Securities Arbitration Lawyers Blog

FINRA Bars Brokers for Failing to Pay Arbitration Awards or Settlements – March 2015

April 30, 2015 | Silver Law Group

According to FINRA Disciplinary actions for March 2015, the following individuals were suspended from FINRA for failing to comply with a FINRA arbitration award or settlement agreement pursuant to FINRA rules:

NAME	FORMER EMPLOYERS
Jay Howard Lustig	Equibond, Inc.
Jay Howard Lustig	Drake Capital Securities, Inc.
Amarjeet Singh	Morgan Stanley Smith Barney
Amarjeet Singh	Morgan Stanley & Co. Inc.

Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Florida Stockbroker Richard Ohrn Fakes Disappearance

April 27, 2015 | Silver Law Group

The Sun Sentinel reports that Richard Ohrn, 44, a former South Florida stockbroker who disappeared while fishing in the Atlantic Ocean last month, has admitted that he staged his disappearance by abandoning the boat and driving to Albany, Georgia.

According to the Sun Sentinel, Richard Ohrn was trying to escape legal issues, including a suit by a former employer alleging that he stole from customer accounts and a civil action accusing him and his wife of misusing funds raised for a home-investing business called RKJMO Home Investors.

FINRA records indicate that he was named in a FINRA Arbitration in December 2014 alleging that he converted $15,250 from two elderly clients by forging signatures. That matter is still pending.

Seadrill Lawsuits Ordered to be Consolidated

April 13, 2015 | Silver Law Group

Recently, a U.S. District Court judge ruled that three class action lawsuits against Seadrill Ltd. will be consolidated. Seadrill is an offshore drilling contractor based in Bermuda. The lawsuits arose after the company announced a suspension of its annual $4-per-share dividend in November, which caused an immediate and significant drop in its share value.

Rule 10b-5 Violations

The plaintiffs claim the company violated Rule 10b-5, which makes it unlawful “to employ any device, scheme, or artifice to defraud, to make any untrue statements of a material fact or to omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, or to engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of a security.”

SEC Charges Former NFL Player and His Business Partner in $32 Million Ponzi Scheme Involving Loans to Professional Athletes

April 8, 2015 | Silver Law Group

A federal court in Boston has unsealed a civil lawsuit filed earlier this month by the U.S. Securities and Exchange Commission (“SEC”) against a former professional football player and his business partner for allegedly defrauding at least 40 investors out of as much as $14 million, alleging the business partners operated a Ponzi scheme that bilked investors who were promised profits from loans to professional athletes.

According to the SEC’s lawsuit, former professional football player William (“Will”) D. Allen — a former first round draft pick who played in the NFL with the New York Giants, the Miami Dolphins, and the New England Patriots and who now resides in Davie, Florida — and his business partner, Susan C. Daub — a financial professional formerly of Acton, Massachusetts who now lives in Coral Springs, Florida — claimed to make loans to professional athletes who were short of cash in the off-season or early in the season. Allen and Daub allegedly told investors that they could profit by funding the loans and receive interest of up to 18 percent paid by the athletes. Under that framework, Allen and Daub raised nearly $32 million from investors while advancing only $18 million in loans to athletes. From July 2012 through February 2015, the investment program paid $20 million to investors while receiving a little more than $13 million in loan repayments from athletes. To fill the nearly $7 million gap, Allen and Daub used money from some investors to pay other investors — the hallmark of a Ponzi scheme.

In addition, Allen and Daub allegedly misled investors about the terms of some of the loans and, in one clear instance, purportedly falsified the existence of one of the loans. According to the SEC, 24 of Allen and Daub’s investors collectively contributed nearly $6 million toward a purported loan to a National Hockey League player. Although the player is real and the money was collected from the investors, no documentation corroborates that any such loan in that amount ever existed. Allen and Daub are purported to have used some investor funds to pay personal expenses, such as charges at casinos, nightclubs, and pawn shops; or to fund other business ventures.

Morgan Stanley Investigated for Securities Recommendations

March 26, 2015 | Silver Law Group

As discussed in last week’s Silver Law Group blog, Cobalt International and Seadrill Limited, two oil and gas publicly traded companies, are now defendants in class action lawsuits. The separate, but similar, suits allege that investors lost significant sums of money by relying on misleading information and SEC filings from each company.

Investigation Reveals Possibility of Inappropriate Investment Advice

It is believed that unsuitable and inappropriate advice from stock brokers and financial representatives who recommended the purchase of these companies contributed to losses suffered by investors. The Silver Law Group is currently investigating the role that the Morgan Stanley’s registered financial representatives may have played in investors’ losses.

