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More Fallout From Hedge Fund’s Sell-Off

A month after Archegos Capital Management (Archegos), a hedge fund and the family office of Bill Hwang, liquidated more than $30 Billion in equities when banks ordered it to post more collateral after borrowing on margin, news about the fallout continues. 

UBS Group has finally disclosed that it lost $861 Million as a result of exposure to Archegos. Morgan Stanley also recently announced that it sustained $644 Million in losses from a “credit event” and $267 Million in related trading involving Archegos.  

Alabama Investor Contends The Daughtry Group Owner Unsuitably Invested His Retirement Funds

Another investor has stepped forward to file a Financial Industry Regulatory Authority (FINRA) arbitration claim against Kestra Investment Services over financial losses sustained while working with the firm’s former broker, James Blake Daughtry. The latter ran a local office in Dothan, Alabama known as The Daughtry Group. FINRA barred Daughtry and Kestra fired him last year. 

The claimant, a senior investor, contends that Kestra failed to properly supervise Daughtry, whom he accuses of making fraudulent and unauthorized transactions in his account. As a result, this retiree lost $232K. He is seeking up to $500K in damages.

Claimant Suffered Significant Losses in Non-Traded Oil and Gas Investment 

An investor recently filed a Financial Industry Regulatory Authority (FINRA) arbitration claim against the brokerage firm, David Lerner Associates for losses he sustained in the Energy 11, LP, an oil and gas private placement that many of the firm’s brokers have sold exclusively to customers. 

This claimant worked, specifically, with David Lerner Associates broker Lawrence Merl, whom he says that the broker-dealer failed to properly supervise.

Central American Retiree Worked with Louisiana-based Financial Advisor Robin Platt

In his Financial Industry Regulatory Authority (FINRA) arbitration claim against Hancock Whitney Investment Services, Inc., a senior investor in Central America is seeking up to $5M in damages. The senior investor suffered losses when he invested $1.25M in Northstar Financial Services (Bermuda) at the recommendation of Hancock Whitney Investment Services broker, Robin Platt

The claimant, a longtime Hancock Whitney Bank client, had mostly invested in bank products and kept his money in checking/savings accounts. In 2016, Platt recommended the Bermuda-based investment, which would go on to make up the majority of the retiree’s portfolio. 

FINRA Arbitration Claim Was Brought by Mexican Investors Who Trusted US Broker-Dealer To Keep Their Assets Safe

A retired couple from Mexico is requesting up to $500K plus interest and costs from J.P. Morgan Securities, LLC over losses they suffered from investing in a Northstar Financial Services (Bermuda) variable annuity. 

Because the carrier, Northstar Bermuda, is located off-shore in Bermuda, the policy that the investors purchased was not protected in the same way as those sold by US-based carriers. Now, the claimants are alleging the following: 

Boutique Broker-Dealer Pays Another 7-Figures to Resolve Customer Disputes 

Independent brokerage firm Purshe Kaplan Sterling Investments, Inc. has agreed to settle another Financial Industry Regulatory Authority (FINRA) arbitration claim with investors.  This time, 50 customers had pursued financial recovery from the firm. 

According to the broker-dealer’s yearly audited financial statement that it recently submitted with the Securities and Exchange Commission (SEC), the settlement amount is $1.6M. Wentworth Management Services, which owns the firm, will pay $1.2M while its insurer will cover the rest.

FINRA Panel’s Ruling is UBS Financial’s Third Loss Involving Yield Enhancement Strategy

In a Financial Industry Regulatory Authority (FINRA) arbitration ruling, UBS Financial Services (UBS) must pay an Ohio couple $371K for financial losses they sustained from the brokerage firm’s Yield Enhancement Strategy (YES). 

This is the third UBS Yes Strategy arbitration claim that the broker-dealer has lost, including one award for $1M to two Denver investors this year. The first award against UBS over its Yield Enhancement Strategy, for $90K, was granted to an investor in December. 

Integration Instigated After Advisor Group’s Acquisition of Ladenburg Thalman 

Securities America, which is a broker-dealer of the Advisor Group network, has completed integrating brokerage firms Investacorp, KMS Financial Securities, and Securities Services Network into its fold. All four were Ladenburg Thalman broker-dealers until Advisor Group acquired Ladenburg and its firms last year for $1.3B. 

Triad Advisors, another former Ladenburg Thalman broker-dealer, will stay a standalone firm. The other Advisor Group broker-dealers include Woodbury Financial Services, FSC Securities, SagePoint Financial, Royal Alliance Associates, and FSC Securities Corporation. 

Unsuitability Involving Private Placements Alleged

Our unsuitable investment fraud attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) are looking into customer complaints involving SagePoint Financial stockbroker, Christopher R. Bice. 

His BrokerCheck record shows a number of pending investment fraud claims including at least two customer disputes involving private placements. The claimants are collectively seeking over $2M in damages. Bice, a Greensboro, North Carolina broker, is also an investment advisor.

Investors Can Still Pursue Damages from Bankoh, Truist, and Ocean Financial Services

The Bermuda Supreme Court has turned down a request by Northstar Financial Services (Bermuda) Ltd.’s management asking for more time to pursue restructuring. Northstar had filed for Chapter 15 bankruptcy last year.

The Court’s ruling means that the company will be liquidated, with the proceeds going to creditors. Specifically, what this means for Northstar Financial Services (Bermuda) investors is that the Bermuda Supreme Court must approve such payments before they can be issued to them.

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