Kalos Capital investigation into non-traded REIT and private placements

The securities attorneys at The Law Office of David Liebrader have opened an investigation into the private placement activity of Kalos Capital, an Alpharetta, Georgia based broker dealer with offices in Las Vegas, Nevada.

The pending customer complaint  that gives rise to the investigation concerns an over concentration into high commission, high risk private placement investments in REITs and oil and gas programs.  Among the investments are GPB Waste Management, Peachtree Hotel Fund, HPI Real Estate Fund, Waveland Resources, the Shopoff Land Fund and GPB Holdings II.  These investments were recommended to an elderly investor as a means of providing income to him in retirement.   Instead, due to an over concentration into these illiquid programs, the client has been unable to liquidate his holdings, and has suffered substantial unrealized losses.  We have previously blogged about Shopoff and GPB Capital Holdings’ issues with regulators.

FINRA suspends Waco Texas broker Michael Kamperman for 20 months

Michael Kamperman, a registered representative from Waco, Texas, formerly with H.D. Vest Investment Services and Prospera Financial Services, was suspended from FINRA membership as a result of an investigation into securities related activity conducted by regulator FINRA.  Findings made in FINRA’s “Acceptance, Waiver and Consent”  order included details of Kamperman making unsuitable investments, and over concentrating customer accounts in speculative, high risk oil and gas investments, as well as his recommendation of an inappropriate long term investment strategy involving an inverse, exchange traded note that was intended only for a short a term investment.  Kamperman 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 20 months and a fine of $20,000.

In June 2019, Michael Kamperman agreed to the suspension and FINRA published its findings that he made unsuitable investments in the retirement accounts of eight customers.  These unsuitable investments took the form of overconcentration in risky oil and gas industry investments, as well as the improper use of an exchange traded note that is designed for short term trading. Instead, the findings state that Kamperman recommended the note for a long term hold, thereby causing the client losses.

Nina Jessee barred for refusing to cooperate with a FINRA investigation.

Nina Jessee, a registered representative from Abingdon, Virginia, formerly with Cetera Advisors and Investors Capital Corp., was barred from FINRA membership as a result of her refusing to cooperate with a FINRA investigation into her recommendation of alternative inestments, and allegations she engaged in outside business activities. After receiving notice from FINRA of the investigation Jessee, though her counsel, notified FINRA that she would not appear for an interview conducted by FINRA as part of their investigation.  As a result of her refusal to cooperate, Nina Jessee was barred from FINRA in any capacity in June, 2019.

FINRA opened the investigation in December, 2018 as a result of a series of customer complaints that had been filed alleging overconcentration and suitability.  In addition, as part of their investigation, FINRA was looking into Jessee’s sales of alternative investments, and whether she engaged in outside busieness activities.

Gurpreet Chandhoke and Stephen Shea Sued by FINRA

In a complaint filed by FINRA, and reported in October, 2019 Gurpreet Chandhoke and Stephen Shea, of Walnut Creek, California were named as Respondents alleging that they failed to disclose outside business activities and engaged in private securities transactions in violation of FINRA rules.  .

The complaint alleges that Chandhoke and Shea created securities offering materials and gave them to prospective investors in order to solicit their interest in investments.  At least three companies were created by Chandhoke for the means of engaging in securities transactions without disclosing the full extent of the outside business to his broker dealer.  Also in violation of FINRA rules, Chandhoke and Shea opened accounts at other broker dealers and failed to disclose these accounts to the member firms.  The complaint further alleges that Chandhoke and Shea engaged in nearly ten million dollars of private securities transactions without providing written notice of those transactions to their firms prior to the sales.

Roger Owens Cetera Advisors 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 Roger Owens a registered representative formerly affiliated with Cetera Advisors in Elkton, Maryland.

The pending investigation concerns investments made by Roger Owens’ clients into the Woodbridge Mortgage Investment Fund.

Jeffrey Schwebach Independant Financial Group 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 Jeffrey Schwebach a registered representative formerly affiliated with Independant Financial Group in Dell Rapids, South Dakota.

The pending investigation concerns investments made by clients into the Woodbridge Mortgage Investment Fund, unregistered securities sold by Jeffrey Schwebach to his clients.

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.

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.

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