Robert H. Rex is a South Florida-based attorney who has been active in the field of securities arbitration, securities fraud and assisting retirees in the recovery of lost nest eggs for more than 20 years. While most of his clients are from South Florida, he has helped investors from all across the country, in parts of Europe, the Carribean and South America. He is a partner at Dickenson, Murphy, Rex and Sloan P.A., Boca Raton's oldest law firm. If you have lost money in your brokerage account or have other questions about how your investments are being handled, contact us at 561-391-1900 or e-mail us. For more information visit our mainwebsite at http://www.dmrslaw.com/ .Please check back on a regular basis for my most recent posts.
BEHRINGER HARVARD OPPORTUNITY REIT I-DOWN 46%
Posted by: Robert Rex
January 23, 2012
Topic: PRIVATE (NON PUBLICLY TRADED) REITS
According to a recent article in the Investment News, the year end value of the Behringer Harvard Opportunity REIT I was down 46% from a year earlier. The current estimated value is $4.12 a share vs. $7.66 a share a year ago.
In 2009, its value was $10 and it has been steadily dropping. According to analysts the falling valuation is due to the deep decline of six real estate properties in the portfolio. While the goal for most nontraded REITs is to return the invested principal to investors, analysts admit that "will be a real challenge" in this case.
FINRA has proposed regulations that would require more disclosure on the valuation of nontraded REITs as they appear on client statements. Presently there is a lack of transparency with regard to commissions and upfront costs when valuing the investments.
Brokers have a duty to make suitable recommendations when offering advise on your portfolio. If you have suffered losses on REITs or any other investment and have questions about your rights, please give us a call at 561 391 1900 begin_of_the_skype_highlighting 561 391 1900 end_of_the_skype_highlighting or email Robert Rex, Esq. at rhr@dmrslaw.com . Visit our main website for more information http://www.dmrslaw.com/ .
MONEY MAG WARNS ON VARIABLE ANNUITIES
Posted by: Robert Rex
January 23, 2012
Topic: Variable Annuities
In a recent Money Magazine article, investors are warned that not all annuities are created equal and that investors should beware of guarantees that appear too good to be true. Following the 2008 crash, there has been a rush to purchase variable annuities, which essentially is a tax-deferred investment with insurance benefits.
The article warns that commissions are high and lifetime income benefits have been scaled back dramatically as a result of the worldwide economic downturn.
Here is a link to the article:
http://money.cnn.com/2012/01/17/pf/variable_annuities_best_money_moves.moneymag/index.htm?iid=EL
If you have questions about investments in your brokerage account, please give us a call at 561 391 1900 or visit our website at www.dmrslaw.com.
SEC SANCTIONS SELLER OF OIL & GAS INTERESTS
Posted by: Robert Rex
January 23, 2012
Topic: SEC news
On September 20, 2011, the Securities and Exchange Commission issued an Order Instituting Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 against Justin William Rifkin of Corpus Christi, TX, who was managing member of Wellco Energy LLC. Wellco, which operated out of Colorado Springs, CO, sold fractional interes in oil and gas deals to others while receiving a commission.
The complaint alleged that the salesmen misrepresented the nature of the deals and Rifkin's experience in the industry. In addition, it alleges that investors were not told that only 42% of their invested capital was actually used to acquire oil and gas interests. The rest was spent on commissions and personal expenses.
The SEC ordered that Rifkin be barred from association with any broker dealer or investment advisor and from making future offerings.
To see the entire order:
http://www.sec.gov/litigation/admin/2012/34-66143.pdf
Questions about your brokerage account ? Call Bob Rex, Esq. at 561 391 1900 or visit or lawfirm website at www.dmrslaw.com.
SEC FILES FRAUD CHARGES VS. BANKATLANTIC BANCORP, INC.
Posted by: Robert Rex
January 23, 2012
Topic: SEC news
On January 18, 2012, The Securities and Exchange Commission filed securities fraud charges against BankAtlantic Bancorp, Inc. and its CEO and Chairman, Alan Levan, with securities fraud intended to hide growing problems early in the financial crisis. The complaint alleges that Bancorp and Levan made misleading statements in public filings and earnings calls regarding the deteriorating state of a large portion of Bancorp's commercial real estate portfolio in the first two quarters of 2007 and Bancorp and Levan improperly accounted for loans they were trying to sell from this portfolio in late 2007 to minimize Bancorp's losses.
The SEC's complaint alleges that Bancorp and Levan knew that a large portion of the commercial residential portfolio was deteriorating early in 2007 due to the fact that many of the loans had required extensions because of the borrowers' inability to meet their loan obligations. A number of loans were kept "current" only by extending the terms or replenishment of the interest reserves from an increase in the loan principal.
