ICON Tag Archives — Securities Lawyers Blog

Stephen Swarbrick Subject to Multiple Complaints Over Equipment Leasing and Oil and Gas Investments

May 29, 2017 | by Staff Attorney

The securities fraud lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against current Questar Capital Corporation (Questar) broker Stephen Swarbrick (Swarbrick). According to BrokerCheck records, Swarbrick has spent 23 years in the securities industry and is currently located in Roseville, California operating under the d/b/a Weston and Tuttle Wealth Advisors, LLC. Over his career, Swarbrick has been the subject of at least three customer complaints.

The most recent complaint was filed in January 2017 alleging that a complaint was filed with the California Department of Business Oversight alleging unsuitable sales for $400,000 in equipment leasing and oil and gas partnerships from December 2009 through June 2014. The customer alleged $400,000 in damages. The claim is currently pending. Many of Swarbrick’s other customer complaints similarly allege damages resulting from the sale of alternative investment products such as equipment leasing and oil and gas private placements.

Our firm often handles cases involving direct participation products (DPPs) and private placements including oil and gas partnerships, non-traded real estate investment trusts (REITs), and other alternative investments.

ICON Equipment Leasing Sanctioned By SEC Over False Valuations

September 19, 2016 | by Staff Attorney

The Securities and Exchange Commission (SEC) announced that ICON Capital LLC, an entity that manages equipment leasing funds, agreed to settle charges that it caused four of its funds to report materially inaccurate financial results in their SEC filings and pay a $750,000 penalty.

Our firm has represented many clients in equipment leasing products like LEAF and ICON. All of these investments come with high costs that do not compensate investors for the extreme risk being taken. Equipment leasing funds historically underperform even safe benchmarks, like U.S. treasury bonds. Investors are destined to lose money in equipment leasing programs like LEAF Equipment Leasing Income Funds I-IV and ICON Leasing Funds Eleven and Twelve. The high costs and fees associated with these investments make significant returns virtual impossibility. Further, investor often fail to understand that they have lost money under many years after agreeing to the investment. In sum, for all of their costs and risks, investors in these programs are in no way additionally compensated for the loss of liquidity, risks, or cost.

On top of these high risks, the SEC has now found that the funds’ opaque nature has allowed the funds to hide more investor losses. According to the SEC’s order instituting a settled administrative proceeding, the four funds’ financial results were misstated due to accounting errors relating to the impairment of assets and that ICON failed to comply with Generally Accepted Accounting Principles (GAAP) on multiple occasions.

Broker Investigation: Customer Complaints Against Broker Daniel McPherson

February 9, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Daniel McPherson (McPherson). According to BrokerCheck records McPherson is subject to two customer complaints. The customer complaints against McPherson allege securities law violations that including unsuitable investments, misrepresentations, and breach of fiduciary duty among other claims. The claims appear to relate to allegations regard direct participation products and limited partnerships such as equipment leasing and non-traded real estate investment trusts (Non-Traded REITs). Other products complained of include oil and gas private placements and tenant-in–common (TIC) investments.

Our firm has written numerous times about investor losses in these types of programs and private placement securities. All of these investments come with costs that make profiting from the investment extremely unlikely. For example, investors are destined to lose money in equipment leasing programs like LEAF Equipment Leasing Income Funds I-IV and ICON Leasing Funds Eleven and Twelve. The high costs and fees associated with these investments make significant returns virtual impossibility. Yet for all of their costs investors are in no way compensated for the additional risks of these products.

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.

Numerous Customer Complaints Against Former Berthel Fisher Broker Jerry McCutchen

August 13, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Jerry McCutchen (McCutchen) has been the subject of at least 15 customer complaints and one judgment or lien. The customer complaints against McCutchen allege a number of securities law violations including that the broker made unsuitable investments, negligence, and misrepresentations among other claims.

The claims against McCutchen involve various investments including equipment leasing, non-traded real estate investment trusts (Non-Traded REITs), and variable annuities. We have written many times about the investing dangers of these products. One quality all of these investments have in common is the fact that they come with high commissions for the broker and low probability of success for the client. Our firm has written numerous times about investor losses in these programs such as equipment leasing programs like LEAF Equipment Leasing Income Funds I-IV and ICON Leasing Funds Eleven and Twelve. The costs and fees associated with all of these investments cause the security to be so costly that significant returns are virtual impossibility. Yet, investors are in no way compensated for the additional risks of these products.

In a typical equipment leasing program upfront fees are around 20-25% of investor’s capital. As for Non-Traded REITs, it was reported in the Wall Street Journal, that a study on “Nontraded REITs are costing investors, especially elderly, retired, unsophisticated investors, billions. They’re suffering illiquidity and ignorance, and earning much less than what they ought to be earning.” In conclusion, “No brokerage should be allowed to sell these things.”

Equipment Leasing Programs LEAF and ICON: Too Costly to Invest In

December 23, 2014 | by Staff Attorney

Our firm has written numerous times about investor losses in programs such as various equipment leasing programs like LEAF Equipment Leasing Income Funds I-IV and ICON Leasing Funds Eleven and Twelve. These direct participation programs, like their non-traded REIT and oil and gas cousins, all suffer from the same crippling flaw that dooms these investments to a high likelihood of failure from the get go. The costs and fees associated with all of these investments cause the security to be so costly that only unprecedented market boom conditions can lead to profitability. Market stagnation or decline makes any significant return a virtual impossibility.

Yet, investors are in no way compensated for these additional risks. These investments tout high yield like returns for risks far in excess of traditional high yield investments. In fact, the only reason brokers sell these products is because of the high sales commissions coupled with the lack of price transparency that allows these products to be displayed at inflated values for years on investor account statements.

In an equipment leasing program a sponsor sells limited partnership units then takes out substantial offering costs and fees and invests the remainder in a pool of equipment leases that are leveraged up with additional borrowing. Brokers market these products as a predictable income stream but in fact, and what nearly all brokers fail to mention, is that a substantial portion of investor distributions are actually a return of their original investment and not actually income generated from operations.