The securities litigation and regulatory law firm of Lubiner, Schmidt & Palumbo can help Springfield, New Jersey investors who have questions or concerns regarding the handling of their retirement or brokerage accounts. Only last year an advisor from Springfield pleaded guilty to financial crimes and securities fraud in New Jersey federal court. Gary Basralian, 43-year industry veteran, was an independent investment advisor at Royal Alliance Associates, Inc., in Jersey City. In August last year he pleaded guilty to wire fraud and investment advisor fraud. The government alleged that from July 2007 through November 2017 Basralian induced victims to the money from the investors to buy a BMW and pay off his credit cards. In one instance investment advisor Basralian provided a fabricated spreadsheet to a client who was questioning his account value. Basralian stole approximately $2 million from his customers. Springfield investors should be wary of investment advisors making promises that are too good to be true. The securities lawyers at Lubiner, Schmidt & Palumbo have handled hundreds of securities arbitrations run by the securities industry’s main self-regulatory agency, FINRA. The firm’s securities litigation lawyers have also appeared in securities matters in courts in New York and New Jersey. The attorneys at the firm include a former Brooklyn Assistant District Attorney, a former stockbroker and an attorney who worked in the legal department of a major securities firm. The securities group at the firm has an in depth understanding of the rules and regulations that govern the securities industry. They fully understand how securities firms and their employees are required to operate to insure the maximum protection of Springfield investors from securities fraud. Only last year an advisor from Springfield pleaded guilty to financial crimes in New Jersey federal court. Gary Basralian, 43-year industry veteran, was an independent investment advisor at Royal Alliance Associates, Inc., in Jersey City. In August last year he pleaded guilty to wire fraud and investment advisor fraud. The government alleged that from July 2007 through November 2017 Basralian induced victims to the money from the investors to buy a BMW and pay off his credit cards. In one instance Basralian provided a fabricated spreadsheet to a client who was questioning his account value. Basralian stole approximately $2 million from his customers. Springfield investors should be wary of investment advisors making promises that are too good to be true.
Securities fraud comes in many forms. Stockbrokers are required by law to “know their customer.” Advisors need to know the financial background of a client and the client’s tolerance for risk and investment objectives prior to making an investment recommendation. If an advisor provides a recommendation without fully comprehending her client’s financial background and investment experience, an unsuitable trade may occur. Any customer losses as a result of such a trade are recoverable.
Stockbrokers are also required to disclose all material facts regarding any proposed investment they show to their customers. Failure to do so could result in misrepresentations/omissions to the client. For instance, if a broker fails to tell his client about a back end sales charge on the early redemption of an annuity, that could be deemed an omission by the broker and client can recover any damages resulting from the omission. If a broker misrepresents the risks involve with a product a client can recover any losses resulting from the misrepresentation.
Securities industry regulations mandate that financial advisors discuss proposed investments with clients before entering any orders regarding that investment. Failure to obtain the customer’s consent prior to entering an order is considered unauthorized trading. If there are any losses resulting from an unauthorized trade a client can recover those losses.
Springfield investors can also be the victims of unscrupulous financial advisors who engage in more complex securities fraud. Ponzi schemes are complicated ruses designed to dupe unsuspecting investors. In a Ponzi scheme the financial advisor promotes an unusual financial program, often involving suspect investments such as high interest paying loans, unregistered private stock, etc. The broker typically uses investors’ funds for personal purchases, such as cars, expensive jewelry and vacations. “Returns” are paid to initial investors from the funds obtained from later investors. The scheme implodes when there are no additional investors to make payments to the earlier investors.
Springfield investors should be wary of the many complex investment products that are available in the market. Exchange traded funds (“ETFs”) are popular investment vehicles that are packaged similar to mutual funds. They are comprised of an underlying “bundle” of securities such as debt, stocks, etc. ETFs usually are comprised of securities from a specific sector of the economy. They are priced daily and trade on exchanges similar a common stock.
The problem of suitability arises when firms sell leveraged and inverse ETFs to customers. Leveraged ETFs utilize the underlying basket of securities as collateral to acquire additional securities for the basket. While this may lead to increased profits, it may also result in increased risk if the market moves against the leveraged ETF.
Inverse ETFs use derivative products so that the ETF performs opposite to the performance of its underlying basket of securities. This makes inverse ETFs a trading vehicle meant for sophisticated investors; they are intended to be held for one day only. Inverse ETFs are not suitable for many Springfield customers.
Springfield investors who question whether their brokerage account has been mishandled have the experienced securities litigation and regulatory attorneys at Lubiner, Schmidt & Palumbo a phone call away. Contact Lubiner, Schmidt & Palumbo for a consultation.