The SEC alleges that Bancorp and Levan tried to sell a number of the deteriorating loans after the announcement but failed to account for them properly because doing so would have required Bancorp to write them down, incurring immediate additional losses. As a result of this scheme, Bancorp understated its net loss by more than 10% .
Here is a link to the SEC complaint:
http://www.sec.gov/litigation/complaints/2012/comp22229.pdf
If you have questions about your brokerage account, call us at 561 391 1900 or visit our website at http://www.dmrslaw.com/.
FINRA DISCIPLINARY ACTIONS FOR JANUARY 2012 (FLA ONLY)
Posted by: Robert Rex
January 19, 2012
Topic: FINRA DISCIPLINARY ACTIONS
Victor Azevado, Miami, Florida submitted a Letter of Acceptance,Waiver and Consent and was fined $2,500 and suspended from association with any FINRA member for five days and to the entry of findings that he knowingly made untrue statements while employed by his member firm's bank affiliate.
Ricardo Blanco, Key Biscayne, Florida submitted a Letter of Acceptance, Waiver and Consent and was barred from association with any FINRA member in any capacity and to the entry of findings that he sent documents that contained false and inflated account values to a customer and also sent a false account statement.
Richard Paul Counts, Belleair, FLorida submitted a Letter of Acceptance Waiver and Consent and was barred from association with any FINRA member in any capacity and to the entry of findings that he misappropriated about $18,000 from a customer checking account and about $73,500 from the same customer's home equity line of credit.
Jason C Dayton aka Jason Krupar, Oviedo, FLorida submitted a Letter of Acceptance, Waiver and Consent in which he was fined $5,000 and suspended from association with any FINRA member for 20 days and to the entry of findings that he failed to properly review and supervise a joint brokerage account application shared by a fellow broker and a firm customer.
Bradley J Delp, Deerfield Beach, FL submitted a Letter of Acceptance Waiver and Consent in which he was fined $25,000 and suspended from association with any FINRA member for two months and to the entry of findings that he faile to provide prompt written notice to his firm that he was engaged in an outside business activity involving insurance products.
Marcela Zamora Erana, Key Biscayne, FL submitted a Letter of Acceptance Waiver and Consent in which she was fined $5,000 and suspended from association with any FINRA member for a month and to the entry of findings that she instructed another registered rep not to cover short positions at agreed upon prices contrary to the account holder's wishes.
Dennis Flanagan, Jr., Miami, FL submitted a Letter of Acceptance Waiver and Consent in which he was fined $25,000 and suspended from association with any FINRA member for two years and to the entry of findings that he willfully failed to timely disclose material information on his U4.
Roy F. Glassberg, Boca Raton, FL submitted a Letter of Acceptance Waiver and Consent in which he was fined $2,500 and suspended from association with any FINRA member for 20 days and to the entry of findings that he failed to notify his member firm that he worked for certain businesses and that he failed to disclose his directorship with an affiliate corporation.
Dennis S. Kaminski, Wellington, FL was fined $50,000, suspended from association with any FINRA member for 18 months, required to requalify and found that he failed to supervise the timely review of his member firms variable annuity trades and failed to heed numerous warnings of staff deficiencies in the compliance department.
Michael A Lichtenstein, Boca Raton, FL submitted a Letter of Acceptance Waiver and Consent in which he was fined $50,000 and suspended from association with any FINRA member for 24 months and to the entry of findings that he solicited firm customers to invest in a private placement offering and distributed inaccurate offering materials.
Jan D. Narrine, Winter Garden, FL submitted a Letter of Acceptance Waiver and Consent in which he was barred from association with any FINRA member and to the entry of findings that he misappropriated over $57,000 from a customer account by forging documents.
Peter Martin Peterson, Tampa, FL was barred from association with any FINRA member for failure to respond to FINRA requests for documents.
Joseph J Sciarra, Jr. , Wellington, FL was barred from association with any FINRA member and ordered to pay restitution in the amount of $393,000 to a customer's estate. Sanctions were based on findings that Sciarra converted a customers funds to his own use.
John F. Sullivan, West Palm Beach, FL submitted a Letter of Acceptance Waiver and COnsent in which he was fined $2,500 and suspended from association with any FINRA member for 15 days adn to the entry of findings that he commingled $425 of customer funds with his own.
Tyge T Tuccillo, Venice, FL submitted a Letter of Acceptance Waiver and Consent in which he was barred from association with any FINRA member and to the entry of findings that he would not agree to appear for on the record testimony before FINRA related to a private placement offering sales practice.
