How can investors review the background of a stockbroker or investment adviser?
Also available at KansasCityLaw.tv and The Kueser Law Firm’s website. In this video, Jason M. Kueser discusses how investors can research the background of stockbrokers, financial advisors, and Registered Investment Advisers (RIAs). Background information related to stockbrokers and financial advisors can be obtained using FINRA’s BrokerCheck tool. Background and other information related to Registered Investment Advisers (RIAs) can be found on the Investment Adviser Public Disclosure website. In addition to these sites, there are various third-party sites/services that provide information related to stockbrokers, financial advisors, and investment advisers.
This video is provided for informational purposes only and nothing contained herein is or should be constituted as legal advice. If you have questions related to any legal topic, you should consult with an attorney and should not rely solely upon information provided via the internet. The choice of an attorney is an important one and should not be based solely upon advertisements such as this website. Past results afford no guarantee of future results. Every case is different and must be judged on its own merits. *Any information submitted via this website may not be secure and/or confidential. Merely contacting this firm does not establish an attorney-client relationship.
Also available at KansasCityLaw.tv In this video, Jason M. Kueser discusses typical causes of action in securities cases. These typical actions are: (1) fraud, (2) securities fraud, (3) breach of fiduciary duty, (4) breach of contract, (5) violation of state securities laws, (6) violation of federal securities laws, and (7) negligence.
This video is provided for informational purposes only and nothing contained herein is or should be constituted as legal advice. If you have questions related to any legal topic, you should consult with an attorney and should not rely solely upon information provided via the internet. The choice of an attorney is an important one and should not be based solely upon advertisements such as this website. Past results afford no guarantee of future results. Every case is different and must be judged on its own merits. *Any information submitted via this website may not be secure and/or confidential. Merely contacting this firm does not establish an attorney-client relationship.
This video is provided for informational purposes only and nothing contained herein is or should be constituted as legal advice. If you have questions related to any legal topic, you should consult with an attorney and should not rely solely upon information provided via the internet. All content provided on this blog are subject to the Disclaimer at the bottom of the page.
How do attorneys decide which securities fraud cases to pursue?
Also available at KansasCityLaw.tv In this video, Jason M. Kueser discusses factors that securities fraud attorneys often evaluate in determining which cases to pursue. This often includes a number of factors, including (1) individual aspects of the customer and the customer’s situation; (2) the amount of investment loss suffered by the investor; (3) the type or types of investments involved; and (4) whether the stockbroker, adviser, or brokerage firm has previously regulatory issues. There are other factors that are involved, as well.
If you feel you have been the victim of investment fraud or securities fraud, please contact an attorney. If you would like to speak with The Kueser Law Firm, please call the firm at (816) 374-5865 or send us an href=”mailto:jason@jmkesquire.com&subject=Contact from Kueser Law Firm blog”>e-mail.
This video is provided for informational purposes only and nothing contained herein is or should be constituted as legal advice. If you have questions related to any legal topic, you should consult with an attorney and should not rely solely upon information provided via the internet. The choice of an attorney is an important one and should not be based solely upon advertisements such as this website. Past results afford no guarantee of future results. Every case is different and must be judged on its own merits. *Any information submitted via this website may not be secure and/or confidential. Merely contacting this firm does not establish an attorney-client relationship.
Leveraged ETFs have recently returned to the news as Direxion announced the release of two new funds. As reported on Marketwatch.com, one of these new funds seeks to obtain returns equal to 300% of the two-year Treasury yield, while the other fund seeks to obtain returns equal to 300% of the inverse return of the two-year Treasury yield (in other words, when the Treasury yield declines, the investor profits).
Despite the repeated warnings issued by FINRA and the SEC as to the tremendous risk presented by leveraged ETFs, it appears that these fund families are forging “full steam ahead.” The announcement from Direxion comes only weeks after its rival, ProShares, released eight additional leveraged ETFs. Four of the new ProShares funds seek to obtain returns equal to 300% of the daily return of the Nasdaq 100, Dow Jones Industrial Average, Standard & Poors 400 Index, and the Russell 2000 Index. The other four funds seek returns equal to 300% of the inverse daily return of these same indices (again, investors in these funds profit when the value of the respective index declines).
