News and Articles

Monthly Archives: August 2015

Concentration Risk is Real

According to FINRA, the Financial Industry Regulatory Authority, “Concentration risk is real. The sooner you give your portfolio a concentration checkup the better.” We are presently seeing portfolios constructed or managed by Raymond James and UBS Financial Services, concentrated in the precious metals sector or commodities sectors. Examples of the securities seen in these concentrated accounts include European Goldfields, LTD, Gold Resource Corp., Goldcorp Inc., Golden Queen Mining, Ltd., New Gold Inc., Silver Wheaton Corp., Yamana Gold Inc., Market Vectors Gold Miners ETF, Franklin Gold and Precious Metals, Van Eck International Gold Fund and Eldorado Gold. Investors, certified public accountants and estate planning attorneys should be especially concerned when seeing clients with concentrated positions in the precious metals sector or commodities sector, especially when any of these securities are part of the portfolio. 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 Raymond James and UBS clients with concentrated positions in the precious metals sector.

European Goldfields, now known as Eldorado Gold

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.

New Gold Inc.

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.

Golden Queen Mining, Ltd.

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.

Puerto Rico to Host North American Securities Administrators Conference, Regulation for the Ages

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.

CITIGROUP Affiliates to Pay $180 Million in Settlement Funds to Harmed Investors

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.