Category Archives: Misrepresentation

Former Ameriprise Broker Thomas Sharp Sanctioned by Regulators Over Misleading Emails On REITs

In July 2014, the Financial Industry Regulatory Authority (FINRA) sanctioned former Ameriprise Financial broker Thomas Sharp for sending emails to clients regarding  non-traded real estate investment trusts (REITs) that were not fair and balanced and failed to provide a sound basis for evaluating the facts.

NASD Rule 2210(d) sets forth the content standards for communications with the public and requires in part:

“[a]11 member communications with the public shall be based on principles offair dealing and good faith, must be fair and balanced, and must provide a sound basis for evaluating the facts in regard to any particular security.”

FINRA Rule 2010 requires that brokers observe high standards of commercial honor and just and equitable principles of trade. According to the FINRA Letter of Acceptance, Waiver and Consent, resolving the matter, Sharp’s email contained the following:

[The REIT] “is buying up properties right now where the baby boomers are spending (or going to be spending) their money: ski resorts, golf courses, some retail, local attractions, etc. The properties they already hold are doing well even in this env?romnent because they purchased them for a great price and people are jlocking there as they are cutting back on their spending. They are also snatching up new properties at bargain prices right now.”(Emphasis added).

FINRA found that this was not fair and balanced since it did not provide a clear description of the performance of the REIT’s portfolio since it omitted that the REIT’s largest property owner was experiencing significant financial difficulties.

If you made investments in REITs or other investment products based upon misrepresentations of the broker, contact us to learn how you may be able to recover damages through FINRA arbitration.

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

Rondell Scott Hedrick of North Carolina Convicted in International Precious Metals Scheme

Jacksonville, FL – US Attorney A. Lee Bentley, III, announced that a federal jury found Rondell Scott Hedrick, 48, of North Carolina, guilty of wire fraud involving a purported high yield international investment program.

Hedrick used the web to advertise his expertise in international gold transactions involving mining operations in Mali, North Africa, and Accra, Ghana as well as refinery operations in Dubai, United Arab Emirates. As part of his sales pitch he told potential investors that he  was able to purchase gold at below market prices because he was willing to travel to dangerous locations in Africa. The money he raised was not invested but used for his personal expenses.

Hedrick made the mistake of making this pitch to an FBI informant leading to the situation he finds himself in today.

Rex Securities Law provides nationwide representation to investors 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.

Rex Securities Law

561 391 1900

Paul C. Larsen-Former VSR Financial Broker-Discloses 17 Customer Disputes-Naples, FL

UPDATE December 2016FINRA records disclose that Paul C. Larsen, formerly a broker with VSR Financial in Naples, FL, discloses 17 customer disputes, several of which are currently pending. FINRA has permanently barred Larsen from acting as a broker or otherwise associating with firms that sell securities to the public.

In the fall of 2016 VSR Financial closed its doors and transferred most of its brokers and customers to a related entity, Summit Brokerage Services. For more information on VSR Financial and their issues related to the sale of alternative investments, including real estate investment trusts (REITs), oil and gas partnerships and equipment leasing investments, follow this link. 

If you have losses on alternative investments made with VSR Financial Services, contact us to learn how you may be able to recover damages through FINRA arbitration. Cases handled on a contingent fee basis, meaning that you pay nothing unless we are successful.

Time is of the essence since there are statutes and rules that affect your right to pursue these claims, so you would be wise not to delay. 

 

OUR ORIGINAL POST OCTOBER 2014

We are investigating Paul C. Larsen, a broker who was registered with VSR Financial Services in Naples, FL, from June 2004-September 2010. Larsen was permanently barred from the securities industry by FINRA in December 2011 when he failed to provide information and documentation to FINRA regarding possible outside business activities and/or private securities transactions. Those outside business activities involved the Yokam Land Holdings, the Camenisch Fann and  a company called CW Capital.

A review of Larsen’s official FINRA records reveals that since 2011 there have been 8 customer disputes filed and settled against Larsen and there are presently 7 customer disputes filed and pending.  These disputes, most of which are substantial six figure claims involve direct investments like oil & gas investments or real estate investment trusts (REITs) as well as tenant in common investments (TICs).

VSR Financial was sanctioned by FINRA in 2013 in connection with the sale of private placements, direct investments and other non-conventional investments and assessed a fine of $550,000. One of the criticisms by FINRA was that VSR did not supervise brokers and permitted them to invest too large a percentage of their liquid net worth in alternative investments.

If you have losses in an account at VSR Financial contact us to find out your options for recovering damages.

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

FBI Cracks Down on Belize Based Offshore Asset Protection Securities Fraud Scheme

In September 2014, FBI unsealed an indictment against the operators of a $500 million fraudulent scheme designed to enable U.S. citizens to evade and circumvent U.S. securities and tax laws. Investigation of off shore tax evasion and money laundering have been on the top of the list for IRS Criminal investigators in recent years.

The individuals named in the indictment are:

  • Robert Bandfield, US citizen
  • Andrew Godfrey, citizen of Belize
  • Kelvin Leach, citizen of Bahamas
  • Rohn Knowles, citizen of Bahamas
  • Brian De Wit, citizen of Canada
  • Cem Can, citizen of Canada

Corporate defendants named are:

  • IPC Management Services
  • IPC Corporate Services
  • Titan International Securities
  • Legacy Global Markets
  • Unicorn International Securities

The charges include conspiracy to commit securities fraud, tax fraud and money laundering. Shell companies were created in Belize and Nevis, West Indies designed to conceal ownership in the stock of public US companies. According to the indictment, this enabled the fraudsters to manipulate the stock of Cannabis.Rx (CANA). Between March 27, 2014 and April 16, 2014, CANA plummeted from nearly $14 a share to fifty cents.

