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SEC SANCTIONS SELLER OF OIL & GAS INTERESTS
Posted by: Robert Rex
January 23, 2012

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.

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SEC FILES FRAUD CHARGES VS. BANKATLANTIC BANCORP, INC.
Posted by: Robert Rex
January 23, 2012

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/.

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SEC CHARGES LIFE PARTNERS HOLDINGS INC WITH FRAUD
Posted by: Robert Rex
January 06, 2012

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 .

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SEC INVESTOR TIPS FOR 2012
Posted by: Robert Rex
January 03, 2012

The SEC offers the following tips for the handling of your financial affairs going into the New Year:

1-Visit the SEC investor page before making your next investment decision at http://www.investor.gov/ .

2-Check the background of your investment professional. We wholeheartedly agree. Before entrusting any amount of your hard earned savings with anyone, in addtition to asking for references from people you trust, you should check them out using the FINRA BrokerCheck website at http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/ss .

3-Research the investment yourself before handing over your money.

4-Teach your children about good financial habits.

5-Understand the fees charged to you by your advisor.

6-Beware of promises of "guaranteed returns".

7-Take advantage of "free money" if available to you.

8-Don't put all your eggs in one basket. This is one of the most common problems we see in our representation of retirees. Having a large percentage of your money invested in any one company is risky.

9-Help stop affinity fraud in your community.

10-Boost your "rainy day" fund.

11-Pay yourself first.

12-Pay off high interest debt.

Here is the link to the SEC website for the full version of their tips:

http://www.sec.gov/investor/alerts/12tipsfor2012.pdf

If you have questions about your broker, your brokerage firm or a particular investment you have made, please call Bob Rex, Esq. at 561 391 1900 or email him at rhr@dmrslaw.com . See www.dmrslaw.com for our main website.

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SEC ANNOUCES PROCEEDINGS VS. DANIEL J SEBASTIAN
Posted by: Robert Rex
January 03, 2012

On December 29th, 2011, the Securities & Exchange Commission instituted proceedings against Daniel Joseph Sebastian pursuant to Section 203(f) of the Investment Advisors Act of 1940. Based upon the investigation of the Division of Enforcement, the SEC alleges that:

• From Jan 2007 through July 2010 Sebastian held himself out as a principal and manager of a purported private equity fund operating under the names of Managed Capital Fund, Safe Harbor Private Equity Fund and Preservation of Principal Fund, while associated with another unregistered investment adviser James Davis  Risher.
• The SEC alleged that Sebastian ad Risher operated a Ponzi scheme which raised about $22 million dollars from over 100 people.

Here is a link to the SEC order:

 http://www.sec.gov/litigation/admin/2011/ia-3346.pdf

Our office has been pursuing the interests of over 100 victims of this Ponzi scheme for over a year in a FINRA arbitration. We anticipate filing additional actions against one or more of the financial institutions that permitted this fraud to operate in the very near future. James Risher was recently sentenced to nearly 20 years in Federal Prison for his role in this scheme which has financially devastated many people. If you have questions about any investments you are involved with or about how your brokerage account is being handled, please do not hesitate to contact Robert H. Rex, Esq. at 561 391 1900 or rhr@dmrslaw.com . For more information, visit our main website www.dmrslaw.com .

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SEC TAKES AIM AT HEDGE FUNDS
Posted by: Robert Rex
December 28, 2011

After overlooking the Madoff Ponzi scheme that cost investors $20 billion dollars, the SEC has decided to investigate hedge funds that tout inordinately high returns.

In a recent article in the Wall Street Journal, the SEC announced a new program targeting over 100  hedge funds that advertise returns that appear to be too good to be true. Encouraged by recent results the SEC has decided to apply its computer based analysis to mutual funds and private equity funds. 

The SEC computer system is designed  to detect returns that barely budge when markets are volatile. Such a system might have set off alarms inside the SEC about Madoff instead of letting him run his scheme for so long. The SEC has been criticized for failing to identify the Ponzi scheme and for its failure to respond to whistleblowers and their warnings that Mr. Madoff's operations were a fraud. 

Investors should be wary anytime they are offered opportunities that seem extraordinarily good in comparison the the rest of the market. Over the years we have noticed than many of the victims we represent were enticed into investments that were just too good to be true. 

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RUDY RUETTIGER AND 12 OTHERS CHARGED IN PENNY STOCK SCHEME
Posted by: Robert Rex
December 27, 2011

To many, Rudy Ruettiger is a hero who is known for overcoming great odds to become part of the Notre Dame folklore. However, the SEC recently charged Daniel "Rudy" Ruettiger and twelve others in a pump and dump scheme involving the stock of Rudy Nutrition. They claim he is a penny stock promoter and scammer.

Ruettiger has agreed to pay over $300,000 to resolve the SEC's claims that he and other fraudulently induced investors to bid up the stock of his sports drink company, Rudy Nutrition. The SEC found that the promoters had earned over $11 million in illicit profits by making false claims designed to increase the value of the company's stock.

The "pump and dump" scheme is just one of ruse's we have seen over the years to cheat hard working people out of their hard earned dollars. If you have questions about your broker or your brokerage account, please give us a call at 561 391 1900 or visit our website at www.dmrslaw.com .

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