Investors have already lost billions in allegedly safe bonds that in fact were of a very high risk nature. The latest expansion of the investigation into Wall Street covers Royal Bank of Scotland. Andrew Cuomo, the New York attorney-general, has subpoenaed RBS and about 15 of Wall Street’s biggest sub-prime mortgage bond underwriters, such as Bear Stearns and Merrill Lynch, requesting information that will help to determine how much due diligence was conducted on the home loan-backed securities that they issued. We have just viewed the tip of the iceberg.
Andrew Stoltmann
312.332.4200
http://www.investmentfraud.pro/
Wednesday, November 28, 2007
Bond Losses Can Be Recovered...
I) Bond Losses Can Be Recovered…
At Stoltmann Law Offices, we’ve represented many clients in arbitrations or lawsuits to recover losses from bond related fraud and negligence. Bonds and bond mutual funds are often one of the most frequently misunderstood investment products stockbrokers and financial planners sell to investors. Fraud in the offer and sale of bonds to individual investors cost billions each year. As interest rates continue to fluctuate the value of investors’ bonds and bond mutual funds have plummeted. More egregiously, the subprime implosion has sheared billions off of what were supposed to be safe fixed income bonds and bond funds. Typically, these risks were simply never disclosed.
Stockbrokers and financial advisors at firms like Merrill Lynch, Morgan Stanley, Smith Barney, Prudential, Morgan Keegan, Edward Jones, Wachovia and AG Edwards were pitching these bonds as rock solid, safe investments that would not lose money. Unfortunately, many times these representations were false. The true risks of these bonds were not disclosed. Even the safest bonds sold to investors have lurking, undisclosed risks that often went undisclosed to clients. FINRA (formerly known as the NASD), the venue through which investors can recover bond losses, is currently experiencing a surge in bond related arbitration actions. We have only seen the tip of the iceberg. Investors, retirees and pension plans are often looking at their statements and seeing the value of their bond holding plummet in short periods of time. Fortunately, these losses may be recoverable (See III: Recovering Bond Losses below).
II) Types of Bond Claims
There are a number of bond related claims investors may have when they’ve suffered losses. These claims are discussed below…
a) The Failure To Disclose Risks Associated With Bonds
Under both federal and state law, financial advisors and brokers have an obligation to disclose all material risks associated with bonds purchased. Unfortunately, many brokers and advisors failed to disclose the bonds and bond funds solicited had subprime related, high risk toxic waste. In recent months, the most common bond claims relate to the failure of an advisor or stockbroker to disclose all material risks related to the bond or bond mutual fund purchased.
False statements in the purchase and sale of fixed income products often include guaranties, price predictions, or purported “special information” regarding merits and safety of the underlying company. Fraud, however, may also take the form of omission by failing to disclose, among other things, the actual quality of the bond, the underlying risks inherent in the bond purchase or other material, relevant information that the client is entitled to before purchasing the bond. Many bond mutual funds were exposed to subprime holdings and this was not told to investors. Over the next 12-18 months, the surge of arbitration claim filings at FINRA will be related to these sorts of claims.
b) Bond Suitability
The FINRA Conduct Rules require that in recommending to a customer any security, a member shall have reasonable grounds for believing that the recommendation is suitable for such customer upon the basis of the facts, if any, disclosed by such customer as to their other security holdings and as to their financial situation and needs. All securities, not just stocks, must be suitable for an investor. For example, if an investor wanted rock solid, safe returns, and a stockbroker recommended lower quality bonds, (also known as junk bonds), then the advisor may have made an unsuitable investment recommendations. If a broker has willfully disregarded his clients stated investment objectives by recommending low priced or speculative bonds, the firm and the broker could be found to have made an unsuitable investment recommendation.
c) Excessive Activity or Bond Churning
Most brokers are compensated by transaction based commissions or markups charged to the client. Sometimes financial advisors effect transactions not for the purpose of reasonably fulfilling the clients stated investment objectives, but instead in an effort to generate excessive commissions or markups for themselves and their firm. Under no conditions are bonds to be utilized as a trading vehicle. Bonds are intended to be long term investments. Bond don’t have commissions but rather have markups embedded in the price of the securities. In other words, a bond may be held in the inventory of a brokerage firm at a cost of $950 per bond. The firm, prior to selling the bond to a client, imposes a markup on the bond. Generally, the lower the quality of bond, the higher the markup. Also, the longer it takes the bond to mature, the larger the markup. So a junk quality bond maturing in 20 years may have a $80 markup. A short term government security, on the other hand, may have a markup of only $5.
d) Bond Purchases on Margin
Stockbrokers often may recommend to a client that he or she buys lower quality bonds on margin. The purported logic is that if a broker can get his or her client 10%-12% on a lower quality bond purchased on margin and the client pays margin interest of 8%, then the client is in effect receiving free money. This logic is tragically flawed and often leads to massive losses for the investor.
Many investors do not understand margin accounts. When you purchase securities on margin, your brokerage firm is lending you money to pay for these securities. Initially, you may use cash equal to half the securities purchased, or pledge certain fully paid securities. Either way, you owe the brokerage firm, or most likely its clearing agent, the debit balance, or the amount borrowed to pay for these securities. In general, unless you purchase more securities or pay down the balance, the debit or the amount borrowed does not change. Bond prices, however, change and if the market value of the securities (bonds or stocks) in your account declines in value, you will be required to meet margin calls and will be called upon to deposit additional cash, or fully-paid securities, into your account. If you fail to meet a margin call, or if your account falls below minimum maintenance levels, even in the absence of notice of a margin call, by contract, your broker is able to liquidate your investments.
