Meyer Wilson Investigating Potential Legal Claims Against Worden Capital Management Relating to Excessive and Unsuitable Trading by Stockbroker John Lopinto

On January 11, 2022, the Financial Industry Regulatory Authority announced sanctions against John Michael Lopinto (CRD#: 4563735). The sanctions stem from allegations that Lopinto engaged in excessive and unsuitable trading in at least five customer accounts and improperly exercised discretion in another customer’s account without prior written authorization.

Lopinto worked as a financial advisor with Worden Capital Management, LLC, from November 2016 to November 2019. FINRA states that during this timeframe:

Lopinto worked as a financial advisor with Worden Capital Management, LLC, from November 2016 to November 2019. FINRA states that during this timeframe:LoPinto recommended high frequency trading and his customers routinely followed his recommendations and, as a result, LoPinto exercised de facto control over the customer’s accounts. LoPinto’s trading was excessive and unsuitable given the customers’ investment profiles. As a result of LoPinto’s excessive trading, the customers suffered collective realized losses of $240,331 while paying total trading costs of $205,523, including commissions of $161,706. The findings also stated that LoPinto exercised discretion to effect trades in a customer’s account without prior written authorization. LoPinto charged the customer a total of $21,632 in commissions to place the trades. The customer did not provide written authorization for LoPinto to exercise discretion in the account and LoPinto’s member firm did not accept the account as a discretionary account.

Under the law, brokers are prohibited from making unsuitable and excessive trades in customer accounts and making trades without proper authority. While Lopinto neither admitted nor denied FINRA’s allegations, he consented to a nine-month bar from working in the securities industry and a $7,500 fine. He was also ordered to pay restitution in the amount of $135,333.

Brokerage firms like Worden Capital are required under securities industry rules to monitor trading activity in customer accounts to detect and prevent unsuitable and excessive trading and unauthorized transactions. Brokerage firm customers may be entitled to compensation if it can be shown that a firm failed to take adequate steps to prevent and respond to possible improper trading activity in the customer’s account.

The latest sanctions are not Lopinto’s first run-in with regulators. In September 2020, Lopinto was the subject of a Securities & Exchange Commission cease-and-desist order, which included a public censure and $40,000 fine. The SEC accused Lopinto and another colleague of various violations of the Investment Advisers Act of 1940 relating to Keyport Venture Partners, LLC, an unregistered investment fund. The SEC accused Lopinto of misrepresentations relating to the fund’s purported investment in a pre-IPO offering.

An investigation of Lopinto’s regulatory record also shows a history of numerous tax liens in excess of $350,000.

If you are a former customer of John Lopinto and suspect misconduct in your trading account, contact the investment fraud lawyers at Meyer Wilson for a complimentary case evaluation.

Did You Lose Money in an Account Managed by Tony Brookfield?

Meyer Wilson is investigating allegations that Anthony Patrick Brookfield, a California-based securities broker registered with UBS Financial Services, engaged in misconduct that caused his clients to suffer substantial investment losses.

Brookfield and UBS are subjects of a recently-filed customer complaint that was filed with FINRA. The complaint alleges that Brookfield recommended unsuitable investments and made misrepresentations relating to an options overlay strategy. The complaints seeks damages of $7,000,000.

Options trading can be highly risky and therefore is often unsuitable for many investors, especially seniors. If brokers sell unsuitable investments or engage in other misconduct, then they and their employer may be held legally responsible for customers’ losses.

If you feel that Brookfield recommended you unsuitable investments, contact us today for a free consultation to discuss your legal options. Meyer Wilson offers a completely free, no-pressure consultation so that you can learn about your rights to recovery after securities fraud, stockbroker misconduct, or investment fraud. All of our cases are handled on a contingency fee basis, so we don’t get paid for our work unless we’re successful in recovering money on your behalf.

Meyer Wilson Attorney Courtney Werning to Present at Piaba Annual Meeting

Courtney Werning, attorney in the Meyer Wilson investor claims practice group, is looking forward to presenting next week at the Annual Meeting of PIABA, an organization of attorneys who represent investors with claims against those in the securities industry. PIABA’s purpose is to promote fairness in the resolution of disputes between investors and the securities industry, to improve upon investor protection legislation, and provide education and support to attorneys who represent investors in claims against the securities industry.

