Peregrine Auction Nets .5% of Shortfall

(December 7) An auction of the corporate vehicles, furniture and other assets belonging to disgraced commodity trader Russell Wasendorf of Cedar Falls, Iowa netted $1M.

Although considered successful by the court-appointed receiver and the bankruptcy trustee, it’s half of one percent of the $190M shortfall still owed to 25,000 investors of Wasendorf’s Peregrine Financial Group, which sought bankruptcy protection in July. The “Madoff of the Midwest” is currently awaiting sentencing on charges of mail fraud, embezzlement of about $200M over 20 years, and lying to the regulatory Commodity Futures Trading Commission. Because Wasendorf stole customer funds from legitimate commodity investments, any clawback action by the trustee targeting former investors is less likely. He could receive 50 years.

(Des Moines Register at

Secretly Recording FINRA Arbitration

Faced with proof that FINRA arbitration hearings have been secretly recorded at least three times, FINRA is making an official policy against the practice. These complaints came from the Securities Experts’ Roundtable Inc., a group of expert witnesses, who had their expert testimony leaked outside the hearing rooms.

Of course we agree that recordings should not be made secretly. It raises obvious ethical problems but practical dangers too. Such as the possibility that one side has an unnamed co-counsel stashed in a hotel room somewhere.

That said, it’s worth clarifying that all FINRA hearings are digitally recorded anyway. Parties have the right to bring court reporters into the hearing. Any party should be permitted to make any recording of the process that it wants, so long as everybody knows they are doing it.

FINRA’s official instructions to arbitrators includes this language:

There must be a record kept of every FINRA arbitration hearing. This is an important function, and is required under FINRA rules. It is essential that care be taken to properly record each hearing, and to timely transmit the digital recorder and memory cards to FINRA Dispute Resolution.

Occasionally, the parties request a stenographic record. In such cases, the arbitrator can determine that the stenographic record will be the official record and dispense with the recording of the hearing. If a stenographic record is used, the parties are required to defray the cost of such record and provide FINRA Dispute Resolution with sufficient copies of the transcript for FINRA and the arbitrators.

…There are no “off the record” conversations between the parties and yourself. Record the entire proceeding!

The news of the secret recordings comes from Dan Jamieson, writing in Investment News.

(The complete article can be found here.)

FINRA Files Claim Alleging McKee’s Trail of Fraud

According to a complaint filed by the Financial Industry Regulatory Authority (FINRA) today, Tuesday, February 15th, J. Scott McKee defrauded investors of at least $370,000 and improperly used at least $650,000 of his client’s money for his own benefit. The Eugene Register-Guard reports that McKee left a trail of victims including our clients. You can read the full 27 pages of the FINRA complaint here.

If you had financial dealings with McKee please contact us immediately at 1-800-647-8130. We will tell you if we might be able to help you recover your losses. We are in close contact with the Eugene police and with FINRA. You can reach Detective Mercy McDonald at 541-62-5169, and the contact at FINRA is Anthony Trambley at 301-590-6500

Demand Sent on Behalf of Former Scott McKee Investors

Banks Law Office PC Sends Demand on behalf of former Scott McKee investors in Oregon and Washington for return of losses in Bedrocks and DeWitt/Grand Slam

Our office has sent a detailed settlement demand letter to Berthel Fisher & Co. Investment Services, outlining investment losses of more than $650,000 from illegal investment transactions involving Bedrocks Coffee and DeWitt/Grand Slam. McKee made some of the investments without the prior knowledge or consent of McKee’s clients.

For the other investments at issue, our clients were not told the truth about the so-called investments. Berthel Fisher lawyers have agreed to review and discuss our claims and attempt to settle them. We are hopeful that we can reach an agreement with Berthel Fisher because of the blatant violation of the securities laws and damages suffered by our clients. If we are not able to reach a settlement soon, we will be filing a FINRA arbitration claim for our client group demanding a return of their investment losses.

If you have made any investments with Scott McKee or if you have had a similar experience with another financial advisor, please give us a call or fill out one of our confidential case analysis forms.

Continuing Investigation into James Scott McKee

A group of aggrieved investors, including a church congregation and retired people throughout Oregon, has retained Banks Law Office to recover losses from investing through James Scott McKee and Berthel Fisher. Our office has been investigating Mr. McKee and receiving complaints about him for months and we are now taking action. We have also fully cooperated with the Eugene Police Department Financial Fraud Detectives in their investigation, and we have spent many hours assisting FINRA in its enforcement efforts against Mr. McKee.

Fraud victims often go through a period of denial when they believed that the person who defrauded them was a trusted advisor. Our current clients, they now understand that they have been victims of investment abuse. If you have any doubt that your investments are safe, call toll free at 1-800-647-8130 or contact us for a free consultation.

More Grifphon Alpha Fund victims emerge

Our office has completed two cases representing six investors over losses in the Grifphon Alpha Fund. Even the most trusting investors now understand that the numerous promises made over the past two years by investment advisors, lawyers and fund managers that the fund would pay were completely false.

Now that we have completed two cases, we are assisting the Securities and Exchange Commission by providing information about Grifphon, which was operated by Jusaf Jawed and his associates. We have encouraged the SEC attorneys to take action and seek prison terms for all wrongdoers. We will volunteer whatever time is necessary to see justice done.

If you have questions or concerns about Grifphon, Mr. Banks is available to discuss your situation.

Our Client Awarded $7.8 Million

Following a 3 week jury trial, a Banks Law Office client was awarded $7.8 million in damages regarding legal work performed on a real estate investment. We believe that this is the largest jury verdict for an individual in Multnomah County, Oregon in 2011.

You can read about the outcome in The Oregonian: Portland developer Terry Bean wins $7.8 million malpractice judgment against Schwabe firm.

Banks Law Office helps people recover their investments. If you’ve been the victim of fraud, please call our office at 1-800-647-8130 or contact us for a free consultation for a review of your case.

Retained by Sikh Dharma International

Banks Law Office has been retained by Sikh Dharma International and others to recover $115 million in damages involving a series of complex corporate business transactions that diverted assets from charitable companies. The case is described in a release prepared by our clients, and was reported in the Eugene Register Guard.

Banks Law Office is experienced in recovering losses incurred as a result of lawyer and broker mistakes. We can be reached at 1-800-647-8130 or contact us for a free consultation.

File Individual Claims For Apple REITs

Banks Law Office is actively investigating Apple REITs, certain collateralized mortgage obligations (“CMOs”), and Real Estate Mortgage Investment Conduits (“REMICs”) sold by David Lerner Associates, Inc. ( “DLA”).

This investigation follows a formal complaint filed by FINRA alleging that DLA sold Apple REIT Ten shares “targeting unsophisticated and elderly customers” to buy illiquid securities. Glade M. Knight, the founder, chairman and CEO of Apple REIT Cos., is also being investigated.

We strongly encourage all investors to seriously consider filing individual claims before deciding to participate in a class action lawsuit. In our experience, investors who bring individual cases often recover more money than those who are merely part of a large class. We would be happy to discuss this further with any investors. Banks Law Office has been protecting investors since 1985 and has years of experience with these types of claims. Please contact us with your questions and concerns. Consultations are free.