Fort Lee Investors
Lubiner, Schmidt & Palumbo is local securities litigation and regulatory firm that stands ready to assist Fort Lee, New Jersey investors who have experienced financial losses. The securities attorneys at the firm have handled securities matters in courts across the country, including New Jersey and New York. The securities group at the firm has also appeared in hundreds of securities arbitration cases overseen by the Financial Industry Regulatory Authority (“FINRA”). The securities attorneys at Lubiner, Schmidt & Palumbo have over thirty years experience handling securities litigation and regulatory matters. Included in the attorneys of the securities group of the firm who are ready to serve Fort Lee investors are a former New York criminal prosecutor, a former stockbroker and an attorney who practiced law in house at a major brokerage firm. Due to Fort Lee’s proximity to Wall Street, the town is home to many broker dealers and Fort Lee has unfortunately seen instances of securities fraud. In 1986 Fort Lee Savings and Loan was nearly wiped out after the collapse of securities firm Beville Bresler. Bevile Bresler traded in government securities and carried out a securities fraud involving banks, such as Fort Lee Savings, as well as municipalities and other institutions. In what was at the time one of the largest securities fraud cases in American history, Bevile Bresler ended up owing investors $144 million more than it had in assets. Fort Lee Savings was said to have lost $40 million alone in the securities fraud scheme. Another example was in April 2004 involving Clover Defense Partners, based in Fort Lee. The New Jersey Attorney General charged three individuals from towns in Bergen County with securities fraud in connection with the sale of fake defense company stocks. The civil action against Clover Defense Partners was a securities fraud case that was international in scale with over 170 foreign investors involved.
Lubiner, Schmidt & Palumbo securities fraud attorneys understand federal and state securities laws and the industry regulations that dictate how financial firms conduct their business. Fort Lee investors who have suffered financial losses at the hands of unscrupulous, incompetent or simply lazy brokers can rely upon the experienced securities litigation attorneys at Lubiner, Schmidt & Palumbo to obtain compensation for any losses incurred in their brokerage and/or retirement accounts.
Securities fraud is a broad term that includes many different improper activities of brokerage firms and their employees. For instance, brokers are required to discuss proposed investments and have the consent of a client before entering an order in a client’s account. Failure to get that prior consent can be deemed unauthorized trading. Any losses that a Fort Lee client incurs as the result of an unauthorized trade can be recovered.
Securities industry rules also require that brokers “know their customer.” They must learn the financial background of a customer, the customer’s investment experience, risk tolerance and investment objectives before making an investment recommendation. If a broker makes a recommendation to the client without a complete understanding of the client’s financial background and prior investment experience, that may lead to an unsuitable trade. Any losses the customer incurs as a result of that unsuitable trade are recoverable.
Another area in which Fort Lee investors may need the expertise of Lubiner, Schmidt & Palumbo involves the complex investment products now being marketed by brokerage firms. Structured products are investments that consist of an underlying “basket” of securities such as bonds, commodities, etc., linked to a derivative security, such as an option. They are issued by large financial institutions such as banks and guarantee the return of principal plus some rate of return. Some of these products are credit default swaps (“CDS”) and collateralized mortgage obligations (“CMOs”).
However, these products are actually the unsecured debt of the issuer. If the issuer goes bankrupt, the notes will likely fail. The instruments are very illiquid and meant to be held as a long-term investment. The initial interest rate is guaranteed for only a defined period. When it is reset the new rate can be as very low, sometimes as low as zero.
These notes are complex investments and may not suitable for most retail clients.
Other now popular but sophisticated investment products include Real Estate Investment Trusts (“REITs”). REITs are created by bundling income producing properties such as hotels, office complexes, hospitals, etc. They are comparable to mutual funds and trade on major exchanges. Non-traded REITs are an entirely different investment. They are not traded on national exchanges and are meant to be held eight years or longer. Therefore, they are very illiquid. There is a limited market for their sale prior to maturity. If sold before maturity, the sales proceeds will be substantially below the purchase price. Non-traded REITs are not suitable for many Fort Lee investors.
A recurring problem in the securities industry involves elder abuse. Industry regulators have passed new rules to curb instances of the abuse of elderly investors but such reprehensible conduct continues to occur. See here, here, here and here. Elderly investors may have difficulty understanding account statements or not fully appreciate the risks entailed in investments presented to them by their financial advisors. If you are a Fort Lee senior citizen, or a friend or relative of one, and have questions concerning the handling of your account, you should consult the experienced securities lawyers at Lubiner, Schmidt & Palumbo.
Fort Lee investors who have suffered investment losses, or question whether their brokerage account has been mishandled, have the experienced securities fraud attorneys at Lubiner, Schmidt & Palumbo to help them recover any losses. Contact Lubiner, Schmidt & Palumbo for a consultation.