Posts Tagged ‘Fraud Attorney’

Ray Lucia San Diego Investment Advisor charged by SEC – Buckets of Money?

September 14th, 2012

The Securities and Exchange Commission today accused local San Diego radio talk show host and bestselling author Ray Lucia of misleading potential investors in regards to his investment strategy called “Buckets of Money.”

Seal of the U.S. Securities and Exchange Commi...

Seal of the U.S. Securities and Exchange Commission. (Photo credit: Wikipedia)

The SEC alleges that Lucia misled potential investors when he told them that his method had been “back-checked” using historical data from past bear markets and that the investors money would be safe and grow.  According to the SEC, the investment program failed to account for fees and included artificially lowered inflation rates.   When historically accurate rates of inflation were used, a 1973 investor would have run out of money by 1989, the SEC said, a far cry from the return claimed by Lucia.

The SEC said Lucia and his company “have admitted during the SEC’s investigation that the only testing that actually performed were some calculations that Lucia made in the 1990’s – copies of which no longer exist – and two two-page spreadsheets.”  Lucia was aware that using the undervalued inflation rate would “make the results look more favorable for the Buckets of Money Strategy,” according to the SEC.

In addition to barring Lucia from making misleading claims, the SEC’s Order instituting Administrative and Cease-and-Desist Proceedings seeks financial penalties and “other remedial actions.”

Lucia quickly posted a passionate defense to the SEC allegations on his website on Wednesday afternoon, stressing that the investigation was a civil matter and not a criminal case and that it involved something he had not used in over two years.  “I want to assure you that I intend to vigorously defend this absolutely meritless lawsuit and will seek an early trial,” said Lucia.

Despite the allegations, Lucia’s website is promoting a seminar to be held at The Hilton San Diego Resort & Spa on September 22nd, which will be co-hosted by actor and financial columnist Ben Stein, and former San Diego Mayor and current talk show host Roger Hedgecock.

Carlson Law Firm is reviewing potential claims against Ray Lucia and his affiliates.  To speak with an attorney regarding your, please call Carlson Law Firm 619-544-9300  for a free consultation.

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Posted in Investment Fraud | Comments (0)

Citigroup Must Pay Claimants $54M in Damages in MAT/ASTA Investment Fund FINRA Arbitration

May 17th, 2011

In April 2011, Citigroup Global Markets, Inc. was ordered by a Financial Industry Regulatory Authority (FINRA) panel to pay damages of more than $54M for its misconduct in managing and promoting a wide range of investment products, including MAT/ASTA municipal bond hedge funds.

The three claimants will receive 100 percent of the compensatory damages they sought, which total $34,058,948, as well as 8 percent interest and $17,000,000 in punitive damages. Furthermore, Citigroup must pay claimants’ attorney fees, expert witness fees, hearing session fees and the nonrefundable portion of the claimants’ filing fee.

The settlement process focused on the company’s poor handling of MAT/ASTA municipal arbitrage funds, including MAT Two, MAT Three and MAT Five; MAT Finance; ASTA Three and ASTA Five; and ASTA Finance. Without regard to their high-risk nature, the funds were promoted as alternatives to municipal bond portfolios. Furthermore, Citibank falsely characterized them as having strong risk-control features. FINRA found that Citibank not only falsely marketed MAT/ASTA funds, but that it also seriously mismanaged them.

If you believe that Citigroup Global Markets mishandled your investments but have yet to file a claim, don’t delay. Contact an experienced investment recovery lawyer in San Diego at Carlson Law today. It may not be too late to recoup your financial loss and stand up for your rights as an investor.

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Posted in Broker Fraud, Fiduciary Duty Breach, Investment Fraud, Negligent Misrepresentation, Securities Arbitration, Securities Fraud, Securities Law, Securities Litigation, Stock Fraud, Stock Loss | Comments (4)

Is Your Broker Guilty of “Switching” Mutual Funds to Generate Fees?