However, many unscrupulous brokers use margin to increase the purchasing power in your account in order to facilitate excessive activity or churning. Aside from this practice, unless you are able to make and meet margin calls, and have the financial ability to satisfy the debit balance in your account, based on your overall financial condition, you may be unsuited for a margin account. If your broker has placed your account on margin, and you do not understand, or are unwilling to trade on margin, you should have your account evaluated by a professional. Such practices are usually the warning sign of other inappropriate activity in your account.
e) Unauthorized Trading
Unless you have signed discretionary papers giving your broker permission to trade your account without your authorization, a broker is required to obtain his clients permission before buying or selling bonds (or any other securities) in the account. It is not uncommon for unscrupulous brokers to buy and sell bonds in a clients account without authorization. If the client calls to complain, the broker might blame it on a "computer error" or some other excuse.
f) Failure To Execute
Brokers are obligated to follow their client’s instructions when selling or buying bonds. Actions may exist based on your broker's failure to execute certain orders. Actions may also be based upon your broker's dissuading you from selling particular bonds.
g) Failure To Supervise
Brokerage firms have a duty to supervise their brokers and the sales practices of their brokers, and to review customer statements for, among other things, evidence of bond suitability, unauthorized trading, or excessive bond trading activity. But for the performance of these duties, most cases of bond fraud may have been reasonably prevented. The failure to supervise is a violation of self-regulatory rules. Courts have recognized a cause of action for the negligent failure to supervise, and brokerage firms are liable for the acts of their registered representatives under the common law doctrine of respondeat superior, and as control persons under Section 20(a) of the Exchange Act
III) Recovering Bond Losses
Investment disputes between investors and their brokerage firm and brokers are generally subject to arbitration. Most brokerage firms use arbitration agreements as a condition to establishing a brokerage account. Additionally, the rules of the major national stock exchanges and the NASD (National Association of Securities Dealers) and NYSE (New York Stock Exchange) require that members and member firms (i.e. brokers and their companies) submit their disputes with customers to arbitration. If you suffered losses due to investments in bonds recommended by your financial advisor, some or all of those losses may be recoverable. Please review this website.
For more detailed information on arbitration and recovering bond losses or other investment losses, please contact Chicago based attorney Andrew Stoltmann at either 312.332.4200 or Stoltmann1234@hotmail.com.
Andrew Stoltmann
Stoltmann Law Offices PC
Chicago, IL
312.332.4200
http://www.investmentfraud.pro/
At Stoltmann Law Offices, we’ve represented many clients in arbitrations or lawsuits to recover losses from bond related fraud and negligence. Bonds and bond mutual funds are often one of the most frequently misunderstood investment products stockbrokers and financial planners sell to investors. Fraud in the offer and sale of bonds to individual investors cost billions each year. As interest rates continue to fluctuate the value of investors’ bonds and bond mutual funds have plummeted. More egregiously, the subprime implosion has sheared billions off of what were supposed to be safe fixed income bonds and bond funds. Typically, these risks were simply never disclosed.
Stockbrokers and financial advisors at firms like Merrill Lynch, Morgan Stanley, Smith Barney, Prudential, Morgan Keegan, Edward Jones, Wachovia and AG Edwards were pitching these bonds as rock solid, safe investments that would not lose money. Unfortunately, many times these representations were false. The true risks of these bonds were not disclosed. Even the safest bonds sold to investors have lurking, undisclosed risks that often went undisclosed to clients. FINRA (formerly known as the NASD), the venue through which investors can recover bond losses, is currently experiencing a surge in bond related arbitration actions. We have only seen the tip of the iceberg. Investors, retirees and pension plans are often looking at their statements and seeing the value of their bond holding plummet in short periods of time. Fortunately, these losses may be recoverable (See III: Recovering Bond Losses below).
II) Types of Bond Claims
There are a number of bond related claims investors may have when they’ve suffered losses. These claims are discussed below…
a) The Failure To Disclose Risks Associated With Bonds
Under both federal and state law, financial advisors and brokers have an obligation to disclose all material risks associated with bonds purchased. Unfortunately, many brokers and advisors failed to disclose the bonds and bond funds solicited had subprime related, high risk toxic waste. In recent months, the most common bond claims relate to the failure of an advisor or stockbroker to disclose all material risks related to the bond or bond mutual fund purchased.
False statements in the purchase and sale of fixed income products often include guaranties, price predictions, or purported “special information” regarding merits and safety of the underlying company. Fraud, however, may also take the form of omission by failing to disclose, among other things, the actual quality of the bond, the underlying risks inherent in the bond purchase or other material, relevant information that the client is entitled to before purchasing the bond. Many bond mutual funds were exposed to subprime holdings and this was not told to investors. Over the next 12-18 months, the surge of arbitration claim filings at FINRA will be related to these sorts of claims.
b) Bond Suitability
The FINRA Conduct Rules require that in recommending to a customer any security, a member shall have reasonable grounds for believing that the recommendation is suitable for such customer upon the basis of the facts, if any, disclosed by such customer as to their other security holdings and as to their financial situation and needs. All securities, not just stocks, must be suitable for an investor. For example, if an investor wanted rock solid, safe returns, and a stockbroker recommended lower quality bonds, (also known as junk bonds), then the advisor may have made an unsuitable investment recommendations. If a broker has willfully disregarded his clients stated investment objectives by recommending low priced or speculative bonds, the firm and the broker could be found to have made an unsuitable investment recommendation.
c) Excessive Activity or Bond Churning
Most brokers are compensated by transaction based commissions or markups charged to the client. Sometimes financial advisors effect transactions not for the purpose of reasonably fulfilling the clients stated investment objectives, but instead in an effort to generate excessive commissions or markups for themselves and their firm. Under no conditions are bonds to be utilized as a trading vehicle. Bonds are intended to be long term investments. Bond don’t have commissions but rather have markups embedded in the price of the securities. In other words, a bond may be held in the inventory of a brokerage firm at a cost of $950 per bond. The firm, prior to selling the bond to a client, imposes a markup on the bond. Generally, the lower the quality of bond, the higher the markup. Also, the longer it takes the bond to mature, the larger the markup. So a junk quality bond maturing in 20 years may have a $80 markup. A short term government security, on the other hand, may have a markup of only $5.
d) Bond Purchases on Margin
Stockbrokers often may recommend to a client that he or she buys lower quality bonds on margin. The purported logic is that if a broker can get his or her client 10%-12% on a lower quality bond purchased on margin and the client pays margin interest of 8%, then the client is in effect receiving free money. This logic is tragically flawed and often leads to massive losses for the investor.
Many investors do not understand margin accounts. When you purchase securities on margin, your brokerage firm is lending you money to pay for these securities. Initially, you may use cash equal to half the securities purchased, or pledge certain fully paid securities. Either way, you owe the brokerage firm, or most likely its clearing agent, the debit balance, or the amount borrowed to pay for these securities. In general, unless you purchase more securities or pay down the balance, the debit or the amount borrowed does not change. Bond prices, however, change and if the market value of the securities (bonds or stocks) in your account declines in value, you will be required to meet margin calls and will be called upon to deposit additional cash, or fully-paid securities, into your account. If you fail to meet a margin call, or if your account falls below minimum maintenance levels, even in the absence of notice of a margin call, by contract, your broker is able to liquidate your investments.
