Securities Arbitration Lawyers Blog

Should You Trust Penny Stocks Endorsed by Celebrities?

July 24, 2015 | Silver Law Group

A big name may not always equal big opportunity.

It’s all around us. Branded tennis shoes, hats and apparel worn by top-ranked, world-famous tennis players. NASCAR drivers and their cars blanketed in corporate logos. Famous models and actresses designing and promoting furniture lines. Top-selling country singers performing with beverage company logos adorning their stages, their tour buses and their fan t-shirts. Everywhere we turn, companies are promoting themselves with the help of famous people.

Why should penny stocks be any different?

Investors Beware: SEC Warns of Financial Professionals Making False Claims

July 23, 2015 | Silver Law Group

Tips on how how to be alert so you do not fall victim to an investment scheme.

The old adage “don’t believe everything you hear or read” rings true in the case of a recent Securities Exchange Commission (SEC) Investor Alert. This particular alert warns investors about financial professionals that may misrepresent their backgrounds and professional experience to lure investors into investment schemes.

Fraudulent Information Abounds

Broker Focus: Patrick Teutonico in the Spotlight for Unauthorized Transactions

July 22, 2015 | Silver Law Group

According to FINRA Teutonico failed to observe high standards of commercial honor.

According to the Financial Industry Regulatory Authority (FINRA) Broker Check website, broker Patrick Teutonico is once again in the spotlight. Over the course of 17 years in the securities industry, Teutonico has 10 disclosures to report.

To provide some background, brokers are required by FINRA – known as the industry watchdog – to disclose different types of events, from customer complaints to IRS tax liens, judgments and even criminal matters. As such, Teutonico has 10 on his record, many of which involve allegations of unsuitable and unauthorized transactions. According to InvestmentNews, only about 12% of financial advisors have any type of disclosure event on their records. Therefore, it would seem the number of disclosures by Teutonico is relatively high.

Investor Update: What You Need to Know About Churning

July 21, 2015 | Silver Law Group

Churning is a Type of Securities Fraud

What is churning?

Simply put, churning is defined as excessive trading.

Have You Suffered Financial Losses with Bruce Sabourin?

July 20, 2015 | Silver Law Group

Formerly of Cetera Advisors, you may not be the only one who has suffered.

Investment broker Bruce Michael Sabourin (CRD #2556826), most recently with Cetera Advisors, once again has a FINRA reported disclosure. Sabourin is now permanently barred from acting as a broker or otherwise associating with firms that sell securities to the public. According to the April 2015 FINRA Disciplinary and Other FINRA Actions Report, Sabourin was suspended as of February 23, 2015 for allegedly failing to provide information or keep information current according to FINRA rules.

What exactly is FINRA, you ask? Good question. It is the Financial Industry Regulatory Authority. All brokers and investment firms must agree to abide by FINRA rules. It’s the watchdog you want keeping an eye on investment players to make sure everyone is playing by the same rules. When someone isn’t, FINRA steps in.

SEC Charges Florida based DFRF Enterprises, LLC with Operating $15 Million Gold Mining Ponzi Scheme Targeting Spanish and Portuguese-speaking Investors

July 17, 2015 | Silver Law Group

The U.S. Securities and Exchange Commission (SEC) has charged Orlando, Florida-based DFRF Enterprises, LLC, its owner, and several of its promoters with operating a $15 million pyramid and Ponzi scheme falsely promising over 1,400 investors in Spanish and Portuguese-speaking communities in Massachusetts, Florida, and elsewhere interests in non-existent gold mines in Brazil and Africa. DFRF Enterprises, LLC (a Florida-based company), DFRF Enterprises LLC (a Massachusetts-based company) (collectively “DFRF”), company owner Daniel Fernandes Rojo Filho (of Winter Garden, FL), and investment promoters Wanderley M. Dalman (Revere, MA), Gaspar C. Jesus (Malden, MA), Eduardo N. DaSilva (Orlando, FL), Heriberto C. Perez-Valdes (Miami, FL), Jeffrey A. Feldman (Boca Raton, FL), and Romildo DaCunha (Brazil) were charged with multiple violations of federal securities laws in a Complaint filed in Massachusetts federal court. The SEC is seeking injunctive relief, disgorgement of ill-gotten gains, prejudgment interest, and civil monetary penalties.

