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Articles Posted in Promissory Notes

Ex-Forest Securities Broker Is Barred By FINRA 

Please contact our broker fraud lawyers at Sheperd Smith Edwards and Kantas (SSEK Law Firm) if former Forest Securities stockbroker, Jeffery Scott Nimmow, sold you Woodbridge promissory notes. 

Nimmow was recently barred by the Financial Industry Regulatory Authority (FINRA) after he sold over $3M in promissory notes from the Woodbridge Group of Companies to 18 investors. Woodbridge is accused of operating a $1.2B Ponzi scam that defrauded 8400 investors. Many of whom were retail investors that included seniors and retirees who lost their retirement money in the scam. 

Merrill Lynch Sold Strategic Return Notes To Retail Investors 

If you are an investor who lost money from Strategic Return Notes (SRNs) that were sold by Bank of America’s (BAC) Merrill Lynch, please contact our investment fraud lawyers at Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) today. 

The investment raised about $150M from their sales and caused substantial losses from many. SSEK Law Firm is committed to helping Strategic Return Notes investors to recoup their losses. 

Frederick Randhahn, a former Sigma Financial Corporation broker, is suspended by the Financial Industry Regulation Authority (FINRA) for nine months after he allegedly sold $625K of Woodbridge promissory notes to investors without the brokerage firm’s permission and approval to sell these products. 

In a letter of acceptance, waiver and consent, Randhahn agreed to pay a $5K fine and disgorge the almost $32K in commissions plus interest that he made from the sales. However, he did not admit to or deny the self-regulatory authority’s (SRO) findings. 

Randhahn Fired For Selling Unapproved Investments

The US Securities and Exchange Commission (SEC) has filed civil charges against Charles Nilosek for acting as an unregistered broker and illegally selling Woodbridge securities to retail investors. The regulator said that Nilosek, who is based in Massachusetts, was one of the top revenue earners when it came to selling the unregistered investments from the Woodbridge Group of Companies.

The Woodbridge investments are tied to a $1.2B Ponzi scheme that ran from 2012 to 2017. Woodbridge and its 281 related companies are accused of bilking more than 8,400 investors, many of whom were elderly investors who lost their money investing in the company’s promissory notes and private placements. The customers were promised 5-8% in yearly returns and many used their retirement money to invest.

The SEC’s complaint said that Nilosek and his Position Benefits LLC sold over $23M in Woodbridge securities to more than 200 investors in at least four states between 9/2013 and 9/2015. He was paid over $1.4M in compensation. The regulator contends that Nilosek was never a registered broker nor was he ever registered with a brokerage firm.

Massachusetts Secretary of the Commonwealth William Galvin has filed an administrative complaint accusing private equity fund ARO Equity LLC, Timothy James Alcott, and Thomas David Renison of running a Ponzi scam that bilked investors of over $5.8M. Most of their victims were senior investors in their 70’s and 80’s who were allegedly promised 8-12% yearly returns over three-to-five years for their purchase of mostly promissory notes.

According to the Massachusetts Regulator’s complaint, Renison, Alcott, and ARO Equity invested just half of investors’ funds, with most investments made sustaining substantial losses. They allegedly ran their scam out of a trailer park in the city of Peabody despite listing their address at the One International Place Tower in Boston. Meantime, the two men have purportedly paid themselves more than $1M since their alleged Ponzi scam began.

Renison, who allegedly made $710K, was barred from the securities industry by the US Securities and Exchange Commission in 2014 for promissory note fraud involving a client. He was ordered by a jury to pay a $1.4M judgment in that matter. A criminal charge for conspiring to commit wire fraud was brought against him in a parallel case that was dismissed following his cooperation and testimony against a co-conspirator.

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The US Securities and Exchange Commission has filed civil charges against Singer Financial Corp. and its owner Paul Singer accusing them of illegally offering unregistered securities. The regulator’s complaint contends that they raised about $3.4M from at least 70 investors via unsecured promissory notes that were not registered while failing to qualify for an exemption from registration.

