ponzi schemes

Should I Contact An Attorney If I’ve Been the Victim of Securities Fraud?

June 16, 2017 | by Staff Attorney

From having spoken to many victims of securities fraud – the hardest thing for many investor victims is asking for help. More specifically, admitting to anyone that they had been taken advantage of. Many victims express feelings of shock, disbelief, and often times shame for having been, apparently, an easy mark for the fraudster.

The truth is there is nothing to be a ashamed of. Fraud is a multi-billion dollar business ensnaring tens of thousands of victims a year. The only real question is – what are you going to do about it? Our investment attorneys are here to help. We’ll let you know what the potential avenues of recovery are. Consider reaching out to our firm and refusing to be another victim while considering the following SEC statistics concerning their regulatory efforts in 2016.

In 2016, the SEC filed 868 enforcement actions exposing financial reporting-related misconduct by companies and their executives and misconduct by registrants and gatekeepers.

SEC Files Complaint Against Former Edward Jones Broker Bernard Parker For Stealing Client Funds

December 31, 2015 | by Staff Attorney

The investment lawyers of Gana Weinstein LLP are investigating customer complaints against broker Bernard Parker (Parker). The Securities and Exchange Commission (SEC) announced fraud charges against Parker, a former broker with Edward Jones through his DBA Parker Financial Services located in Indiana, Pennsylvania. Parker has been accused of raising at least $1.2 million of investor money that was in reality used to remodel his house and pay other bills among other uses.

The SEC alleged that Parker raised more than $1.2 million from his brokerage customers and others who Parker told were purchasing real estate tax lien certificates that would earn returns of 6-9% annually. Specifically, Parker told prospective investors that Parker Financial Services would use funds to purchase tax liens placed by municipalities on properties primarily in Florida, Arizona, and Colorado. However, the SEC found that Parker pooled the money he raised into several bank accounts and routinely deposited only a portion of the money into a bank account and took the remainder in cash for himself.

The SEC alleged that Parker only used a small amount of investor funds to purchase tax liens and instead used their money to remodel his home, make car payments, and pay bills for his father-in-law. For instance, according to the SEC Parker withdrew more than $650,000 in investor funds in cash from teller transactions, ATM withdrawals, and checks. Parker additionally spent approximately $197,000 of investor money in other transactions, $150,000 through personal checks, and $169,000 for online bill payments. In total Parker made approximately $188,000 in interest payments to earlier investors in an effort to keep his investment scheme from being discovered.

Broker Ismail Elmas Terminated Over Outside Business Activities

September 22, 2014 | by Staff Attorney

According to broker Ismail Elmas’ (Elmas) Financial Industry Regulatory Authority (FINRA) BrokerCheck records the representative was recently discharged from CUSO Financial Services, LP (CUSO Financial) concerning allegations that the broker “converted client funds for personal use as well as participated in an unauthorized outside business activity involving investments without the firm approval…” Previously Elmas was associated with CUNA Brokerage Services, Inc.

Shortly thereafter, a customer filed a complaint against Elmas alleging that the broker took the client’s variable annuity contract, surrendered it, and sent the proceeds to a third-party – which the client says was unauthorized activity. In addition, since Elmas was terminated from CUSO Financial authorities have been unable to locate the broker. In articles, officials say that Elmas, 49, has been missing since July 29^th and have warned that Elmas may be armed and should not be approached. According to reports Elmas was last seen leaving his home in his gray 2008 Toyota Prius.

The allegations against Elmas are consistent with a “selling away” securities violation. Selling away occurs when a financial advisor solicits investments in companies or promissory notes that were not approved by the broker’s affiliated firm. Under the FINRA rules, a brokerage firm owes a duty to properly monitor and supervise its employees. In order to properly supervise their brokers each firm is required to establish and maintain a system to supervise the activities of each registered representative to achieve compliance with the securities laws. Selling away often occurs in environments where the brokerage firms either fails to put in place a reasonable supervisory system or fails to actually implement that system and meet supervisory requirements.

The Failure to Protect the Public From Securities Fraud – Part II

June 20, 2014 | by Staff Attorney

As discussed in Part I, the primary defense to preventing securities fraud is has been to “bar” the person from the industry and to instruct the criminal to stop committing fraud. Despite the evidence that the slap on wrist approach has been ineffective, some lawmakers continue to think barring individuals and educating the public is the best way to stop securities fraud.

Yet, according to Futures Magazine, during the hearing Sens. Susan Collins (R-ME) and Bill Nelson (D-FL) stressed the importance of “consumer education” to prevent future scams. If only we could convince senior citizens to spend their golden years reading CFTC and SEC news releases and memorize the names of hundreds of barred fraudsters each year maybe we can turn the tide in this fight – right. Great game plan. At least Sen. Claire McCaskill (D-MO) understood the disservice the education alone approach would provide the investing public by stating that “The first line of defense is not consumer education,” but rather “putting the crooks in prison.”

The hearing also featured testimony of a former fraudster, Karl Spicer. Spicer was convicted for ripping off investors in a metals scam. Spicer’s testimony also clearly stated that it is government agencies failure to instill fear into fraudsters that has resulted in no progress in investor protection. Without real world consequences, criminals merely go from scam to scam and will unapologetically continue to swindle. Spicer stated that “With all due respect to the civil authorities, the people that I have encountered…don’t really respect the civil authority bans.” In fact, “The gentleman I was with had a CFTC ban, he cooperated; he had a ban and he still went about doing business the very next day.”

The Failure to Protect the Public From Securities Fraud – Part I

June 19, 2014 | by Staff Attorney

If someone broke into your home and stole hundreds of thousands of dollars of your possessions you expect that person to go to jail. But what if the consequence was merely to pay a fine and a court ordered bar from breaking into homes. Would you be alright with that outcome? Could such an approach really stop or even deter criminals? Could you imagine lawmakers arguing with you that the key to preventing more burglaries is to inform homeowners about locking their doors and windows and installing alarms – but not jail. If such an approach sounds silly then why have we accepted this approach to securities fraud.

The primary defense to preventing securities fraud is simply to “bar” the person from the securities industry and to instruct him or her to stop committing fraud. For many recidivist fraudsters, being barred from the industry is merely part of the career plan. Often times being barred from the industry merely frees the fraudster from the shackles of having to conceal their fraud within the confines of industry supervision. After being barred fraudsters are often in a perfect position to continue stealing from investors. Think about it – they have been industry trained, have spent years learning their craft, and have established many contacts and industry connections that they can now utilize for their post-industry frauds.

Yet regulators and lawmakers seemingly fail to grasp the very simple principal that those who commit securities fraud need to go to jail – period. Recently, the Senate presented findings of the Senate Special Committee on Aging concerning investigations gold investment scams targeting Florida seniors. The hearing clearly exposed how securities regulators, in this case the Commodity Futures Trading Commission (CFTC), has no ability to prevent securities fraud and protect the investing public.