However, many unscrupulous brokers use margin to increase the purchasing power in your account in order to facilitate excessive activity or churning. Aside from this practice, unless you are able to make and meet margin calls, and have the financial ability to satisfy the debit balance in your account, based on your overall financial condition, you may be unsuited for a margin account. If your broker has placed your account on margin, and you do not understand, or are unwilling to trade on margin, you should have your account evaluated by a professional. Such practices are usually the warning sign of other inappropriate activity in your account.
e) Unauthorized Trading
Unless you have signed discretionary papers giving your broker permission to trade your account without your authorization, a broker is required to obtain his clients permission before buying or selling bonds (or any other securities) in the account. It is not uncommon for unscrupulous brokers to buy and sell bonds in a clients account without authorization. If the client calls to complain, the broker might blame it on a "computer error" or some other excuse.
f) Failure To Execute
Brokers are obligated to follow their client’s instructions when selling or buying bonds. Actions may exist based on your broker's failure to execute certain orders. Actions may also be based upon your broker's dissuading you from selling particular bonds.
g) Failure To Supervise
Brokerage firms have a duty to supervise their brokers and the sales practices of their brokers, and to review customer statements for, among other things, evidence of bond suitability, unauthorized trading, or excessive bond trading activity. But for the performance of these duties, most cases of bond fraud may have been reasonably prevented. The failure to supervise is a violation of self-regulatory rules. Courts have recognized a cause of action for the negligent failure to supervise, and brokerage firms are liable for the acts of their registered representatives under the common law doctrine of respondeat superior, and as control persons under Section 20(a) of the Exchange Act
III) Recovering Bond Losses
Investment disputes between investors and their brokerage firm and brokers are generally subject to arbitration. Most brokerage firms use arbitration agreements as a condition to establishing a brokerage account. Additionally, the rules of the major national stock exchanges and the NASD (National Association of Securities Dealers) and NYSE (New York Stock Exchange) require that members and member firms (i.e. brokers and their companies) submit their disputes with customers to arbitration. If you suffered losses due to investments in bonds recommended by your financial advisor, some or all of those losses may be recoverable. Please review this website.
For more detailed information on arbitration and recovering bond losses or other investment losses, please contact Chicago based attorney Andrew Stoltmann at either 312.332.4200 or Stoltmann1234@hotmail.com.
Andrew Stoltmann
Stoltmann Law Offices PC
Chicago, IL
312.332.4200
http://www.investmentfraud.pro/
House Bill Banning Arbitration Clauses Gaining Steam...
Legislation that would ban mandatory arbitration has picked up more support in the U.S. House of Representatives. Investment News reports today that there are now 53 co-sponsors of HR 3010 which would nullify pre-dispute mandatory-arbitration agreements that apply to employment, consumer, franchise or civil-rights disputes. Investors, although not named specifically, would likely fall under the purview of consumer disputes. For a look at the bill or its companion, S 1782, visit thomas.loc.gov.
Andrew Stoltmann
http://www.investmentfraud.pro/
312.332.4200
Andrew Stoltmann
http://www.investmentfraud.pro/
312.332.4200
FINRA Announces Wachovia Fine...
FINRA (formerly known as NASD) announced today it fined Wachovia Capital Markets LLC, a subsidiary of Wachovia Corp., $300,000 for deficient disclosures in certain of its research reports. FINRA said that from June 2004 to May 2006, Wachovia failed to include in 40 research reports a total of 56 disclosures concerning Wachovia's financial relationships with subject companies. In 20 of those reports, Wachovia failed to disclose that it managed or co-managed a public offering of securities issued by the subject company. For the entire story, please visit the link below.
http://www.finra.org/PressRoom/NewsReleases/2007NewsReleases/P037532
http://www.finra.org/PressRoom/NewsReleases/2007NewsReleases/P037532
Tuesday, November 27, 2007
Donald Overbey Of Ameriprise...
We are now currently representing former clients of Oscar Donald Overbey who was at one point an Ameriprise (American Express) financial adviser based in Illinois. Donald Overbey already has had his Illinois license revoked and is prohibited from serving as an investment adviser in Illinois. There are at least 8 victims who unfortunately lost millions of dollars in fraudulent schemes, purportedly investments in the coffee business (called Color Me Coffee), business loans, investment notes, real estate and even vitamins. The link below will take you to the Illinois Securities Department's complaint. To receive a copy of the FINRA complaint created by Stoltmann Law Offices, please contact the Stoltmann Law Offices at 312.332.4200 or Andrew@StoltLaw.com.
http://www.cyberdriveillinois.com/departments/securities/administrative_actions/2007/march/oscaroverbrey._ops.pdf
Andy Stoltmann
Stoltmann Law Offices
http://www.investmentfraud.pro/
312.332.4200
http://www.cyberdriveillinois.com/departments/securities/administrative_actions/2007/march/oscaroverbrey._ops.pdf
Andy Stoltmann
Stoltmann Law Offices
http://www.investmentfraud.pro/
312.332.4200
Tuesday, November 20, 2007
Latest on Edward May: SEC Charges Him With Fraud...
The latest on Edward May for our clients with claims against him and Gunn Allen...
SEC charges Edward May with fraud
By Bruce Kelly November 20, 2007
Edward May, the flamboyant Detroit area money manager, was charged this morning by the SEC for a committing a massive $250 million fraud that turned as many as 1,200 investors into victims.
The deals offered by Mr. May and his firm, E-M Management Co. LLC, involved shares in bogus Las Vegas casino and resort telecommunications transactions, the SEC said.
The FBI is also investigating the money manager and his firm concerning the series of investments that recently collapsed (InvestmentNews, Oct. 22) .
According to the SEC, Mr. May sold investors shares of limited liability companies that claimed to receive revenue from telecommunications equipment and services contracts with hotels, casinos, resorts and similar establishments, many of which were purportedly located in Las Vegas.
No such contracts ever existed, said the SEC, which filed its civil complaint in U.S. district court in the Eastern District of Michigan.
Mr. May and E-M management raised as much as $250 million between 1998 and July 2007 from investors living in such states as Michigan, California, Florida, Illinois, New York, Ohio and New Jersey.
Mr. May and E-M Management told investors that the LLCs had been contracted to install and provide telecommunications equipment and services to such major hotel chains and casinos as Hilton, MGM Grand, Motel 6, Tropicana and Sheraton, according to the SEC.
Both orally and in writing, May and E-M promised returns in the form of monthly payments to investors for a period as long as 12 to 14 years, and "guaranteed" that investors, at a minimum, would receive the promised payments for approximately the first 20 to 24 months after they invested.