Courtney has been representing investors in court and arbitration forums for the last nine years. She will be on the panel “How to Bring RIA Cases,” discussing the considerations of bringing and winning claims against registered investment advisers. Understanding the distinctions between a stockbroker and an investment adviser is critically important to determining the path necessary to take legal action in the event something goes wrong. Courtney is looking forward to sharing her knowledge and experience with the PIABA Annual Meeting attendees.

FINRA Issues Investor Alert About Fraud After Hurricane Florence

The Financial Industry Regulatory Authority (FINRA) issued a warning to investors about potential investment scams that promise financial gains in the aftermath of Hurricane Florence. This is a common occurrence that often targets financially vulnerable people.

“When a natural disaster strikes, it’s not uncommon for scammers to rush in. In addition to charity frauds, we often see investment scammers try to exploit a variety of hurricane-related opportunities,” said Gerri Walsh, FINRA’s Senior Vice President of Investor Education. “Investors may become the targets of unsolicited emails, texts, phone calls, messaging apps and social media communications touting high returns, lucrative contracts, cutting-edge technology or other claims tied to prospering in the aftermath of Hurricane Florence… While some of these opportunities and claims might be legitimate, many others could be scams.”

These types of scams typically center around selling stocks of companies claiming to be part of the clean-up and rebuilding efforts following the natural disaster. In many cases, the promoters of these scams talk about supposed brand new technology that will set new standards in current and future recovery efforts. Some of the most common talking points in these pitches include:

In order to help potential targets recognize and avoid a potential scam, FINRA outlined a number of steps people can follow to protect themselves:

If you were the victim of fraud, out investment fraud attorneys at Meyer Wilson are ready to help you fight for the compensation you deserve. Through our efforts, we have recovered more than $350 million in verdicts and settlements for our clients, and we continue to hold those responsible accountable for their actions. Call us at (800) 738-1960 today to discuss your options over the phone, or fill out our online form to start out with a free case consultation.

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SEC Investor Alert: the Risks of Investing in Marijuana-related Companies

The Securities and Exchange Commission’s (SEC) Office of Investor Education and Advocacy (OIEA) consistently hears complaints about marijuana-related investments, one of the countless “hot” industries scammers are using to take advantage of unwary targets. It recently issued a new Investor Alert to warn potential investors about the risks of market manipulation and investment fraud relating to marijuana-related investments.

Market Manipulation

One of the most common tactics used by scammers involves manipulating stock prices by spreading misleading and/or false information about the company or product in question. This is especially dangerous with penny stocks or other similar products because information about these potential investments can be much harder to find than information about larger stocks. Some red flags related to market manipulation the SEC highlighted include:

Investment Fraud:

Fraudsters often take advantage of the latest hot topic in the media, and the consistent buzz around the growing legalization of marijuana across the United States can give additional easy promotion for their latest scams. Some things to keep an eye out for include:

If you were the victim of a scam or investment fraud, Meyer Wilson may be able to help you recover your losses. We have spent nearly two decades working with clients across the United States, and through our efforts we have secured more than $350 million in verdicts and settlements. Give us a call at (800) 738-1960 to discuss your situation with one of our investment fraud attorneys, or send us your information through our online form today to set up a free, in-depth consultation with a member of our firm.

Are the Sales of Private Placements an Indication of Brokers Gone Bad?

The rise in sales of private stakes in companies is raising concerns among regulators and investors about investment fraud. The sale of private placements to investors, especially senior investors are popular among unethical brokers who are looking to increase personal profits.

Do Sales of Private Placements Indicate Fraud?

According to the Wall Street Journal, high-risk brokers are selling billions of dollars of private placements every year. In reviewing over one million regulatory records, the Journal found more than 100 firms where 10 to 60 percent of in-house brokers had three or more complaints from investors, regulatory actions, and/or criminal charges on their records. These brokerages sold more than $60 billion in private placements to investors.

