Lubiner, Schmidt & Palumbo has over more than 30 years experience in practicing securities law and, in particular, handling securities fraud cases. Warren, New Jersey investors who may have lost money in their brokerage and/or retirement accounts should look to Lubiner, Schmidt & Palumbo for legal assistance. You can be the victim of securities fraud! Recently, the New Jersey Attorney General and the Bureau of Securities charged a Warren resident and his Morris County investment advisory firm, Financial Planning Advisors LLC in Chatham, with securities fraud relating to the sale of $6.1 million in unregistered securities. According to the New Jersey Bureau of Securities the investment advisor sold unregistered securities to at least eight investors, some of whom were elderly and retired. The Warren investment advisor was also charged with misappropriating investor assets to cover personal expenses. The unregistered securities were connected with promissory notes that offered a fixed interest rate well above the benchmark available in the bond market in the time. The Bureau of Securities stated in its enforcement action that from 2008 to 2015 the Warren investment advisor sold promissory notes that were presented as issues of local diners and a developer. In reality the promissory notes were backed by the owners of the businesses, not the business themselves. The business owners also had undisclosed financial relationships with the Warren investment advisor. Interest from the promissory notes was in some instances paid directly out of the bank account of the Warren investment advisory firm. The Warren investment advisor and his firm were fined $500,000.00 and had their registrations revoked.
The securities group at Lubiner, Schmidt & Palumbo includes a former New York City Assistant District Attorney, a former in house attorney at a Wall Street investment firm and a former stockbroker. The experienced securities litigation attorneys at Lubiner, Schmidt & Palumbo have appeared in courts and arbitrations across the country, including New York and New Jersey. The firm’s attorneys have also handled hundreds of securities arbitrations administered by the Financial Industry Regulatory Authority (“FINRA”). Warren investors can rest assured that the securities fraud attorneys at Lubiner, Schmidt & Palumbo know how brokerage firms work: how branch offices handle customer transactions and supervise their employees; and the industry and internal regulations that firms are obligated to follow. Most importantly, the securities attorneys at Lubiner, Schmidt & Palumbo know what questions to ask and what documents to review in order to find out if an investor’s rights have been violated. Warren investors who have incurred losses in their accounts will find that the experienced securities fraud attorneys at Lubiner, Schmidt & Palumbo will be aggressive advocates on their behalf.
There are various forms of securities fraud perpetrated on unsuspecting investors. Investors are often the victims of excessive trading/churning. If a client has trouble following the amount of trading occurring in her account because of the sheer number of trades, the client’s account may be excessively traded. A broker churns a client’s account when the number of trades, and the related commission charges, benefit the broker more than the client.
Another area for the potential abuse of investors concerns margin trading. The brokerage industry allows a customer to borrow funds from her investment firm, using the securities held in the customer’s account as collateral for the loan. By increasing the customer’s ability to acquire more securities in her account through margin, the customer can potentially increase any trading profits. However, the opposite is true: using margin also increases the potential for losses if the market moves against the customer’s position. Margin trading is unsuitable for many investors. It should only be used sparingly and by sophisticated investors.
Unfortunately, investors also suffer at the hands of unscrupulous financial advisors who engage in more complex securities fraud. Ponzi schemes are complex but not unheard of ruses designed to relieve investors of their assets. In a Ponzi scheme the financial advisor entices investors to invest in some type of program, often involving unusual investments such as promissory notes, unregistered private stock, etc. The bad actor typically uses investors’ funds for personal purchases, such as cars, vacations and homes. He pays “returns” to initial investors from the funds entrusted to him by later investors. The scheme eventually unravels when there are no new investors to make payments to the earlier investors.
Lastly, the financial abuse of senior citizen clients is nowadays an unfortunate occurrence in the securities industry. See here, here and here. Elderly investors are all too frequently the victims of brokers who view their retirement funds as a source of income – for the broker! Elderly investors who may have difficulty reading their monthly account statements or the possibly unsuitable investment their broker is recommending to them are susceptible to such securities fraud.
The experienced securities fraud attorneys at Lubiner, Schmidt & Palumbo stand ready to assist Warren investors who believed they have suffered financial damages because of broker misconduct. Contact us for a free consultation.