Mr. May and his firm relied on a network of individuals, some of whom organized "investment seminars," to entice investors to invest with E-M, contends the SEC.
Mr. May's attorney, Harold Gurewitz, was not immediately available for comment.
Andrew Stoltmann
Stoltmann Law Offices
312-332-4200
http://www.investmentfraud.pro/
SEC charges Edward May with fraud
By Bruce Kelly November 20, 2007
Edward May, the flamboyant Detroit area money manager, was charged this morning by the SEC for a committing a massive $250 million fraud that turned as many as 1,200 investors into victims.
The deals offered by Mr. May and his firm, E-M Management Co. LLC, involved shares in bogus Las Vegas casino and resort telecommunications transactions, the SEC said.
The FBI is also investigating the money manager and his firm concerning the series of investments that recently collapsed (InvestmentNews, Oct. 22) .
According to the SEC, Mr. May sold investors shares of limited liability companies that claimed to receive revenue from telecommunications equipment and services contracts with hotels, casinos, resorts and similar establishments, many of which were purportedly located in Las Vegas.
No such contracts ever existed, said the SEC, which filed its civil complaint in U.S. district court in the Eastern District of Michigan.
Mr. May and E-M management raised as much as $250 million between 1998 and July 2007 from investors living in such states as Michigan, California, Florida, Illinois, New York, Ohio and New Jersey.
Mr. May and E-M Management told investors that the LLCs had been contracted to install and provide telecommunications equipment and services to such major hotel chains and casinos as Hilton, MGM Grand, Motel 6, Tropicana and Sheraton, according to the SEC.
Both orally and in writing, May and E-M promised returns in the form of monthly payments to investors for a period as long as 12 to 14 years, and "guaranteed" that investors, at a minimum, would receive the promised payments for approximately the first 20 to 24 months after they invested.
Mr. May and his firm relied on a network of individuals, some of whom organized "investment seminars," to entice investors to invest with E-M, contends the SEC.
Mr. May's attorney, Harold Gurewitz, was not immediately available for comment.
Andrew Stoltmann
Stoltmann Law Offices
312-332-4200
http://www.investmentfraud.pro/
Wednesday, November 14, 2007
Ponzi Scheme Fraud & the Recovery Process...
The Bernard L. Madoff fraud has ponzi schemes in the news again. At Stoltmann Law Offices we have represented dozens of investors in lawsuits and FINRA arbitration actions in Ponzi schemes. Just 2 weeks ago, we recovered millions in losses for 2 ponzi schemes created and run through 2 ING financial advisors (See http://www.investmentfraud.pro/ingsettles.asp for more information).
Ponzi fraud is a very common tool utilized by unscrupulous financial advisors like Bernie Madoff. A Ponzi scheme is nothing more than a fraudulent investment operation where abnormally high returns/profits are paid to investors out of the money paid in by subsequent investors, as opposed to net revenues generated by any real business.
These scams are not rare. Unfortunately, brokers and advisors at virtually every major national brokerage firm (Merrill Lynch, Smith Barney, Morgan Stanley, Wachovia, Prudential, American Express) and regional firm (AG Edwards, Edward Jones, Stifel, Robert Baird, Gunn Allen, Stifel Nicolaus, Ameriprise, Linsco, LPL) have had brokers running some version of a ponzi scheme. It is much more common than people might expect. FINRA arbitration actions are the primary method for recovering these fradulent investment losses at brokerage firms. For ponzi schemes run by advisors like bernard Madoff, those claims can be heard in court through a lawsuit assuming there is no binding arbitration clause.
It is named after infamous hustler Charles Ponzi. A Ponzi scheme usually offers abnormally high short-term returns in order to entice new investors. The high returns that a Ponzi scheme advertises (and pays) require an ever-increasing flow of money from investors in order to keep the scheme going.
The system is doomed to collapse because there are little or no underlying earnings from the money received by the promoter. However, the scheme is often interrupted by legal authorities before it collapses, because a Ponzi scheme is suspected and/or because the promoter is selling unregistered securities. As more investors become involved, the likelihood of the scheme coming to the attention of authorities increases.
The scheme is named after Charles Ponzi, who became notorious for using the technique after emigrating from Italy to the United States in 1903. Ponzi was not the first to invent such a scheme, but his operation took in so much money that it was the first to become known throughout the United States. Today's schemes are often considerably more sophisticated than Ponzi's, although the underlying formula is quite similar and the principle behind every Ponzi scheme is to exploit lapses in judgment arising from investor naivete.
Stoltmann Law Offices has represented dozens of investors in FINRA arbitration actions and lawsuits against brokerage firms and brokers where the advisor does something like place an advertisement promising extraordinary returns on an investment – for example 20% for a 30 day contract. The precise mechanism for this incredible return can be attributed to anything that sounds good but is not specific: "global currency arbitrage", "hedge futures trading", "High Yield Investment Programs", Offshore investment", or something similar.
With no proven track record for the investors, only a few investors are tempted, usually for smaller sums. Sure enough, 30 days later, the investor receives the original capital plus the 20% return. At this point, the investor will have more incentive to put in additional money, and, as word begins to spread, other investors grab the "opportunity" to participate. More and more people invest, and see their investments return the promised large returns.
The reality of the scheme is that the "return" to the initial investors is being paid out of the new, incoming investment money, not out of profits. There is no "global currency arbitrage", "hedge futures trading", or "high yield investment program" actually taking place. Instead, when investor D puts in money, that money becomes available to pay out "profits" to investors A, B, and C. When investors X, Y, and Z put in money, that money is available to pay "profits" to investors A through W.
One reason that the scheme initially works so well is that early investors – those who actually got paid the large returns – quite commonly reinvest (keep) their money in the scheme (it does, after all, pay out much better than any alternative investment). Thus those running the scheme do not actually have to pay out very much (net) – they simply have to send statements to investors that show how much the investors have earned by keeping the money in what looks like a great place to get a high return. They also try to minimize withdrawals by offering news plans to investors, often where money is frozen for a longer period of time, for example 50% return per month for one year. They then get new cash flows as investors are told they could not transfer money from the first plan to the second.
The catch is that at some point one of three things will happen:
1) the promoters will vanish, taking all the investment money (less payouts) with them;
2) the scheme will collapse of its own weight, as investment slows and the promoters start having problems paying out the promised returns (and when they start having problems, the word spreads, and more people start asking for their money, similar to a bank run)(this is what happened with Bernard L. Madoff's ponzi scheme);
3) the scheme is exposed, because when legal authorities begin examining accounting records of the so-called enterprise, they find that much of the "assets" that should exist, do not.
