Category Archives: Conflict of Interest

Nicolaas P. Pronk-Noble Capital Named in Complaint Over Sale of AdCare Health Systems Stock-Boca Raton, FL

November 2016-Boca Raton, FL

According to publicly available records Nicolaas P. Pronk , (CRD# 1726101) ,  a  stockbroker who is employed by  Noble Capital Markets,  disclose  a pending regulatory matter.

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.

Pronk is named in a FINRA complaint alleging that he and Noble Financial Capital Markets violated securities laws by soliciting seven customers to purchase nearly a million shares of  stock in AdCare Health Systems (ADK) without disclosing the firm’s multiple and material conflicts of interest.

According to the complaint filed in FINRA Case #2013035740901, Pronk and Noble Capital Markets promoted and recommended ADK to prospective investors to profit from Noble’s undisclosed investment banking relationships with AdCare and their undisclosed arbitrage of AdCare securities, which created a financial incentive to recommend ADK to customers. Pronk retained ultimate control over all firm activities including proprietary trading, sales, investment banking, and the decision to initiate and prioritize the promotion and sale of ADK.

Nicolaas Pronk has been registered with Noble Capital Markets since 1988 and he acts as Noble’s CEO, COO, CFO and President.

Noble Capital Markets has been registered since 1984, is headquartered in Boca Raton, FL, and has 5 branch offices with 38 registered individuals.

If you have questions about an account in an account at Noble Capital Markets , contact us 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

United Development Funding Offices Raided by FBI- Grapevine, Texas

February 19, 2016- Grapevine, Texas

The FBI raided the offices of United Development Funding (UDF) yesterday causing the shares of its largest fund United Development Funding IV to fall over 50%, before trading was suspended. In December 2015 UDF IV was trading at over $17. At the time of this writing it is trading at just over $3.

UDF

UDF IV 90 Day Chart

 

UDF is based in Grapevine, Texas, and was founded in 2003. The company sells shares to investors and loans the money to real estate companies. Over $1 billion has been raised by UDF from mostly individual investors, many of which are older retired individuals who purchased the UDF  real estate investment trusts (REITs) seeking safe, dependable fixed income.

The Wall Street Journal (WSJ) published an article earlier this week that highlighted risks related to the UDF business model, including the following:

  • UDF IV Loans are Concentrated Geographically– while also operating in North Carolina, South Carolina and Florida, 99% of the UDF IV portfolio consists of loans made to borrowers in Texas, which is contrary to representations made to investors that UDF IV has portfolio diversification by submarket and loan type. Closer examination reveals that 68% of the loans are in the Dallas area, the WSJ reports.
  • UDF IV Loans are Concentrated to Single Borrower– 67% of its loans are to a single borrower, Centurion American Development and its affiliates.
  • UDF III Loans are Concentrated Geographically– 86% of its loans are secured by Texas properties.
  • UDF V Loans are Concentrated Geographically– 100% of it loans are secured by properties in Texas.

Recovery Option for Investors Who Suffered Losses on UDF 

Brokers have a duty to make suitable recommendations to investors. You may be able to recover damages from the brokerage firm that sold you the investment if the recommendation was not suitable for you taking into account your age, health and level of financial sophistication.

Brokers also have a duty to conduct an independent due diligence review of investments before offering the product for sale.

Call to discuss how you may be able to recover damages through FINRA arbitration, a process much more expedient & efficient than court litigation.

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

JMP Securities Fined $125,000 Over Failure to Disclose Conflict of Interest

August 17, 2015,

JMP Securities LLC entered into a Letter of Acceptance Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA) to resolve allegations that from January 2010 through December 31, 2013, the firm violated several provisions of FINRA’s research analyst conflict of interest rule, NASD Rule 2711.

Rule 2711 fosters transparency in research reports by requiring broker dealers to clearly and prominently provide investors with important information regarding conflicts of interest.

AWC NO. 2013039333001

JMP Securities was censured and fined $125,000.  

JMP Securities  has been a FINRA member since 1988, is headquartered in San Francisco, and has over 150 registered persons in 6 branch offices.  According to FINRA, it publishes about 3,100 research reports annually.