Andrew J Aragona, Deerfield Beach, FL was named in a FINRA complaint alleging that he recommended variable annuity switches to an elderly customer. The new annuity was purchased for $1.1 million and switching from the old annuity incurred surrender charges of $69,000 for which Aragona received $67,500 in commissions. The customer incurred over $130,000 in surrender fees in less than one year.
Brookstone Securities, Lakeland FL was named as a respondent in a FINRA complaint alleging that the firm, through its brokers, recommended and sold two private placements without understanding the inherent risks of the offerings; ie, the firm failed to perform adequate due diligence. The firm sold $815,000 worth to their customers and collected commissions of nearly $73,000.
Carlos F Otalvaro aka Francisco H Otalvaro, Coral Gables, FL was named in a FINRA complaint alleging that he wrongfully withheld customer funds.
Individuals Barred for Failure to Provide or Keep Current Information per FINRA Rule 9552(h)
Wilfredo Colon, Miami FL
Paul A LaRocco, Ocala, FL
Sherise C Lee, Tallahassee, FL
Juan R Marte, Orlando, FL
Antonio Seminario aka Jorge Antonio, Plantation FL
Van Gregory Zovluck, Plantation, FL
Individuals Suspended for Failure to Comply iwth FINRA Rule 9552(d)
Todd N Farmer, Deltona, FL
Michael F Louis, Boca Raton, FL
James B Herrick, Venice, FL
Timothy B Ruggiero, Plantation, FL
For a complete listing of the FINRA enforcement actions, visit their website at
http://www.finra.org/web/groups/industry/@ip/@enf/@da/documents/disciplinaryactions/p125399.pdf
If you have questions about the way your brokerage account has been handled, please give us a call at 561 391 1900 or visit our website at http://www.dmrslaw.com/ . We have been assisting investors recover investment losses in South Florida, across the nation and across the world for over 20 years.
FIRMS DISCIPLINED UNDER NASD TAPING RULE
Posted by: Robert Rex
January 09, 2012
Topic: FINRA DISCIPLINARY ACTIONS
It is not uncommon for small (and sometimes not so small) brokerage firms to go out of business or to be expelled from FINRA membership for various disciplinary reasons. When a firm is expelled or has its FINRA registration revoked, the brokers (who comprise the salesforce of a brokerage firm) must look for employment elsewhere. Given the fact that this salesforce may have contributed to the reason for the firm's expulsion, FINRA instituted a rule in 1998 requiring taping of broker's conversations with customers in certain instances.
Whenever a a brokerage firm has a salesforce comprised of a specified number (40% in small firms and 20% in large firms) of brokers who were previously employed by a firm that was expelled from FINRA membership within the last three years, the Taping Rule applies. Under this rule the firm is required to adopt special written supervisory procedures to supervise the telemarketing activities of all of its registered persons (brokers).
Link to the Taping Rule in NASD Notice to Members 98-52:
http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p004858.pdf
The FINRA website currently lists the following firms as having been disciplined under the Taping Rule during the past three years:
AIS Financial, Inc.
APS Financial Corporation
Aura Financial Services, Inc.
Brewer Financial Services, LLC
Dolphin & Bradbury Incorporated
ITRADEdirect.com Corp.
Meeting Street Brokerage, LLC
Melhado, Flynn & Associates, Inc.
MICG Investment Management LLC
Mission Securities Corp.
MMR, Inc.
Morgages LTD Securities, LLC
North American Clearing, Inc.
Prestige Financial Center, Inc.
Provident Asset Management, LLC
If you have a question about the way your brokerage account is being handled, please give us a call at 561 391 1900, email rhr@dmrslaw.com or visit our website at http://www.dmrslaw.com/Securities-Arbitration-Administration/index.html .
SEC INVESTOR BULLETIN ON NON-TRADED REITS
Posted by: Robert Rex
January 06, 2012
Topic: PRIVATE (NON PUBLICLY TRADED) REITS
The Securities & Exchange Commission issued an Investor Bulletin describing the necessary qualifications of a real estate investment trust, commonly referred to as a REIT. That bulletin may be read in its entirety at:
http://www.sec.gov/investor/alerts/reits.pdf
REITS may be publicly traded or non-traded (private). As suggested by the name, publicly traded REITs trade on national exchanges and non-traded REITs do not. Non-traded REITs may not be liquid and may be difficult or impossible to value. Sales commissions on non-traded REITs are generally substantially higher than for traded REITs. The lack of liquidity, lack of share transparency, the significant up-front fees, the fact there are often conflicts of interest between the REIT and related parties and the fact that distributions may be paid from offering proceeds or borrowing make the purchase of non-traded REITs somewhat more risky than other investments.