According to market studies, sales of private placements are on the rise. In 2017, more than 1,200 securities firms sold approximately $710 billion of private placements. The first five months of 2018 are expected to top last year's record-setting numbers. Private placements can be stakes in oil companies, construction projects, real estate, high-tech companies, bio-tech research, and many other privately-held enterprises. They offer investors higher returns than publicly traded stocks and bonds, but limited company information creates a greater risk for financial losses.

With the rising numbers of lucrative sales of private placements, regulators are worried about high-risk brokers and brokerage firms looking to increase their profits. High commissions create strong motivations to sell, often without considering an investor's best interests. The Financial Industry Regulatory Authority (FINRA), a watchdog agency has expressed concerns about private placements. They are investigating broker markups and sales perks, how private placements are sold to investors, and whether the companies involved are legitimate businesses. Sophisticated and wealthy investors like insurers and hedge funds are often drawn to private placements as alternatives to publicly-traded stocks and bonds.

The Wall Street Journal states that high-risk brokers tend to flock to brokerages selling private placements. Reports show that unethical brokers with questionable tactics can make huge commissions on the sale of private placements at the expense of their clients who often suffer significant losses. Investors who suffer losses due to broker fraud and misconduct can often recover their investment principal, the expected gains (if money had been invested appropriately), arbitration costs, attorney's fees, and punitive damages for egregious misconduct. According to the SEC, private placements are considered unregistered offerings, and investors should be aware of fraudsters using unregistered offerings to conduct investment scams.

If you lost money because of an investment scam, broker misconduct, fraud, etc., contact Meyer Wilson today. Our securities fraud attorneys have secured more than $350 million in verdicts and settlements since we first opened our doors, and we will fight to secure the compensation you deserve. Call us at (800) 738-1960 today to speak with a member of our firm, or send us your information through our online form to schedule a free case consultation.

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SEC Charges Transamerica Entities $97 Million over Faulty Investment Models

The Securities and Exchange Commission (SEC) announced that it charged four Transamerica entities $97.6 million for its misconduct in misleading retail investors with faulty investment models.

The SEC found that the faulty models developed and used by AEGON USA Investment Management LLC, affiliated advisers Transamerica Financial Advisors Inc. and Transamerica Asset Management Inc., and affiliated broker-dealer Transamerica Capital Inc. contained a number of errors and failed to work in the way that investors were promised. The affected companies reportedly invested billions of dollars into strategies and mutual funds that used this faulty model, and when the issues were discovered, the investment companies simply stopped using the models without first informing the investors of the errors or changes in models.

“Investors were repeatedly misled about the quantitative models being used to manage their investments, which subjected them to significant hidden risks and deprived them of the ability to make informed investment decisions,” Co-Chief of the SEC Enforcement Division’s Asset Management Unit C. Dabney O’Riordan said in a press release.

The four Transamerica entities agreed to settle the charges without admitting or denying the findings, and will pay a $36.3 million penalty, $53.3 million in disgorgement, and $8 million in interest to the affected investors through a fair fund. In addition to the $97.6 million charges, former AEGON USA Investment Management LLC Global Chief Investment Officer Bradley Beman and former AEGON USA Investment Management LLC Director of New Initiatives Kevin Giles were charged as the cause of some of these violations. Beman was charged $65,000 and Giles was charged $25,000 in penalties for their failure to take reasonable steps to ensure the models worked as intended and for contributing to the company’s compliance failings.

If you lost money after being misled by a broker or investment agency, you may be able to recover some or all of your losses by filing a claim. Our investment fraud lawyers at Meyer Wilson have represented thousands of investors since we first opened our doors nearly two decades ago, and we understand what it takes to secure the verdict or settlement you require. Through our efforts, we have secured more than $350 million in verdicts and settlements, and we continue to fight for the rights of our clients every day. Schedule a free consultation with a member of our firm through our online form.

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SEC Issues Warning About Cryptocurrencies, IRA Fraud

The United States Securities and Exchange Commission (SEC) recently issued an investor warning about the growing risks posed by unregistered IRAs and the growing levels of investment in cryptocurrencies.

