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$70 MILLION Recovery for Investment Fraud
$44 MILLION Recovery for Ponzi Scheme Victims
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$9.1 MILLION FINRA Arbitration Award Against Brokerage Firm
$7.9 MILLION Securities Arbitration Award Against Stockbroker
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Sumitro Pal (CRD# 4763364) is a former registered broker and investment advisor whose last known employer was Morgan Stanley (CRD#:149777) of Bethesda, MD, where he was registered from 2009-2018. Pal has worked in the securities industry since 2004. Currently, Pal is the subject of four pending customer disputes, filed between November 2018 and November 2020, which allege damages totaling $1,575,000. Investors’ allegations range from “selling away” to “unsuitability” and “misappropriation of funds for an outside investment.”  The dates of the alleged actions range from October 2007 through September 2018.  Two previous customer disputes were settled for a total of $3,625,000.00. The most recent dispute was filed on 5/4/2018, and alleged, “inter alia, Misappropriation of funds for an outside investment - Oct 2017 to Feb 2018.” This claim was settled for $2,500,000.00.  The earlier claim was filed 9/26/2017 and had similar allegations that “the FA invested his retirement money in high risk corporate bonds including an over-concentration of bonds in the energy sector and also that the FA misrepresented the losses of his investments. 01/01/2013-08/31/2017.” This claim was settled for $112,500.00.Sumitro Pal (CRD# 4763364) is a former registered broker and investment advisor whose last known employer was Morgan Stanley (CRD#:149777) of Bethesda, MD, where he was registered from 2009-2018. Pal has worked in the securities industry since 2004. Continue reading ›

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In January 2021, the Securities and Exchange Commission (SEC) filed a complaint against Eric C. Malley (Malley) and MG Capital Management LP concerning what the SEC characterized as “an offering fraud orchestrated by Malley, the founder and principal of MG Capital, the investment manager of two real estate funds.” The SEC’s Complaint can be found here. Malley and his firm, MG Capital, are based in New York and conducted much of their business in Manhattan. According to the SEC, Malley and his firm raised almost $60 million from investors through various alleged fraudulent representations and omissions. For this misconduct, the SEC seeks a permanent injunction preventing Malley from further violating federal securities laws, disgorgement of all ill-gotten gains from the alleged scheme, and civil money penalties.In January 2021, the Securities and Exchange Commission (SEC) filed a complaint against Eric C. Malley (Malley) and MG Capital Management LP concerning what the SEC characterized as “an offering fraud orchestrated by Malley, the founder and principal of MG Capital, the investment manager of two real estate funds.” The SEC’s Complaint can be found here. Malley and his firm, MG Capital, are based in New York and conducted much of their business in Manhattan. Continue reading ›

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In January 2021, Steadfast Apartment REIT Inc. announced that it is lowering its distribution rate and limiting share repurchases, effective February 1, 2021. Steadfast Apartment REIT is a publicly registered non-traded real estate investment trust (“REIT”). Steadfast invests in apartment communities across the United States. According to a letter to shareholders, Steadfast is cutting its distribution rate nearly in half, from $0.90 per share to $0.5250 per share. Steadfast Apartment REIT’s NAV Continues To Decline As of March 6, 2020, Steadfast’s net asset value (NAV) was reported at $15.23 per share.  However, the reduced distributions indicate that things may be worse for the REIT than can be discerned from the NAV. In fact, Steadfast Apartment REIT is trading on the secondary market for approximately $10-$11.In January 2021, Steadfast Apartment REIT Inc. announced that it is lowering its distribution rate and limiting share repurchases, effective February 1, 2021. Steadfast Apartment REIT is a publicly registered non-traded real estate investment trust (“REIT”). Steadfast invests in apartment communities across the United States. Continue reading ›

