Shopoff Securities investigated by FINRA; Promissory Notes sold from 2010 to 2017 under review.

On January 10, 2019 FINRA opened a regulatory investigation against Shopoff Securities of Irvine, CA and its principals, William Shopoff and Stephen Shopoff concerning the sale of promissory notes.  FINRA charged that Shopoff Securities sold over $12 million of personally guaranteed promissory notes to 29 investors.

Among the claims made are that the funds raised by Shopoff Securities were used to pay returns to prior investors, and that the transactions were unsuitable for the purchasers.  Using funds raised to repay prior investors could be indicative of a Ponzi scheme.  FINRA Rule 2111 requires that all recommendations to purchase securities made to clients must be suitable.

Patrick Teutonico Network 1 Financial Securities broker excessive trading investigation

The securities attorneys at The Law Office of David Liebrader have opened an investigation into the securities related conduct of Patrick Teutonico a registered representative affiliated with the Network 1 Financial Securities office in Seaford, New York. Mr. Teutonico partnered with Wesley Clinton, another Network 1 broker.

The pending customer dispute that gives rise to this investigation concerns a number of high risk private placements, as well as excessive trading, amounting to nearly 6 times turnover in the account.  Turnover measures the number of times that investment positions in an account are replaced each year.  Industry averages are 1.2 x per year.  In this customer’s case the turnover ratio far exceeded industry standards.  Furthermore, due to the use of margin, or borrowed money the cost to equity ratio in the account was extremely high, meaning the customer needed to generate a 10%+ return in the account just to break even.

Judgement against Ronald J. Robinson former CEO of Virtual Communications Corporation

The Law Office of David Liebrader is pleased to announce a judgment in the Reva Waldo vs. Virtual Communications Corporation and Ronald J. Robinson case in Clark County, Nevada District Court after a bench trial before Judge Timothy Williams in Dept. 16.

The Judgment is against Las Vegas businessman Ronald J. Robinson, who guaranteed the promissory note issued by Virtual Communications Corporation, creator of the ALICE virtual receptionist system.

EB-5 Fraud is on the rise.  From immigration attorneys acting as unregistered broker-dealers to scammers preying on unsuspecting investors the field is a potential trap for the unwary.

In 1990 the US Congress devised the Immigration Investment Program in the hopes of attracting capital to the US from foreign investors.  The program came to be known as the EB-5 program.  As a means to attract investments Congress offered the potential for Visas, “Green Cards” and residency status to foreigners who agreed to invest at least a million dollars into a business that agreed to employ or continued to employ at least ten full time US workers.  The EB-5 program also provided that a $500,000 investment in a “rural area” or an area of “high unemployment” would qualify.

As a result, investments grew around so called “Regional Center Investments” such as hotels, business parks, warehouses or other “economic units” that offered the prospects for job growth.

Future Income Payments information for investors

In the past several years multiple state finance and securities regulators have filed enforcement actions against Henderson, Nevada based Future Income Payments LLC to stop them from targeting pensioners – many of them military veterans- with a pitch to “cash out” their pensions and receive a lump sum payment.  Some of these pension advance transactions are structured like loans, charging above market rate interest rates.  The decision to sell the rights to a pension at a discount is fraught with perils, and could be one of the worst mistakes a retiree ever makes.

On the other side of the Future Income Payments transaction are investors who were contacted by Registered Investment Advisors or brokers looking for investors to “fund” the “loans” to the Pension recipients.  Investing in these transactions is full of risks, including the lack of transparency, high commissions and fees, and an inability to collect in the event of default.

Sheaff Brock Put Option Income Strategy Caused Losses

The securities attorneys at The Law Office of David Liebrader have opened an investigation into the securities related conduct of Sheaff Brock a registered investment advisor that offered a put option income strategy that it described as a conservative way to earn income.

Sheaff Brock described the program as a conservative “income generator”, which belied the actual risks associated with the strategy that targeted stocks with increased volatility.  Sheaff Brock represented that the strategy would stack small monthly gains from its proprietary strategy, which would amount to a six percent annual return, without incurring substantial risk.

Peter Lewis Morgan Stanley broker TSLA option trading investigation

The securities attorneys at The Law Office of David Liebrader have opened an investigation into the securities related conduct of Peter Lewis a registered representative affiliated with the Morgan Stanley office in Summerlin, Las Vegas, Nevada.

The pending customer dispute that gives rise to this investigation concerns a number of high risk option trades in TSLA Motors that Peter Lewis made for a customer while at Morgan Stanley in the Fall of 2016.  TSLA is a growth stock that has enjoyed significant price appreciation over the past several years.  The pending customer complaint describes an environment where Mr. Lewis was particularly negative on TSLA Motors, and made sizeable “bearish” options transactions in the customer’s account.  These trades resulted in significant losses.

Allegis Investment Advisors ordered to pay investors $911,000.

On January 8, 2018 an American Arbitration Association panel issued a $911,000 binding arbitration award to clients of the Law Office of David Liebrader.  The award stems from options trading losses losses suffered by the clients in 2015.  The award of $911,000 was issued against Allegis Investment Advisors, a registered investment advisor based in Boise, Idaho.  Allegis offered a complex options trading strategy to its clients known as a net credit spread strategy.

In August 2015 this strategy failed spectacularly, causing over $39 million in losses to Allegis’ clients.  The Law Office of David Liebrader filed a AAA arbitration against Allegis Investment Advisors on behalf of six clients who lost a combined $636,000.  In December 2017 an arbitration hearing was held over seven days in Salt Lake City, chaired by arbitrator James Holbrook.

Alvery Bartlett investigation into oil and gas private placements

The securities attorneys at The Law Office of David Liebrader have opened an investigation into the securities related conduct of Alvery Bartlett a registered representative formerly with Berthel Fisher and Company, now with Arête Wealth Management.

The pending customer dispute that gives rise to the investigation concerns a number of high risk private placements into oil and gas investments, as well as private equity, including Nytrox and the Alvery Bartlett Hedge Fund. Mr. Bartlett recommended these illiquid, high commission investments that were supposed to provide income and a safe return of principal.  Instead, due to an over concentration into these programs, the customer suffered substantial losses.  Among the investments at issue are: Atlas Oil and Gas, Noble Access Fund, PDC Energy, Strategic Energy Income Fund, and Waveland Drilling Partners.

Jon VanSlooten, a registered representative from Toledo, Ohio, formerly with Edward Jones, was suspended from FINRA membership as a result of an investigation into his discretionary trading without the consent of his customers or firm. VanSlooten entered into an acceptance, waiver and consent agreement with FINRA in which he neither admitted nor denied the findings, but agreed to a suspension of three months and a fine of $7,500.

In June 2017, Jon VanSlooten agreed to the suspension and FINRA published its findings that he participated in discretionary trading without telling his customers. Discretionary trading occurs when a broker is permitted to sell securities and investments on his or her own with the agreement of the client. The broker is essentially given control and discretion over when, where and in what amounts the transactiosn will be made.

VanSlooten made nearly 600 trades for four of his customers without gaining their consent or telling his firm. Edward Jones’ Written Supervisory Procedures do not allow discretionary trading and because of this, he was fined and suspended by FINRA.