Leveraged ETFs invest their shareholders’ money in futures and/or derivatives in order to multiply the daily return of an index. Some leveraged ETFs seek a return that is 200% or even 300% of the daily performance of the index. Inverse ETFs work in much the same way, except that these funds seek a return that is equal to 100%, 200%, or even 300% of the opposite of the daily performance of the index. With these funds, an investor actually profits when the index declines in value. Typical leveraged ETFs and inverse ETFs reset each day and therefore, over periods longer than one day, their performance can vary considerably from the index.
Leveraged ETFs may be appropriate investments for professional asset managers and highly sophisticated investors; however, in this author’s opinion, leveraged ETFs are inappropriate for the vast majority of individual investors. Given the level of volatility in the stock markets in recent times, leveraged ETFs expose investors to tremendous potential for loss in a short period of time. Furthermore, in various instances in the retail setting, leveraged ETFs have been sold to investors without full disclosures related to these risks.
The Kueser Law Firm represents investors who have lost money in leveraged ETFs. If you are concerned that your investments have been mismanaged, contact us to learn more about your rights.
ProFunds Group, one of the largest issuers of leveraged and inverse ETFs recently issued a warning that some of its leveraged and inverse ETFs may not be suitable for all investors. In the prospectus dated October 1, 2009, the company repeatedly states:
The Fund is different from most exchangetraded funds in that it seeks leveraged returns and only on a daily basis. The Fund also is riskier than similarly benchmarked exchange-traded funds that do not use leverage. Accordingly, the Fund may not be suitable for all investors and should be used only by knowledgeable investors who understand the potential consequences of seeking daily leveraged investment results. Shareholders should actively monitor their investments.
(See, e.g., prospectus at pp. 49, 54, 59, 64, 69, 74, 79.)
While additional disclosures are an improvement, this disclosure is still somewhat vague. It is similar to telling someone that an investment is suitable for them if they are seeking growth of their investment. Whoisn’t seeking growth of their investments? I have never heard anyone say “I am looking for an investment that will cause me to lose money.”
In addition, many investors who are sold leveraged ETFs such as these never receive a copy of the prospectus. If an investor does not receive the prospectus, the disclosure does not protect them (however, it could protect the fund company from liability).
Leveraged ETFs invest their shareholders’ money in futures and/or derivatives in order to multiply the daily return of an index. Some leveraged ETFs seek a return that is 200% or even 300% of the daily performance of the index. Inverse ETFs work in much the same way, except that these funds seek a return that is equal to 100%, 200%, or even 300% of the opposite of the daily performance of the index. With these funds, an investor actually profits when the index declines in value. Typical leveraged ETFs and inverse ETFs reset each day and therefore, over periods longer than one day, their performance can vary considerably from the index. In addition to ProFunds, the most popular leveraged ETFs and inverse ETFs are managed by Rydex and Direxion.
FINRA has already declared that leveraged ETFs are typically unsuitable for retail investors. Therefore, the announcement by ProFunds is not a revelation. If your stockbroker or financial advisor has sold you any leveraged ETFs or inverse ETFs, or purchased any leveraged ETFs or inverse ETFs in your accounts, you may be entitled to recover any losses on these investments. The Kueser Law Firm represents investors who were sold leveraged ETFs and inverse ETFs. If you are concerned that your investments have been mismanaged, contact us to learn more about your rights.
“A nation that forgets its past is doomed to repeat it.” — Winston Churchill
On Wednesday, September 23, 2009, several major media outlets published articles discussing the Obama administration’s continued efforts to enact enhanced regulatory reform over the financial markets.