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FINRA, the Financial Industry Regulatory Authority, is the U.S. broker-dealer industry’s most prominent self-regulatory organization, authorized by Congress to protect investors by ensuring that the broker-dealer industry operates fairly and honestly. However, despite overseeing more than 600,000 brokers across the country, FINRA’s jurisdiction does not include Vlad Tenev, the CEO of Robinhood, who is not registered or licensed with the organization. Robinhood has been hailed as one of the fastest-growing online brokerage firms in the world, but has been the subject of extreme scrutiny over the past several weeks due to its role in recent market activity related to GameStop, AMC Theatres, and others. Many Brokerage CEOs Are Not FINRA-Registered Unfortunately, Tenev’s lack of FINRA registration is not an exception, but the industry norm. Robinhood’s response to this revelation has been that Tenev is the CEO of the holding company for Robinhood’s brokerage service, not the broker-dealer itself, meaning Tenev is not required to be registered. Nonetheless, FINRA’s website states that “we require individuals and firms who wish to conduct business with the investing public to achieve and maintain certification as members of FINRA.” Tenev’s implication in recent events has led many to question whether Tenev, and individuals in similar positions at other firms, should be deemed individuals conducting business with the investing public.FINRA, the Financial Industry Regulatory Authority, is the U.S. broker-dealer industry’s most prominent self-regulatory organization, authorized by Congress to protect investors by ensuring that the broker-dealer industry operates fairly and honestly. However, despite overseeing more than 600,000 brokers across the country, FINRA’s jurisdiction does not include Vlad Tenev, the CEO of Robinhood, who is not registered or licensed with the organization. Continue reading ›

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Silver Law Group is investigating potential claims on behalf of investors in Clover Health Investments, Corp. Clover Health is a health insurance services company based in Tennessee. In January 2021, Clover Health went public, but shortly thereafter, Hindenberg Research published a report calling into question Clover’s business practices leading up to Clover’s Initial Public Offering (IPO). Clover Health’s share price dropped more than 12% following the news. Short Seller Hindenburg Published A Report Exposing Serious Alleged Misconduct On February 4, 2021, Hindenburg Research published a report titled “Clover Health: How the ‘King of SPACs’ Lured Retail Investors Into a Broker Business Facing an Active, Undisclosed DOC Investigation”. The report lodged serious allegations regarding Clover Health’s business practices, including: Clover has not disclosed that its business model and its software offering, called the Clover Assistant, are under active investigation by the Department of Justice (DOJ), which is investigating at least 12 issues ranging from kickbacks to marketing practices to undisclosed third-party deals, according to a Civil Investigative Demand (similar to a subpoena) we obtained. Much of Clover’s sales are driven by a major undisclosed related party deal and misleading marketing targeting the elderly.Silver Law Group is investigating potential claims on behalf of investors in Clover Health Investments, Corp. Clover Health is a health insurance services company based in Tennessee. In January 2021, Clover Health went public, but shortly thereafter, Hindenberg Research published a report calling into question Clover’s business practices leading up to Clover’s Initial Public Offering (IPO). Clover Health’s share price dropped more than 12% following the news. Continue reading ›

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On February 4, 2021, a federal indictment was unsealed against three GPB Capital insiders: David Gentile, Jeffry Schneider, and Jeffrey Lash. Gentile was the founder, owner, and CEO of GPB Capital, Schneider was the CEO of Ascendant Capital, the placement agent for GPB, and Lash was a managing partner of GPB Capital primarily responsible for overseeing GPB’s investments in car dealerships. GPB Capital is a New York-based alternative asset manager that raised over $1.8 billion dollars from investors across the United States.  GPB offered a series of limited partnership deals, including: GPB Holdings, LP; GPB Holdings II, LP; GPB Automotive Portfolio, LP; GPB Waste Management, LP, and GPB Cold Storage, LP.  GPB was sold by a vast network of brokerage firms who promised protection of principal investment, a steady dividend payment, and major upside if GPB went public. GPB’s funds have not paid any distributions since 2018, have substantially declined in principal value, and are illiquid, meaning investors are stuck in these funds with no way to sell and/or recoup their losses.On February 4, 2021, a federal indictment was unsealed against three GPB Capital insiders: David Gentile, Jeffry Schneider, and Jeffrey Lash. Gentile was the founder, owner, and CEO of GPB Capital, Schneider was the CEO of Ascendant Capital, the placement agent for GPB, and Lash was a managing partner of GPB Capital primarily responsible for overseeing GPB’s investments in car dealerships. Continue reading ›

