Investment Litigation Blog

Today is the last day of the chairmanship of Mary Schapiro at the SEC. As investor advocates, let’s look ahead at major issues for the SEC in 2013. It’ll be a busy year. There are at least five large-scale reforms under way, all with a bearing on the safety of equity investments. Mary Schapiro took…

(December 13) The former CFO of Provident Royalties was indicted today by a federal grand jury on charges of conspiracy to commit mail fraud. W. Mark Miller, 59, faces a possible 20 year sentence. Miller’s indictment is the latest legal reckoning in the 2009 collapse of the Dallas oil and gas investment fraud (and partial…

(December 12) Legal action by Massachusetts securities regulators serves as a warning to investors about an entire class of investments. Charges were filed against LPL Financial LLC, the largest organization of independent financial advisors in the U.S., on the sales of nontraded REITs offered by Inland American Real Estate Trust, the largest nontraded REIT in…

(December 11) Former Oregon Governor Neil Goldschmidt filed a lawsuit in Multnomah County Circuit Court indicating that he and his wife were the victims of financial fraud. The suit accuses the Voyager Financial Group of Little Rock, Arkansas of accepting $600,000 from Goldschmidt in return for an income stream derived from Voyager’s business of buying…

(December 11) A former U.S. Congressman for Oregon’s Second District was sentenced to a year and a day in federal prison on tax evasion charges and ordered to repay $3.5 million to defrauded investors, along with $138,470 in back taxes. Republican Wes Cooley, now 80 years old, served one term beginning in 1994. He withdrew…

(December 11) Prominent U.S. District Judge Lewis Kaplan has criticized the current system of bringing class action suits in securities cases. Speaking at a conference on securities litigation organized by the New York Bar, Kaplan pointed to causes ranging from legal precedent (the restrictive “fraud-on-the-market” reasoning of the 1988 Supreme Court decision in Basic Inc…

FOR IMMEDIATE RELEASE THREE MORE TRADERS IMPLICATED IN GRIFPHON PONZI SCHEME As reported in a December 6th article in The Oregonian, the Securities and Exchange Commission has charged three more men with securities violations in connection with Grifphon Asset Management. The Grifphon Alpha Fund was the $37 million hedge fund scheme run by Yusaf Jawed…

(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,…

(December 6) U.S. District Judge Robert Sweet in Manhattan has named lead plaintiffs in two separate suits resulting from the Facebook IPO in May. One suit against NASDAQ contends that investors lost money due to the exchange’s computer malfunctions on offering day, preventing them from liquidating their positions on the stock’s immediate and dramatic correction.…

FOR IMMEDIATE RELEASE “ZEEK REWARDS” PONZI SCHEME WILL BREAK NEW GROUND IN CLAWBACK LITIGATION The collapse of the online Ponzi scheme called “Zeek Rewards” this past August threatens to break new ground in the area of Ponzi clawback litigation. With an estimated 800,000 victims identified, another 100,000 former affiliates are being targeted by the receiver…