Given what has occurred over the past two years, enhanced regulation is absolutely necessary. As Paul Krugman noted in a New York Times Op-Ed article: “In the grim period that followed Lehman [Brothers'] failure, it seemed inconceivable that bankers would, just a few months later, be going right back to the practices that brought the world’s financial system to the edge of collapse.” However, that is exactly what is happening. While the rest of America continues to struggle with job losses, foreclosures, and the effect that the downturn had on their investment portfolios, Wall Street is again promoting the very investments that caused the problem — and business appears to be good.
For example, in a recent article on Bloomberg.com, Abigail Moses and Shannon D. Harrington stated that “A year after the bankruptcy of Lehman Brothers Holdings Inc., credit-default swaps have lost their stigma for disaster and are contributing to the growing confidence in the credit markets.” Have we already forgotten Lehman Brothers and AIG and the problems that CDS created? It appears that we have. In a recent article, Greg Burns of the Chicago Tribune noted that credit default swap reform has “fizzled.”
The only reason that all this appears to have been forgotten is due to the recent “recovery” in the stock market. As Treasury Secretary Timothy Geithner stated yesterday in his remarks before Congress:
Make no mistake, the flaws in our financial system and regulatory framework that allowed this crisis to occur, and in many ways helped cause it, are still in place . . . . We may disagree over details over how to best fix those flaws, but that cannot mean we do not act.
It seems to me that the Treasury Secretary is someone we should be listening to, and not Wall Street or others with a similar agenda. Let us not forget our past.
On September 21, 2009, Missouri Secretary of State Robin Carnahan announced that her office had finalized a consent order with JP Morgan Chase & Co. related to the firm’s marketing and sale of auction rate securities (ARS) to Missouri investors.
According to the press release, Missouri investors will receive more than $28 million. In addition, JP Morgan will pay $86,000 to the Missouri Investor Education and Protection Fund, which is used to educate Missourians about potential investment fraud and other fraudulent schemes.
JP Morgan, like many of the other investment firms across the country marketed auction rate securities as “safe,” “liquid,” and “same as cash,” when, in fact, the investments were subject to the willingness of many of the same firms to provide the necessary liquidity to sustain the auction rate securities market. As these firms’ liquidity began to diminish in late 2007 and early 2008, they became unable to support the market with the necessary liquidity. As a result, in mid-February 2008, the auctions failed and investors were stuck holding long-term and perpetual investments that paid short-term interest rates.
The Kueser Law Firm represents investors in securities arbitration and litigation. If you were sold Auction Rate Securities and your positions have not been redeemed or repurchased, you should contact an attorney to discuss your rights. Feel free to contact us if you have any questions or would like additional information.
Earlier this week, the Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) issued a joint warning cautioning investors on the dangers in investing in leveraged ETFs and inverse ETFs. The two regulators issued the warning because they “believe individual investors may be confused about the performance objectives of leveraged and inverse exchange-traded funds (ETFs).”
The warning also notes that leveraged ETFs are designed to achieve their investment performance objectives on a daily basis, rather than a long-term basis as with typical exchange-traded and mutual funds. In fact, the performance of these funds can vary significantly from their stated objectives over long-term periods. The joint warning contains a detailed description of leveraged and ETFs, as well as examples of how the funds generally operate. The SEC also included a link to a NYSE “Informed Investor” Bulletin entitled “What You Should Know About Exchanged Traded Funds.”
While this warning is welcome, it unfortunately has come after many investors have sustained significant losses in these risky and unsuitable investments. As previously discussed in this blawg, FINRA has already declared that leveraged ETFs are typically unsuitable for retail investors. The most popular of these investments are managed by Rydex, Direxion, and ProShares. If your stockbroker or financial advisor has sold you any leveraged ETFs, or purchased any leveraged ETFs in your accounts, and you have lost money on these investments, you may be entitled to recover these losses. The Kueser Law Firm represents investors who were sold leveraged and inverse ETFs. If you are concerned that your investments have been mismanaged, contact us to learn more about your rights.
Yesterday, August 17, 2009, the Attorney General of the state of New York announced that it had filed a lawsuit against Charles Schwab & Co. for its sales of auction rate securities. According to the press release, the Complaint charges Schwab with violations of the Martin Act for:
falsely representing auction rate securities as liquid, short-term investments without discussing the risks. These representations gave investors a false sense of security that their investments would always be liquid when auction rate securities, in fact, faced significant, inherent liquidity risks.