According to the Commission, Singer and his financial firm had at first tried for registration exemption for investment certificates that were almost identical to the promissory notes, but they gave up on their attempt and engaged in the illegal offering of the unregistered promissory notes instead. The SEC said that by not registering the promissory note offering with the regulator or obtaining qualification for registration exemption, investors were “deprived” of “critical information” about the risks involved in their investments. Also, investors in a previous offering ended up trading in their securities with promissory notes that had terms favoring Singer and his firm more than it did them. The notes also generally stretched out “repayment obligations.”

The SEC claims that Singer and his firm used marketing collateral that did not include financial statements, pervious performance facts, and other documents that are usually provided in such instances.

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Financial Firm and Its CEO Settle Life Settlement Fraud Charges
The US Securities and Exchange Commission announced that Verto Capital Management and its CEO William Schantz III have settled civil charges accusing them of running a Ponzi-like scam involving life settlements. As part of the settlement, Verto Capital and Schantz will pay over $4M.

According to the regulator’s complaint, the two of them raised about $12.5M through promissory note sales that were supposed to pay for the firm’s purchase and sale of life settlements. The notes were sold mostly through insurance brokers in Texas.

Investors who were religious were the main target of the alleged fraud.They were allegedly told that that the securities were short-term investments that were at low risk of defaulting.

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The U.S. Securities and Exchange Commission has filed promissory note fraud charges against Onix Capital and it owner Albert Chang-Rajii.  The Miami-based asset management company and Chang are accused of bilking investors who put their money into promissory notes and start-ups, as well as of falsely portraying the Chilean national as an award-winning multi-millionaire “angel” investor who had graduated from Stanford University’a business school.

According to the regulator’s complaint, Chang and Onix Capital sold over $5.7M in promissory notes that they falsely claimed he had guaranteed and told investors that the notes themselves  “guaranteed” yearly returns of 12-19%. They also raised over $1.7M that Chang was supposed to invest in companies like Square, Snapchat and Uber.

The SEC said that, in truth, Onix Capital’s investment revenue was “non-existent” and Chang did not have the professional or educational background that he touted.  The Commission alleges that rather than use the funds as promised, the money went to Chang and to pay other investors.

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$10M Texas Ponzi Scam Solicited Over 100 Investors

Austin resident Robert Roland Langguth is sentenced to four years in federal prison for running a $10 million Texas Ponzi scam that solicited over 100 investors to become involved in real and bogus construction projects and investments. Often, the money brought in would go toward supporting the 71-year-old’s extravagant lifestyle.

Monthly dividends paid to investors were actually payments from newer investors, which is typical for a Ponzi scam. Last year, Langguth pled guilty to money laundering and wire fraud charges. Aside from prison time, he will pay more than $10 million in restitution to investors that were defrauded.

The Financial Industry Regulatory Authority has issued temporary cease-and-desist order against Fuad Ahmed, the president and CEO of Success Trade Securities, Inc., to stop his alleged financial fraud activities. It also put out a complaint against him and the online brokerage firm, charging them with promissory note fraud. The notes were issued by Success Trade, Inc. Ahmed is one of its majority owners. Success Trade Securities runs LowTrades and Just2Trades.

FINRA issued the TCDO over concerns that if it didn’t, investors’ assets and funds would continue to be misused. The SRO contends that the brokerage firm, its financial representatives, and Ahmed sold over $18M in promissory notes to nearly five dozen investors, including ex- and current NBA and NFL Athletes, while omitting or misrepresenting material facts, such as how they were raising $5 million via the selling of the notes or that the sales went over 300% above the original offering.

The majority of notes promised a 12.5-26% yearly interest rate payment monthly over three years. Also, Success Trade Securities and Ahmed allegedly did not disclose both how much the brokerage firm owed investors and that it couldn’t keep paying interest payments unless it brought it new investor money. The SRO believes that note sale proceeds went to unsecured loans to Ahmed, past investor payments, and firm operations.

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