Banks Talks Aequitas in New Oregonian Article

Samuels Yoelin Kantor attorney Bob Banks was featured again in the Oregonian this Sunday. The article, by Jeff Manning, focuses on the the ongoing Aequitas debacle. Also highlighted in the piece is latest case that Banks filed in Seattle last week for a group of investors who lost $11 million.

In the article, Manning states “Bob Banks, a Portland securities lawyer, is representing 18 investors in Washington and California who were clients of Strategic Capital and Private Advisory Group, investment advisors based in Gig Harbor and Redmond, Wash., respectively. Strategic Capital got into trouble with the Securities and Exchange Commission in 2014. The company and its co-founder, Gary Price, were sanctioned by the agency for engaging in prohibited transactions…. Bank’s 18 clients agreed to invest between them more than $11 million in Aequitas. They claim Aequitas’ ownership of Private Advisory Group was never disclosed to them.”

Banks is quoted, saying that “when our clients hired Private Advisory Group, they trusted that they were getting unbiased professional investment advice… In fact, PAG was secretly owned by Aequitas. Our clients had no idea that they were  actually being advised by Aequitas to invest in Aequitas.”

Be sure to read the full article.

For more information about the ongoing Aequitas case, check out the Investor Defender Aequitas Investor Information Center.

Aequitas Investor Updates

                  UPDATE: We have created a site specific hub for investors wanting information about the Aequitas Situation.

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Recent Concerns:

 In the last two weeks, we have been contacted by investors  around the country who were sold investments in the Aequitas Income Opportunity Fund II, LLC in 2015 and into 2016.  This was at a time when the Securities and Exchange Commission was investigating Aequitas, when Aequitas was unable to make payments on its private notes to lenders, and when the Consumer Financial Protection Bureau was investigating Aequitas for its lending practices. We are at a loss to understand how professional Registered Investment Advisory firms and their investment advisors would put their clients’ retirement money into the Income Opportunity Fund II (or any Aequitas investment) in 2015 and 2016 in light of those events.   We also question how Aequitas and its accountants and legal advisors could offer those investments without amending or supplementing their written disclosures to reflect Aequitas’s list of new problems.

Early Aequitas Warnings.

Investor rights attorney Bob Banks (click here for full biography)  has been following Aequitas since 2011, when a  high net worth client asked for advice on whether an investment in secured subordinated promissory notes issued by Aequitas Commercial Finance, LLC Fund was a safe investment.  After reviewing the prospectus for that investment, Banks strongly advised his client not to make the investment.  Among other things, Banks told his client that, contrary to the oral statements that were made to him, the Aequitas fund was not comprised of truly “secured” notes because other creditors would be paid before investors per the subordination agreements tied to the notes.  Additionally, Banks noted, the Commercial Finance LLC notes involved loans to companies that were not able to get financing from traditional financial institutions, making them more of a credit risk.  The “security” that was touted on some of the loans was equipment whose true value was not disclosed and may have been worth less than the loans they secured.  And, the “security” was based on personal guarantees from persons of unknown credit reliability.  Finally, Banks advised his client of the levels of fees charged to investors in the Commercial Finance LLC Fund, which is a common denominator running through all of the Aequitas investments Banks has reviewed.

Since then, Mr. Banks, associate attorney Darlene Pasieczny, and others on the team at Samuels Yoelin Kantor have followed Aequitas’s growth decline.

What Now? Primer On The Laws Governing Investment Advisors and Issuers of Investment Securities.

It is against the law to sell investments by means of misrepresentations of fact or by omitting to state important facts that a reasonable investor would want to know about. The rules governing FINRA-licensed financial advisors requires that the advisor understand any investment he or she recommends, and state that advisors cannot recommend any investment that is not suitable to the investment objectives and risk tolerance levels of the investor.  The law also provides that Registered Investment Advisors have a fiduciary duty to their clients.  That means, first and foremost, that they must place their clients’ interests ahead of their own interests.  In other words, they cannot recommend investments that pay high commissions and fees if it is not in their clients’ best interest.  We believe that Aequitas investments were sold in violation of the securities laws and the fiduciary responsibility laws, and that the investors we have agreed to represent are entitled to a refund of their investments, together with interests and their attorney fees. We are preparing to pursue those claims for investors in the Aequitas Income Opportunity Fund II and all other Aequitas investments that were misrepresented to individuals and institutions.