If you suffered losses on CANA that you purchased on the recommendation of your stock broker, you may be able to recover damages. Contact us for more information.

Rex Securities Law provides nationwide representation to investors 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.

Rex Securities Law

561 391 1900

Examples of Annuity/Insurance Sales That Are Financial Exploitation of the Elderly

The following are narratives of past cases resolved by Florida and Federal  securities and insurance regulators that demonstrate a variety of ways in which unscrupulous insurance agents and stock brokers take advantage of the elderly in connection with the sale of annuities and insurance products.

Since these abuses tend to repeat themselves, if you are being urged to purchase an annuity or insurance product by an agent you may find this past history helpful. If you have any doubts, get a second opinion from a trusted professional.

  • In October 2004, an 84 year old retiree from Delray Beach, FL , attended a seminar in which Eric J. Brown was discussing investments. A couple of days after the seminar, he made arrangements to meet with Brown who criticized his current insurance agent, and he falsely advised him that the company from which he had earlier purchased and was holding annuity contracts with was having financial difficulties.Brown told him that if he transferred his old annuity policy to the new company, he would be provided with a “bonus.” When he  told Brown that he was concerned about suffering $33,000 in surrender penalties, Brown assured him that the return on the new policy would offset all but $3,000 of the penalties to be incurred within the first year.

    Brown advised him that another policy he had was not worth keeping as well and on the instruction of Brown he signed a number of blank forms to effectuate the transfer and purchase.

    Brown had intentionally misled this elderly victim and there was no bonus and he suffered large losses due to the surrender fees.

    Brown, who had worked for Prime Capital Services,  was sanctioned by the FLA Department of Financial Services and removed him from the insurance industry and he was assessed civil penalties in excess of $500,000 by the Securities and Exchange Commission.

  • In 2005,  a man from Boynton Beach, FL,  was pursuing court proceedings to be appointed his father’s  , who was 90 years old, guardian. The father was living with  his companion of 15 years. Due to his advanced age and lack of short-term memory, he was unable to manage his own finances; instead he relied on his companion who had power of attorney.The companion insurance agent Joseph Ripa that she needed an investment through which she could safely keep some money for a very short period of time and explained to Ripa that she needed to have full access to the money whenever she needed it. Ripa falsely represented to the companion , who was 82 years of age, that an annuity investment was appropriate to meet these investment objectives and convinced her to purchase an annuity.

    Ripa misrepresented the terms and conditions of this investment by failing to disclose  that the investment he described was actually an equity-indexed deferred annuity, carrying ten years of surrender charges as high as twelve percent.

    In direct contradiction to her stated objective of having full access to her money whenever she needed it, and the victims’ full understanding of the terms and conditions of the investment, Ripa placed the funds in an annuity whereby access to her money would be limited for the following ten years, or until she was 92 years of age.

    The Department of Financial Services permanently revoked the insurance licenses of Joseph Ripa and fined him $40,000. Then Florida Chief Financial Officer made the following statement in connection with the revocation of Ripa’s license: “It is sad and deplorable that anyone would take advantage of senior citizens looking for help in supplementing their income,” said CFO Sink.  “This man knowingly locked his customers’ money away in annuities that could be accessed only by paying steep penalties or after a dozen years or more, and that certainly was not to the benefit of the customers he targeted.”

  • A 94 year old  resident of New Port Richey, FL,  and her husband had purchased annuities since 1994 and had nine of them with American Investors Life.In 1996, they heard an agent, Bijan Razdar, discussing annuities on the radio which created enough interest that they decided to attend one of his seminars. After attending the seminar, they decided not to do business with him at that time but approximately one year later, Razdar called them and arranged an appointment and decided to do business with him and purchased two deferred annuities for approximately $65,000.

    Following her husband’s death, Razdar began moving the annuities from one company to another or “twisting” policies in order to generate commissions.

     

    She told the agent that she did not want any investment that restricted her access to funds from the annuity for more than 5 years nor did she want to pay any surrender charges. Notwithstanding , the agent gave her blank forms to sign that she didn’t understand. She “trusted” the agent was working on her behalf.

    Over a period of six years, Razdar sold the couple approximately 30 annuities by convincing them to surrender old ones to buy new ones and suffered significant monetary penalties as a result.

    The victims paid over $20,000 in surrender charges, lost ownership of nearly $293,000 through multiple “twisting” of annuity policies, and were left with policies that had a surrender period of 14 years.

    Razdar’s license was permanently revoked by the Department of Financial Services.

  • An 89 year old lady from Clearwater, FL, also fell victim to Radzar’s radio advertisement and believed him when he told her she would not make any money by keeping the annuities she already owned. She followed his advice and liquidated the existing policies and purchased ten new ones, costing about $1.5 million. Radzar earned over $200,000 in commissions and she lost nearly $100,000 on surrender charges.  Unfortunately she was victimized again when John Morehart portrayed himself as a white knight who could undo Radzar’s misdeeds. He convinced her to liquidate the new annuities and buy a single premium life policy and place $200,000 in a fraudulent investment which turned out to be the bank account of his wife Debra. The Morehart’s licenses were revoked and they were barred from the industry.

 

  • An 81 year  from Tallahassee, FL, and his wife, suffering from dementia in a nursing home, were targeted by Georgia insurance agent Shannon Vick who convinced the couple to cash out existing annuity policies and other savings which he had them use to purchase life insurance and annuity policies. Vick also convinced the couple to take out a reverse mortgage on their home. The $60,000 proceeds from the mortgage was use by Vick to purchase another life insurance policy.  Vick, who had worked for ING/Old World Finance was arrested and charged in Georgia with conspiracy to commit insurance fraud and exploitation of an elderly person. 

    Rex Securities Law provides nationwide representation to investors 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.

Rex Securities Law

561 391 1900