According to the SEC, DFRF claimed to operate more than 50 gold mines in Brazil and Africa that collectively produced 13-16 tons of gold monthly, realized a return of over 100% on each kilogram it produced, and controlled gold reserves valued at approximately $1.4 trillion. The sales pitch also claimed, among other things, that DFRF donated 25% of its profits to African charities and that investors could realize a 15% monthly return — an annual return of nearly 200%. DFRF purportedly promised investors that their investments were fully insured and promised investors that with the company’s stock allegedly set to become publicly traded, each investor would have the ability to convert his/her membership interests into stock options at approximately $15.00 per share. When recently questioned about the status of the stock, Filho allegedly claimed that the “value” of the stock had already surpassed $64 per share.

However, according to the SEC: “There are no gold mines, no gold reserves, or no gold operations. DFRF bank documents indicate that none of the investors’ money has been used to conduct gold mining, and DFRF has received no proceeds from gold mining operations.” Instead, the SEC has charged that the company’s revenue came solely from selling membership interests to investors, not from mining gold; and that to keep the fraud afloat, commissions were paid to earlier investors using new investors’ funds in typical a Ponzi-like fashion. In the SEC lawsuit, Filho is accused of siphoning more than $6 million for his own personal lavish lifestyle that included a fleet of luxury automobiles.

Alex Makarovsky Recently Sanctioned by FINRA

July 16, 2015 | Silver Law Group

In the news again.

According to the FINRA website, Alex Makarovsky is once again in the hot seat for allegedly violating FINRA By-Laws and SEC rules. Makarovsky was most recently registered with Blackbook Capital, LLC.

Let’s go back a few years to build some context on his history. In 2010, while associated with Avenir Financial Group, Makarovsky allegedly made unauthorized trades in a client’s account. As a result, Makarovsky’s State of Indiana license was suspended for five years. In addition he and his firm had to pay a civil penalty and restitution to two customers.

Michael McGregor Suspended for 45 Days, Fined $5000

July 15, 2015 | Silver Law Group

Currently employed by and registered with Blackbook Capital, LLC

Since 1997, Michael Anthony McGregor has been registered with FINRA as a General Securities Representative (GSR). Through the years, McGregor has been subject to judgments and liens that have not been properly reported. By not reporting them, Michael McGregor is in violation of FINRA’s By-Laws and now he’s facing FINRA sanctions.

In March 2015, Michael McGregor was handed a 45-day suspension and fined $5,000 by FINRA for allegedly failing to amend and timely amend his FINRA registration to reflect unsatisfied judgments and liens he received. Without admitting or denying the findings, McGregor consented to the sanctions and to the entry of the findings.

Broker Robert Tricarico Permanently Barred from Securities Industry

July 14, 2015 | Silver Law Group

Alleged mismanagement of funds and failure to provide documentation to FINRA lead to Industry Bar

FINRA had questions for Robert Tricarico, Tricarico did not provide the information requested. And now Robert Tricarico is permanently barred from associating with any FINRA member in any capacity. That means he is barred from the securities industry forever.

To fill in the background, here are the details:

FINRA Bars Wesley C. Smith

July 13, 2015 | Silver Law Group

Earlier this year, the Financial Industry Regulatory Authority (FINRA) barred Wesley Smith from working for any FINRA member. The broker had been previously registered with Edward Jones from January of 2008 to September of 2014. According to the CRD, Mr. Smith had not passed any principal/supervisory exams, but had passed one general industry/product exam and one state securities law exam. Mr. Smith has five customer disputes that have been resolved, and one pending.

Following FINRA Notice of Suspension and Suspension from Association letters dated November 4, 2014 and December 1, 2014, FINRA, pursuant to Rule 9552(H), barred Mr. Smith from any association with any FINRA member in any capacity. Specifically, the bar resulted due to Mr. Smith’s failure to request termination of his suspension within three months of the date of the Notice of Suspension. While notice of it occurred on November 4^th, Mr. Smith’s actual suspension began on November 28, 2014. A failure to make a request to end a suspension results in an automatic expulsion or bar from association with FINRA. The sanction was officially ordered on February 9, 2015.

Operated by FINRA, the CRD is the central licensing and registration system for the U.S. securities industry and its regulators. It contains the registration records of over 6,500 registered broker-dealers. Additionally, the CRD contains the qualification, employment and disclosure histories of more than 650,000 active registered individuals. Access to the Web CRD is for entitled members only. In order to gain access, firms must go through the entitlement process administered by FINRA.