Ponzi schemes should be differentiated from some similar, but different types of fraudulent schemes…
1) A pyramid scheme is a form of fraud similar in some ways to a Ponzi scheme, relying as it does on a disbelief in financial reality, including the hope of an extremely high rate of return. However, several characteristics distinguish pyramid schemes from Ponzi schemes:
--In a Ponzi scheme, the schemer acts as a “hub” for the victims, interacting with all of them directly. In a pyramid scheme, those who recruit additional participants benefit directly (in fact, failure to recruit typically means no investment return).
--A Ponzi scheme claims to rely on some esoteric investment approach, insider connections, etc., and often attracts well-to-do investors; pyramid schemes explicitly claim that new money will be the source of payout for the initial investments.
--A pyramid scheme is bound to collapse a lot faster, simply because of the demand for exponential increases in participants to sustain it. By contrast, Ponzi schemes can survive simply by getting most participants to "reinvest" their money, with a relatively small number of new participants.
2) A bubble. A bubble relies on suspension of disbelief and an expectation of large profits, but it is not the same as a Ponzi scheme. A bubble involves ever-rising (and unsustainable) prices in an open market (be that shares of a stock, housing prices, the price of tulip bulbs, or anything else). As long as buyers are willing to pay ever-increasing prices, sellers can get out with a profit. And there doesn't need to be a schemer behind a bubble. (In fact, a bubble can arise without any fraud at all - for example, housing prices in a local market that rise sharply but eventually drop sharply because of overbuilding.) Bubbles are often said to be based on "greater fool" theory.
3) Robbing Peter to pay Paul. When debts are due and the money to pay them is lacking, whether because of bad luck or deliberate theft, debtors often make their payments by borrowing or stealing from other monies they have. It does not follow that this is a Ponzi scheme, because from the basic facts set out there is no indication that the lenders were promised unrealistically high rates of return via claims of unusual financial investments. Nor (from these basic facts) is there any indication that the borrower (banker) is progressively increasing the amount of borrowing ("investing") to cover payments to initial investors (as, again, Ponzi was not the first to do).
Other notable (but lesser dollar) Ponzi schemes include:
1) Sarah Howe, who in 1880 opened up a "Ladies Deposit" in Boston promising eight percent interest, although she had no method of making profits. This unique scheme was billed as "for women only". Howe disappeared with the money from her scam.[2]
2) The novel Chance by Joseph Conrad depicted a Ponzi scheme in 1914 before Ponzi himself had hit the scene. Conrad's scammer "de Barral" offered ten percent interest on deposits in his operation "without system, plan, foresight, or judgement".
3) On March 22, 2000, four people were indicted in the Northern District of Ohio, on charges including conspiracy to commit and committing mail and wire fraud. A company with which the defendants were affiliated allegedly collected more than $26 million from "investors" without selling any product or service, and paid older investors with the proceeds of the money collected from the newer investors. [6]
4) In late 2003, a scheme by Bill Hickman, Sr., and his son, Bill Jr., was shut down. He had been selling unregistered securities that promised yields of up to 20 percent; more than $8 million was defrauded from dozens of residents of Pottawatomie County, Oklahoma, along with investors from as far away as California. [7] Hickman was sentenced to 160 years in state prison.
5) In December 2004, Mark Drucker pleaded guilty to a Ponzi scheme in which he told investors that he would use their funds to buy and sell securities through a brokerage account. He claimed that he was making significant profits on his day trades and that he had opportunities to invest in select IPOs that were likely to turn a substantial profit in a short period of time. He promised guaranteed returns of up to fifty (50%) percent in 90 days or less. In less than two years of trading, Drucker actually lost more than $850,000 in day trading and had no special access to IPOs. He paid out more than $3.6 million to investors while taking in $6.3 million. [8] [9]
6) In June 2005, in Los Angeles, California, John C. Jeffers was sentenced to 168 months (14 years) in federal prison and ordered to pay $26 million in restitution to more than 80 victims. Jeffers and his confederate John Minderhout ran what they said was a high-yield investment program they called the “Short Term Financing Transaction.” The funds were collected from investors around the world from 1996 through 2000. Some investors were told that proceeds would be used to finance humanitarian projects around the globe, such as low-cost housing for the poor in developing nations. Jeffers sent letters to some victims that falsely claimed the program had been licensed by the Federal Reserve and the program had a relationship with the International Monetary Fund and the United States Treasury. Jeffers and Minderhout promised investors profits of up to 4,000 percent. Most of the money collected in the scheme went to Jeffers to pay commissions to salespeople, to make payments to investors to keep the scheme going, and to pay his own personal expenses. [10]
7) 12DailyPro was a version of what is commonly known as a "paid autosurf" program where "investors" deposited money and received an extremely high profit (44%) within a short period (12 days). Charis Johnson created what authorities considered one of the largest modern day versions of the Ponzi scheme. She accumulated a total of over US$1.9 million from the program. More than 300,000 people joined over the course of 8 months, spending over $500 million [13]. When a federal investigation of 12DailyPro took place, its main payment processor, Stormpay, froze all funds related to it. Stormpay has since refused to return any of these funds. On February 24, 2006, the United States Securities and Exchange Commission (SEC) ordered 12DailyPro and its parent company to cease and desist all operations. On February 28, a Los Angeles judge ordered all company assets and records to be turned over to an appointed receiver for investigation. Charis F. Johnson now faces criminal and civil suits from both local and federal agencies.
8) High Yield Investment Programs are related to established economic rules such as supply and demand, material assets that appreciate based on value-added through high-end skills such as high-end electronics, buildings & estates, hotels, technology parks, museums, theater and organic systems such as businesses involved in producing the previously mentioned material assets. HYIPs could involve printing of cards as certificates, with units being transferable to third parties. The monetary value of units rises over time, so most holders of such cards won't want to transfer their units. At the same time, the card can be used as a means of exchange for value making it a form of money. It's like turning the HYIPs into a form of Central Bank and the units it issues become currency.