May 13th, 2011
Mutual fund

Image via Wikipedia

Ordinarily, mutual funds are long-term investments. And ordinarily, brokers who switch shares among funds with comparable investment goals have committed a violation if the switch serves little or no legitimate financial purpose other than earning him or her a fee. Such switching not only increases the fees investors pay, but it also puts them at risk of increased tax liability.

Often, investors are unaware that their broker has increased their investment costs and risks by “switching” their mutual funds. Mutual funds are intended to be held for a substantial length of time, not traded like individual stocks. To do so results in considerable charges that don’t apply to common stocks. Furthermore, the majority of mutual funds, by their very nature, may already be diversified and do not need to be traded unless there’s been a major change in the allocation of their assets or the fund manager’s market focus is narrow to the extent that it increases investor risk.

Mutual fund switch transactions are a violation of FINRA acceptable sales practices. If you believe you may have experienced financial loss due broker switching, contact an investment recovery lawyer at Carlson Law. Your broker’s misconduct may constitute a viable claim on your part for damages.

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Posted in Broker Fraud, Fiduciary Duty Breach, Investment Fraud, Negligent Misrepresentation, Securities Arbitration, Securities Fraud, Securities Law, Securities Litigation, Stock Fraud, Stock Loss | Comments (1)

Before you Invest in a Mutual Fund, Learn the Basics. Fees, Costs and Undisclosed Risk Can Make Mutual Funds Unsuitable for Investors.

May 13th, 2011

Mutual Funds 101
Mutual funds are sold by companies that pool money (capital) from many investors. This capital is then invested in bonds, stocks and/or other securities. Investors in the fund all have shares, and these shares represent a part of the fund’s holdings.

If you’re interested in making an investment, a mutual fund may or may not be the right choice for you. Like all investments, they come with many different levels of risk. They aren’t insured or guaranteed by financial institutions or government agencies, even those sold by banks. However, because mutual funds are often a mix of various bonds and/or stocks, the risk is some mutual funds is “spread out” or diversified. That said, some mutual funds are not diversified, and it is important to understand that a mutual fund investment can be very high risk, or very low risk, depending upon the holdings and the goals of the fund. Each fund must be looked at individually to determine if it is appropriate for the investor, in the same manner as any individual stock or other investment.

Mutual funds are managed by professional fund managers. These managers invest the money investors contribute into individual stocks, bonds and other securities. And because mutual funds buy and sell securities in large amounts at one time, they usually incur fewer fees, thus operating in a cost-efficient manner. However, it is very important to carefully examine prior to purchase all of the fees and costs associated with the fund you are purchasing as they can vary greatly and take a significant bite out of your return.

If you feel your financial advisor placed you in inappropriate mutual fund investments and/or failed to disclose the fees and costs associated with investment or that the underlying holdings of the fund were beyond your tolerance for risk, you may have a case. Call Carlson Law at 858-544-9300 for a free consultation.

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Posted in Broker Fraud, Fiduciary Duty Breach, Investment Fraud, Negligent Misrepresentation, Securities Arbitration, Securities Fraud, Securities Law, Securities Litigation, Stock Fraud, Stock Loss | Comments (0)

Variable Annuity Exchanges & Replacements: Annuity Loss – Annuity Fraud – Did You Get Shafted by Your Broker?

May 11th, 2011

There is a continuing problem for investors relating to the improper sale or switching by investment advisors of variable annuities that can be annuity fraud and result is annuity losses. Many older investors have been counseled by their brokers to replace their old variable annuity contracts with new ones. In many cases it may be unsuitable and result in the creation of fees and commissions for the advisor, surrender charges for the investor and new long term non-liquid investment. Furthermore, adding insult to injury, in some cases advisors have neglected to exercise due diligence by assuring that the exchange of those annuities was tax free under Internal Revenue Code (Section 1035).

