Articles Posted in Fraudulent Trading

Colorado Bankers Life Insurance Investors Continue To Explore Their Legal Options

Our Annuity Investor Loss Lawyers Are Filing Broker Fraud Lawsuits

Shepherd Smith Edwards and Kantas ( are continuing to speak with annuity investors who have suffered losses in a number of Greg Lindberg-owned entities, including Colorado Bankers Life Insurance, Bankers Life Insurance, Southland National Insurance Corp., Southland National Reinsurance Corp., PB Investment Holdings, and Northstar Financial Services (Bermuda). All of these companies are under scrutiny and in some kind of financial trouble with many of them in liquidation.

How Can SmartStop Self Storage REIT Investors Recover Their Losses? 

Our Non-Traded REIT Fraud Lawyers Continue To Investigate Claims Against Broker-Dealers. If you are an investor whose brokerage firm recommended SmartStop Self Storage REIT, you may be trying to figure out how to recover your investment losses. Formerly called Strategic Storage Trust II, this self-managed non-traded real estate investment trust (non-traded REIT) suspended its share redemption program and distribution reinvestment plan in early 2022. However, even if redemptions are possible, investors might not be able to recover their full investment.

SmartStop Self Storage REIT touts itself as “one of the largest self-storage companies in North America.” According to its website, the real estate investment trust has a team of about 450 self-storage professionals, owns or manages approximately 176 properties in Canada and the United States, and has about $2.8B in total capitalization.

What Should You Do If You Are A GK Investment Holdings 7% Bond Investor? 

JCC Advisors and Other Broker-Dealers May Have Unsuitably Sold This Investment To Customers

Earlier this year, GK Investment Holdings, LLC (GKIH) sent a letter to investors warning that if 90% of them failed to trade in their current 7% Bonds with “new bonds,” which would extend the bonds’ maturity date, the old bonds would likely go into default. This could delay the repayment of bondholders’ principal or render the company unable to pay back their principal at all. GKIH cautioned that it could end up having to file for bankruptcy even. All of these possible outcomes are highly concerning for investors given that they could stand to lose money.

What Are Common Signs of Investment Fraud and How Can Our Investor Attorneys Help? 

Red Flags May Help Identify When You Have Become The Victim of Fraudulent Activities

If you are someone who has suffered significant losses to your investment or retirement funds, it is important that your financial advisor explains to you what happened. Unfortunately, all too often there are investors, including retirees, who will have sustained financial losses due to poor account mismanagement, broker negligence, or securities fraud.

SSEK Investigating Ex-Commonwealth Financial Network Broker

SSEK Law Firm is meeting with investors who suffered losses while working with former Commonwealth Financial Network broker, Gerald Allan Eaton, or another financial representative from the firm. 

Eaton was recently barred by the Financial Industry Regulatory Authority (FINRA) in the wake of allegations that he fraudulently took money out of his clients’ accounts. Commonwealth fired him last month, claiming it had found that he’d engaged in “serious misconduct” that involved “fraudulently facilitated distributions” from accounts that were not for clients’ benefit and without letting them know or getting their permission. 

SSEK Investigates Eddie Lyons Of Raymond James & Associates

Shepherd, Smith, Edwards & Kantas (“SSEK”), a law firm specializing in representing wronged investors, is looking into allegations against Eddie Lyons as noted by FINRA.  Lyons was a financial advisor registered with Raymond James & Associates, Inc. He was terminated, in part, due to allegations by his clients that he engaged in unauthorized trading of accounts.

FINRA then initiated an investigation in November 2017.  The inquiry was based on several complaints from customers.  The allegations ran the gambit of bad acts. These include, but may not be limited to, unauthorized trading. 

Equinox Fund Management Resolves SEC Charges For Over $5.8M
A Denver-based alternative fund manager has consented to settle Securities and Exchange Commission charges accusing it of misleading investors about the way certain assets were valued and for overcharging management fees. According to the regulator, Equinox Fund Management LLC determined its management fees differently from the method it described in registration statements for The Frontier Fund, which is a managed futures fund.

Although registration statements said that management fees would be calculated based on each series’ net asset value, Equinox used the assets’ national trading value instead. Also, the firm is accused of straying from the valuation methodology it had disclosed for certain holdings.

The fund manager will pay back investors about $5.4M in excessive management fees that it was paid over seven years, in addition to $600K in prejudgment interest. It also will pay a $400K penalty.

