling Green, Kentucky-area men with defrauding investors in oil-and-gas securities offerings. The SEC’s complaint, filed in federal court in Bowling Green, Kentucky, alleges that Scott Stacy Phelps and James Michael Harper raised approximately $611,000 by selling securities to nine investors between February 2015 and March 2016. Although they told prospective investors that the investment proceeds would be used to drill for oil in Kentucky, the main goal of the offering was to enrich Phelps and Harper. They spent the vast majority of the investor funds on themselves and their families, paying themselves generous six-figure salaries, and using the investor funds for rent, vacations, consumer goods, dating and adult websites, entertainment, golf, and hotels. They used a small amount to drill two wells. Neither well was commercially viable. Despite knowing this, the complaint alleges that Defendants continued soliciting additional funds from investors, purportedly to drill for oil in both wells.

EFG Capital International Corp. – Failure to Supervise – South Florida FINRA Arbitration Attorney

Published on: September 3, 2018 | By Russell L. Forkey, P.A.

EFG Capital International Corp. – Failure to Supervise – South Florida, including Boca Raton, Lake Worth, Deerfield Beach, Boynton Beach and West Palm Beach, FINRA Arbitration Attorney

EFG Capital International Corp. (CRD #40118, Miami, Florida)

Recently, the Financial Industry Regulatory Authority announced that EFG Capital International Corp. entered into an Acceptance, Waiver and Consent in which the firm was censured, fined $800,000 and required to adopt and implement supervisory systems and written procedures reasonably designed to achieve compliance with the requirements of FINRA Rule 3110. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to establish and implement an adequate supervisory system, including WSPs, or anti-money laundering (AML) program related to two material areas of its international business model. The findings stated that the firm did not adequately assess, supervise or mitigate the business risks associated with its payment of transaction-based compensation to non-registered individuals or entities, and potentially suspicious outgoing wire transfer activity occurring in accounts of dual customers of the firm and its Swiss bank affiliate. The findings also stated that as part of its international business model, the firm entered into transaction referral agreements under which a foreign individual or entity, called a “foreign introducer,” referred specific transactions to the firm in exchange for a percentage of the firm’s mark-up or commission on the referred transactions. However, the firm’s supervisory system was unreasonable because it failed to assess whether it had sufficient information about the foreign introducer, or its ability to legally satisfy its obligations under an agreement, to conclude that the firm’s payment of transaction-based compensation to the foreign introducer was permissible under U.S. law.

Harold Connell – Private Placement Memorandums – Undisclosed Self-Dealing – Unregistered Regulation D Offerings – Boca Raton, Florida FINRA Arbitration Attorney

Published on: September 3, 2018 | By Russell L. Forkey, P.A.

Harold Connell – Private Placement Memorandums – Undisclosed Self-Offerings – Unregistered Regulation D Offerings – Fraud, Deceit and Misrepresentation – Boca Raton, Florida Finra Arbitration Attorney

Harold Lee Connell (CRD #1482623, Pinecrest, Florida)

Recently, the Financial Industry Regulatory Authority announced that Harold Lee Connell entered into an Acceptance, Waiver and Consent which barred Connell from association with any FINRA member in all capacities. Without admitting or denying the findings, Connell consented to the sanction and to the entry of findings that he willfully violated Section 10(b) of the Exchange Act and Rule 10b-5, and FINRA Rules 2010 and 2020 by participating in the sale of three unregistered Regulation D offerings through misrepresentations and omissions.

FAQ – How Are Microcap Stocks Different From Other Stocks – South Florida Litigation and Arbitration Attorney

Published on: August 23, 2018 | By Russell L. Forkey, P.A.

How Are Microcap Stocks Different From Other Stocks?

Lack of public information. Often, the biggest difference between a microcap stock and other stocks is the amount of reliable publicly-available information about the company. Most large public companies file reports with the SEC that any investor can get for free from the SEC’s website. Professional stock analysts regularly research and write about larger public companies, and it is easy to find their stock prices on the Internet or in newspapers and other publications. In contrast, the same information about microcap companies can be extremely difficult to find, making them more vulnerable to investment fraud schemes and making it less likely that quoted prices will be based on full and accurate information about the company.

No minimum listing standards. Companies that list their stocks on exchanges must meet minimum listing standards. For example, they must have minimum amounts of net assets and minimum numbers of shareholders. In contrast, companies quoted on the OTC Bulletin Board (OTCBB), OTC Link LLC (OTC Link) or Global OTC generally do not have to meet any minimum listing standards, but are typically subject to some initial and ongoing requirements. You can find the OTCBB’s eligibility requirements for stocks at http://www.finra.org/industry/faq-otcbb-frequently-asked-questions and you can find additional information about OTC Link and Global OTC at www.otcmarkets.com and www.globalotc.com , respectively.

FAQ – Where Do Microcap Stocks Trade – South Florida State and Federal Court Litigation Attorney

Published on: August 23, 2018 | By Russell L. Forkey, P.A.

FAQ – Where Do Microcap Stocks Trade?

Many microcap stocks trade in the “over-the-counter” (OTC) market. Quotes for microcap stocks may be available directly from a broker-dealer or on OTC systems such as the OTC Bulletin Board (OTCBB), OTC Link LLC (OTC Link), or Global OTC.

OTC Bulletin Board is an electronic inter-dealer quotation system that displays quotes, last-sale prices, and volume information for many OTC equity securities that are not listed on a national securities exchange. The OTCBB is operated by the Financial Industry Regulatory Authority, Inc. (FINRA). You can read more about the OTCBB marketplace at http://www.finra.org/industry/faq-otcbb-frequently-asked-questions .