Articles Posted in Industry Headlines

(December 14) Crowdfunding advocates and entrepreneurs continue to eagerly monitor the progress of regulators at FINRA, as it develops interim rules to allow the advertisement and sale of equity securities online. “Funding portals” as authorized under the JOBS Act signed in April remain illegal until regulation is complete. The most optimistic projection for having rules…

(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…

(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.…

(December 5) Two recent scientific studies may help explain why the elderly tend to fall victim to financial fraud in disproportionate numbers. In 2009 the National Institute of Justice found that almost 12 percent of Americans 60 and older had been financially exploited; for 2010 MetLife estimated the total size of elder financial fraud losses…

(December 5) Legal wrangling intensifies in the ZeekRewards case, the largest Ponzi scheme in U.S. history by the number of victims. It was closed by the SEC in August. In only eighteen months online entrepreneur (and former singing magician) Paul Burks received $600M from over a million people involved in his penny auction pyramid. In…