Futures Trader Goes to Jail, Pays Restitution for Securities Fraud
RXM Holdings Ltd. futures trading director Robert Scott Wiens is sentenced to one year in prison after pleading guilty to securities fraud He also will pay $260k in restitution to investors he harmed.

Wiens was an unlicensed securities professional in 2010 and 2011. He sold fraudulent investments, which he traded on the futures market.

Wiens directed investors to open bank accounts under RXM’s name for their funds. He told them that there was zero risk and returns were guaranteed. He then used the money in the accounts to pay off earlier investments and cover his own spending.
Continue Reading ›

In separate securities lawsuits, the Securities and Exchange Commission and the Commodity Futures Trading Commission are both suing EagleEye Asset Management LLC, which a Massachusetts asset management firm, and Jeffrey A. Liskov, its principal.

The CFTC is accusing the two defendants of defrauding at least one US-based client while trading forex on a margined or leveraged basis for her. Per the CFTC’s lawsuit, the client decided to grant permission to EagleEye and Liskov to trade part of her retirement money because Liskov allegedly advised her that this type of trading was appropriate for her conservative investment objects.

However, Liskov allegedly did not warn her of the risks involved or tell her that he did not have a successful track record with forex trading. While the trading did generate short-term profits for the woman, she lost most of the money that she invested. The CFTC contends that instead of revealing the trading losses, Liskov allegedly forged the client’s name and set up a new account opening documents and on more than $3 million in secret wire transfers from her mutual fund account to her forex account so that trading wouldn’t have to stop. The woman client lost more than $3.24 million, while Liskov and EagleEye made about $235,000 in performance incentive fees.

Per the SEC, between 4/08 and 8/10, Liskov made misrepresentations to clients to persuade them to move funds they’d placed in securities investments into forex trading. The SEC contends that these investments were not appropriate for elderly clients that had conservative investment objectives and that this caused them to sustain significant financial losses totaling almost $4 million. EagleEye and Liskov allegedly earned performed fees of over $300K, plus management fees. The Commission believes that having clients make short-term investment gains and then earning performance fees before these gains were lost was the defendants’ plan.

Liskov allegedly did not even help some investors understand the nature of forex trading. With other clients, he deemphasized the degree of investment risk involved. The SEC also says that Liskov made false statements with claims that he had achieved success with forex trades when, in fact, the opposite was the case.

Meantime, Massachusetts Secretary of the Commonwealth William Francis Galvin (D) has also filed administrative charges against the investment advisor firm and Liskov. Galvin is accusing them of violating Massachusetts’s Uniform Securities Act.

Our securities fraud law firm has helped thousand of investors recoup their losses caused by broker misconduct and investment adviser fraud. Working with a stockbroker fraud law firm is the best way to help you get back your lost investment.

Read the SEC’s Complaint (PDF)

CFTC Charges Massachusetts Man Jeffrey Liskov and His Company, EagleEye Asset Management, LLC, with Committing a $3 Million Forex Fraud, CFTC, September 8, 2011
State files complaint against local investment advisor, WickedLocal, September 13, 2011
Mass. Adviser Sued by Regulators Over Alleged Forex Trading Scheme, BNA Securities Law Daily, September 9, 2011

More Blog Posts:
Texas Commodity Trading Advisor FIN FX LLC Now Subject to NFA Emergency Enforcement Action, Stockbroker Fraud Blog, April 27, 2011
Commodity Options Fraud Charges by CFTC Prompts District Court to Freeze Assets and Records of 20/20 Trading Co. Inc. & 20/20 Precious Metals Inc., Stockbroker Fraud Blog, May 6, 2011
$63 Million Mortgage-Backed Securities Lawsuit Against Bank of America is Second One Filed by Western and Southern Life Insurance Co. Against the Financial Firm, Institutional Investor Securities Blog, August 29, 2011 Continue Reading ›

Kweku Adoboli, a UBS trader, has been charged with false accounting and fraud allegedly resulting in about $2 billion in losses. Adoboli, 31, was arrested in London.

The alleged financial misconduct is said to have taken place between 10/8 and 12/09 and 1/10 and 9/11 while Adoboli, who works out of UBS’s office in London, was a senior trader with UBS Global Synthetic Equities. FSA, which is Britain’s financial watchdog, and FINMA, which is Switzerland’s, have instigated an investigation into the loss. UBS will pay for the probe, which will be conducted by an independent third party.

