Valerie Escobar, Author at David A. Weintraub

Former Aegis Capital Broker Surage Kamal Roshan Perera Charged With Fraud

Valerie Escobar March 27, 2023March 29, 2023

On March 27, 2023, the SEC charged former broker Surage Kamal Roshan Perera and his firm, Janues Capital Incorporated, with defrauding at least one investor out of millions by lying about investment opportunities and strategies, concealing trading losses, and using funds received from others to give the victim the promised returns in Ponzi-like fashion. The SEC has obtained emergency relief in court, including a temporary restraining order and an asset freeze.

According to the SEC’s complaint, from February 2022 until March 2023, Perera, a Long Island, NY resident, falsely told an investor, not named in the complaint, that Janues had access to specific restricted securities at discounted prices though connections with large, institutional investors. He allegedly claimed to also exercise a trading strategy, which he referred to as ‘Options Straddles,’ that would not only prevent any trading losses but also guarantee returns on some of the investments of up to 9 percent with the potential for returns of 50 percent. According to the complaint, Perera and Janues misappropriated at least $3.5 million of the investor’s funds to engage in highly speculative and leveraged trading. In total, Perera engaged in more than $2.5 billion in securities transactions, with nearly $3 million in trading losses. Perera then allegedly concealed the misappropriation and losses by providing the investor with phony confirmations and account statements that falsely showed the expected returns. The complaint also alleges that Perera further attempted to hide the losses by using funds received from other sources to make Ponzi-like payments to the investor.

“As noted in our complaint, Perera and his firm Janues engaged in predatory and fraudulent behavior by claiming to have special access to securities through their professional connections, but instead defrauded millions of dollars from his investor,” said Antonia Apps, Director of the New York Regional Office. “We will continue to pursue individuals who prey upon retail investors and steal money from their clients.”

In a parallel action, the U.S. Attorney’s Office for the Eastern District of New York today announced criminal charges against Perera.

The SEC’s complaint alleges that Perera and Janues violated antifraud provisions of the federal securities laws. Perera also was charged with aiding and abetting Janues’ alleged violations. The SEC’s complaint names Nishani Alahakoon, whose brokerage account Perera and Janues traded, as a relief defendant. The asset freeze obtained by the SEC prevents any further dissipation of investor funds. The SEC is seeking permanent injunctions and disgorgement of ill-gotten gains plus interest and penalties.

If you were a victim of Mr. Perera, please contact David A. Weintraub, P.A. at (800) 718-1422 to discuss possible representation.

David A. Weintraub, P.A. is Investigating Losses Related to Closed-End Funds

Valerie Escobar February 16, 2023March 3, 2023

The national securities and investment fraud law firm, David A. Weintraub, P.A., continues to investigate claims regarding the recommendation and sale of closed-end funds. Closed-end funds can involve a high degree of risk and may be unsuitable for certain investors.

Investors who have sustained losses related to investment in a closed-end fund are strongly encouraged to contact David A. Weintraub, P.A. for a free consultation. Aggrieved investors can call David A. Weintraub, P.A. directly at (800) 718-1422 or email: [email protected]

What Is a Closed-End Fund?

Closed-End Funds or CEFs are a type of mutual fund that unlike open-end funds only sells a limited number of shares during its initial public offering (IPO). Closed End Funds are also known as closed-end investment companies and differ in several ways from the other type of investment companies. There are many types of closed-end funds, but the most common are municipal bond funds or muni bond funds.

Closed-end funds are complex and subject to price volatility. They are less liquid than open-end funds, which are more common. CEFs may be subject to high fees and expenses. They can also result in significant losses, particularly when they use leverage to borrow money and generate income. It is imperative to have a firm understanding of the potential risks involved with investing in a closed-end fund.

The recent market downturn has cost investors in closed-end funds substantial amounts of money, with some CEFs cutting dividends by over 40%. Rising rates continue to put a stop to the normal payouts, causing retirees, often reliant on this form of investment for income, to suffer.

Contact David A. Weintraub, P.A., for a Free Consultation

If you sustained losses after investing in a closed-end fund, contact David A. Weintraub, P.A., for a free case evaluation. Harmed investors can call (800) 718-1422 or email [email protected] to discuss their legal options. All consultations are free and confidential.

Most cases are handled on a contingency fee basis, meaning that clients are not obligated to pay attorney fees unless money is recovered on their behalf.

