Articles Posted in Investigations

Frank Dietrich Quest Capital broker Woodbridge Mortgage Fund investigation

The securities attorneys at The Law Office of David Liebrader have opened an investigation into the securities related conduct of Frank Dietrich a registered representative formerly affiliated with Quest Capital Strategies in Springfield, Virginia.

The pending customer dispute that gives rise to this investigation concerns an investment in Woodbridge Mortgage Investment Fund 4, an unregistered security sold by Frank Dietrich to the Claimant, an elderly retiree.

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.

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.

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.

The Woodbridge Group of Companies filed for bankruptcy in December, 2017 after the Securities and Exchange Commission opened an investigation against them for, among other things, selling unregistered securities.  As a result of these two proceedings, Woodbridge Group’s assets have been frozen, and investors face a long delay before they begin receiving their investment principal back.

In the meantime, investors should consider their options; If the SEC and multiple state securities regulators are correct, that the Woodbridge Group sold unregistered securities through misrepresentations, then investors may have a remedy they can pursue while the bankruptcy proceedings unfold in Delaware.

Not only does Woodbridge Group and its “control persons” (including Robert Shapiro) have liability for selling unregistered securities, but so does anyone who materially aided in the transactions, such as the salespeople, and possibly, the company that employed the salespeople.  All states have securities laws that prohibit the sale of unregistered securities, and investors should look to their state’s securities laws to pursue claims and recover funds lost in their Woodbridge Group transactions.

Todd Seeholzer a representative for Allegis Investment Services in Logan, Utah recommended a risky options strategy that caused substantial losses on August 21, 2015. We presently represent several clients who were solicited by Todd Seeholzer to open accounts with Allegis Investment Services.

The securities attorneys at The Law Office of David Liebrader have opened an investigation into the securities related conduct of Todd Seeholzer, a licensed FINRA registered representative from Logan Utah who is affiliated with Allegis Investment Services.

Seeholzer presented Allegis’ clients with a complex options strategy despite not having the proper license to recommend options transactions.  The options strategy failed spectacularly on August 21, 2015, when the transaction at issue cost Allegis’ clients $39 million.  The net credit spread strategy that caused the losses was a high risk strategy suitable only for aggressive investors.

Goldfield Oil Goldfield McKenzie 7 Drilling Fund sued in Clark County District Court.

The securities attorneys at The Law Office of David Liebrader have opened an investigation into the securities related conduct of the Las Vegas based company Goldfield Oil Goldfield Mckenzie 7 Drilling Fund.

The underlying matter concerns the solicitation by Goldfield to invest in their Goldfield McKenzie 7 Drilling Fund through the use of cold calling of prospective investors.