UBS is also investigating this trading loss but says that no client positions have been impacted. The financial firm has said that most of the risk exposure went undetected because bogus hedging positions were placed in the bank’s systems.

Adoboli’s arrest for “suspicion of fraud by abuse of position” is bringing up questions about UBS’s risk management systems, which are supposed to prevent unauthorized trading. It was just in 2008 that UBS wrote down $50 billion in securities trades, leading to losses of 34.4 billion francs. That was the year that the Swiss Central Bank had to rescue UBS, which then closed down significant parts of its trading division and revised its risk-management systems.

News of Adoboli’s alleged fraud and the $2B loss has caused shares in UBS to drop, while the expense of insuring its 5-year bonds against default for a year became expanded by 15 basis points to 225 basis points. According to Reuters, analysts are saying that that this latest loss is the “final nail in the coffin” for UBS, which has had to deal with plunging markets, strict new regulation, and a Swiss franc that has gotten stronger.

Moody’s and Standard Poor’s now say that UBS’s credit rating is on negative watch. Meantime, Fitch says it has the financial firm’s viability rating on negative watch and that this latest incident only lends to the argument that UBS needs to downsize its investment banking unit.

The $2B loss and Adoboli’s arrest is unfortunate for UBS, which had just started to regain client confidence this year. This huge loss has pretty much cost the financial firm its first year of saving that was supposed to come from a cost-cutting plan involving the elimination of 3,500 jobs. UBS Chief Executive Oswald Gruebel and Chairman Carten Kengeter, who is the head of UBS’s investment bank division, are also now under fire. Gruebel has dismissed calls to step down.

UBS Raises Tally on Losses, Wall Street Journal, September 19, 2011
UBS trader charged with $2 billion fraud, Reuters, September 16, 2011

More Blog Posts:
Ex-UBS Financial Adviser Pleads Guilty to Defrauding Private Fund Investors, Stockbroker Fraud Blog, July 13, 2011
UBS to Pay $2.2M to CNA Financial Head for Lehman Brothers Structured Product Losses, Stockbroker Fraud Blog, January 4, 2011
UBS Financial Reaches $160M Settlement with the SEC and Justice Department Over Securities Fraud, Antitrust, and Other Charges Related to Municipal Bond, Institutional Investors Securities Blog, May 16, 2011 Continue Reading ›

RBC Capital Markets Corp., Equity Station Inc., Fagenson & Co. Inc., Olympic Securities LLC, and Alpine Securities Corp. have consented to pay $385,000 to settle Financial Industry Regulatory Authority that they sold collectively over 7.5 billion in “unregistered” penny stock in Universal Express Inc. shares and made about $8.4 million as a result. By settling, the broker-dealers are not agreeing to or denying the securities fraud accusations.

FINRA says that “in each instance” the investment firm’s clients deposited certificates that consisted of huge blocks of thinly traded securities and then liquidated the positions right away. The firms conducted the sales even after a 2004 Securities and Exchange Commission complaint accused Universal Express of illegally issuing over 500 M shares in unregistered stock to be distributed to the public. The SEC claimed the company’s leaders put out bogus press releases and false and misleading statements to promote the sale of the unregistered stock.

According to FINRA:

• RBC Capital Markets reported making $68,000 in commissions from the unregistered stock sale. The broker-dealer has consented to a $135,000 fine.

• Equity Station made $13,575 in commissions. The investment firm is fined $25,000.

• Fagenson & Co. has agreed to a $165,000 fine and made $44,000 in commissions.

• Olympic Securities is fined $20,000 after making $5,200 in commissions.

• Alpine Securities is fined $40,000 for earning $13,575 in commissions.

FINRA says that even with numerous red flags, all five firms did not take the necessary actions to find out whether selling the securities would violate violating federal registration requirements. FINRA contends that when the five broker-dealers conducted the majority of the illegal unregistered stock sales the SEC had either began or won its case against Universal Express, which was eventually sanctioned almost $22 million.

Related Web Resources:
FINRA Fines Five Firms $385,000 for Sale of Unregistered Securities, Other Violations Relating to Penny Stocks, FINRA, April 27, 2010
Regulatory Notice 09-05, FINRA
SEC wins case against Universal Express, CEO, Business Journal, March 2, 2007 Continue Reading ›

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