9) In September 2007, another bank in Second Life called "The Bank" owned by the in-game character "Jasper Tizzy", operated as part of an in-game group of companies known as Atlas Venture Capital (AVC) and Countless Galaxies (CGI), stopped processing customer withdrawals. This was closely followed by the disappearance of Jasper Tizzy and his staff; Paydayloan Lindman and Teanna Nomura. They claimed they could give returns on average of 10% to 20% per month and, like in many of these schemes, they were making good on their claims for several months. The beginning of the end was when a separate venture supported by The Bank, the Kristatos Fashion Mall (KFM), was abandoned by the owner, Teanna Nomura and caused AVC and CGI to prematurely cave in on themselves. As with the Ginko episode, some residents have lost amounts of L$2.5M (around US$10,000) in the scheme and more calls for Linden Labs to clamp down have been raised as a result.
Ponzi schemes are not rare. They are surprisingly common. What happened at Bernard L. Madoff Investment Securities LLC happens much more frequently than people think. Please contact Stoltmann Law Offices in Chicago, Illinois if you have been a victim of a ponzi scheme at a firm like Merrill Lynch, Citigroup Smith Barney, Wachovia, Morgan Stanley, AG Edwards, Stifel Nicolaus, Gunn Allen, Ameriprise, Robert Baird, Linsco Private Ledger (LPL) or other similar firm. The lawsuits and FINRA arbitration claims are the primary method for recovering these fradulent investment losses.
Andrew Stoltmann Esq.
Stoltmann Law Offices
10 S. LaSalle, 35th Floor
http://www.investmentfraud.pro/
312.332.4200
Ponzi fraud is a very common tool utilized by unscrupulous financial advisors like Bernie Madoff. A Ponzi scheme is nothing more than a fraudulent investment operation where abnormally high returns/profits are paid to investors out of the money paid in by subsequent investors, as opposed to net revenues generated by any real business.
These scams are not rare. Unfortunately, brokers and advisors at virtually every major national brokerage firm (Merrill Lynch, Smith Barney, Morgan Stanley, Wachovia, Prudential, American Express) and regional firm (AG Edwards, Edward Jones, Stifel, Robert Baird, Gunn Allen, Stifel Nicolaus, Ameriprise, Linsco, LPL) have had brokers running some version of a ponzi scheme. It is much more common than people might expect. FINRA arbitration actions are the primary method for recovering these fradulent investment losses at brokerage firms. For ponzi schemes run by advisors like bernard Madoff, those claims can be heard in court through a lawsuit assuming there is no binding arbitration clause.
It is named after infamous hustler Charles Ponzi. A Ponzi scheme usually offers abnormally high short-term returns in order to entice new investors. The high returns that a Ponzi scheme advertises (and pays) require an ever-increasing flow of money from investors in order to keep the scheme going.
The system is doomed to collapse because there are little or no underlying earnings from the money received by the promoter. However, the scheme is often interrupted by legal authorities before it collapses, because a Ponzi scheme is suspected and/or because the promoter is selling unregistered securities. As more investors become involved, the likelihood of the scheme coming to the attention of authorities increases.
The scheme is named after Charles Ponzi, who became notorious for using the technique after emigrating from Italy to the United States in 1903. Ponzi was not the first to invent such a scheme, but his operation took in so much money that it was the first to become known throughout the United States. Today's schemes are often considerably more sophisticated than Ponzi's, although the underlying formula is quite similar and the principle behind every Ponzi scheme is to exploit lapses in judgment arising from investor naivete.
Stoltmann Law Offices has represented dozens of investors in FINRA arbitration actions and lawsuits against brokerage firms and brokers where the advisor does something like place an advertisement promising extraordinary returns on an investment – for example 20% for a 30 day contract. The precise mechanism for this incredible return can be attributed to anything that sounds good but is not specific: "global currency arbitrage", "hedge futures trading", "High Yield Investment Programs", Offshore investment", or something similar.
With no proven track record for the investors, only a few investors are tempted, usually for smaller sums. Sure enough, 30 days later, the investor receives the original capital plus the 20% return. At this point, the investor will have more incentive to put in additional money, and, as word begins to spread, other investors grab the "opportunity" to participate. More and more people invest, and see their investments return the promised large returns.
The reality of the scheme is that the "return" to the initial investors is being paid out of the new, incoming investment money, not out of profits. There is no "global currency arbitrage", "hedge futures trading", or "high yield investment program" actually taking place. Instead, when investor D puts in money, that money becomes available to pay out "profits" to investors A, B, and C. When investors X, Y, and Z put in money, that money is available to pay "profits" to investors A through W.
One reason that the scheme initially works so well is that early investors – those who actually got paid the large returns – quite commonly reinvest (keep) their money in the scheme (it does, after all, pay out much better than any alternative investment). Thus those running the scheme do not actually have to pay out very much (net) – they simply have to send statements to investors that show how much the investors have earned by keeping the money in what looks like a great place to get a high return. They also try to minimize withdrawals by offering news plans to investors, often where money is frozen for a longer period of time, for example 50% return per month for one year. They then get new cash flows as investors are told they could not transfer money from the first plan to the second.
The catch is that at some point one of three things will happen:
1) the promoters will vanish, taking all the investment money (less payouts) with them;
2) the scheme will collapse of its own weight, as investment slows and the promoters start having problems paying out the promised returns (and when they start having problems, the word spreads, and more people start asking for their money, similar to a bank run)(this is what happened with Bernard L. Madoff's ponzi scheme);
3) the scheme is exposed, because when legal authorities begin examining accounting records of the so-called enterprise, they find that much of the "assets" that should exist, do not.
Ponzi schemes should be differentiated from some similar, but different types of fraudulent schemes…
1) A pyramid scheme is a form of fraud similar in some ways to a Ponzi scheme, relying as it does on a disbelief in financial reality, including the hope of an extremely high rate of return. However, several characteristics distinguish pyramid schemes from Ponzi schemes:
--In a Ponzi scheme, the schemer acts as a “hub” for the victims, interacting with all of them directly. In a pyramid scheme, those who recruit additional participants benefit directly (in fact, failure to recruit typically means no investment return).
--A Ponzi scheme claims to rely on some esoteric investment approach, insider connections, etc., and often attracts well-to-do investors; pyramid schemes explicitly claim that new money will be the source of payout for the initial investments.
--A pyramid scheme is bound to collapse a lot faster, simply because of the demand for exponential increases in participants to sustain it. By contrast, Ponzi schemes can survive simply by getting most participants to "reinvest" their money, with a relatively small number of new participants.