Oppenheimer Hit With $20 Million in Fines

March 26, 2015 | Silver Law Group

Oppenheimer and Co. is an investment bank and full-service investment firm offering financial advisory services, capital market services, wealth management, investment banking, and related products and services worldwide. In late January, the Securities and Exchange Commission (SEC) charged Oppenheimer and Co. with violating federal securities laws by improperly selling penny stocks in unregistered offerings on behalf of customers.

Penny Stocks 101

“Penny stocks” are common shares of small public companies that trade at comparatively low prices per share. More specifically, the SEC defines a penny stock as a “security that trades below $5.00 per share, is not listed on a national exchange, and fails to meet other specific criteria.”

State of Florida Charges Four Computer Support Companies in Ruthless Fraud Scheme

March 17, 2015 | Silver Law Group

The Office of the Attorney General of the State of Florida has filed a series of complaints alleging that four South Florida companies — (1) ASAP Tech Help LLP, (2) E-Racer Tech LLC, (3) Protech Support LLC d/b/a Rapid Tech Support, and (4) Techfix USA LLC d/b/a Smart Support and First Class Tech Support — engaged in a ruthless telemarketing scheme through which each company allegedly marketed deceptive computer software and tech support services to consumers that were little more than false promises aimed at bilking consumers of millions of dollars.

According to the lawsuits, each company used software — such as pop-up ads warning of viruses or other malware — designed to trick consumers into thinking that there were problems with their home and office computers. The software directed consumers to call the companies, which then subjected those consumers to high-pressure deceptive sales pitches for tech support products and services to fix their non-existent computer problems. By preying upon consumers’ lack of technical knowledge, the companies were able to convince consumers that their computers were fraught with viruses and a multitude of computer errors for which those consumers purportedly needed security software and tech support services that typically cost between $99 and $600. In all, the companies were able convince numerous consumers that the non-existent problems actually did exist, and each company made huge profits in the process.

In November 2014, Florida’s Attorney General and the Federal Trade Commission obtained temporary restraining orders against two other South Florida-based tech companies (Inbound Call Experts LLC d/b/a Advanced Tech Support and Advanced Tech Supportco LLC) with similar deceptive schemes marketing and selling computer support services and software. The Attorney General now believes that some of the newly-charged scammers are former employees of the companies named in the November lawsuits.

Legal Recourse May be Available to Investors Hurt by Cobalt International and Seadrill Limited Stock Declines

February 19, 2015 | Silver Law Group

The recent and sharp decline of oil prices has been the source of joy for consumers at the gas pump. Unfortunately, many investors have been experiencing the opposite emotions as the price of many oil and gas related stocks have plummeted. Two of these companies are Cobalt International Energy, Inc. and Seadrill Limited. Cobalt is an international oil exploration company that has seen its stock price drop by well-over 50% since this time last year. Similarly, Seadrill is a separate offshore drilling company that has similarly seen its share prices fall by 72% in the past six months. Seadrill shareholders also saw their dividends suspended.

Losses Rooted in Violations?

The losses suffered by investors in Cobalt and Seadrill were exacerbated by alleged violations of misconduct and SEC violations by both entities. Among other misconduct, Cobalt has been accused of making false and misleading statements to investors, issuing equally false press releases, and filing misleading filings with the SEC. A number of the allegation center around statements by Cobalt regarding its access to Angolan wells and related unethical business practices.

Silver Law Group is Investigating Financial Advisor Anthony Fisher

February 3, 2015 | Silver Law Group

Anthony Fisher was a financial advisor with Morgan Stanley from 2003 through April 2009. He subsequently worked at Stifel, Nicolaus and Company. Mr. Fisher was suspended by FINRA in November 2014 for failing to pay an arbitration award. However, over the last decade, Mr. Fisher’s employers have been the subject of multiple customer FINRA arbitration claims relating to Mr. Fisher. In response to a FINRA request for information, Mr. Fisher failed to respond to FINRA or otherwise cooperate in FINRA’s investigation.

In December 2014, Stifel, Nicolaus & Company settled a case brought by one of Mr. Fisher’s former clients for $500,000 relating to allegations of fraud and unsuitable recommendations.

Stifel, Nicolaus & Company has been the recent subject of several FINRA arbitration claims relating to the sale of promissory notes and other equities. Mr. Fishers’ full CRD can be viewed here.

FINRA Bars Mark Foster from Securities Industry

February 3, 2015 | Silver Law Group

Mark Foster, of Pasadena, California, was barred from association with any FINRA member in any capacity. Foster worked for Stern Fisher Edwards, Inc. until May 2012. The sanction was based on findings that Foster failed to respond to requests from FINRA for information and documents and to appear and provide on-the-record testimony regarding allegations that he misappropriated more than $2 million in customer funds. Stern Fisher allegedly paid a customer $625,000 to settle the claim. (FINRA Case #2014039867601)

Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.