According to the SEC, the unregistered IRA market is estimated at approximately $100 billion in value, and while it gives people the opportunity to invest in properties outside the stock market like cryptocurrencies, private company stock, precious metals, and more, there is considerable risk in doing so. In its warning, the SEC reminded investors that these self-directed IRAs do not fall under the agency’s oversight – while there wasn’t a single event that pushed the agency to issue this warning, the entrance of cryptocurrency into the mainstream pushed it to update consumers to the potential risks.

"Now that some self-directed IRAs include digital assets — cryptocurrencies, coins and tokens, such as those offered in so-called initial coin offerings — we think it is important to alert investors about the potential risks and fraud involved with these kinds of investments that may not be registered," Director of the SEC's Office of Investor Education and Advocacy Lori Schock said in an interview with CNBC.

This is not the first time that the SEC has issued a warning to investors about cryptocurrency. Earlier this year, the agency stated that investors needed to use caution when diving into this new type of investment, especially since many of these exchanges are not regulated.

In its latest warning, the SEC noted that while self-directed IRAs are required to be set up by authorized custodians, these individuals don’t validate the legitimacy of any given investment which can increase the risk of being scammed. With a growing number of people from the baby boomer generation moving into retirement, the issue is growing as the potential number of targets grows in size. One key red flag to look out for, according to Executive Director of the Retirement Industry Trust Association Mary Mohr, is when promoters say that an investment was approved by the IRS – the IRS does not approve assets. Most importantly, any time an investment seems too good to be true, there’s a high likelihood that it is, and it actually a scam.

The SEC included a number of tips and examples of fraud in its investor warning, which can be found here. If you were the victim of fraud, our investment fraud lawyers at Meyer Wilson are ready to hear your story. With nearly two decades of experience under our belts, we understand what it takes to fight for and secure the maximum compensation possible. Since our firm first opened its doors, we have successfully recovered more than $350 million for our clients. Fill out our online form to schedule a free, in-depth consultation with a member of our firm.

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How to Recover Losses in FIP

Future Income Payments Reportedly Costs Investors More Than $100 Million

Future Income Payments, a company run from a mailbox located in a strip mall just outside of Las Vegas, recently shut down, potentially costing investors more than $100 million. At least 25 states have already started investigations into the company or have taken enforcement actions against it, and investors plan to sue the brokerage and investment firms that sold Future Income Payments products. The investment fraud attorneys at Meyer Wilson are investigating claims on behalf of individuals who were sold these investments by brokers and brokerage firms.

The company, run by Scott Kohn, who previously pled guilty to trafficking in counterfeit goods back in 2006 and served 15 months in federal prison, operated by essentially selling investors other people’s pensions. Future Income Payments would reach out to workers who were entitled to pension payments and buy the rights to them, which essentially lent the pension beneficiaries money in return for future pension income, something that is commonly referred to as a “pension advance”. The company would then sell the rights to investors for a lump sum payment – for example, investors could pay $100,000 in return for a seven percent income over five years.

However, the sudden shutdown of Future Income Payments has left investors in the dark. According to court documents, the company is not collecting the pension money it used to fund the investors’ payments. Investors are scrambling to make heads or tails of this potential blow to their financial futures. Two of those investors, JC and Mary Barb, spoke with the Wall Street Journal, and said that their financial adviser, Kevin Kraemer, convinced them to invest approximately $78,000 with the company in 2017.

“[Kraemer] came to us and said, ‘Hey we can make some more money on your money,’ [and] sold us this new deal,” said Mrs. Barb, a 66-year-old retired postal worker. Her husband, a 63-year-old retired teacher, said the money “was to be a big help to us in our retirement and now it’s not there, it’s gone.”

Private-market products, like those offered by companies like Future Income Payments, don’t need to follow the same rules set for publicly traded investments. These types of products often come with high commissions for financial advisers, and they’re often sold to retired people who are looking for an investment with better returns than those offered by bonds and similar savings products. In some reported instances, people have been advised to refinance homes or even cash in pensions to buy private-market products.

