News & Resources
In its Annual Information Form dated March 31, 2011, European Goldfields stated with regard to Market Price Volatility, “The trading price of the Common Shares has been and may continue to be subject to large fluctuations….Ownership of the Common Shares is currently concentrated and sales of substantial amounts of Common Shares in the public market by the Company’s shareholders, or the perception that such sales might occur, could result in a material adverse effect on the market price of the Common shares….[t]he effect of these and other factors on the market price of the Common Shares on the exchanges in which the Company trades has historically made the Company’s share price volatile and suggests that the Company’s share price will continue to be volatile in the future.” Investors, certified public accountants and estate planning attorneys should be especially concerned when seeing this stock in an investment portfolio managed by Raymond James or UBS Financial Services if the portfolio was not supposed to be invested in high risk securities. Not only should your clients consider having a Certified Financial Planner review the portfolio, they should also consider having an experienced securities arbitration attorney review the portfolio.
David A. Weintraub, P.A. is interested in speaking with European Goldfields and Eldorado Gold investors who believe that their investments were supposed to be conservatively managed.
In its Annual Information Form dated March 31, 2011, New Gold stated with regard to Risk Factors, “The operations of the Company are speculative due to the high-risk nature of its business, which is the acquisition, financing, exploration, development and operation of mining properties. These risk factors could materially affect the Company’s future operating results….The Company’s earnings and cash flows are subject to price risk due to fluctuations in the market price of gold, silver and copper. World gold prices have historically fluctuated widely. World gold prices are affected by numerous factors beyond the Company’s control….” Investors, certified public accountants and estate planning attorneys should be especially concerned when seeing this stock in an investment portfolio managed by Raymond James or UBS Financial Services if the portfolio was not supposed to be invested in high risk securities. Not only should your clients consider having a Certified Financial Planner review the portfolio, they should also consider having an experienced securities arbitration attorney review the portfolio. David A. Weintraub, P.A. is interested in speaking with New Gold investors who believe that their investments were supposed to be conservatively managed.
In its 10Q report for the first quarter of 2011, Golden Queen stated, “[t]he Company has had no revenues from operations since inception and as at March 31, 2011 has a deficit of $64,172,865 accumulated during the exploration stage. Management plans to control current costs and does not anticipate requiring additional financing to fund Company activities over the next twelve months. In addition, management plans to secure equity and/or debt or joint venture financing to fund construction of the operating facility at the Soledad property (“Soledad”) once a feasibility study has been concluded and a production decision has been made. The ability of the Company to obtain financing for its ongoing activities and thus maintain solvency, or to fund construction of the operating facility at Soledad, is dependent on equity market conditions, the market for precious metals, the willingness of other parties to lend the Company money or the ability to find a joint venture partner. While the Company has been successful at certain of these efforts in the past, there can be no assurance that future efforts will be successful. This raises substantial doubt about the Company’s ability to continue as a going concern.” Investors, certified public accountants and estate planning attorneys should be especially concerned when seeing this stock in an investment portfolio managed by Raymond James or UBS Financial Services if the portfolio was not supposed to be invested in high risk securities. Not only should your clients consider having a Certified Financial Planner review the portfolio, they should also consider having an experienced securities arbitration attorney review the portfolio. David A. Weintraub, P.A. is interested in speaking with Golden Queen Mining investors who believe that their investments were supposed to be conservatively managed.
It is ironic that Puerto Rico will serve as host for NASAA’s 2015 Annual Conference. Puerto Rico is ground zero since 2013 for claims of investor losses. Since 2013 hundreds of arbitration claims have been filed by investors in Puerto Rico municipal debt. Most of the claims have been brought by clients of UBS Financial Services. As of this date there have been three FINRA arbitration awards rendered against UBS Financial Services, all in favor of the investor Claimants. Puerto Rico bond investors have filed claims against other firms as well, including Merrill Lynch, Santander Securities, Popular Securities and Oriental Financial Services Corp.
Likewise, investors in the “upper 48 states” have also suffered significant losses investing in Puerto Rico debt. Those investors who have not already retained counsel should have their portfolios evaluated by an experienced Securities Arbitration Attorney. David A. Weintraub, Esq. spent the first
13 years of his career representing Wall Street. He now represents investors asserting claims against Wall Street’s largest firms. He is available to consult with you at your convenience.
The Securities and Exchange Commission announced on August 17, 2015 that two Citigroup affiliates, Citigroup Global Markets, Inc. (CGMI) and Citigroup Alternative Investments LLC (CAI), agreed to bear all costs of distributing $180 million in settlement funds to harmed investors.
The Citigroup affiliates agreed to pay nearly $180 million to settle charges that they defrauded investors in two hedge funds by making false and misleading representations. The companies, through their financial advisors, misrepresented the funds by selling them as safe, low-risk, and suitable for traditional bond investors. The funds later crumbled and eventually collapsed during the financial crisis.