If done properly, exchanging variable annuities should be tax free.
In a tax-free 1035 exchange, the owner of a variable annuity replaces the current contract with a new contract. No tax is paid on the investment gains or income from the old variable annuity. If, however, an investor gives up his or her old annuity for cash and then uses that money to buy a new annuity, he or she will have to pay taxes on the old annuity.

Variable annuities can be fraught with hidden costs.
An additional problem with variable annuities is that exchanging and replacing them often results in surrender charges. Customers must pay these charges when annuities are surrendered before the end of their given surrender period. Usually, that’s six to eight years from the purchase date. Because surrender charges reduce the amount of money available for reinvestment in a new annuity, they also lower an investor’s potential return. And if that weren’t bad enough, the new replacement annuity has a new surrender period, so funds are ordinarily locked into place for another six to eight years.

In general, seniors shouldn’t invest in them.
Because of the risks, high fees and surrender charges associated with variable annuities, they’re poor financial choices for most investors over 65. In fact, California law requires that selling agents prove that an annuity replacement is of “substantial benefit” to their senior clients.

FINRA oversight of variable annuities is increasing.
The Financial Industry Regulatory Authority (FINRA) has recently implemented new rules regarding broker recommendations to purchase and exchange variable annuities, making variable annuities one of the few securities products with its own suitability requirements. These new rules require that brokerage firms put supervisory procedures into practice for the detection and prevention of “inappropriate exchanges.”

Should you contact a securities attorney?
If you’re an older investor whose financial advisor has advised to exchange or replace variable annuities, resulting in a loss in your annuity either fraom annuity fraud or simple negligence, call Carlson Law for a free consultation at 619-544-9300. Furthermore, if your broker failed to facilitate a tax-free 1035 exchange of variable annuities, contact our firm. Your broker may be liable for any or all fees, taxes and financial loss you incurred as a result.

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Posted in Fiduciary Duty Breach, Investment Fraud, Negligent Misrepresentation, Securities Arbitration, Securities Fraud, Securities Law, Securities Litigation, Stock Fraud, Stock Loss | Comments (4)

Trusting Your Financial Advisor – Do You Really Know Who is Handling Your Life Savings?

April 15th, 2011

There are over 210 possible different credentials available to financial advisors.  Very few of those credentials are regulated and some mean little or nothing.  It is important for every investor to do their homework and really get to know their financial advisor, their credentials, licensing and experience.  Simply because your advisor has many credentials or friends have recommended them is not enough.

While the CFP (Certified Financial Planner) and CFA (Certified Financial Advisor) designations require course work, exams and continuing education many certifications in the financial industry do not.   So what should an investor do in order to select a financial advisor? There are a number of things that can be done.

  1. Everyone can go and look up the record of the advisor they are considering using on the Financial Industry Regulatory Authority’s BrokerCheck service.  The BrokerCheck service will give you important information about the advisor you are considering; such as if that advisor has had prior complaints, been sued before, where he or she has worked in the past and for how long,  the reason they left a prior employer, in addition to information about licensing and credentials.
  2. Next, look at the information from state securities regulators at the North American Securities Administrators Association.
  3. Also, review the National Association of Insurance Commissioners website regarding the advisor you are considering using.

A good question to ask a prospective advisor regarding their credentials is what percentage of people who apply for the credential obtain it?  Also, feel free to ask about the qualifications of the instructors for the credential program touted.  As an investor interviewing a financial advisor, you should be careful if the advisor is put off or unable to answer such simple questions.

If you have already fallen victim to an unqualified investment advisor and suspect an incidence of investment fraud, please call the Carlson Law Firm at (619) 544-9300 or contact a San Diego securities fraud attorney today.

 

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Posted in Broker Fraud, Fiduciary Duty Breach, Investment Fraud, Negligent Misrepresentation, Securities Arbitration, Securities Fraud, Securities Law, Securities Litigation, Stock Fraud, Stock Loss | Comments (11)