This is another action by Mr. Cuomo’s office to remedy the massive fraud perpetrated by Wall Street firms relating to auction rate securities. In fact, late last month, the Attorney General announced a $456 million settlement with TD Ameritrade related to its sales of auction rate securities.
Auction rate securities, which are also referred to as auction rate preferred shares, ARS, ARPS, and MARS, to name a few, have been at the epicenter of regulatory investigations across the country. Auction rate securities are long-term (or perpetual) investments that traded in periodic “auctions.” They are designed to allow companies, mutual funds, municipalities, and other organizations to borrow money for a long-term period while paying short-term rates of interest, which were reset during the periodic auctions. It was in these auctions that investors who held the securities could also sell their holdings if they needed to have access to cash. Because these auctions occurred on a relatively frequent basis (i.e., weekly, bi-weekly, or monthly), investors had the ability to sell their positions and obtain cash in a relatively short period of time.
For years, Wall Street firms sold auction rate securities as short-term, cash equivalent investments that paid marginally higher rates of interest as compared to other short-term investments. What these firms did not tell their customers was that the liquidity of the auction rate securities markets was entirely dependent on the ability and willingness of these same firms to participate in the auctions — in other words, these firms had to be willing and able to purchase the securities that were not purchased by the other auction market participants. In most cases, these firms were purchasing more securities than the other market participants. The firms (and their representatives) did not disclose these critical facts, but rather, only disclosed that the interest rates paid on the securities was reset at the auctions. In addition, these firms generally failed to inform investors that they would not be able to access their invested capital if the auctions froze.
In 2007, these Wall Street firms came under massive liquidity problems. As a result, these firms made a decision to cease participation in the auction rate markets, leaving investors across the country with illiquid investments that typically paid short-term rates of interest. In some cases, the auction rate securities paid no interest for months at a time. Therefore, investors were left holding a bag of illiquid long-term securities that paid little, if any interest.
Several class actions have been filed across the country on behalf of auction rate securities investors. In addition, numerous securities arbitration claims have been filed by investors. Some of these cases, as well as action by state regulators, has resulted in redemption of some investors’ auction rate securities. However, many investors remain stuck with these illiquid investments.
If you own auction rate securities that have not been redeemed, you may want to contact an attorney to discuss your rights. The Kueser Law Firm is a boutique legal practice that focuses its practice on protecting the rights of investors and recovering investment losses for companies and individuals. You may contact us by completing the form to the right, or by visiting our website.
The choice of an attorney is an important one and should not be based solely upon advertisements such as this website. Past results afford no guarantee of future results. Every case is different and must be judged on its own merits.
*Any information submitted via this website may not be secure and/or confidential. Merely contacting this firm does not establish an attorney-client relationship.
