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Articles Posted in Current Investigations

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Silver Law Group is investigating claims related to Barry Kornfeld and First Financial Tax Group for the sale of investment products issued by the Woodbridge Group of Companies as safe alternatives for income seeking retirees.

Barry Kornfeld (“Kornfeld”) is the owner of First Financial Tax Group in Boca Raton, FL and teaches Baby Boomer Retirement Courses at Florida Atlantic University. Kornfeld is alleged to have sold short-term mortgage notes issued by the Woodbridge Group of Companies (“Woodbridge”) to retirees seeking safe, conservative, income alternatives. Barry Kornfeld was barred in July 2010 by both the U.S. Securities and Exchange Commission (“SEC”) and the Financial Industry Regulatory Authority (“FINRA”) from acting as a broker or investment adviser or otherwise associating with firms that sell securities or provide investment advice to the public.

Woodbridge is currently the subject of a SEC probe for the possible fraudulent sale of securities to investors. Woodbridge filed for Chapter 11 bankruptcy today citing costs of expansion, litigation, and a government fraud investigation as the reason. According to Woodbridge Wealth’s website, Woodbridge offers First Position Commercial Mortgages, Secondary Market Annuities and a Commercial Bridge Loan Fund. Woodbridge has reportedly raised approximately 1 billion dollars from investors around the country through agents such as Barry Kornfeld and First Financial Tax Group.

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Mack L. Miller

CRD#2822317

Silver Law Group is investigating New York, New York-based former Dawson James Securities Broker Mack L. Miller after multiple clients filed FINRA complaints alleging misrepresentation and excessive trading in client accounts.

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Our attorneys are investigating  financial advisor Cory R. Burnell (CRD# 3260340), previously of LPL Financial LLC (CRD# 6413), for unsuitable recommendations to invest in inverse leveraged exchange-traded funds (ETFs).

Cory Burnell has 8 customer complaints on his FINRA BrokerCheck report, all of which concern Burnell’s unsuitable recommendations to invest in inverse leveraged ETFs. These complaints allege damages totaling over $1.9 million. All of the customer complaints have been filed within the past two years.

FINRA requires brokerage firms to supervise their brokers’ activities during the time the brokers are registered with them. According to Burnell’s BrokerCheck report, Burnell is no longer registered with FINRA.

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If you’re investing in an instrument other than traditional stocks, bonds, or cash, then you’re investing in an alternative. In the current low-interest rate environment, many retail investors are allocating a greater portion of their portfolio to alternatives in search of higher yield. It is also common for investors to believe that alternatives help contribute to a diversified portfolio and reduce volatility. Originally offered to institutional investors and sophisticated, high net worth individuals, alternatives come in many shapes and sizes. They include private placements, precious metals, managed futures, structured products, commodities, currency, and “alternative alternatives” – just to name a few.

Let’s start by differentiating these from more traditional investments. Because alternatives frequently claim to have a low correlation with market indices, performance frequently depends more on manager skill than on market returns. Fees are often opaque and layered, and leverage may be used to magnify returns. One should also note that these investments can be highly illiquid. Their complexity explains their popularity among sellers, as complex products are often designed in favor of the issuer by having multiple layers of fees. In 2010, for the top five U.S. brokerage firms, alternatives generated $18 billion in fee revenues (McKinsey & Company: The Mainstreaming of Alternative Investments).

According to Financial Industry Regulatory Authority (FINRA) rules, broker-dealers have an obligation to provide their clients with adequate disclosures and follow suitability rules. The disclosures include such details as liquidity, leverage, associated fees, and conflicts of interest. With regard to suitability, broker-dealers must consider the investor’s age, risk tolerance, liquidity needs, financial and tax status, and other relevant characteristics (FINRA Rule 2111). Unfortunately, many broker-dealers have allocated a large portion of conservative investors’ portfolios to alternatives. When broker-dealers, enticed by high commissions, take advantage of retirement savers and elderly clients, investors may be entitled to compensation for their losses.

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