Category Archives: Private Placements

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FINRA Barred Broker for Private Securities Transactions Related to Unregistered Bonds

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Released February 2017

 

Thomas Joseph Vilord (CRD #4261608, Sewell, New Jersey) submitted an AWC in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Vilord consented to the sanction and to the entry of findings that he participated in undisclosed private securities transactions involving more than $347,500 in unregistered corporate debenture notes sold to customers of his member firm. The findings stated that Vilord assisted these customers in making the investments by, among other things, preparing transaction paperwork and providing the customers with information about the company issuing the notes. Vilord did not give prior notice, oral or written, to his firm that he would be participating in the offering. The findings also stated that Vilord lacked a reasonable basis to recommend the notes because he failed to conduct adequate due diligence on the offering. Vilord’s knowledge of the company was limited to his conversations with the company’s owner, information contained on the company’s website and Google searches. Although Vilord was familiar with some sources of the company’s revenue, he did not know actual revenue and debt amounts, and failed to review the company’s financial statements. The findings also included that Vilord willfully failed to timely disclose customer complaints related to the sales on his Form U4 and made false statements about one complaint in a Form U4 filing. FINRA found that Vilord provided false statements regarding the same complaint in his written response to FINRA’s request for information and documents concerning the offering and a customer’s complaint. (FINRA Case #2013037385001)

 

Source: FINRA, Financial Industry Regulatory Authority, Inc. 2017
Full Disciplinary Reports Available to the public at: www.finra.org

LaeRoc Income Funds

By | Blog, FINRA Sales Practice Violations, LaeRoc Funds, Private Placements, Securities Arbitration | No Comments

Our law firm is handling claims against Financial Industry Regulatory Authority (“FINRA”) brokerage firms who solicited customers to purchase a  private placement called LaeRoc Income Funds, LP, including LaeRoc 2002 Income Fund and LaeRoc 2005-2006 Income Fund. The law firm’s investigation shows that Commonwealth Financial Network and LPL Financial sold the Fund to their customers.

According to LaeRoc Funds’ website, it is a real estate investment firm managing over $650 million in assets in the last 23 years. The Company focuses on income producing properties in the western U.S. with a concentration in southern California.

The LaeRoc 2005-2006 Income Fund, LP is currently in the process of trying to raise another $12 million to $15 million to pay off at least $49 million of debt.  This cash call is often a negative sign for the Fund’s investors.  Investors had until July 30 to respond to the cash call. According to Investment News, “The Fund’s lenders have said that they will foreclose on one of its holdings, the Country Club Plaza shopping center in Sacramento, Calif., by the end of the year if they can’t raise enough money.” The LaeRoc Fund has paid more than $180 million to buy eight properties and owes $105 million in mortgage debt.

Investors have reported that LaeRoc Income Funds were represented as being conservative, fixed income investments. Accordingly, our law firm is investigating the manner in which the Funds were marketed, and whether brokerage firms mis-marketed the products and/or failed to disclose the entirety of the risks associated with LaeRoc Income Funds.

Under FINRA Rules, brokerage firms have an obligation to conduct a reasonable investigation of the issuer and the securities they recommend in offerings made under the SEC’s Regulation D under the Securities Act of 1933, also known as private placements.  The LaeRoc Income Funds are private placements. Regulation D provides exemptions from the registration requirements of Section 5 under the Act.  Regulation D transactions, however, are not exempt from the antifraud provisions of the federal securities laws.  A brokerage firm has a duty—enforceable under federal securities laws and FINRA rules—to conduct a reasonable investigation of securities that it recommends, including those sold in a Regulation D offering.  Failure to comply with this duty gives rise to an individual cause of action against the brokerage firm who sold the product to the customer.

Investors who purchased LaeRoc Income Funds from a full-service brokerage firm and sustained significant losses can contact our law firm to explore their legal rights and options. For more information on this topic, please visit our blog by clicking here.

The Securities Arbitration Law Firm of Klayman & Toskes Files What Is Believed To Be The First FINRA Arbitration Claim Against LPL Financial To Recover Losses Sustained in LaeRoc Funds

By | Blog, LaeRoc Funds, Private Placements, Securities Arbitration, Uncategorized | No Comments

The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”)(http://www.recoverlaerocfundlosses.com) announced today that it filed a securities arbitration claim against LPL Financial (NasdaqGS: LPLA) (“LPL”) on behalf of an investor to recover losses sustained in LaeRoc 2005-2006 Income Fund, LP (“the LaeRoc Fund”). The claim, filed with the Financial Industry Regulatory Authority’s (“FINRA”) Arbitration Department, seeks damages of $500,000. The LaeRoc Funds include LaeRoc 2002 Income Fund, LaeRoc 2004-2005 Income Fund, LaeRoc 2005-2006 Income Fund, LaeRoc Edge Fund, and LaeRoc Income Fund 2007.

According to the Statement of Claim, while LPL sold the LaeRoc Fund as a safe, conservative, stable, diversified, non-correlated investment which would have predicable income and a growth component achieved through asset appreciation, the firm and its financial advisors failed to perform the proper due diligence and misrepresented the multiple and substantial risks of the LaeRoc Fund to the Claimant. Moreover, while LPL Financial and its financial advisors received an estimated $35,000 in syndication fees and commissions on the Claimant’s investment in the LaeRoc Fund, the Claimant sustained damages of approximately $500,000 and seeks the rescission of its investment.

Investors who purchased LaeRoc Income Funds from a full-service brokerage firm, including LPL, can contact K&T to explore their legal rights and options, at 888-997-9956, or visit us on the web at http://www.recoverlaerocfundlosses.com

Do you have a question or need more information? Get in touch with us