I remember a story about a retired policeman who was tricked into taking out a $100,000 mortgage on a house that he'd already paid off in hopes of banking a double-digit return. But the “investment banker” was a fraud, and the policeman, who had put ...See all stories on this topic » […]
HOUSTON (May 23, 2013)—Samuel Ray Palasota, 52, of Houston, who authorities say portrayed himself as a pastor running a religious-themed investment program, is charged with 24 counts of fraud for what federal prosecutors say was a real estate ...See all stories on this topic » […]
(WBIR) Four additional people have been charged in connection with an alleged investment fraud scheme that targeted the elderly in Tennessee and North Carolina. According to a press release from the U.S. Attorney's Office, dozens invested more than ...See all stories on this topic » […]
Page 1 of 1. CHICAGO (AP) — A former Lake County man has been sentenced to more than six years in federal prison for a $1.6 million investment fraud scheme. The U.S. Attorney's Office in Chicago says 54-year-old William Block was sentenced Thursday.See all stories on this topic » […]
Chicago, IL-(ENEWSPF)- A former Lake County man was sentenced today to more than six years in federal prison for cheating at least 20 victims of approximately $1.6 million in an investment fraud scheme. The defendant, William Block, promised investors ...See all stories on this topic » […]
Investment adviser Pierre Montpellier, who lived the good life from 1995 until 1998, conned 125 locals out of more than $5 million before the fraud was discovered. He fled to London, England, got married and had a new job when the law caught up with ...See all stories on this topic » […]
Then, the investment fraud criminal bombards them with a flurry of influence tactics after they determine which buttons to push. This can leave even the savviest person in a haze—making it easier for the fraudster to walk away with the victim's hard ...See all stories on this topic »Better Business Bureau (blog) […]
The government proved that Block lied to at least 20 people to get them to give him money in an investment fraud scheme between May 2002 and November 2008, according to a statement from federal prosecutors. Block told the investors he would use their ...See all stories on this topic » […]
HOUSTON (AP) — A 52-year-old Houston man who portrayed himself as a pastor running a religious-themed investment program is charged with 24 counts of fraud for what federal prosecutors say was a real estate scheme that cost a Mississippi woman ...See all stories on this topic » […]
NEW DELHI - For 75-year-old pensioner Sova Sengupta the collapse of Indian property-to-media empire Saradha Group, to which she had entrusted her life's savings with the promise of a handsome return, spelt financial ruin. "I'd deposited 100,000 rupees ...See all stories on this topic » […]
The case began in federal court in Kentucky as a securities fraud class action claiming that the pharmaceutical distributor deceived investors when it concealed its supposedly illegal kickback and false billing deals with pharma manufacturers ...See all stories on this topic »Thomson Reuters News & Insight […]
Net) – Charlotte hedge fund manager Stephen Ewing Maiden has pleaded guilty to securities fraud for hiding investment losses that cost his victims at least $8.9 million, and was released on a $50,000 unsecured bond until sentencing. “U.S. Magistrate ...See all stories on this topic » […]
FARGO — A former West Fargo securities broker charged with bilking investors out of more than $900,000 in a Ponzi-type scheme has agreed to plead guilty. Robert Medhus, 65, was charged in Cass County District Court with 16 counts of securities fraud, ...See all stories on this topic » […]
NEW YORK--The Securities and Exchange Commission on Thursday charged a former Georgia-based LPL Financial LLC adviser with fraud, accusing him of misappropriating about $2 million from at least six clients. Blake Richards allegedly directed ...See all stories on this topic » […]
Charlotte man pleads guilty to securities fraud Associated Press |. A Charlotte man has pleaded guilty to carrying out an $8.9 million Ponzi scheme. Stephen Maiden pleaded guilty Thursday to securities fraud and was released on bond. The 40-year-old ...See all stories on this topic » […]
A former Bell Potter Securities advisor has been sentenced to five years in jail for fraudulent conduct which cost investors and self-managed superannuation fund holders more than $1.6 million. Glen Evans pleaded guilty to 10 different fraud-related ...See all stories on this topic » […]
Subscribe to our newsletter. City of South Miami Charged by SEC for Muni Fraud in Tax-Exempt Status. The Securities and Exchange Commission is usually seen going after individuals, fiduciary managers, and companies for various aspects of investor fraud.See all stories on this topic » […]
Russell Erxleben will remain in custody pending his second federal fraud trial. U.S. Magistrate Andrew Austin on May 16 rejected bond for Erxleben, who was indicted in January on wire fraud, securities fraud, and money laundering charges related to an ...See all stories on this topic » […]
Stephen Maiden pleaded guilty Thursday to securities fraud and was released on bond. The 40-year-old Maiden faces a maximum penalty of 20 years in prison and a $250,000 fine. The U.S. Attorney's Office in Charlotte says Maiden conducted a Ponzi ...See all stories on this topic » […]
A former Charlotte hedge fund manager pleaded guilty to securities fraud in federal court on Thursday and was released on a $50,000 unsecured bond until sentencing. Stephen Maiden, 40, reached a plea agreement in February with the U.S. Attorney's ...See all stories on this topic »Charlotte Observer […]