If you have questions about your investment and what you should do, or if you have information to share, please contact our office at 800-647-8130 or by email at bbanks@samuelslaw.com

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George Merhoff and Energy Stocks – The Investigation Continues

The Investigation of Klamath Falls Financial Advisor George Merhoff Jr. and Cetera Investments, Pacific West Securities, Inc. Continues

Customer Concerns Grow About Energy Stock Concentration and George Merhoff

Our office continues to investigate Cetera Investments and its representative George Merhoff Jr. Since our last reporting, even more investors have called us to report that they suffered significant losses in their accounts as a result of having virtually all of their investments in energy stocks. We continue to evaluate how widespread this problem is for our clients and potentially others who were customers of George Merhoff. Mr. Merhoff is currently a registered representative of Cetera Investments, and was previously a registered representative of Pacific West Securities, Inc.

If you are or were a customer of George Merhoff and are willing to share your information with us that might help us in this investigation, or if you have lost money in another investment or have concerns about the conduct of another financial advisor, please call our office at 800-647-8130 for a confidential, and free no obligation consultation.

Is Your Investment Portfolio Over-Concentrated in Energy Stocks?

Here is why we are conducting our investigation: When a portfolio is heavily weighted in one particular industry sector, we refer to it as a non-diversified, over-concentrated account. Over-concentration increases volatility and risk in investment portfolios. Licensed securities stockbrokers and have an obligation under the law and FINRA Rule 2110 to recommend only suitable investments and trading strategies, based upon the particular customer’s risk tolerance, investment objectives, investment experience, time frame, and other factors when recommending an investment. If a broker recommends the same types of concentrated energy sector portfolios to a broad array of clients, regardless of their needs for safety and moderation, that suggest that the securities laws may have been violated.

What is FINRA and what is the Suitability Rule?

FINRA (the Financial Industry Regulatory Authority) is the self-regulatory organization that is authorized by Congress to regulate the securities industry.

That includes brokers and brokerage firms. FINRA has various rules to do this including Rules 2110 and 2111, which provide that a broker’s investment recommendations must be “suitable” for the customer. Suitability includes reasonable-basis suitability (that the investment or investment strategy is suitable for at least some investors), customer-specific suitability (the recommendations are suitable for that specific customer), and quantitative suitability (that a series of recommended transactions, even if suitable in isolation, when considered together are not excessive and unsuitable for that customer). Violations of the FINRA suitability rules may implicate other laws such as negligence and breach of fiduciary duty, and financial losses caused by the unlawful conduct may be recoverable by the investor.

Do you have questions about losses in accounts managed by Cetera Investments or George Merhoff?

The fact that you invested with Mr. Merhoff or Cetera does not necessarily mean that there was wrongdoing. However, if your account was over-concentrated in energy stocks and you did not ask for those investments, we would like to hear from you. Bob Banks, a nationally recognized securities attorney, has fought for investors in court and FINRA arbitration since 1985. He has successfully represented investors in over-concentration cases where there has been a failure to diversify investments. He leads the Investor Defenders practice group at Samuels Yoelin Kantor LLP. If you have lost money in an investment, or if you have any concerns about the conduct of your financial adviser, please contact us, or call our office at 800-647-8130 for a free no obligation consultation.

Energy Stocks: Problems with Cetera Investments and George Merhoff

Investigation: Cetera Investments and George Merhoff

At the request of our clients, we are investigating Cetera Investments and its representative George Merhoff Jr. regarding concerns that the investment portfolios held at that firm were overly concentrated in energy stocks. Investors report to us that they have suffered significant losses as a result of having virtually all their investments in energy company investments. We are evaluating how widespread the problem is for our clients.  We also want to compare similarities of our clients’ investment portfolios to those of other clients of Cetera Investment where George Merhoff was the advisor. Please feel free to contact our office if you are willing to share information that might assist our clients and us in this investigation. You may remain anonymous if you prefer.

Is Your Account Concentrated In Energy Stocks?

