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Brokers Indicted For $131M ForceField Investor Fraud

By Kali Hays of law360.com Law360, New York (May 3, 2016, 4:45 PM ET) -- Several registered securities brokers were indicted Tuesday in New York federal court for fraud, kickbacks and other misconduct that allegedly cost investors of efficient lighting products maker ForceField Energy Inc. roughly $131 million. ForceField itself had been hit with a proposed securities class action about one year ago, with former company owner and Chairman Richard St. Julien arrested during that time for allegedly inflating ForceField's stock by paying for positive press, among other things. The brokers arrested Tuesday are being accused by the U.S. Department of Justice...

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You May Have Rights Under the Indiana Securities Act

In Indiana, companies and individuals offering and selling securities or investment advice must comply with the Indiana Securities Act, Indiana Code § 23-19-1 et seq. (the “Act”). The Indiana Securities Act, and the Indiana case law interpreting the Act, allows private litigants – typically the purchasers of securities or investment advice – to sue for damages. These damages include, but are not limited to, a return of the purchase price, interest at the rate of eight percent per year on the amount of the purchase price, attorney’s fees, and other litigation expenses. Claims under the Indiana Securities Act are typically based...

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Puerto Rican Bond Losses Result In UBS Paying For Damages

The Financial Industry Regulation Authority Inc has ordered that the UBS Group must pay more than $470,000 to three investors who claimed damages, due their accounts being over saturated with Puerto Rico bonds that plummeted in value. While filing claims in October of 2014, Carlos Merced, Ramon Velez Garcia, and Obdulio Ramos sought as much as $570,243 in damages, alleging negligence and fraud. UBS spokesman Gregg Rosenberg stated, “Although the arbitrators awarded less than the full damages the claimants requested, UBS is disappointed with the decision to award any damages, with which we respectfully disagree.” How The Damages Came About The Swiss bank’s...

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$2.7 Million Dollar Ponzi Scheme Results in Ramifications

Two brothers have been charged by the Securities and Exchange Commission for operating a $2.7 million ponzi scheme, by targeting elderly investors. Daniel Rivera, a New York resident, promised investors they would profit in a Pennsylvania real-estate venture named Robbins Lane. He recommended investors sell their retirement assets, enabling them to invest in the venture, which had no operations. To make the ponzi scheme more sophisticated, Rivera created a Robbins Lane website and a brochure advertising featuring an offer that gave “the senior investor a guaranteed monthly income.” In return, Rivera used the funds for his personal expenses. He purchased sporting...

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Four Charged in Fraud Scheme That Targeted The Elderly

A “free dinner” investment seminar ended in a fraud scheme that targeted elderly people, according to the SEC. Philadelphia residents John D. Ellis Jr. and Joseph Andrew Paul fabricated their respected track record of their investment firm, Paul-Ellis Investment Associates. The two recruited James S. Quay and Donald H. Ellison to help lure potential victims with promises of lofty returns. Approximately $1.3 million was raised from investors for Paul-Ellis Investment Associates from July 2011 through February 2012. The firm that Quay and Ellison founded, Aptus Planning LLC, located in Tampa, Fl, assisted in the fraud. Their alleged expertise was financial planning...

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Improper Trading Leads to Finra Charges

Finra has charged former broker David Randall Lockey with profiting from improper trading of client accounts for about two years. According to the Finra complaint, Mr. Lockey had engaged in unsuitable short-term trading and switching mutual funds and unit investment trust involving four accounts from May 2012 to March 2014. Lockey was associated with SWS Financial Services. Effects of Unsuitable Trading and How Starr Austen Can Help Mr. Lockey’s activities resulted in his own personal gain, to the tune of $75,730. Three of his four clients accrued a combined loss of $15,699. The fourth client, a retired engineer, benefited from a small...

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Samsung Hit With Lawsuit Over Exploding Washers

By Steven Trader Law360, New York (March 9, 2016, 7:10 PM ET) -- Consumers have accused Samsung of breaching its implied warranty and unfairly making money by selling defective washing machines that explode randomly and are prone to "catastrophic failure," according to a proposed class action filed in Indiana federal court on Wednesday. Indiana resident Suzann Moore and Texas resident Michelle Soto Fielder say Samsung Electronics America Inc. exposed them to unreasonable harm and unjustly received their money by selling them brand-new washing machines that exploded violently in their homes just a few years later, causing significant damage. Though the machines' express...

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How a Favor From a Friend Led To Uncovering a $7 Billion Ponzi Scheme

Financial adviser Andrew Dalmady was doing his friend a favor by reviewing his investments. Unbeknownst to him at the time, he would go on to uncover the second largest ponzi scheme in history. Allen Stanford, a titan in the banking industry and listed in Forbes as one of the richest men in the world, was in big trouble. As Dalmady began to investigate his friend’s investments, he began to grow weary. He started noticing many things that seemed “fishy”. This was just the tip of the monumental iceberg that would sink quickly. How the Ponzi Scheme was Setup Stanford was convicted for...

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The SEC Charges Wells Fargo With Securities Fraud in Connection With Video Game Company

Wells Fargo and the Rhode Island Economic Development Corp. (RIEDC) have been charged by the SEC with fraud, in relation to a bond offering that supported the now extinct video game company 38 Studios. Investigators on the case say that bond investors were unaware that their $50 million pledge would still leave the video game company short of the capital needed to operate. Andrew Ceresney, director of SEC enforcement, stated, “We allege that RIEDC and Wells Fargo knew that 38 Studios needed an additional $25 million to fund the project yet failed to pass that material information along to bond...

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Finra Nixes Broker for Rash Debt Recommendations Regarding Elderly Clients

David Joseph Escarcega was barred from the financial industry following a February 29th disciplinary decision from the Financial Industry Regulatory Authority Inc. He was found guilty for making at least 12 unnecessary recommendations involving debt tools known as debentures, which are used for life insurance policies. Escarcega was also fined $52,270, which was the amount he profited in commissions from his clients. How the Risky Debt Scheme Began CWG Holdings Inc. buys life insurance policies with the goal of profiting more in benefits, once the policyholder eventually dies. It was found that Escarcega sold the debentures issued by CWG between March 2012...

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