An SEC investigation found that the Citigroup affiliates made false and misleading representations to investors in the ASTA/MAT funds and the Falcon funds, which collectively raised nearly $3 billion in capital from approximately 4,000 investors before collapsing. Financial Advisors failed to disclose the very real risks of the funds. Many of the misleading representations made by Citigroup employees were in conflict with disclosures made in marketing documents and written materials provided to investors. Furthermore, CAI accepted nearly $110 million in additional investments and continued to assure investors that the funds were low risk, well capitalized investments with adequate liquidity, even as the funds began to collapse.
Andrew Ceresney, the Director of the SEC’s Enforcement Division said “Firms cannot insulate themselves from liability for their employees’ misrepresentations by invoking the fine print contained in written disclosures,” he added “Advisers at these Citigroup affiliates were supposed to be looking out for investors’ best interests, but falsely assured them they were making safe investments even when the funds were on the brink of disaster.”
CGMI and CAI consented to the SEC order without admitting or denying the findings.
The Securities and Exchange Commission announced today, that a company insider, whose information was critical to the SEC to crack a complex fraud investigation, received a multi-million dollar payout. The whistleblower award of more than $3 million is the third highest award since the 2011 inception of the SEC’s whistleblower program.
Whistleblowers who provide the SEC with unique and useful information that contributes to a successful enforcement action are eligible for awards that can range from 10 percent to 30 percent of the money collected when financial sanctions exceed $1 million. By law, the SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity.
In reference to today’s award, Sean X. McKessy, Chief of the Office of the Whistleblower, said “The award made today is another testament to the agency’s commitment to reward those who provide high-quality information that leads to successful enforcement actions and related actions,” He added, “Our office continues to receive thousands of whistleblower tips each year. When those tips bear fruit, those individuals, like today’s whistleblower, may receive significant financial awards.”
“Insiders may hold the key to helping our investigators unlock intricate fraudulent schemes,” said Andrew Ceresney, Director of the SEC’s Division of Enforcement. “By providing significant financial incentives for people to come forward, the SEC’s whistleblower program continues to be profoundly effective in helping us protect investors and hold wrongdoers accountable.” As for this particular case, the whistleblower’s specific and detailed information comprehensively laid out the fraudulent scheme which otherwise would have been very difficult for investigators to detect. The whistleblower’s initial tip also led to related actions that increased the whistleblower’s award.
If you believe you have information evidencing violations of the federal securities laws, please contact David A. Weintraub, P.A., 800.718.1422
On January 22, 2015, Ariel Luis Hernandez appeared in Broward County Court to face two charges of grand theft from an elderly person and misuse of identification. The initial bond of $300,000 has since been increased to $1 million. Broward Judge John “Jay” Hurley ordered him not to set foot on Century Village property or advertise financial services seminars or informational luncheons.
According to FINRA, Mr. Ariel Hernandez, was barred from the financial securities industry in March 2014, based upon allegations that he wired money form a client’s brokerage account to a bank without the client’s permission or knowledge. Mr. Hernandez used his position as a financial advisor to gain the trust of his victims. According to FINRA records, Mr. Hernandez is not currently registered, his previous employment records include: a) Liberty Partners Financial Services, b) Summit Brokerage Services and c) J.B. Hanauer.
According to Pembroke Pines Police, Hernandez forged the signatures of unwitting victims to steal hundreds of thousands of dollars from elderly clients who trusted him with their investment accounts. Three Century Village residents lost over $200,000, Detective Thomas Moran said he expected more victims to come forward.
Pembroke Pines Police Captain, Al Xiques, said “Although this is an economic crime, a white-collar crime, it’s actually one of the most heinous types of crime you can commit…The money was literally what these people were going to live off of for the rest of their lives.”
Attorney David Weintraub is currently representing three of the victims in this case.
On December 22, 2014, FINRA announced that Jeffrey C. McClure has been permanently barred from the securities industry. Mr. McClure, allegedly, wrote himself 36 checks totaling $88,850 drawn from the customer’s bank account, without her knowledge. Through its investigation, FINRA found that from December 2012 to Agust 2014, McClure had access to the checks because the elderly customer had authorized him to pay her rent and other expenses; instead, he deposited the checks amounting to nearly $89,000 to his personal bank account and used the funds for his personal expenses. At the time, Mr. McClure worked for Wells Fargo Advisors, LLC. The affiliated bank that held the accounts, located in Chico, California, has made the customer whole for her losses.
In settling this matter, Mr. McClure neither admitted nor denied the charges, but consented to the entry of FINRA’s findings. FINRA’s investigation was conducted by the Office of Fraud Detection and Market Intelligence and the Department of Enforcement. In a statement, FINRA’s Executive Vice President and Chief of Enforcement, said “FINRA has a zero tolerance policy for brokers who steal form their clients, especially those who are most vulnerable. Rooting out this type of misconduct and removing these kinds of bad actors from the industry is a top priority.”
