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Investment Litigation Blog

NOTICE TO WOODBRIDGE GROUP OF COMPANIES’ INVESTORS WHO LOST IN EXCESS OF $500,000 – Klayman & Toskes, P.A. Continues to Investigate Claims on Behalf of Investors Who Purchased Woodbridge Commercial Notes

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Boca Raton, Florida – January 9, 2018 – The Securities Arbitration Law Firm of Klayman & Toskes, P.A., www.nasd-law.com, continues to investigate claims on behalf of investors in Woodbridge Group of Companies, LLC “(Woodridge”). Woodbridge, a luxury real estate developer, is currently being investigated by the Securities and Exchange Commission (“SEC”) for the direct and indirect sale of unregistered securities.

In recent weeks, amidst the SEC investigation, the CEO of Woodbridge, Robert Shapiro resigned. Following the resignation of their CEO, Woodbridge filed for chapter 11 Bankruptcy. Brokerage firms and financial advisors who sold securities in Woodbridge had a duty to their customers to perform their due diligence and recommend suitable investments to their clients. This would require the brokerage firms and financial advisors to evaluate the risks and client objectives before recommending securities.

Brokers across the country have been selling these notes as secure investments.  Many of these notes include maturity dates between 12 months and 18 months.  Amongst the brokers selling these notes include some former registered brokers, non-registered brokers, and registered insurance agents.  Investors should be aware that they may have multiple options when it comes to remedies, including FINRA Arbitration claims, class action lawsuits, and joining the ongoing Bankruptcy.

The sole purpose of this release is to investigate the sales practices and financial misconduct of brokerage firms and financial advisors in connection with the sale of Woodbridge to their customers. Investors who purchased these investments are encouraged to contact Lawrence L. Klayman, Esq. of Klayman & Toskes, P.A.  at (888) 997-9956, or visit our website at www.nasd-law.com.

NOTICE TO UPS EMPLOYEES: Klayman & Toskes, P.A. Continues to Investigate and Pursue Claims on Behalf of UPS Employees Who Sustained Losses from Unsuitable Covered Call Writing Strategies

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BOCA RATON, FL, January 9, 2018 – The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”), www.nasd-law.com, continues to investigate and pursue claims for current and former UPS (NYSE: UPS) employees for losses sustained from unsuitable covered call writing strategies for concentrated UPS stock positions. The investigation focuses on firms’ sales practices for customers who acquired UPS stock through UPS’s Employee Stock Purchase Plan or Managers Incentive Program and were advised to implement a covered call strategy on their concentrated UPS stock position.

K&T continues to bring claims on behalf of clients who are current or former UPS employees, who held concentrated positions in UPS stock. UPS employees received their shares at a low cost-basis as a form of compensation, and firms solicited them to employ a covered-call strategy that promised present income. UPS employees often have no desire to lose their shares that they worked so hard to acquire. UPS employees also wanted to keep their shares, because the shares produced consistent dividends, and the shares have a history of appreciation. In many instances the covered call strategy failed.  Wall Street brokerage firms, in their implementation of the covered call strategy sold options with strike prices that were too close to the market value of the shares, sometimes while the shares were “in the money.” The strategy placed investors in a precarious position of either losing their shares or having to pay a significant sum to buy-back their stock. Further, the sale of such large positions typically ended in significant tax liability to investors.

The sole purpose of this release is to investigate whether the covered call strategies deployed by investment firms were suitable for UPS investors with concentrated stock positions which were acquired through the Employee Stock Purchase Plan and/or Managers Incentive Programs. Current and former UPS employees who held accounts at full-service brokerage firms, and have information relating to the manner in with the firm handled their concentrated, leveraged portfolios, are encouraged to contact the attorneys of Klayman & Toskes, P.A., at (888) 997-9956, or visit our firm’s website at www.nasd-law.com.

NOTICE TO UPS EMPLOYEES: Klayman & Toskes, P.A. Continues to Investigate and Pursue Claims on Behalf of UPS Employees Who Sustained Losses from Unsuitable Covered Call Writing Strategies

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BOCA RATON, FL, Dec. 28, 2017 (BUSINESSWIRE) – The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”), www.nasd-law.com, continues to investigate and pursue claims for current and former UPS (NYSE: UPS) employees for losses sustained from unsuitable covered call writing strategies for concentrated UPS stock positions. The investigation focuses on firms’ sales practices for customers who acquired UPS stock through UPS’s Employee Stock Purchase Plan or Managers Incentive Program and were advised to implement a covered call strategy on their concentrated UPS stock position.