Here is why we are conducting our investigation: When a portfolio is heavily weighted in one particular industry sector, we refer to it as a non-diversified, over-concentrated account. Over-concentration increases volatility and risk in investment portfolios. Licensed securities stockbrokers and have an obligation under the law and FINRA Rule 2110 to recommend only suitable investments and trading strategies, based upon the particular customer’s risk tolerance, investment objectives, investment experience, time frame, and other factors when recommending an investment. If a broker recommends the same types of concentrated energy sector portfolios to a broad array of clients, regardless of their needs for safety and moderation, that suggest that the securities laws may have been violated.

FINRA BrokerCheck Reveals Customer Complaints

Mr. Merhoff and Cetera are both registered with the Financial Industry Regulatory Authority. Mr. Merhoff’s (CRD#2918171) FINRA BrokerCheck report reveals six prior disclosure events. He previously was registered with Pacific West Securities Inc. in Klamath Falls, Oregon. Cetera Investment Services (CRD#15340) operates out of St. Cloud Minnesota, and has offices in Oregon. Their BrokerCheck report shows 26 disclosure events including claims of breach of fiduciary duty and failure to supervise.

Do you have questions about losses in accounts managed by Cetera Investments or George Merhoff?

The fact that you invested with Mr. Merhoff or Cetera does not necessarily mean that there was wrongdoing. However, if your account was over-concentrated in energy stocks and you did not ask for those investments, we would like to hear from you. Bob Banks, a nationally recognized securities attorney who is listed in SuperLawyers and Best Lawyers In America, has fought for investors in court and FINRA arbitration since 1985.  He has successfully represented investors in over-concentration cases where there has been a failure to diversify investments. He leads the Investor Defenders practice group at Samuels Yoelin Kantor LLP. If you have lost money in an investment, or if you have any concerns about the conduct of your financial adviser, please contact us or call our office at 800-647-8130 for a free no obligation consultation.

Investor Alert: Kevin Winder Lesson – Beware of Promised High Return Investments

Oregonian article alerts investors to the dangers of high return investments

Securities attorney Robert Banks and Chief of Enforcement at the Division of Finance and Corporate Securities Consumer & Business Services Department (DFCS), Van Pounds,  were both quoted in Molly Young’s recent Oregonian article about high return investments and Salem investment adviser Kevin Winder.  Winder lost his license for selling promissory notes to clients in businesses in which he had a personal  interest. Misrepresenting investments is not a new storyline, but it is uniquely tragic for every new set of victims. You can read the full story here.

Use caution when advisors recommend alternative Investments with high return rates

As a general rule Banks says, “If you can’t sell your investment at will, and you can’t find out its true value on any given day, then you should avoid it. Some private investments are certainly legitimate, but so many of them involve far more risk than the investor understands. Don’t risk it unless you really understand the potential for loss.”

Investor Defender attorneys Robert S. Banks, Jr. and Darlene Pasieczny represent investors in securities industry disputes in FINRA arbitrations across the U.S. Banks himself has over 33 years of experience in securities litigation and FINRA arbitration, and has served multiple times on the National Arbitration and Mediation Committee, an advisory board to FINRA on its rules, regulations, and procedures.  We know the rules, and we fight for our clients in recovering investment losses. Contact us at 800.647.8130

Investor Alert: Complaints Against Sagepoint Financial Advisor Daryl Richard Lemon

Investors may have claims against Daryl Richard Lemon (CRD 2473133), a broker with Sagepoint Financial. He submitted another letter of Acceptance, Waiver & Consent (AWC) to FINRA this week after the most recent allegations involving his actions with an elderly customer’s account.  According to Lemon’s BrokerCheck report, this is not the first time he has been investigated for misconduct. Mr. Lemon’s report includes allegations of excessive fees  and unsuitable recommendations, among others.  He has been barred from association with any FINRA member in any capacity.

If you are concerned about advice you received from financial advisor Daryl Richard Lemon of Sagepoint Financial, contact our office at 800.647.8130 or info@investordefenders.com.

Your choice of attorney could be the most important step you take in recovering your loss.

Investor Defender attorneys Robert S. Banks, Jr. and Darlene Pasieczny represent investors in securities industry disputes in FINRA arbitrations across the U.S. Bob Banks himself has over 33 years of experience in securities litigation and FINRA arbitration, and has served multiple times on the National Arbitration and Mediation Committee, an advisory board to FINRA on its rules, regulations, and procedures.  We know the rules, and we fight for our clients in recovering investment losses. Contact us at 800.647.8130

Investor Defenders are the securities litigation practice group at Samuels Yoelin Kantor, LLC.

