Recover Your EquiAlt Investment Losses!

Robert Wayne Pearce, P.A. is investigating and representing investors against brokerage firms and financial advisors who offered and sold securities issued by affiliates of EquiAlt, LLC.  EquiAlt is a private real estate company which organized at least four private placements: EquiAlt Fund, LLC; EquiAlt Fund II, LLC; EquiAlt Fund III, LLC; and EA Sip, LLC (collectively referred to as the EquiAlt Funds).  According to a recent SEC Complaint, EquiAlt CEO Brian Davison and Managing Director Barry Rybicki offered and sold $170 million of unregistered debentures issued by the EquiAlt Funds to over 1,100 investors across the United States. The SEC Complaint alleged that Brian Davison, Barry Rybicki, and others misrepresented the unregistered debentures as “safe,” “low risk,” and “conservative.”  Also, while investors were promised “that substantially all of their money would be used to purchase real estate in distressed markets in the United States and their investments would yield generous returns … EquiAlt, Davison, and Rybicki misappropriated millions in investor funds for their own personal use and benefit.”  According to the SEC Complaint, the revenues generated by the EquiAlt Funds became insufficient to pay the interest owed to investors.  Because of this insufficiency, the SEC alleged the Defendants resorted to fraud (a Ponzi scheme), using new money from investors to pay the returns promised to existing investors. While many of the sales were solicited by unregistered EquiAlt salespersons, there were reportedly many sales by small offices of registered salespersons associated with large independent FINRA-registered brokerage and insurance firms in Arizona, California, Nevada, and many other states nationwide.

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The SEC Charges MA-Based Portfolio Manager with Diverting Millions to Personal Account

The Securities and Exchange Commission (SEC) has charged a Massachusetts-based portfolio manager, Kevin J. Amell, with fraud amid allegations that he diverted nearly $2 million from an account over which he had trading authority (the Fund) to his personal brokerage account.  In a parallel action, the U.S. Attorney’s Office for the District of Massachusetts has also filed criminal charges against Mr. Amell. According to the SEC complaint, Kevin Amell abused his trading authority at least 265 times by pre-arranging the purchase or sale of call options between his personal brokerage account and the Fund’s brokerage accounts.  The complaint alleges that Mr. Amell matched trades wherein he profited by either buying call options at artificially lower prices and selling them shortly thereafter at higher prices to third parties; or by purchasing call options from third parties and selling them shortly thereafter to the Fund at artificially high prices.  In one example, the SEC’s complaint alleges that, in a series of trades involving Amazon securities, Mr. Amell allegedly generated a profit of $23,000 for himself in less than 23 minutes at the Fund’s expense.

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JP Turner Broker Barred by the SEC for Fraudulent Investment Scheme

The Securities and Exchange Commission (SEC) announced that it has accepted an Offer of Settlement submitted by Levi Lindemann in which he is barred from the securities industry for allegedly operating a fraudulent scheme through his private company, Gershwin Financial, Inc. and his sole proprietorship, Alternative Wealth Solutions.  The SEC alleged in its complaint that Levi Lindemann, of West Lakeland, Minnesota, raised approximately $976,000 from six investors, including elderly individuals, and told the investors that their money would be used to purchase various investments including notes and interests in a unit investment trust (UIT).  The SEC complaint alleged that in reality, none of Mr. Lindemann’s purported investments were ever made. Mr. Lindemann is a former registered representative with J.P. Turner & Company, LLC (J.P. Turner).  His BrokerCheck report shows that Mr. Lindemann is currently involved in four (4) pending customer disputes while he was employed by J.P. Turner for allegations including breach of fiduciary duty, misrepresentations, violation of Minnesota Uniform Securities Act, and negligence.

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Paul Rampoldi & William Blythe Under SEC Investigation for Insider Trading Scheme

Paul T. Rampoldi and William S. Blythe III, were named Respondents in a Securities and Exchange Commission (SEC) complaint that alleges the two participated in an insider trading scheme to profit in advance of two major pharmaceutical company announcements. The insider trading case involved the securities Ardea Biosciences, Inc. (Ardea), a California-based biotechnology company. The SEC alleged, in advance of several announcements between April 2009 and April 2012, Michael J. Fefferman, who was Ardea’s Senior Director of Information Technology, tipped his brother-in-law nonpublic information concerning an agreement between Ardea and another company to license a cancer drug and an acquisition of Ardea by AstraZeneca PLC (AstraZeneca). This information eventually came to Mr. Rampoldi, for which the SEC alleges, he used along with his friend Mr. Blythe to illicit profits by trading ahead of the pharmaceutical announcements. Hopefully, Mr. Rampoldi and Mr. Blythe have obtained skilled representation because they have a battle on their hands.

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Matrix Capital Markets Under SEC Investigation for Fraud and Misappropriation of Funds

Matrix Capital Markets (Matrix) and firm representative, Nicholas Mitsakos of San Francisco, California were named Respondents in a Securities and Exchange Commission (SEC) complaint that alleges the firm, acting through Mr. Mitsakos, falsely marketed themselves and used clients’ funds for their own personal use. The SEC alleges from approximately the spring of 2014 to the present, the Respondents made false and misleading statements to prospective investors and financial institutions in order to raise funds and increase clientele. The SEC alleged that Mr. Mitsakos made numerous false and misleading statements included lying about investment returns and their broker and auditor relationships. According to the SEC, the Respondents marketed themselves as experienced money managers with a highly successful track record. They claimed to be managing millions, when in fact they did not manage client assets at all, and allegedly fabricated a hypothetical portfolio of investments earning 20-66% annual returns.