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On February 4, 2021, the Securities and Exchange Commission (SEC) announced that it charged three people and their affiliated entities with running a “Ponzi-like scheme” that raised more than $1.7 billion by selling private placements issued by alternative asset management firm GPB Capital Holdings. Silver Law Group represents investors in claims against the broker-dealers who sold GPB to investors. Claims to recover investment losses allege that the broker-dealers failed to conduct adequate due diligence on the investment, among other causes. Our securities fraud attorneys have already filed multiple FINRA arbitration claims. Silver Law Group reportedly filed the first GPB-related stockbroker arbitration claim in 2019.  Since that time, our attorneys have recovered substantial damages for investors around the country. The SEC action further demonstrates the gross misconduct allegedly at GPB and although most brokerage firms refused to sell GPB, investors have alleged that the selling brokerage firms failed to do adequate due diligence or turned a blind eye to red flags because GPB paid substantial commissions to the selling stockbrokers.On February 4, 2021, the Securities and Exchange Commission (SEC) announced that it charged three people and their affiliated entities with running a “Ponzi-like scheme” that raised more than $1.7 billion by selling private placements issued by alternative asset management firm GPB Capital Holdings. Continue reading ›

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A FINRA arbitration panel has awarded customers of Arete Wealth Management $515,000 for investment losses in risky GPB Capital Holdings private placements. The award is notable because Arete was ordered to pay $259,000 in client legal fees, which is not typical in FINRA arbitration awards. Arete Wealth Management, a broker-dealer based in Chicago with 35 offices, is known to sell high-risk alternative investments. Silver Law Group filed a FINRA arbitration claim against Arete on behalf of an elderly client who we alleged was sold unsuitable leveraged ETNs, ETFs, and non-traded REITS. Among the investments that caused our client significant losses were: American Finance Trust, Hospitality Investors Trust, and Benefit Partners Realty Trust. GPB Capital Holdings FINRA arbitration claims have been piling up against GPB Capital Holdings, a New York-based alternative asset management firm that raised $1.8 billion since its founding in 2013 by Scientologist David Gentile.A FINRA arbitration panel has awarded customers of Arete Wealth Management $515,000 for investment losses in risky GPB Capital Holdings private placements. The award is notable because Arete was ordered to pay $259,000 in client legal fees, which is not typical in FINRA arbitration awards. Continue reading ›

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Social media has become an integral part of modern culture. It’s the place where we can keep in touch with friends, relatives, and people you met long ago. You can meet people with shared interests, learn new things, swap stories, and ask for advice. Facebook, LinkedIn, and other similar sites have group functions for like-minded people to gather to share and discuss. Silver Law Group’s managing partner, Scott Silver, is a frequent news commentator speaking about current events relating to investing. Scott appeared in multiple news outlets including CNBC discussing the trading around Gamestop and the perceived relationship between wall street v main street. Just like “reality TV” and those gossip magazines at the grocery checkout, not everything on social media is what it seems. Psychology offers many answers as to why so many people believe everything they see and read without asking questions. For instance, “influencers” are those who post frequently about their life and lifestyle, and frequently receive paid sponsorships and other compensation in return. However, not all of these “influencers” are telling the truth about their lives, and taking pictures for social media that aren’t completely accurate. Researching financial related information can be just as inaccurate no matter where it’s found. That’s why it’s important to have a strong understanding about any securities purchases you’re considering, as well as reliable sources before making any decision. This includes anything from your stockbroker and/or financial advisor. If you’re just a casual investor who doesn’t have the experience of a more sophisticated investor, you’re taking a gamble with the risk of losing not only your investment capital, but more.   The Securities And Exchange Commission recently published an investor alert discussing stock information on social media. Keep this in mind when researching stocks, securities, or other financial information.Social media has become an integral part of modern culture. It’s the place where we can keep in touch with friends, relatives, and people you met long ago. You can meet people with shared interests, learn new things, swap stories, and ask for advice. Facebook, LinkedIn, and other similar sites have group functions for like-minded people to gather to share and discuss. Continue reading ›

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Former NEXT Financial Group broker Charles Kulch (Charles Chester Kulch CRD# 2371584) is the subject of four pending customer disputes, as well as five settled disputes, according to his FINRA record. Kulch was previously registered with NEXT Financial Group, Inc. in Nashua, New Hampshire from 2006 until he left the brokerage industry in 2020. According to Kulch’s CRD Report, he was also operating Kulch Associates Inc., a tax preparation service, and Kulch Insurance Group LLC.Former NEXT Financial Group broker Charles Kulch (Charles Chester Kulch CRD# 2371584) is the subject of four pending customer disputes, as well as five settled disputes, according to his FINRA record. Kulch was previously registered with NEXT Financial Group, Inc. in Nashua, New Hampshire from 2006 until he left the brokerage industry in 2020. According to Kulch’s CRD Report, he was also operating Kulch Associates Inc., a tax preparation service, and Kulch Insurance Group LLC. Continue reading ›

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