2) A bubble. A bubble relies on suspension of disbelief and an expectation of large profits, but it is not the same as a Ponzi scheme. A bubble involves ever-rising (and unsustainable) prices in an open market (be that shares of a stock, housing prices, the price of tulip bulbs, or anything else). As long as buyers are willing to pay ever-increasing prices, sellers can get out with a profit. And there doesn't need to be a schemer behind a bubble. (In fact, a bubble can arise without any fraud at all - for example, housing prices in a local market that rise sharply but eventually drop sharply because of overbuilding.) Bubbles are often said to be based on "greater fool" theory.
3) Robbing Peter to pay Paul. When debts are due and the money to pay them is lacking, whether because of bad luck or deliberate theft, debtors often make their payments by borrowing or stealing from other monies they have. It does not follow that this is a Ponzi scheme, because from the basic facts set out there is no indication that the lenders were promised unrealistically high rates of return via claims of unusual financial investments. Nor (from these basic facts) is there any indication that the borrower (banker) is progressively increasing the amount of borrowing ("investing") to cover payments to initial investors (as, again, Ponzi was not the first to do).
Other notable (but lesser dollar) Ponzi schemes include:
1) Sarah Howe, who in 1880 opened up a "Ladies Deposit" in Boston promising eight percent interest, although she had no method of making profits. This unique scheme was billed as "for women only". Howe disappeared with the money from her scam.[2]
2) The novel Chance by Joseph Conrad depicted a Ponzi scheme in 1914 before Ponzi himself had hit the scene. Conrad's scammer "de Barral" offered ten percent interest on deposits in his operation "without system, plan, foresight, or judgement".
3) On March 22, 2000, four people were indicted in the Northern District of Ohio, on charges including conspiracy to commit and committing mail and wire fraud. A company with which the defendants were affiliated allegedly collected more than $26 million from "investors" without selling any product or service, and paid older investors with the proceeds of the money collected from the newer investors. [6]
4) In late 2003, a scheme by Bill Hickman, Sr., and his son, Bill Jr., was shut down. He had been selling unregistered securities that promised yields of up to 20 percent; more than $8 million was defrauded from dozens of residents of Pottawatomie County, Oklahoma, along with investors from as far away as California. [7] Hickman was sentenced to 160 years in state prison.
5) In December 2004, Mark Drucker pleaded guilty to a Ponzi scheme in which he told investors that he would use their funds to buy and sell securities through a brokerage account. He claimed that he was making significant profits on his day trades and that he had opportunities to invest in select IPOs that were likely to turn a substantial profit in a short period of time. He promised guaranteed returns of up to fifty (50%) percent in 90 days or less. In less than two years of trading, Drucker actually lost more than $850,000 in day trading and had no special access to IPOs. He paid out more than $3.6 million to investors while taking in $6.3 million. [8] [9]
6) In June 2005, in Los Angeles, California, John C. Jeffers was sentenced to 168 months (14 years) in federal prison and ordered to pay $26 million in restitution to more than 80 victims. Jeffers and his confederate John Minderhout ran what they said was a high-yield investment program they called the “Short Term Financing Transaction.” The funds were collected from investors around the world from 1996 through 2000. Some investors were told that proceeds would be used to finance humanitarian projects around the globe, such as low-cost housing for the poor in developing nations. Jeffers sent letters to some victims that falsely claimed the program had been licensed by the Federal Reserve and the program had a relationship with the International Monetary Fund and the United States Treasury. Jeffers and Minderhout promised investors profits of up to 4,000 percent. Most of the money collected in the scheme went to Jeffers to pay commissions to salespeople, to make payments to investors to keep the scheme going, and to pay his own personal expenses. [10]
7) 12DailyPro was a version of what is commonly known as a "paid autosurf" program where "investors" deposited money and received an extremely high profit (44%) within a short period (12 days). Charis Johnson created what authorities considered one of the largest modern day versions of the Ponzi scheme. She accumulated a total of over US$1.9 million from the program. More than 300,000 people joined over the course of 8 months, spending over $500 million [13]. When a federal investigation of 12DailyPro took place, its main payment processor, Stormpay, froze all funds related to it. Stormpay has since refused to return any of these funds. On February 24, 2006, the United States Securities and Exchange Commission (SEC) ordered 12DailyPro and its parent company to cease and desist all operations. On February 28, a Los Angeles judge ordered all company assets and records to be turned over to an appointed receiver for investigation. Charis F. Johnson now faces criminal and civil suits from both local and federal agencies.
8) High Yield Investment Programs are related to established economic rules such as supply and demand, material assets that appreciate based on value-added through high-end skills such as high-end electronics, buildings & estates, hotels, technology parks, museums, theater and organic systems such as businesses involved in producing the previously mentioned material assets. HYIPs could involve printing of cards as certificates, with units being transferable to third parties. The monetary value of units rises over time, so most holders of such cards won't want to transfer their units. At the same time, the card can be used as a means of exchange for value making it a form of money. It's like turning the HYIPs into a form of Central Bank and the units it issues become currency.
9) In September 2007, another bank in Second Life called "The Bank" owned by the in-game character "Jasper Tizzy", operated as part of an in-game group of companies known as Atlas Venture Capital (AVC) and Countless Galaxies (CGI), stopped processing customer withdrawals. This was closely followed by the disappearance of Jasper Tizzy and his staff; Paydayloan Lindman and Teanna Nomura. They claimed they could give returns on average of 10% to 20% per month and, like in many of these schemes, they were making good on their claims for several months. The beginning of the end was when a separate venture supported by The Bank, the Kristatos Fashion Mall (KFM), was abandoned by the owner, Teanna Nomura and caused AVC and CGI to prematurely cave in on themselves. As with the Ginko episode, some residents have lost amounts of L$2.5M (around US$10,000) in the scheme and more calls for Linden Labs to clamp down have been raised as a result.
Ponzi schemes are not rare. They are surprisingly common. What happened at Bernard L. Madoff Investment Securities LLC happens much more frequently than people think. Please contact Stoltmann Law Offices in Chicago, Illinois if you have been a victim of a ponzi scheme at a firm like Merrill Lynch, Citigroup Smith Barney, Wachovia, Morgan Stanley, AG Edwards, Stifel Nicolaus, Gunn Allen, Ameriprise, Robert Baird, Linsco Private Ledger (LPL) or other similar firm. The lawsuits and FINRA arbitration claims are the primary method for recovering these fradulent investment losses.
Andrew Stoltmann Esq.
Stoltmann Law Offices
10 S. LaSalle, 35th Floor
http://www.investmentfraud.pro/
312.332.4200
Thursday, November 08, 2007
Edward May/Gunn Allen Investment Scam...
