Carmel, Milazzo & DiChiara LLP (CMD) is investigating potential claims against securities broker Steven Ellsworth Larson (CRD# 2422755) and Oakbridge Financial Services for unauthorized trading and failure to supervise.
FINRA has filed a complaint alleging that Steven Ellsworth Larson made numerous misstatements or omissions of material facts concerning the present values and safety of “church bonds”—bonds issued by religious organizations to construct or develop real property, and which are secured by first mortgages on the real property to be constructed or developed. The complaint alleges that Larson made these misstatements or omissions in order to mislead customers about the true value of their church-bond holdings, which were securities, to avoid confrontation with customers, and to prevent customers from liquidating their holdings or closing their accounts. By May 2013, most of the church bonds that Larson’s customers held in their accounts had already gone into default, bankruptcy, forbearance or restructuring. Due to a decline in real-estate values, many of the church-bond issuers were underwater on their mortgages. Nonetheless, Larson represented to customers that their defaulted church bonds retained all or most of their original value and even, in many instances, significantly more than their original value. Larson knew or was reckless in not knowing that his statements and omissions in the church bond update about the church bonds and church bond issuers were false and misleading, and that pricing reports provided to customers repeatedly and significantly inflated the values of his customers’ church-bond holdings.
The complaint also alleges that when recommending the purchase side of each cross trade, Larson knowingly, willfully, or recklessly misrepresented or omitted material facts regarding the prices at which he recommended those purchases. In particular, Larson knew or was reckless in not knowing that the bonds involved in those cross trades should have been bought or sold only at significant discounts from par value, that the prices at which he recommended his customers buy the bonds were not reasonably related to the prevailing market prices or fair market values for the bonds, and that he recommended each purchase without exercising reasonable diligence to discover whether the purchasers could have obtained the bonds at more favorable prices. As a result, Larson violated Section 10(b) of the Exchange Act Rule 10b-5.
If you or someone you know lost money investing with Steven Ellsworth Larson and/or Oakbridge Financial Services, you may be entitled to recover your investment losses through FINRA arbitration. CMD accepts cases on a contingency fee basis, which means we only get paid if you get paid. Your time to file a claim may be limited, so contact us today at (212) 658-0458 or firstname.lastname@example.org for a free and confidential case evaluation.