Approximately 20 years ago, Thomas Priore was playing the biggest game of his life as the quarterback of Harvard University. Unfortunately, he lost that game 34-19. The 41-year-old Mr. Priore now faces a greater challenge, as federal regulators accuse him of investment fraud. Mr. Priore, who earned an MBA from Columbia Business School, and his colleagues …
LPL Financial Sued in Classaction Over Variable Annuities
Boston-based LPL Financial has been sued by two Nebraska investors in a class action alleging the sale of unsuitable variable annuities in their retirement accounts. The lawsuit alleges that the firm’s broker, Bob Bennie, made material misrepresentations regarding the nature, suitability, and appropriateness of a variable annuity within an IRA or qualified retirement plan. Court documents prepared by an …
Survey: 1 in 5 Over Age 65 Likely to Be Victims of Financial Fraud
At least one in five Americans over the age of 65 has been the victim of financial abuse and/or financial fraud, according to a June 15, 2010 press release issued by the Investor Protection Trust. That’s approximately 7.3 million Americans exploited. The numbers come from a new Investor Protection Trust (IPT) survey conducted by Infogroup/ORC, …
FINRA Issues Compliance Guidelines Regarding Use of Blogs and Social Networking Websites
The Financial Industry Regulatory Authority (FINRA) recently issued Regulatory Notice 10-06 regarding the use of blogs and social networking websites such as Facebook, Twitter, and LinkedIn by brokers to communicate with the public. The Notice makes clear that the use of such “Web 2.0” tools is subject to applicable federal securities laws and self-regulatory organization (SRO) rules, including …
SEC Files Complaint to Halt $300 Million Ponzi Scheme Involving Supposed Gold Mining Investments
Last week, the United States Securities and Exchange Commission (“SEC”) filed a complaint against several individuals charging that they perpetrated a $300 million Ponzi scheme, selling promissory notes to over 3,000 investors in the United States and Canada which were allegedly being used to fund gold mining operations. The defendants in the case are four Canadian …
Investor Squares Off Against Merrill Lynch Over “Investor Sophistication”
Investors are filing increased numbers of arbitration claims against investment firms for investment misconduct and fraud relating to the sales of complex investment products. A common defense, according to a June 11 Wall Street Journal article, is the claim that the investors were sophisticated enough to understand the risks involved with their investments. Investors, particularly …
FINRA Proposes Expanding Registration to Include Broker-Dealers’ “Back Office” Staff
The Financial Industry Regulatory Authority (FINRA) recently issued Regulatory Notice 10-25 in which it proposed expanding registration requirements in the securities industry to include those individuals working in a broker-dealers’ “back office.” The proposed new registration category for these individuals, called “Operations Professionals,” will enhance oversight by requiring individuals “engaged in, or supervising, activities relating to sales and …
Former South Florida Lawyer Sentenced to 50 Years for $1.2b Ponzi Scheme
Scott Rothstein was sentenced to 50 years in prison for his role in the operation of a $1.2 billion Ponzi scheme. Rothstein pled guilty in January to running the Ponzi scheme in which he sold stakes in legal settlements, in which people sell large settlements in legal cases for lump sums of cash at a discounted …
Securities America Requests Broker-Dealers Be Subpoenaed in Legal Battle Involving Medical Capital Private Placements
In a move Massachusetts securities regulators are calling an attempt to delay proceedings based on a “dangerous false presumption,” Securities America is asking the Court to subpoena other broker-dealers that sold Medical Capital notes, according to Investment News. Last January, Massachusetts regulators sued Securities America for allegedly misleading investors regarding Medical Capital private placements. While Securities …
Northern Colorado Ponzi Scheme Involves $3.5 Million
Jeremy Hart and Richard Novaria were arrested on Friday, May 28, 2010, for their alleged connection to a Northern Colorado Ponzi scheme that involved $3.5 million. The pair has been accused of duping nearly 25 investors in association with the illegal scam. According to Colorado Securities Commissioner Fred Joseph, 36-year-old Mr. Hart recruited a majority of the …
“Pump and Dump” Investment Scams Tied to BP Oil Spill
Federal officials are warning investors to be wary of pump-and-dump schemes in the aftermath of the BP oil spill, according to The Sacramento Bee. These scams are relatively common after a natural or environmental disaster, and several popped up in the aftermath of Hurricane Katrina. In a pump-and-dump scheme, a company goes to great lengths to …
Investor Claims Involving “100 Percent Principal Protected Notes” Soar
In the last few years, individual investors have lost billions of dollars collectively due to the marketing of complex, supposedly safe, securities by brokerage firms and securities advisors. Now, investors are bringing new cases against firms and advisors involving another complex security marketed as secure: “100 percent principal protected absolute return barrier notes.” According to …