FINRA Fined Center Street Securities for GPB Capital Fund Sales

Valerie Escobar February 1, 2023February 6, 2023

On December 29, 2022, the Financial Industry Regulatory Authority fined Nashville based, Center Street Securities, Inc., for improperly selling GPB Capital Holding private placements. According to FINRA, Center Street Securities failed to inform nearly 20 investors that GPB had failed to submit its required filings with the SEC.

According to the Letter of Acceptance, Waiver and Consent, filed by FINRA, Center Street “negligently failed” to tell 20 investors in two offerings related to GPB Capital Holdings LLC, that the issuer failed to make timely required filings with the Securities and Exchange Commission. Per FINRA, in connection with these 20 sales, Center Street representatives did not inform the customers that the partnerships in question, Automotive Portfolio and Holdings II had not timely filed their audited financial statements with the SEC or the reasons for the delay. The delay in filing audited financial statements and the reasons for it was material information that should have been disclosed. Between May 4, 2018, and June 29, 2018, Center Street sold limited partnership interests. The principal value of those 20 sales, totaled $1,206,000. These transactions generated $98,727.50 in commissions. By negligent omitting material facts, Center Street violated FINRA rules.

In settling this matter, Center Street Securities neither admitted nor denied the charges, but consented to the entry of FINRA’s findings. Center Street Securities, agreed to a public censure and to pay a $70,000 fine and partial restitution of $89,652.50.

If you have not hired an attorney and wish to discuss any securities related question, please contact David A. Weintraub, P.A., 7805 SW 6th Court, Plantation, FL 33324. By phone: 954.693.7577 or 800.718.1422.

Florida Employee Leasing Companies Operating Without Licenses Under the Guise of Being “Employers of Record”

Valerie Escobar January 22, 2023January 23, 2023

This law firm is investigating the potentially illegal efforts of Employee Leasing Companies attempting to evade Florida’s stringent licensing requirements by calling themselves “Employers of Record”, when in fact they may be operating as de facto Employee Leasing Companies. Employee Leasing Companies are also known as “professional employer organizations”, or PEO’s.

These licensing requirements are to protect you, the consumer, and Florida law makes clear that PEOs must be licensed in Florida. Just as the state emphasizes the importance of hiring only licensed contractors after a hurricane, Florida’s employers should only hire licensed PEOs to protect them and their employees’ payroll.

It appears that the state of Florida and the DBPR began investigating unlicensed EOR companies late last year. We are also investigating several EOR companies including OysterHR, Deel and others. PEOs or employee leasing companies that conduct business in Florida without an active license, are subject to discipline pursuant to Chapter 468, Florida Statutes.

If you are aware of PEOs or Employee Leasing Companies operating in Florida without active licenses, please contact this law firm if you wish to discuss the issue. Please contact David A. Weintraub, P.A., 7805 SW 6^th Court, Plantation, FL 33324, or call (954) 693-7577.

Morgan Stanley Smith Barney Fined and Order to Pay Restitution to Customers Affected by its Failure to Supervise

Valerie Escobar November 21, 2022February 22, 2023

On November 21, 2022 FINRA censured Morgan Stanley Smith Barney LLC for its failure to supervise nine registered representatives who recommended potentially high risk securities to their customers. The firm previously paid restitution to some of the customers who suffered losses as a result of its conduct. FINRA ordered Morgan Stanley to pay restitution to the remaining customers.

From January 2014 through December 2018, Morgan Stanley failed to reasonably supervise nine registered representatives who recommended potentially high-risk securities to their customers in violation of the firm’s Plan of Solicitation policy. Each of the nine representatives recommended that customers purchase securities in quantities that were subject to Morgan Stanley’s pre-approval requirement but did not complete a Plan of Solicitation. The investigation revealed that Morgan Stanley received alerts that some of its registered representatives had made hundreds of recommendations that violated the firm’s Plan of Solicitation policy. The firm’s procedures require that a supervisor at the firm review and approve the Plan of Solicitation prior to the representative recommending the security. Each of the representatives recommended that customers purchase securities in quantities that were subject to the firm’s pre-approval requirement but did not complete a Plan of Solicitation. Some of the recommended securities were high risk and inconsistent with certain of their customers’ moderate or conservative risk tolerances. The firm did not take appropriate action in response to alerts that its representatives had violated its own policies. In particular, the firm did not evaluate whether the recommendations were consistent with the customers’ investment profiles. These customers incurred realized losses as a result of many of the recommended trades. Subsequently, the firm improved its enforcement of the Plan of Solicitation policy, including by directing review of Plan of Solicitation alerts to a central review unit.