Recently we have be consulted by a number of investors who have suffered losses as a result of investing in non-traded REITs. If you have questions about this or any other matter related to your investment account, please call us at 561 391 1900 , email rhr@dmrslaw.com or visit our website www.dmrslaw.com .
SEC CHARGES LIFE PARTNERS HOLDINGS INC WITH FRAUD
Posted by: Robert Rex
January 06, 2012
Topic: SEC news
The SEC charged Texas-based Life Partners Holdings and three senior executives with fraud related to disclosure and accounting practices involving life settlements. Chairman and CEO Brian Pardo, president and general counsel Scott Peden and CFO David Martin were charged with misleading shareholders by failing to disclose risks to Life Partner's business by underestimating the life expectancy estimates it used to price transactions. As a result the assets were overvalued and it was made to appear that the revenue stream was greater and more steady that it actually was.
Pardo and Peden sold nearly $12 million of their own stock at inflated prices while in possession of material non-public information about the financial condition of the company.
If you have questions about your brokerage account, call us at 516 391 1900 , email rhr@dmrslaw.com or visit our website www.dmrslaw.com .
NUMBER OF BROKERAGE FIRMS IS SHRINKING
Posted by: Robert Rex
January 06, 2012
Topic: FINRA news
Recent statistics confirm that the number of brokerage firms in the country is shrinking. According to The Compliance Department Inc. , between May 2010 and May 2011, 336 broker-dealers notified FINRA that they were shutting down. Only 190 new firms were admitted by FINRA during that same time period. Projections suggest that this trend will continue for at least the next 3 years.
This comports with what we have seen in our representation of investors over the past year. Many of the companies we have pursued on behalf of our clients have chosen to withdraw from the industry rather than having an arbitration award they are unable to pay rendered against them.
Investors should be very wary of the brokerage firm they choose to entrust with their life savings. Contrary to popular notion, most firms do not have insurance and most small firms are so thinly capitalized that even a low six figure settlement or award to an aggrieved investor is something they are not capable of satisfying.
When deciding whether to open an account with one of the lesser known brokerage firms, investors would be wise to do things:
- Obtain the CRD on the broker to determine if he or she has prior disciplinary problems or customer complaints. This may be obtained by visiting the Broker Check page on the FINRA website.
- Obtain a copy of the recent financials for the firm to assess their ability to be financially responsible. This can be obtained by searching the SEC Edgar filing page for the name of the company, then finding the most recent SEC form X17A-5.
If you have questions about this or any other matter related to the handling of your brokerage account, call us at 561 391 1900 or email rhr@dmrslaw.com or visit our website www.dmrslaw.com .
Harbinger Capital Partners/ Philip Falcone
Posted by: Robert Rex
January 05, 2012
Topic: Harbinger Capital Partners
Philip Falcone and the hedge fund he manages Harbinger Capital received Wells Notices from the Securities and Exchange Commission in December 2011. A Wells Notice from the SEC is notice to the recipeints that the government is considering filing civil fraud charges for manipulative trading during the period from 2006 to 2008.
A Wells Notice is a recomendation from the enforcement division and while the SEC can decline to follow it, in practice the SEC generally does follow the action suggested by enforcement.
Falcone borrowed over $100 million from Harbinger in October 2009, and although it has been repaid, news sources indicate that the SEC may be investigating whether investors were apprised in a timely manner about the loan.
This fund, which once oversaw $26 billion in assets has experienced large losses and client withdrawals and now manages about $5 billion. Of that amount nearly half is invested in LightSquared, a controversial company thatis making plans to build a wireless network using new technology that opponents claim interferes with current global positioning systems.
If are an investor in Harbinger Capital and have questions, please contact Bob Rex, Esq. at 561 391 1900 or email rhr@dmrslaw.com . Visit our main website www.dmrslaw.com for more information on recovering investment losses.
Robert H. Rex is a South Florida-based attorney who has been active in the field of securities arbitration, securities fraud and assisting retirees in the recovery of lost nest eggs for more than 20 years. While most of his clients are from South Florida, he has helped investors from all across the country, in parts of Europe, the Carribean and South America. He is a partner at Dickenson, Murphy, Rex and Sloan P.A., Boca Raton's oldest law firm. If you have lost money in your brokerage account or have other questions about how your investments are being handled, contact us at 561-391-1900 or e-mail us. For more information visit our mainwebsite at www.dmrslaw.com .
Please check back on a regular basis for my most recent posts.