K&T continues to bring claims on behalf of clients who are current or former UPS employees, who held concentrated positions in UPS stock. UPS employees received their shares at a low cost-basis as a form of compensation, and firms solicited them to employ a covered-call strategy that promised present income. UPS employees often have no desire to lose their shares that they worked so hard to acquire. UPS employees also wanted to keep their shares, because the shares produced consistent dividends, and the shares have a history of appreciation. In many instances the covered call strategy failed, as it was improperly implemented. The strategy placed investors in a precarious position of either losing their shares or having to pay a significant sum to buy-back their stock. Further, the sale of such large positions typically ended in significant tax liability to investors.

The sole purpose of this release is to investigate whether the covered call strategies deployed by investment firms were suitable for UPS investors with concentrated stock positions which were acquired through the Employee Stock Purchase Plan and/or Managers Incentive Programs. Current and former UPS employees who held accounts at full-service brokerage firms, and have information relating to the manner in with the firm handled their concentrated, leveraged portfolios, are encouraged to contact the attorneys of Klayman & Toskes, P.A., at (888) 997-9956, or visit our firm’s website at www.nasd-law.com.

NOTICE TO WOODBRIDGE GROUP OF COMPANIES’ INVESTORS – The Securities Arbitration Law Firm of Klayman & Toskes, P.A. Commences Investigation after Bankruptcy Filing

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Newport Beach, California (GLOBE NEWSWIRE) – December 8, 2017 – The Securities Arbitration Law Firm of Klayman & Toskes, P.A., www.nasd-law.com, has commenced an investigation into the sales of notes by brokerage firms and financial advisors who recommended Woodbridge Group of Companies, LLC “(Woodridge”) to their customers. Woodbridge, a luxury real estate developer, is currently being investigated by the Securities and Exchange Commission (“SEC”) for the direct and indirect sale of unregistered securities.

In recent days, amidst the SEC investigation, the CEO of Woodbridge, Robert Shapiro resigned. Following the resignation of their CEO, Woodbridge filed for chapter 11 Bankruptcy. Brokerage firms and financial advisors who sold securities in Woodbridge had a duty to their customers to perform their due diligence and recommend suitable investments to their clients. This would require the brokerage firms and financial advisors to evaluate the risks and client objectives before recommending securities.

Documents in the SEC investigation and Bankruptcy filing suggest Woodbridge raised more than $1 billion in various funds sold to investors. While all $1 billion is not currently accounted for, it appears that investments were made in many states. Massachusetts, for instance barred Woodbridge and its entities from selling securities in the state. Many other states recently began investigating the sales practices of Woodbridge within their borders regarding the sale of securities.

The sole purpose of this release is to investigate the sales practices and financial misconduct of brokerage firms and financial advisors in connection with the sale of Woodbridge to their customers. Investors who purchased these investments are encouraged to contact Lawrence L. Klayman, Esq. of Klayman & Toskes, P.A.  at (888) 997-9956, or visit our website at www.nasd-law.com.

Klayman & Toskes, P.A. Launches GoFundMe Relief Campaign for Puerto Rico

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Boca Raton, Florida (Globe Newswire) – October 9, 2017 – The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”), www.nasd-law.com, recently launched a GoFundMe campaign for Puerto Rico, which has recently been devastated by multiple hurricanes, most recently Hurricane Maria, which devastated the island and its infrastructure. K&T has close ties to the Puerto Rican community as it has employees who come from Puerto Rico, a large client base who lives on the island, and many family members and friends who have been affected by these storms.

According to the GoFundMe, started by founders, Lawrence Klayman, Esq. and Steven Toskes, Esq., this relief effort will go toward helping Puerto Rico directly. “There is no sprint to win this relief effort, and it is a marathon, one which will take many months and perhaps years to fix the infrastructure and for people of the island’s lives to return to normalcy,” said Steven Toskes. “We just want to do what we can, what is right, to help the island rebuild. We have been dealing with cases in Puerto Rico for several years now, and it is part of our belief that helping goes much beyond the legal practice.”

If you would like to donate visit the GoFundMe page here, or visit our website at www.nasd-law.com.

Notice to Clients of Austin Richard Dutton Jr. and Newbridge Securities: The Securities Arbitration Law Firm of Klayman & Toskes, P.A. has commenced an Investigation in Light of Regulatory Fines of nearly $700,000.