Earlier this year, Kohn sent out a letter to investors stating that Future Income Payments was facing,

“intense regulatory pressure and legal expense,” and investors had been told there were “no guarantees [they] would receive all payments.”

State regulators have been taking action against the company since at least 2014 over alleged illegal lending based on the terms it bought pension benefits under. According to some states, Future Income Payments allegedly breached state laws that limit the amount of interest that can be charged on a loan. In one case, a disabled Gulf War veteran from Minnesota was required to send $450 from his pension benefits over five years after borrowing $2,700, a 200 percent annual percentage rate.

Despite the growing number of state regulatory actions taken against the company, financial advisers and advisory firms continued to sell the products, many of which were sold as part of a retirement-savings strategy.

According to company records, Future Income Payments was formed in 2011 by Kohn, and its mailing address is the same as dozens of other companies he has set up over the years, most of which are now defunct. He set up FIP, LLC in 2016, a separate company that uses the URL https://futureincomepayments.com/. It is controlled by a corporation based in the Philippines, also owned by Kohn.

Losing money in an investment fraud scheme is a hard notion to face, but you don’t have to face it alone. Our investment fraud lawyers at Meyer Wilson have spent years fighting to recover investors’ stolen and lost finances, and through our efforts we have secured more than $350 million in verdicts and settlements. If you lost money investing with Scott Kohn or his company, Future Income Payments, call us at (800) 738-1960 to discuss your legal options with a member of our firm over the phone, or fill out our online form today to schedule a free case evaluation. We will work with you to put together a plan of action that will put you in the best position to secure the maximum compensation possible.

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Defrauding Investors by Inflating Fund Performance

Broker-dealers who inflate investment fund performance to retain business and gain new clients deny investors the opportunity to make informed investment decisions.

Inflating Fund Performance is Illegal

In May 2018, the Securities and Exchange Commission (SEC) filed charges against Premium Point Investments, a New York investment firm, for inflating fund performance to retain and attract investors. The SEC alleges that the firm engaged in a high-level, six-month investment scam where a firm's adviser exchanged trades with a broker-dealer who inflated valuations on mortgage-backed securities. The firm allegedly inflated fund performance even further by using mid-point valuations. The scam allegedly inflated the value of Premium Point’s securities holdings and grossly exaggerated investment returns to investors.

The recent SEC complaint filed charges against the CEO and chief investment officer of Premium Point Investments, Anilesh Ahuja, as well as a former portfolio manager, Amin Majidi, and a former trader, Jeremy Shor. All three men were charged with fraud and aiding and abetting fraud. The SEC is seeking permanent injunctions against the men, as well as the return of illegally obtained gains including interest and civil penalties.

Hedge funds commonly use pooled funds from large institutional investors and high-net-worth individuals with private investments. When investors invest in hedge funds, cash is distributed into a variety of investments chosen by fund managers who usually receive a percentage of returns. This often creates an opportunity for hedge fund fraud by unethical hedge fund managers. Since hedge funds do not have to register with the SEC, they are not regulated by mandatory reporting rules like other types of investment funds. It's easier for dishonest hedge fund promoters to entice potential investors by promising fast, high returns on their investments.

Most hedge funds do not engage in unethical or illegal behavior. However, large investments and intense competition can lead to investment fraud. Although hedge funds are not subject to mandated reporting rules, mandated fiduciary duties may still apply. Hedge fund managers and promoters must comply with the same duties as other securities brokers. If they don't, they can be charged with investment fraud.

Investors rely on their brokers to accurately value their investments so they can make informed investment decisions. When the true performance or value of an investment is masked and an investor loses money, he or she can file a lawsuit or arbitration case to hold the broker liable for damages. Investors who lose money may be able to recover the purchase price of the securities, the gains he or she reasonably should have expected to make had the funds been invested appropriately, arbitration costs, and reasonable attorney fees. In some situations, when egregious misconduct is involved, the investor may be entitled to punitive damages.

Dishonest brokers often defraud investors by inflating hedge fund performance to show profits that do not exist. If you have been a victim of securities fraud and need legal assistance with loss recovery, contact the attorneys at Meyer Wilson at 888-390-6491 for a free consultation today.

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