Another top flight Gunn Allen broker behaving badly... Losses are estimated to be as high as $300 million in this ponzi scheme headed by Edward May working through E-M Management Investments and Gunn Allen. For more information, please contact Stoltmann Law Offices @ 312.332.4200.
Andrew Stoltmann
www.InvestmentFraud.PRO.
Pair suspected in Ponzi scam
Of The Oakland Press
Several metro Detroit attorneys are looking for as many as 700 to 1,000 investors who, when combined, might have been scammed out of as much as $300 million.
Andrew Stoltmann
www.InvestmentFraud.PRO.
Pair suspected in Ponzi scam
Of The Oakland Press
Several metro Detroit attorneys are looking for as many as 700 to 1,000 investors who, when combined, might have been scammed out of as much as $300 million.
The investors, many of them Oakland County residents, were victims of a Ponzi scheme allegedly led by Edward May, a resident of the metro Detroit area. May and his company, E-M Management Investments LLC, are under investigation by the FBI.
A Ponzi scheme is a form of investment fraud that pays abnormally high profits to investors. The money, however, comes from the investments of others rather than money generated by actual investment earnings.
Joseph H. Spiegel is one of the attorneys representing the investors. Spiegel, who is investigating the matter in partnership with attorney Anthony V. Trogan, said a complaint has been filed against May's former business colleague, Frank Bluestein, for breach of fiduciary duty, claiming he gave out bad checks without informing May about unregistered securities being sold.
"The complaint claims that Bluestein received commissions and that seems to be illegal, according to Mr. May," Spiegel said. "Bluestein owed a duty not to sell or accept payment from the sale of unregistered securities and acted in his own self-interest, in conflict with the interest of May.
"Bluestein, I am sure, claims a defense and will point the finger back to Mr. May in order to avoid liability not only to Mr. May, but to the people he sold the securities to," Spiegel continued.
According to Spiegel, some of his clients have stated they may lose their homes "because of mortgages (obtained) to buy the Ed May investment."
"This has harmed many retired and elderly persons who could not afford a loss and are dependent upon this money," Spiegel said. "Those who file an arbitration quickly generally have a better chance of recovery than those who wait."
In addition to Southeast Michigan investors, court documents list additional names of people spanning the United States. Popular Las Vegas casinos, including the Bellagio, Caesars Palace, Planet Hollywood Resort and Rio Suite Hotel and Casino, are also listed as creditors, although the nature of their claims has not yet been released.
Bradley Schram, an attorney with Hertz Schram PC in Bloomfield Hills, said May has filed for bankruptcy. Schram explained that attorney David Findling of Royal Oak-based Findling Law was named as assignee for the benefit of May's creditors and now serves as the debtor in possession in the Chapter 11 case.
"We have heard various numbers," Schram said. "The way the pyramid structure works is the new money that is raised is paid to earlier investors, and some of the numbers you see here are almost counted twice. In Oakland County, there was a hearing a couple weeks ago when Mr. Findling was first appointed and the numbers were not verified, but the discussion was that there could possibly be hundreds of investors and hundreds of millions of dollars involved, although no one knows these numbers for sure. That's a matter being investigated by attorneys, the Securities and Exchange Commission and the FBI."
Bluestein, a Highland Township resident, is believed to have had at least 1,500 clients and possibly $10 million in investments, said Kirk Smith, an attorney with Shepherd Smith & Edwards.
The Houston-based law firm specializes in securities regulation and the securities industry.
Smith said they represent a small number of people seeking arbitration and are negotiating to represent others.
No official documents had been filed as of late last week, but Smith said they would seek judgment from the Financial Industry Regulatory Authority, which is the largest nongovernmental regulator for securities companies doing business in the United States.
According to a statement on the law firm's Web site, Bluestein was selling fraudulent investments to people, many of whom were retirees.
The statement goes on to say that a "mastermind of the scheme stated in a sworn statement that the investments were fraudulent and that he had acted on advice of the GunnAllen broker/manager."
Bluestein, Smith said, is claiming he had no idea the shares he was selling were fraudulent.
"Ed May created these things. I think initially these started off as legitimate enterprises and they, like many Ponzi schemes, started off legitimate and turned into Ponzi schemes," he said. "As far as Mr. Bluestein is concerned, he claims he had no idea but that might be evidence of negligence right there."
Bluestein had been a former independent affiliate of GunnAllen Financial for a little more than two years, working as a traditional registered representative, according to officials with the brokerage firm.
He also operated as a broker through a company called Maximum Financial Group Inc., listed as having offices in Waterford Township.
Bluestein resigned in September and was terminated in late October, officials said.
"He submitted his retirement and we, as an organization, determined that in the exercising of our obligations as good regulatory citizens, we could not accept his retirement, but rather should and did terminate him," said David Jarvis, executive vice president and the firm's general counsel.
In a corporate statement from the brokerage firm, officials say they "became aware of potential improprieties in one of its independent contractor locations in Michigan operated by Mr. Bluestein."
The statement goes on to say, "An internal review proactively notified the regulators, and has since learned that purported investments were sold by certain individuals associated with Mr. Bluestein's company, Maximum Financial Group."
Officials with the firm did not "authorize, endorse, sponsor, approve, sanction, participate or benefit in any way from this activity," according to the statement.
It's believed these activities were purposely hidden from GunnAllen Financial officials despite two "comprehensive" on-site branch examinations, according to the statement.
The Michigan Office of Financial and Insurance Services also is investigating Bluestein and May, although the policy of the state agency is not to release any other information about the case, spokeswoman Kathy Fagan said.
Benton K. May is May's attorney and son.
"It's really too early to tell exactly what's going on," Benton May said, referring to the matter as a "business dispute."
"The defendants haven't even filed an answer as of yet," he said. "Things are slow developing in this particular case."
Bluestein's attorney, Matthew Leitman, said his client denies doing anything wrongful in connection with the investments involving May.
Leitman would not comment on specifics, but said Bluestein had been with GunnAllen Financial "for a number of years."
"He invested substantial amounts of his own money and his family's money and lost money and so did family members," Leitman said. "We view him as among the folks who lost money."
Friday, November 02, 2007
Robert Loffredi Raymond Financial UPDATE
Due to calls and inquiries for information into our investigation into Robert Loffredi, Raymond Financial and Linsco's complete failure to supervise him and his fictitious CD scam, we have launched the website http://www.sueloffredi.com/. Please visit the site for more information on investigation into Robert A. Loffredi.
Andrew Stoltmann
http://www.investmentfraud.pro/
Andrew Stoltmann
http://www.investmentfraud.pro/
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