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NEW YORK, Oct. 6, 2017 (GLOBE NEWSWIRE) — The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”), www.nasd-law.com, has commenced an investigation in light of recent regulatory action concerning Austin Richard Dutton Jr. (“Dutton”) and Newbridge Securities Corporation (“Newbridge”). The Pennsylvania Department of Banking and Securities recently levied fines against Newbridge for $499,000 and against Dutton personally for $200,000, for misconduct between 2012 and 2016. Dutton is currently registered with Sandlapper Securities, LLC, which is currently embroiled in a Financial Industry Regulatory Authority regulatory action regarding the fraudulent markup of saltwater disposal wells.

According to securities attorney Lawrence L. Klayman, Esq., “Newbridge Securities is responsible for adequately supervising its registered representatives.  When brokerage firms fail to adequately supervise their registered representatives, they may be liable for any resulting investment losses sustained by customers.” The fine levied against Newbridge of $499,000, according to its Consent Agreement, is based on the failure to reasonably supervise one agent, Dutton, in-connection with sales of structured products. Dutton was also fined $200,000 in a separate action for dishonest and unethical practices in the securities business related to those same sales.

The sole purpose of this release is to investigate the sales practices of Dutton and Newbridge in-connection with the sale of structured products to their customers.  Current and former customers of Dutton who held accounts with Dutton and have information relating to the manner in which Dutton represented these products, are encouraged to contact the attorneys of Klayman & Toskes at (888) 997-9956, or visit our website at www.nasd-law.com.

NOTICE TO ALL SANDLAPPER SECURITIES, LLC CLIENTS WHO PURCHASED SALTWATER DISPOSAL WELLS: The Securities Arbitration Law Firm of Klayman & Toskes, P.A. Commences Investigation on the heels of FINRA Complaint

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Boca Raton, Florida (GLOBE NEWSWIRE) – October 4, 2017 – The Securities Arbitration Law Firm of Klayman & Toskes, P.A., www.nasd-law.com, has commenced an investigation into Financial Industry Regulatory Authority (FINRA) sales practice violations by Sandlapper Securities, LLC (“Sandlapper”). FINRA alleges Sandlapper sold saltwater disposal wells to investors with excessive, undisclosed markups, through an owned and controlled middleman.

On September 29, 2017 FINRA filed a complaint (Disciplinary Proceeding # 2014041860801) against Sandlapper (CRD # 137906), Trevor Lee Gordon (CRD # 2195122), and Jack Charles Bixler (CRD # 22331), alleging that Gordon and Bixler, “extracted ill-gotten profits for themselves through their control of the fund.” Gordon and Bixler sold interests in the fund through Sandlapper, and made all investment decisions, specifically which wells to acquire and what prices to pay. The Complaint alleges that the fraudulent markups totaled over $8 million.

The sole purpose of this release is to investigate whether Sandlapper sold interests in saltwater disposal wells which may have resulted in unsuitable recommendationsbreach of fiduciary dutymisrepresentations and omissions of material facts and a failure to supervise. Current and former clients who have information about the sales practices of Sandlapper are encouraged to contact Lawrence L. Klayman, Esq. of Klayman & Toskes, P.A.  at (888) 997-9956, or visit our website at www.nasd-law.com.

 

dollars-in-chains-medium

AVISO A CLIENTES DE UBS PUERTO RICO: Los bufetes de Klayman & Toskes y Carlo Law Offices presentan una reclamación de arbitraje de FINRA por $15 millones contra UBS, por concentración en bonos y fondos de bonos cerrados de Puerto Rico, tras la radicación de la petición de quiebra por parte del gobierno de Puerto Rico.

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San Juan, Puerto Rico, 5 de mayo de 2017 – El bufete de arbitraje de valores Klayman & Toskes, P.A., www.sueubspuertorico.com, junto con Carlo Law Office, P.S.C., ubicado en Puerto Rico, anunció hoy que presentó una reclamación por $15 millones ante FINRA, en contra de UBS Financial Services Incorporated of Puerto Rico y UBS Financial Services, Inc. (NYSE: UBS). La reclamación se presentó tras la radicación de quiebra por el gobierno de Puerto Rico; la más grande de la historia municipal de los Estados Unidos. Según la reclamación, el demandante confió sus ahorros de retiro a UBS, con el objetivo de inversión de ingreso fijo y preservación de capital. Contrario a este objetivo, UBS concentró la cuenta en bonos del gobierno de Puerto Rico (“PRGBs”) y en fondos de bonos cerrados generados por UBS (“UBS PR CEBFs”), los cuales estaban apalancados con préstamos de UBS Bank USA.