FINANCIAL ALERT: Michael Oppenheim Charged With Fraud

Investor Defender Attorneys encourage investors who had money with Michael Oppenheim when he was with J.P. Morgan Chase to call us at 800.647.8130. We can help you understand your options for recovery of your investment.

Recent news reports reveal that Oppenheim effectively stole more than $20 million from customers. Oppenheim convinced clients to allow millions of dollars in transfers from their accounts with promises that he would invest the funds in low-risk bonds.

The SEC’s complaint alleges that Oppenheim took intentional action to conceal his fraud.  Evidence suggests that he created false account statements and transferred money from one customer to another to replenish missing dollars.The SEC and the FBI continue to investigate this situation. Investor Defender attorneys will be focused on helping investors explore their options for recovery.

Investor Defender attorneys Robert S. Banks, Jr. and Darlene Pasieczny represent investors in securities industry disputes in FINRA arbitrations across the U.S.   Bob Banks himself has over 33 years of experience in securities litigation and FINRA arbitration, and has served multiple times on the National Arbitration and Mediation Committee, an advisory board to FINRA on its rules, regulations, and procedures.  We know the rules, and we fight for our clients in recovering investment losses. Contact us at 800.647.8130

Investor Alert – Pacific West Capital Group and Owner Andrew Calhoun IV Charged With Fraud in Sale of Life Settlement Investments

We are investigating Pacific West Capital and their sales agents after the SEC announced fraud charges related to their sale of life settlements. Investors with life settlement investments are encouraged to contact us at 800.647.8130 or by email at info@investordefenders.com.

The SEC alleges that Pacific West and Andrew B. Calhoun IV, a life insurance agent, raised $100 million from investors who purchased life settlement contracts.  The alleged fraud occurred when Pacific West used proceeds from the sale of new life settlements to continue funding life settlement investments sold years earlier, without informing would-be buyers of this practice.

According to the SEC, Calhoun and West used false and misleading statements about the risk of the life settlements, and they misled investors as to the annual returns. They are charged with violating broker-dealer and anti-fraud securities registration provisions of the federal securities laws.

Also named as defendants are PWCG Trust, which held and serviced the insurance policies and five sales agents of Pacific West: Brenda C. Barry and her company BAK West, Andrew B. Calhoun Jr. of Anderson, Eric C. Cannon and his company Century Point, Michael Dotta, and Caleb A. Moody.

We have handled a number of life settlement cases with death benefits ranging from $50,000 to $4.5 million.   We’ve found life settlements to be an area where fraud and misrepresentation frequently occurs.

If you purchased life settlements from Pacific West Capital Group and have questions about your investment, contact us to learn more. We represent individual and institutional investors nationwide in FINRA arbitration and in court since 1985.

LPL’s Trail of REIT Sales Draws Complaints – Recover your LPL Loss

Investment News reported today that LPL Financial is being asked to pay $3.6 million in investor repayments and fines. The state of New Hampshire and LPL financial on Monday slapping LPL with a $1 million fine and $200,000 in investigative costs in addition to the $2.4 million in buybacks and restitution for clients.The state alleges unsuitable sales of real estate investments to elderly clients and adds that LPL failed to supervise its agents.

This is not  the first time that LPL has been in the news for problems with REITs. In March of 2013 Investment News reported that the Montana State Auditor’s Department was concerned with the sale of REITs to unsophisticated investors. The New York Times collaborated the story and also questioned LPL’s broader compliance efforts.

We applaud The New Hampshire Bureau of Securities and the Montana State Auditor’s Department for taking action, and wish other state securities regulators would do the same.  Unfortunately, the New Hampshire action can only benefit New Hampshire investors.  Our firm has successfully represented investors nationwide in claims against LPL Financial and other firms selling non-traded REITS, both in court and in the FINRA arbitration process.   Our claims have most commonly been based on the fact that our clients were not told that the REITs and other so-called alternative investments they were sold could not be sold in the public market, and were laden with undisclosed fees.   We continue to investigate firms that sell these products and welcome calls from investors with questions about their investments that they cannot sell.