Category Archives: Affinity Fraud

SEC Files Action Over Verto Notes-Dallas & Plano, Texas

July 2017-Dallas and Plano, Texas

Two Texas firms and three individuals employed by the firms were named in an enforcement proceeding filed by the U.S. Securities and Exchange Commission over the sale of 7% promissory notes issued by Verto Capital Management LLC.

Named as respondents in the Order Instituting the proceedings, are:

  • Retirement Surety LLC-a Plano-based company, which according to its website is a ‘practicing Christian organization” who provide investment advice for retirement planning. This company has never been registered as a broker dealer.
  • Crescendo Financial LLC-a Plano-based company that brokered the sale of the Verto Notes that also touts itself as being a “practicing Christian organization”.
  • Thomas Rose-a 61 year old resident of Plano, TX, who was a partner of Retirement Surety and Crescendo Financial. Rose does not hold any securities licenses and has never been registered as or associated with a registered securities dealer.
  • David Leeman-a 67 year old resident of Dallas, TX, who is also a partner of Retirement Surety and Crescendo Financial. He purports to be a licensed insurance agent in TX, but has never been registered as or associated with a registered securities dealer.
  • David Featherstone-a 70 year old resident of Dallas, TX. He also purports to be a licensed insurance agent in TX, but has never been registered as or associated with a registered securities dealer.

Other relevant individuals in the order are:

  • WIlliam Schantz III, 62 of Moorestown, New Jersey.
  • Randal Wallis, 63 of Pottsboro, TX.
  • Ronald Howard Wills, 71, of McKinney, TX.

According to the SEC the respondents sold $12.5 million of the Verto Notes  to 82 individual investors and collected commissions of over $650,000 on the sales notwithstanding the fact that none of the respondents was registered as a securities broker. Respondents solicited sales on radio shows broadcast on two Christian networks and by use of the Retirement Surety website where the Verto Notes were touted as being a “Short Term Investment with Superior Returns and Minimal Risk”.

Investors who were referred to respondents by a registered stockbroker may be able to recover damages from the brokerage firm employing that broker. Call for details.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have 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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Stephen Hatch-Texas Real Estate Investor Sentenced to Five Years on Ponzi Scheme Targeting Christians

The Arizona Republic reports that Texan Stephen J. Hatch, 68, pleaded guilty to felony fraud and was sentenced to five years for operating a $70 million Ponzi scheme that targeted Christians who were promised double digit returns on real estate investments.

According to the press release, Hatch solicited investments in partnerships named after biblical verses and sent emails containing biblical quotes to his investor victims. Hatch told investors he was already a wealthy man and that he didn’t need the money but rather was trying to help them make money in the name of God.

Rather than use the victim’s money to invest in real estate as represented, Hatch used it for extravagant salaries for his children and friends, an investment in a restaurant, luxury items for himself, including a California ranch.

AFFINITY FRAUD

This type of fraud is known as ‘affinity fraud’Affinity fraud refers to investment scams that prey upon members of identifiable groups, such as religious or ethnic communities, the elderly, or professional groups. See this for more information about affinity fraud. 

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have 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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Miguel A. Hernandez-Former Thrivent StockBroker-Barred From Securities Industry

El Paso, Texas

According to FINRA records, Miguel A. Hernandez  a broker who was formerly  registered  with Thrivent Investment Management in El Paso, Texas , has been permanently barred from acting as a broker or otherwise associating with firms that sell securities to the public.

Without admitting or denying findings, Hernandez consented to the sanction and to the entry of findings that he obtained $25,000 in cash from an elderly customer he met at church  under false pretenses and converted the funds to personal use. Mr. Hernandez promised the elderly woman a stake in his purported tax business. After the misconduct was discovered, he repaid the elderly lady.

The Financial Industry Regulatory Authority (FINRA) is the agency that licenses and regulates stockbrokers and brokerage firms. FINRA requires brokers and brokerage firms to report customer complaints and disputes as well as regulatory sanctions. In addition brokers are required to disclose certain financial matters such as personal bankruptcies, judgments and liens.

Hernandez was registered with Thrivent Investment Management from 11/2003 until 5/2015 when he was discharged after the company discovered the misconduct.

