Articles Posted in Current Investigations

State Securities Regulator Seeks to Ban Former Capital Planning Group Investment Adviser 

Massachusetts securities regulator William Galvin has fined MassMutual broker-dealer subsidiary MML Investors Services $250K for its alleged failure to supervise its former registered representative Charles Jonathan Evan. The ex-Wellesley, MA broker is also a former registered investment adviser who most recently was with Capital Planning Group of Massachusetts, Inc. Both Evan and Capital Planning are respondents in a separate but related civil complaint brought by the state.

According to Galvin’s office, Evan allegedly pressured investors to buy high-commission insurance products that were unsuitable for them. The state securities regulator is seeking to permanently bar him from operating as a financial advisor in Massachusetts.

Broker-Dealers May Have Not Fully Apprised Hedge Fund Investors of the Risks 

According to Bloomberg, sources report that on July 18, 2022, Legion Strategies suspended investor redemptions. The hedge fund is managed by Anthony Scaramucci’s Skybridge Capital.

Scaramucci was a communications director for former US President Trump for eleven days in July 2017. His Skybridge Capital is an SEC-registered investment adviser and asset manager that, as of the end of June 2022, was overseeing about $2.5B, including more than $800M in digital assets. 

New Financing Package Is Still No Guarantee of Financial Recovery for 27,000 L Bond Investors

The Texas Southern Bankruptcy Court has approved a new debtor-in-possession financing package for GWG Holdings. The alternative asset firm, which sold $1.6B of L Bonds to investors, filed for Chapter 11 bankruptcy protection in April 2022. Not long after, a judge at the US Bankruptcy Court in Houston allowed GWG to borrow a $10M emergency loan from National Founders LP to avoid immediate liquidation. 

This new verbally approved financing package is for $65M and offers the option to sell GWG’s life insurance asset portfolio for at least $610M—that’s $1B less than what L Bond investors are owed. It takes the place of another $65M financing package deal, includes lower interest rates and fees, and provides other protections. The loan is to be issued by Chapford SMA Partnership LP. 

Retail Customers Are Each Requesting Up to Six Figures in Damages for Their Losses 

Our GWG L Bond loss attorneys continue to file Financial Industry Regulatory Authority (FINRA) arbitration claims against Centaurus Financial because its affiliated brokers unsuitably marketed and sold L Bond to customers, including inexperienced investors and retirees.

Here are the recent claimants and the Centaurus brokers involved:

Investors Allege Unsuitability and Misrepresentations

Our UBS Yield Enhancement Strategy (UBS YES) investment loss attorneys are speaking with customers of UBS Financial Services broker William Word Huthnance in Houston, Texas. Huthnance, who has worked for 20 years in the industry, is accused of allegedly unsuitably recommending the firm’s risky iron condor strategy to customers while purportedly making misrepresentations and omissions to them. 

Already, one claimant reached a $580K settlement over their UBS YES losses, as well as losses involving purportedly unsuitably recommended hedge funds, structured notes, and private equity fund recommendations. 

Irvine, CA Claimants Are Pursuing Up To $500K in Damages from American Trust Investment Services

 Three Southern California investors have filed a six-figure Financial Industry Regulatory Authority (FINRA) arbitration claim against broker-dealer American Trust Investment Services over their GWG L Bond losses. The claimants, who are related, worked with former broker Kyle William Chapman, who was a registered investment adviser with Clarity Capital Partners in Newport Beach until July 2022. 

Our L Bond loss attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm at represent these claimants in FINRA arbitration. A panel of three arbitrators in Los Angeles will hear their case.  

Unfortunately, Property Management Firm May Not Be Able to Come Up with All the Funds 

According to attorneys for Greg Milligan, the plan administrator for liquidation proceedings involving luxury high-rise student building Skyloft Austin, a court has approved on a final basis the liquidation plan that would require Nelson Partners Student Housing to pay its investors a claim of $50M. Under the Stipulation and Plan of Liquidation, the real estate management firm will likely have to sell most of its twenty students housing real estate properties to obtain this money. 

The website of this property management company shares that Nelson Partners own off-campus student housing properties in multiple US States, including various buildings close to the following universities:

Brokerage Firm Allegedly Pursued Commissions over Customers’ Best Interests

Three Illinois retirees have filed a Financial Industry Regulatory Authority (FINRA) arbitration claim against Moloney Securities, pursuing up to six figures in damages for bond losses sustained in GWG Holdings L Bonds. The two brokers, Shane Michael DeSherlia and Dale Erbin Timmerman, allegedly unsuitably recommended these risky junk bonds to the retirees. DeSherlia in Jerseyville, Illinois, is a registered investment adviser with Moloney Securities Asset Management, whereas Timmerman is associated with Timmerman & Co. in Vandalia, Illinois. 

Our professional L Bond investment loss attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm at represent these elderly investors in their FINRA arbitration claim against Moloney Securities. An arbitrator will preside over their case in Chicago.

Aegis Brokers in Melville, NY and Boca Raton, FL Allegedly Unsuitably Recommended VRSPs to 48 Customers, Including Elderly Investors 

In July 2022, the US Securities and Exchange Commission (SEC) filed civil charges against Aegis Capital Corp., former Managing Director Alan Zelig Appelbaum, and ex-broker Paul Francis Gallivan. They are charged for allegedly unsuitably recommending variable interest rate structured products (VRSPs) to retail customers. These complex, structured products are usually issued only by well-known financial institutions.

According to the Commission’s settled administrative proceeding against Aegis, fourteen of its brokers from its Melville, New York and Boca Raton, Florida branches recommended VRSPs to four dozen customers for whom this type of investment was unsuitable. Without denying or admitting to the regulator’s findings, Aegis will pay a $2.3M penalty and $220K disgorgement plus prejudgment interest.

FINRA suspends former Florida Financial Advisor

The Financial Industry Regulatory Authority (FINRA) has indefinitely suspended ex-broker Chad Ryan Barancyk after he failed to respond to the self-regulatory organization’s probe. FINRA attorneys requested more information on the arbitration award/settlement agreement, which the former broker allegedly didn’t address.  

Barancyk was fired by Great Point Capital, Chicago, where he worked as a registered representative for less than a year between 2021 to 2022. 

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