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Boca Raton Firm Shearson Financial Services Fined By FINRA

Shearson Financial Services, LLC (SFS) of Boca Raton, Florida submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly maintaining inaccurate books and records. FINRA investigators found between June 10,2013 through October 6,2015, SFS maintained inaccurate books and records reflecting that 1,873 transactions were unsolicited, when in fact, the transactions were solicited, in violation of FINRA Rules 451 1(a), 2010, and Section 17(a) and SEC Rule 17a-3 of the Securities Exchange Act. In addition, during this period, SFS, acting through 15 registered representatives, exercised discretion in 231 transactions in 56 customer accounts, without written authorization from the account holders, in violation of NASD Rule 2510(b) and FINRA Rule 2010.

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Huntington Representative Barred, Ordered to Pay $800k Restitution for UIT Misrepresentations

David Miller of Columbus, Ohio was named Respondent in a Financial Industry Regulatory Authority (FINRA) complaint that alleged he made negligent misrepresentations and omissions of material fact in connection with customers’ purchases of UITs. FINRA alleged that Mr. Miller recommended 140 UIT purchases totaling over $5.3 million in 129 customer accounts without having a reasonable basis to make the recommendations, in violation of FINRA Rules 2111 and 2010. From June 2008 through August 2013, Mr. Miller was registered as a General Securities Representative (GSR) with The Huntington Investment Company (Huntington), the broker-dealer affiliate of The Huntington National Bank (Huntington Bank). The FINRA complaint originated after Huntington filed a Form U5 on August 27, 2013, disclosing that Mr. Miller had “violated industry standards of conduct.” Upon investigation, FINRA found that Mr. Miller engaged in a pattern of recommending unsuitable UITs without having a reasonable basis for the recommendations, causing his customers to lose a total of $1,019,656.83.

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Feltl & Company Fined for Failing to Apply Sales-Charge Discounts to UIT Customers

Feltl & Company (Feltl) of Minneapolis, Minnesota submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement for the Financial Industry Regulatory Authority (FINRA) for allegedly failing to apply sales-charge discounts to certain customers’ eligible purchases of unit investment trusts (UITs) and for failing to establish, maintain, and enforce a proper supervisory system. Feltl has been registered with FINRA and the NASD since 1975 and has faced three similar FINRA disciplinary actions in the past. UITs are generally issued by a firm representative that assembles the UIT’s portfolio of securities, deposits the securities in a trust, and sells units of the UIT in a public offering. UIT units are redeemable securities that are issued for a specific term, and entitle an investor to receive his or her proportionate share of the UIT’s net assets on redemption or at termination.

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The SEC Charges Software Executive and Three Friends with Insider Trading

The Securities and Exchange Commission (SEC) has brought insider trading charges against a former software executive, Christopher Salis, and his three close friends, Douglas Miller, Edward Miller and Barrett Biehl, who allegedly made  over half a million dollars based upon an illegal tip regarding a corporate merger. According to the SEC complaint, Christopher Salis was a global vice president at SAP America, Inc. (SAP) when he became aware of plans for an upcoming SAP merger with Concur Technologies, Inc. (Concur).  Salis allegedly tipped his close friend, Douglas Miller, who allegedly then passed on the tip to his brother, Edward Miller and another friend, Barrett Biehl.  Douglas Miller and his brother, Edward, allegedly rushed to open brokerage accounts in order to quickly begin trading in securities of Concur based upon the tip from Mr. Salis.  In total, the complaint notes that the tip from Mr. Salis yielded illicit trading profits of over $545,000 for Douglas and Edward Miller, Barrett Biehl, the Miller’s parents and another friend.  The SEC complaint further alleges that Mr. Salis received at least $10,400 in kickbacks and his startup company later received nearly $80,000 from Mr. Miller and his family. 

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SEC Charges Two California Men with Ponzi Scheme Targeting Middle-Class Investors

The Securities and Exchange Commission (SEC) has filed a Complaint against Jaswant “Jason” Gill and Javier Rios, both California residents, and their company, JSG Capital Investments, with operating a classic Ponzi scheme aimed at middle-class investors with promises of exclusive investment opportunities and guaranteed annual returns of up to 60%, according to the SEC’s press release. The SEC alleges that Mr. Gill and Mr. Rios, through their company JSG Capital Investments, raised approximately $10 million by catering to average retail investors and promising exorbitant returns by investing in hot pre-IPO stocks of well-known companies like Uber and Airbnb.  According to the SEC Complaint, Mr. Gill and Mr. Rios used most of the investors’ funds to pay returns to earlier investors, in classic Ponzi scheme fashion.  Further, the Complaint alleges that Mr. Gill and Mr. Rios personally pocketed at least $2.8 million of investors’ funds for their personal use, including excursions to Las Vegas casinos, gentlemen’s clubs, and professional sporting events.

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