Private Placements
Fredericksburg Virginia Registered Rep Indicted
As set out in this Fredericksburg.com article, John Robert Graves, a former FBI agent, was indicted on charges of defrauding Virginia investors out of $1,300,000. According to the indictment filed in U.S. District Court in Richmond (Case 3:11CR246), Mr. Graves used funds obtained from investors to buy personal real estate, to pay personal expenses and credit cards, to pay himself cash, and to pay back prior investors.
Mr. Graves operated Brooke Point Management in Spotsylvania County since 2003 which provided financial planning, insurance sales, estate planning, and investment advice to customers. According to FINRA’s Brokercheck report, Mr. Graves had been a registered securities salesperson since 1998 with various firms including, Harrison Douglas, Community Bankers Securities, Fintegra, Questar Capital Corporation, Pacific West Securities, and H. Beck. The Brokercheck report also discloses multiple pending arbitration claims alleging fraud, negligence, breach of fiduciary duty, and unsuitable investments regarding private placements, limited partnerships and REITs.
If you wish to discuss a potential securities fraud claim with one of our attorneys, please contact us here for a free consultation.
Posted by Greco & Greco on 10/13 at 02:35 PM
Arbitration •
Brokerage Firms •
Community Bankers Securities •
H. Beck •
Pacific West Securities •
Questar Capital Corporation •
Ponzi Scheme •
Private Placements •
Securities Fraud •
State Regulators •
Virginia •
Suitability •
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SEC Fraud Charges Regarding The Nutmeg Group LLC
As set out in the SEC Complaint which can be found here, the SEC filed civil fraud claims in Illinois against The Nutmeg Group, LLC, Randall Goulding, and others. The SEC alleges in its Complaint that Nutmeg was an investment adviser to 15 funds which invested fund assets in private investments in public equity (PIPE) transactions. As a basis for its fraud claims, the SEC alleges in the Complaint that Nutmeg “improperly commingled investor and fund assets,” “misappropriated over $4 million in fund assets,” “failed to maintain the required books and records,” and “overstated the performances of its Funds to investors.” (paragraphs 2 and 3 of SEC Complaint).
This article from tampabay.com discusses the recruitment of investors for The Nutmeg Group investments by an individual (Harvey Altholtz) from the Sarasota, Florida area. Here is a cease and desist Order from the Colorado Securities Commissioner relating to Altholtz and Wealth Strategy Partners.
Greco & Greco have recently filed a FINRA arbitration on behalf of investors who were sold investments in Nutmeg Group funds by a FINRA registered representative (securities salesperson). All FINRA registered representatives are required to be registered with a FINRA firm (Broker-Dealer). FINRA firms have legal responsibilities to supervise their registered representatives, and further may be found liable for the wrongful actions of their agents. Examples of legal grounds for liability of Broker-Dealers in these situations include:
a) under tort and agency law, principals can be found liable for the acts of their agents even if they are entirely innocent and have received no benefit from the transaction;
b) a broker’s Broker-Dealer can also be found liable as a “control person” of that broker under state and federal securities laws; and
c) claims can be pursued in arbitration based on violations of FINRA rules including Rules related to supervision, suitability, and outside business activities.
If you were sold investments in Nutmeg Group funds by a FINRA registered representative, and you would like to discuss legal options with an attorney, please contact Greco & Greco for a free consultation with one of our lawyers.
Posted by Greco & Greco on 06/08 at 04:05 PM
Arbitration •
Brokerage Firms •
Intersecurities •
Transamerica Financial Advisors •
Ponzi Scheme •
Private Placements •
SEC •
State Regulators •
Colorado •
Florida •
Suitability •
Unregistered Securities •
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Medical Capital Charged With Fraud by SEC
Medical Capital Holdings is another private placement investment that has been subject to claims of fraud by the SEC. In the Amended Complaint found on the Receivership site the SEC alleges that despite promises in the offering memoranda from Medical Capital not to use investor funds to pay administrative fees, 24% of investor funds were paid out as administrative fees, and the companies engaged in sham intercompany transactions to pay back principal and interest to investors in prior offerings.
Furthermore, as set out in this Orange County Register article, the head of Medical Capital (Sidney Field) had previously had his insurance license revoked by California, had been sued twice by state insurance regulators for racketeering and fraud, and had filed bankruptcy.
Investors who were sold these offerings by their stock brokers and have suffered losses may have claims that they can bring in FINRA arbitrations against their brokerage firms. Firms selling such offerings have due diligence duties prior to approval of their sale, and representatives are required to only make suitable recommendations to their customers. Additionally, representatives may not misrepresent the risk of securities they recommend, and they must disclose material facts related to risk. Greco & Greco is pursuing claims in arbitration on behalf of customers who were sold these products. If you think you may have a claim, please contact us for a free consultation with one of our attorneys.
Posted by Greco & Greco on 03/19 at 03:17 PM
Arbitration •
Brokerage Firms •
CapWest •
Gunn Allen •
FINRA •
Private Placements •
SEC •
Suitability •
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Provident Royalties / Shale Royalties charged with fraud by SEC
As set out in this SEC Release, Provident Royalties, LLC and many related entities (including Shale Royalties entities) have been charged with engaging in a $485 million offering fraud and orchestrating a ponzi scheme. According to the SEC’s Complaint and release, “Provident falsely promised yearly returns of up to 18 percent,” and used investor funds from later offerings to pay “expenses related to earlier offerings and returns to investors in those offerings.” Unaffiliated brokerage firms were solicited by Provident to sell the investments through placement agreements for each offering, thereby selling the investments to retail investors nationwide.
Investors who were sold these offerings by their stock brokers and have suffered losses may have claims that they can bring in FINRA arbitrations against their brokerage firms. Firms selling such offerings have due diligence duties prior to approval of their sale, and representatives are required to only make suitable recommendations to their customers. Additionally, representatives may not misrepresent the risk of securities they recommend, and they must disclose material facts related to risk. Greco & Greco is pursuing claims in arbitration on behalf of customers who were sold these products. If you think you may have a claim, please contact us for a free consultation with one of our attorneys.
Posted by Greco & Greco on 11/13 at 05:12 PM
Arbitration •
Brokerage Firms •
CapWest •
Gunn Allen •
FINRA •
Ponzi Scheme •
Private Placements •
SEC •
Suitability •
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