If you have questions about  a brokerage account handled by Miguel A. Hernandez  , call to discuss your legal options.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have 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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Matthew Bell-Former WFG Investments Broker- Discloses 46 Customer Complaints-Pleads Guilty on Fraud Charges-San Antonio, TX

UPDATE MAY 2017

March 8, 2015- San Antonio, Texas

The Financial Industry Regulatory Authority (FINRA) reports that Matthew A. Bell , 47 of Boerne, TX, a broker who formerly worked for WFG Investments and Securities America, has been named in 46 customer disputes alleging damages in excess of $2.5M. There are two disputes that have not yet been resolved, all of which allege unsuitable recommendations and misrepresentation and seek damages ranging from $5,000 to $75,000.

Bell was permitted to resign from WFG Investments in 6/2013 and is not currently registered with any broker dealer. Bell pleaded guilty to conspiracy to commit securities fraud and conspiracy to commit mail and wire fraud in a civil action brought by the Securities and Exchange Commission (SEC).

The SEC had charged Bell and a group of other conspirators with pumping up the price of penny stocks and dumping them on unsuspecting investors. The companies involved in the pump and dump were CodeSmart Holdings Inc., Cubed Inc., StarStream Entertainment Inc. and The Staffing Group Ltd. 

Bell found many of his victims through the Oak Hills Church.

If you had an account handled by Bell that suffered losses, contact us to learn how you may be entitled to damages from his former employer.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have 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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Betsy Marcom-NEXT Financial Group Broker Fined/Suspended for Unsuitable Recommendation to Church-Georgetown, TX

November 19, 2015-Georgetown, Texas

Betsy Marcom (formerly Betsy Bratton Perryman) , entered into a Letter of Acceptance Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA) to resolve allegations that between June 1, 2009 and August 31, 2012, she made unsuitable investment recommendations to her client, a non-profit parish church.

In addition, FINRA alleges that Marcom , who was a member of the finance council for the church, recommended that they invest almost its entire portfolio in non-investment grade corporate bonds, resulting in an unsuitable concentration in such bonds, in violation of various NASD and FINRA rules.

“Investment Grade” is defined as a credit rating denoting only minimal risk for investors, and encompasses bonds rated BBB and above. Bonds that are rated BB. B, CCC, CC, C, and below are considered non-investment grade, or “junk” bonds. They are also frequently referred to as “high-yield” bonds.

AWC No.  2013037257201

Marcom was fined $15,000 and suspended from association with any FINRA member firm in all capacities for a period of four months.

According to FINRA recordsMarcom  was registered with NEXT Financial Group  from 2/2009-11-2015. Prior to that she was registered with Investment Professionals, Inc. from 5/1995-1/2009.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have 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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

FSC Securities Hit with $1.28M Award For Aubrey Lee Price Ponzi Scheme

Aubrey FSC brokerAugust 11, 2015 -Atlanta, Georgia

An arbitration panel of the Financial Industry Regulatory Authority (FINRA) awarded $1.28 million to a group of individuals who were victims of a ponzi scheme conducted by Aubrey Lee Price, a former FSC Securities broker. FINRA Case# 14-02355.

Price , who went from devout Christian minister and trusted financial adviser, was registered with FSC Securities in McDonough, GA,  from 2006-2008. He made headlines when, after his scheme was uncovered,  he faked his suicide on a boat in Key West, FL, in 2012.  See this FBI story “The Fraudster Who Faked His Own Death: Inside the Aubrey Lee Price Case” for more details.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have 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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Eight South Florida Individuals Charged with Securities Fraud Targeting Elderly

July 27, 2015- Boca Raton, Florida

The FBI announced today the indictment of eight individuals for participating in securities fraud involving Thought Development Inc., a Miami Beach based company claiming invention of a green line on the football field visible, and Virgin Gaming, a fee based service facilitating on line gaming and fantasy sports leagues.

Those charged with conspiracy to commit wire fraud are:

  • David Anthony Eratostene, 53, of Miramar, Florida,
  • Christopher J. Borgo, 41, of Boca Raton,
  • Alan D. Messina, 54, of Sunrise,
  • Michael T. Angeletti, 33, of Sunrise,
  • Michael J. Calash 34, of Boca Raton,
  • Stephen R. Reynolds, 38, of Pompano Beach,
  • Gary X. Schultz, 55, of Miramar,
  • Chazon Stein, 36, North Miami Beach

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have 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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870