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

William Blair & Company Fined $350,000 Over Failure to Disclose Conflict of Interest

August 17, 2015,

William Blair & Company entered into a Letter of Acceptance Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA) to resolve allegations that from January 2010 through September 25, 2013, the firm violated several provisions of FINRA’s research analyst conflict of interest rule, NASD Rule 2711.

Rule 2711 fosters transparency in research reports by requiring broker dealers to clearly and prominently provide investors with important information regarding conflicts of interest.

AWC NO. 2013038534401

William Blair & Company was censured and fined $350,000.  

William Blair & Company  has been a FINRA member since 1944, is headquartered in Chicago, and has nearly 900 registered persons in 15 branch offices.  According to FINRA, it publishes about 6,000 research reports annually, covering over 600 companies.

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

Ronald Rafaloff, Former Liberty Partners Financial Broker, Sanctioned by Regulator

February 3 , 2015

Ronald Rafaloff  entered into an Order Accepting Offer of Settlement (Order) with the Financial Industry Regulatory Authority (FINRA) to resolve allegations that beween January 2011 and November 2012, while associated with Liberty Partners Financial Services, he invested the retirement savings of an elderly client in companies he controlled and thereafter converted the funds to his personal use.

The Order alleges that Rafaloff invested $405,000 of the elderly client’s savings in three speculative business entities founded by him and thereafter converted at least $168,000 of the client’s funds to pay his personal expenses.

FINRA Disciplinary Proceeding #2013036261002

Rafaloff was permanently barred from associating with any FINRA registered firm in any capacity.

Liberty Partners Financial Services was formed in 2004 and is registered in 52 States and Territories. Their main office is located in Bakersfield, California.

If you had losses in an account handled by Ronald Rafaloff, you may be able to recover damages from the broker dealer employing him. Call to speak with an experienced securities attorney.

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

Christopher Wheeler, Penny Stock Promoter Charged with Securities Fraud

January 14, 2015

The SEC charged Christopher Wheeler of Victor, New York,  a penny stock promoter, with fraud for not disclosing that he was being paid to promote the stock of certain issuers while he was simultaneously liquidating millions of his personally owned shares and reaping profits of nearly $3 million.

According to the SEC press release, Wheeler received millions of shares from issuers and then featured the stock on his website www.OTCStockExchange.com , recommending that investors purchase the stock.

“Wheeler and OTCStockExchange.com concealed from investors that Wheeler was paid to hype the very stocks that he was unloading from his own account,” said George S. Canellos, Director of the SEC’s New York Regional Office. “The securities laws require stock promoters to disclose their compensation so that investors can make informed decisions about the credibility of the information they are being provided.”

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

Texas Securities Board Notices Hearing to Revoke Registration of Mowery Capital Management & Frederick Mowery

Austin,Tx-November 17th, 2014- The Texas State Securities Board (TSSB) set a hearing to determine whether the registrations of Mowery Capital Management, LLC and Frederick Eugene Mowery , both of McKinney, Texas, should be revoked, whether Mowery and his company should be fined and ordering a cease and desist from engaging in fraudulent conduct. The hearing is January 27, 2015, 9am CST at the TSSB office in the William P Clements Building, 300 W 15th ST, Austin, TX.

According to the notice, Frederick “Fritz”  Mowery is currently registered as an investment advisor with Worth Financial Group. The TSSB alleges that Mowery has an undisclosed conflict of interest, has failed to disclose material facts on Form ADV , has committed fraudulent acts on persons 65 years of age or older, failed to disclose a bankruptcy petition,   and other claims.

Frederick Mowery is not currently registered with FINRA. He was previously registered with Worth Financial Group from 6/2004-11/2008.

The Austin Statesman reports that Mowery is a friend and business associate of Attorney General-elect Ken Paxton. According to the Statesman, Paxton agreed to a TSSB reprimand and $1,000 fine in May 2014 for soliciting clients for Mowery’s firm, receiving 30 percent of management fees without registering as an investment adviser representative as required by Texas law and without disclosing the business relationship to potential clients.

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