UBS compró y mantuvo para el demandante los PRGBs y UBS PR CEBFs, los cuales están estrechamente ligados al desempeño de la economía de Puerto Rico. El demandante creyó que estas compras fueron consistentes con su tolerancia al riesgo. Sin embargo, la sobre concentración en estos PRGBs y UBS PR CEBFs dio lugar a riesgos excesivos, que se vieron exacerbados por el uso de préstamos de UBS Bank USA. UBS no divulgó al demandante los riesgos asociados con la concentración excesiva de su cuenta en estos valores. A consecuencia, el demandante sufrió pérdidas, las cuales fueron precipitadas por llamadas de margen, ya que sus inversiones ilíquidas se utilizaron como garantía para el préstamo.

El único propósito de este comunicado es investigar, en nombre de nuestros clientes, las prácticas de venta de UBS en relación con recomendaciones de inversión inadecuadas proporcionadas a sus clientes. Los clientes actuales y antiguos de UBS que tengan información relacionada con el asesoramiento de inversión proporcionada por UBS relacionados con PRGBs y UBS PR CEBFs, deben contactar a Steven D. Toskes de Klayman & Toskes u Osvaldo Carlo de Carlo Law Offices, al (787) 268-6444, o visite nuestro sitio web: www.sueubspuertorico.com.

closeup of a court gavel on cash

NOTICE TO UBS PUERTO RICO CUSTOMERS: Klayman & Toskes and Carlo Law Offices File $15 Million FINRA Claim Against UBS for Concentration in Puerto Rico Government Bonds and Closed-End Bond Funds in the Wake of Puerto Rico’s Bankruptcy Filing

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San Juan, Puerto Rico.  May 5, 2017 — The Securities Arbitration Law Firm of Klayman & Toskes, P.A., www.sueubspuertorico.com, together with Carlo Law Offices, P.S.C. located in Puerto Rico, announced today that they filed a FINRA claim against UBS Financial Services Incorporated of Puerto Rico and UBS Financial Services, Inc. (NYSE: UBS) (collectively “UBS”) for $15 million.  The claim has been filed in the wake of Puerto Rico’s recent bankruptcy filing, which is the largest in U.S. Municipal history. According to the Claim, the Claimant entrusted his retirement assets to UBS with an investment objective of current income and capital preservation.  Contrary to these objectives, UBS concentrated his account in Puerto Rico Government Bonds (“PRGBs”) and its proprietary Puerto Rico closed-end bond funds (“UBS PR CEBFs”), which are leveraged with UBS Bank USA Loans.

UBS purchased and held for Claimant PRGBs and UBS PR CEBFs, both of which are closely tied to the performance of Puerto Rico’s economy. The Claimant believed the purchases were consistent with his risk tolerance. However, the over concentration in these PRGBs and UBS PR CEBFs resulted in excessive risks, which were exacerbated by the use of UBS’ Bank Loans.  UBS failed to disclose to Claimant the risks associated with over concentrating his account in these securities.  Ultimately, the Claimant suffered losses which were precipitated by margin calls since his illiquid securities were utilized as collateral.

The sole purpose of this release is to investigate, on behalf of our clients, the sales practices of UBS in connection with unsuitable investment recommendations provided to their customers. Current and former customers of UBS who have information relating to the investment advice provided by UBS related to Puerto PRGBs and UBS PR CEBFs, are encouraged to contact Steven D. Toskes of Klayman & Toskes or Osvaldo Carlo of Carlo Law Offices, at (787)268-6444, or visit our website: www.sueubspuertorico.com.

FINRA Bars Broker for Excessive Trading in Elderly Customer Accounts

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Released April 2017

Matthew Christopher Maczko (CRD #1888519, Downers Grove, Illinois) submitted an AWC in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Maczko consented to the sanction and to the entry of findings that he engaged in excessive trading in an elderly customer’s accounts. The findings stated that Maczko effectively controlled these accounts, which had an average aggregate value of $3 million. Maczko’s transactions in these accounts generated approximately $581,650 in commissions, $84,270 in other fees, and approximately $397,000 in trading losses. This level of trading was unsuitable for the customer given her investment profile, including her age, risk tolerance and income needs. The findings also stated that Maczko provided inaccurate and misleading testimony to FINRA. Maczko testified that he had not spoken with two customers since his termination earlier that month. However, a review of Maczko’s telephone records revealed that he had in fact spoken with these customers by telephone several times after his termination.

(FINRA Case #2016050430201)

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

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