FINRA Fines Merrill Lynch $1.9 Million Plus Orders it to Pay $540,000 as Restitution to Affected Customers
On December 16, 2014, FINRA fined Merrill Lynch, Pierce, Fenner & Smith Incorporated $1.9 million for fair pricing and supervisory violations in connection with more than 700 retail customer transactions in distressed Motors Liquidation Company Senior Notes (MLC Notes). In addition, Merrill Lynch was ordered to pay $540,000, plus interest, in restitution to affected customers.
Through its investigation, FINRA found that Merrill Lynch’s Global Credit Trading Desk purchased MLC Notes issued by General Motors Corporation, prior to its bankruptcy, from its retail customers at prices below the prevailing market price. The Credit Desk, after accumulating small lots of discounted MLC Notes, sold these Notes to other broker-dealers at a higher price, within the prevailing market price. Accordingly, in 716 instances, Merrill Lynch purchased MLC Notes at prices that were not fair to its customers. In fact, out of the 716 customer transactions 510 of them had markdowns in excess of 10 percent.
In addition, FINRA found that Merrill Lynch did not have in place an adequate supervisory system to detect whether the firm’s Credit Desk executed customer transactions at a fair price. Specifically, the firm lacked post-trade best execution or fair pricing reviews or failed to conduct fair pricing or best execution post-trade reviews. As part of the sanctions, Merrill Lynch is also ordered to submit three reports over the next 18 months regarding the effectiveness of the firm’s supervisory system with respect to the pricing of retail customer transactions executed by the Credit Desk.
In a statement, FINRA said “…We expect firms to adhere to their fair pricing obligations to customers when transacting in lower-price or distressed securities. Even after factoring in the nature of the market for these types of instruments, the markdowns charged were simply unacceptable, as was Merrill Lynch’s failure to conduct post-trade fair pricing or best execution reviews for customer transactions executed on the Credit Desk.” On the other hand, Merrill Lynch neither admitted nor denied the allegations, but consented to the entry of FINRA’s findings.
FINRA Expels NSM Securities, Inc. and bars Niyukt Raghu Bhasin from Association with any FINRA Member
In November 2014, FINRA announced that it had submitted an Offer of Settlement in which NSM Securities, Inc. was expelled from FINRA membership, and Niyukt Raghu Bhasin was barred from association with any FINRA member in any capacity. Without admitting or denying the allegations, the firm and Bhasin consented to the sanctions and to the entry of findings that the firm, acting through and at the direction of its founder, owner, President and Chief Executive Officer (CEO) Bhasin, derived most of its revenue from actively and aggressively trading stocks in the commission-based accounts of its retail customers.
The findings stated that Bhasin prioritized his firm’s profits over the duties owed to its customers and chose not to establish, maintain and enforce a supervisory system tailored to the firm’s business. Instead, Bhasin fostered a culture of non-compliance that resulted in widespread sales practice violations, numerous customer complaints, related reporting violations and cold-calling abuses. The firm, through Bhasin, failed to establish, maintain and enforce a system, including written supervisory procedures (WSPs), to supervise its core activity, an active and aggressive investment strategy. The firm, through Bhasin, failed to monitor for, detect and prevent churning, excessive trading, related violations of Regulation T, and unsuitable investment recommendations, and failed to adequately review electronic correspondence, adequately handle customer complaints, and place certain brokers who were the subjects of multiple customer complaints and arbitrations on heightened supervision. The firm’s culture of non-compliance that Bhasin fostered harmed the firm’s customers, as the lax to non-existent oversight of its brokers resulted in significant sales practice abuses. As a result, the firm willfully violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
The findings also stated that in implementing Bhasin’s active and aggressive trading strategy, and in order to generate commissions, the firm committed multiple violations of Regulation T and the related NASD®/FINRA rules governing the extension of credit. Specifically, the firm, acting through its brokers, made a practice of allowing customers to buy securities in cash accounts where the cost to buy the securities was met by the sale of the same securities, known as free-riding. The findings also included that the firm’s active and aggressive trading strategy, as developed and instituted by Bhasin, led to numerous customer complaints. The firm, through Bhasin, failed to report and failed to timely report customer complaints to FINRA, and failed to disclose and/or timely disclose material facts on its brokers’ Uniform Applications for Securities Industry Registration or Transfer (Forms U4) or Uniform Termination Notices for Securities Industry Registration (Forms U5).
FINRA found that Bhasin willfully failed to disclose material facts or information on his own Form U4, and willfully filed false and misleading amendments to his Form U4. The firm, through Bhasin, also filed an untimely and inaccurate Form U5 for its former chief compliance officer (CCO). FINRA also found that the firm, through Bhasin, failed to institute adequate procedures for cold-calling prospective customers. As a result, the firm, through its brokers and other representatives, initiated telephone solicitations to persons whose numbers were on the firm’s do-not-call list and/or the national do-not-call list.