Without admitting or denying the findings, the firm consented to the entry of findings that it failed to reasonably supervise registered representatives who recommended potentially high-risk securities to their customers in violation of the firm’s Plan of Solicitation policy. Morgan Stanley was fined $200,000.00 and required to pay $497,897, plus interest in restitution to affected customers.

Harmed investors can call (800) 718-1422 or email [email protected] to discuss their legal options. All consultations are free and confidential. Most cases are handled on a contingency fee basis, meaning that clients are not obligated to pay attorney fees unless money is recovered on their behalf.

Registered Representative, Douglas F. Kaiser Fined, and Suspended in Relation to his Failure to Supervise US Treasury Securities Transactions

Valerie Escobar November 11, 2022February 22, 2023

On November 11, 2022, FINRA sanctioned Douglas Fulton Kaiser of Boca Raton, Florida. Kaiser, who is registered with Westpark Capital Inc., was fined $5,000.00 and suspended from association with any FINRA member in any principal capacity for three months. In addition, he is required to attend and satisfactorily complete twenty hours of continuing education concerning supervision. The sanctions stemmed from failing to supervise WestPark’s markups and markdowns for US Treasury securities.

Through the investigation, FINRA learned that Kaiser was the supervisor of WestPark’s fixed-income trading desk while a representative, who was recommending an unsuitable investment strategy characterized by the active, short-term trading of U.S. Treasury securities and charging excessive markups on certain transactions involving U.S. Treasury securities was registered at the firm. In his role, Kaiser was responsible for reviewing markups and markdowns on fixed-income transactions. For eight customers who suffered losses due to the representative’s Treasury-trading strategy, the representative charged, and Kaiser approved, markups or markdowns more than the firm’s policies allowed. Kaiser failed to recognize and respond appropriately to the elevated markups and markdowns. Moreover, for five of the eight customers, Kaiser miscalculated the markdowns the representative charged for certain sales on one day. Those sales were part of a group of same-day sales followed by purchases the following day that collectively amounted to “proceeds” transactions.

Without admitting or denying the findings, Kaiser consented to the sanctions and to the entry of findings that he failed to supervise his member firm’s markups and markdowns for U.S. Treasury securities. The suspension is in effect from December 5, 2022, through March 4, 2023.

FINRA Fined Wedbush Securities Inc., Due to its Misrepresentation In Connection with Certain Corporate and Municipal Bonds Interest or Principal Payments

Valerie Escobar November 3, 2022February 22, 2023

On November 3, 2022, FINRA censured Wedbush Securities Inc., fined the firm $850,000, and required it to certify that the firm’s WSPs and supervisory system are reasonably designed to review the accuracy of account statements sent to customers and to achieve compliance with its obligation to deliver to customers annual privacy notices, margin disclosures, and order execution disclosures.

From January 2013 through December 2018, Wedbush negligently misrepresented on monthly account statements that it sent to approximately 610 customers that certain corporate and municipal bonds were making interest or principal payments when, in fact, the bonds were in default. The investigation stated that the firm failed to establish and maintain a supervisory system reasonably designed to review the accuracy of account statements it sent to customers. Although the firm received notice when bonds held by customers had defaulted, it did not have any system to verify that such information was reflected in the system the firm used to maintain information about securities held by customers. In addition, from January 2010 through August 2020, Wedbush failed to deliver to a total of approximately 14,900 customers three types of annual notices and disclosures required by FINRA and SEC rules. The notices were available on the firm’s website. FINRA found that the firm did not have a supervisory system reasonably designed to achieve compliance with its obligation to deliver annual privacy notices, order execution disclosures, and margin disclosures. The firm’s WSPs required the firm to deliver the privacy notices, order execution disclosures, and margin disclosures to customers on an annual basis. However, the firm did not have any system to verify that such notices were sent to customers who elected to receive materials from the firm via its online platform. Instead, the firm relied on its vendor to deliver these required annual notices and disclosures to customers, but the firm did not take any steps to verify that its vendor had appended the required notices and disclosures to the account statements sent electronically to customers. Ultimately, the firm identified that customers had not been receiving the required notices and disclosures, implemented changes in its delivery process, and self-reported the issue to FINRA. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it negligently misrepresented the default status of bonds on customer account statements.

South Florida Stockbroker Indicted and Charged With Stealing From Client

Valerie Escobar January 21, 2022January 28, 2022

On January 21, 2022, the Securities and Exchange Commission filed a complaint in the U.S. District Court for the Southern District of Florida against German Nino, a former investment advisor with UBS Financial Services, Inc.

The SEC alleges that, over a period of 6 years, Nino stole approximately $5.8 million from an advisory client. The client invested $11 million with UBS through Nino. He gradually wired large sums of money into a personal account. This account was, naturally, separate from his shared marital accounts, as Nino spent most of the money ($4.6 million) on various gifts for women with whom he was having affairs. These gifts ranged from vacations to luxury cars to an apartment in Colombia. The rest of the funds went towards paying back another client from whom he previously stole.

Nino doctored account statements to conceal his fraud. In meetings with the client, he lied about account performance and account balances to perpetuate his scheme. Nino’s crimes were not revealed until the client’s son noticed discrepancies in the accounts.

One must always remain diligent in regard to one’s investments. If you wish to discuss any securities related question, please contact David A. Weintraub, P.A., 7805 SW 6^th Court, Plantation, FL 33324. By phone: 954.693.7577 or 800.718.1422.

SEC Charges Wedbush Securities with Unregistered Sales of Microcap Securities and Failing to Report Suspicious Transactions

Valerie Escobar December 15, 2021January 4, 2022

The SEC announced that Wedbush has agreed to pay more than $1.2 million to settle charges arising from the unlawful, unregistered distribution of nearly 100 million shares of more than 50 different microcap companies. In addition, Wedbush failed to file suspicious activity reports (SARs) in reference to these transactions.

According to the SEC’s Order, Wedbush engaged in unregistered offers and sales of large blocks of low-priced securities by an offshore customer. Wedbush held a brokerage account for Silverton SA, now known as Wintercap, S, a purported Swiss assets manager. The activity in Silverton’s account reflected a pattern of depositing them low priced securities, selling a large quantity of these shares soon after depositing them and withdrawing the proceeds. Silverton’s business model enabled individuals or groups scheming to conceal their ownership of and control over public companies to fraudulently sell stock to investors. Despite the presence of numerous red flags that Wedbush had identified in its written guidance to employees, it failed to file SARs for the transactions it executed on behalf of its offshore customer, as required to do when transactions are suspected to involve fraudulent activity.

Wedbush agreed to cease and desist from committing or causing violations of these provisions; to be censured; payment of disgorgement and prejudgment interest of over $207,000 and a civil penalty of $1 million. Additionally, in 2018, the SEC and US Attorney’s Office for the District of Massachusetts brought parallel actions against a number of related parties, including Silverton’s principal, Roger Knox, for the alleged fraudulent scheme.

If you wish to discuss any securities related questions, please contact David A. Weintraub, P.A. 7805 SW 6^th Court, Plantation, FL 33324. By phone 954-693-7577 or 800-718-1422.

FINRA Barred Former LPL Broker who Allegedly Misappropriated Funds from an Elderly Client

Valerie Escobar October 7, 2021October 29, 2021

On October 7, 2021 FINRA announced that it had barred Eric Shea Hollifield, a former LPL Broker, who allegedly converted a senior client’s funds, after he refused to cooperate with FINRA’s investigation into his conduct.

According to FINRA, an investigation was launched into Hollifield after an elderly client filed an arbitration alleging Hollifield misappropriated $1,240,000. Consequently, LPL fired Hollifield on September 10 for failure to disclose an outside business activity. On October 7, 2021, FINRA filed an Letter of Acceptance, Waiver and Consent where Hollifield agreed without admitting or denying the findings of the FINRA’s investigation, to be barred from the industry. The customer’s FINRA arbitration remains pending.

This case illustrates how easily vulnerable adults can be exploited by unscrupulous professionals. If you have elderly friends or relatives who may be vulnerable, please take whatever steps you can to protect them from this type of exploitation. If you wish to discuss any securities related questions, please contact David A. Weintraub, P.A. 7805SW 6^th Court, Plantation, FL 33324. By phone 954-693-7577 or 800-718-1422.

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