CMD is Investigating Claims Against Arthur Espinoza and Freedom Investors Corp. for Fraud

Securities law firm Carmel, Milazzo & DiChiara LLP (CMD) is investigating claims against Arthur Espinoza and Freedom Investors Corp. for fraud and failure to supervise.

In August 2016, Arhtur Espinoza was barred from association with any FINRA member in any capacity.  The findings stated that Arthur Espinoza incorporated a company that he operated and obtained investors who collectively invested more than $325,000 with the company.  In return for the investments, which were undocumented, Arthur Espinoza orally agreed to pay the investors an annual or semi-annual payment equaling 5.25 percent of their invested principal. Arthur Espinoza is unable to account for substantial amounts of the funds he raised from the investors, is not currently able to pay the principal back, and does not have any credible plans to do so.

If you or someone you know lost money investing with Arthur Espinoza and/or Freedom Investors Corp., 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 contact@cmdllp.com for a free and confidential case evaluation.

CMD is Investigating Claims Against Lawson Financial Corporation for Securities Fraud

Securities law firm Carmel, Milazzo & DiChiara LLP (“CMD”) is investigating claims against brokerage firm Lawson Financial Corporation (CRD# 15261)  for securities fraud.

In May 2016, FINRA filed a complaint against Lawson Financial Corporation and its CEO Robert Lawson, alleging that they carried out a massive securities fraud in connection with the sale of millions of dollars of municipal revenue bonds to Lawson Financial Corporation customers, in violation of Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), Rule 10b-5 there under and Municipal Securities Rulemaking Board (“MSRB”) Rule G-17.  During this same period, and continuing through the present, Robert Lawson also misused customer funds in violation of FINRA Rules 2150(a) and 2010, and Robert Lawson and Respondent Pamela Lawson  violated FINRA Rule 2010 by abusing their positions as co-trustees of a charitable remainder trust by improperly transferring millions of dollars from the trust in an undisclosed attempt to prop up the faltering borrowers of the municipal revenue bonds.

Lawson Financial Corporation’s and Robert Lawson’s fraudulent securities sales involved four municipal revenue bonds: the Hillcrest Bonds, the Decatur Bonds, the Cullman Bonds, and the Destiny Bonds. Lawson Financial Corporation and Robert Lawson’s fraudulent bond sales included bond sales made in primary market sales to Lawson Financial Corporation customers in the initial bond offering period for the Hillcrest Bonds, as sold commencing in October 2014, as well as later secondary market bond sales of the Hillcrest Bonds to Lawson Financial Corporation customers in 2015.  In addition, Lawson Financial Corporation and Robert Lawson’s fraudulent bond sales included secondary market bond sales made (i) to Lawson Financial Corporation customers who purchased the Cullman Bonds and Decatur Bonds between January 2013 and July 2015, and (ii) to Lawson Financial Corporation customers who purchased the Destiny Bonds between May 2015 and September 2015.

The Destiny Bonds and Hillcrest Bonds funded a charter school located in Mesa, Arizona, while the Cullman Bonds and Decatur Bonds funded two assisted living facilities located in, respectively, Cullman and Decatur, Alabama. The charter school and the two assisted living facilities (the conduit borrowers for the municipal revenue bonds) each suffered from severe financial difficulties and were unable to meet their required operating expenses. Moreover, the Cullman and Decatur assisted living facilities often were unable to meet required debt service payments on the Cullman Bonds and the Decatur Bonds without using funds from the charitable remainder trust account at Lawson Financial Corporation.

If you or someone you know lost money investing with Lawson Financial Corporation, 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 contact@cmdllp.com for a free and confidential case evaluation.

CMD Investigating Claims Against Steven Ellsworth Larson and Oakbridge Financial Services for Fraud

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 contact@cmdllp.com for a free and confidential case evaluation.

CMD Investigating Claims Against Broker Kelsey Marie Molyet and J.J.B. Hilliard, W.L. Lyons, LLC for Fraud

Carmel, Milazzo & DiChiara LLP (CMD) is investigating potential claims against securities broker Kelsey Marie Molyet (CRD #5695243, Indianapolis, Indiana) and J.J.B. Hilliard, W.L. Lyons, LLC, for fraud and failure to supervise.

In May, Kelsey Marie Molyet submitted an Acceptance, Waiver and Consent in which she was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Ms. Molyet consented to the sanction and to the entry of findings that she falsified documents, including checks and account statements, and provided them to J.J.B. Hilliard, W.L. Lyons, LLC’s customers and their agents with the intent to deceive them about their account balances.

FINRA’s findings stated that Ms. Molyet made written misrepresentations to customers and their agents regarding the value of their accounts and the execution status of certain requested transactions. The findings also stated that Ms. Moyet impersonated a customer during telephone calls with third parties. FINRA’s findings also included that Ms. Molyet falsely asserted, in response to a FINRA information request, that she did not alter documents before sending them to customers and their agents.

If you or someone you know lost money investing with Kelsey Marie Molyet and/or J.J.B. Hilliard, W.L. Lyons, LLC, 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 contact@cmdllp.com for a free and confidential case evaluation.

CMD Investigating Claims Against Lawson Financial Corporation, Inc. and CEO Robert Lawson for Fraud

Carmel, Milazzo & DiChiara LLP (CMD) is investigating potential claims against Lawson Financial Corporation, Inc., an Arizona based company, and its CEO Robert Lawson for fraud related to municipal bonds.

FINRA has issued a formal complaint against Lawson Financial Corporation, Inc. (LFC), as well as Robert Lawson, the company’s CEO and President with self-dealing – furthermore the regulator has charged LFC with abuse and securities fraud given their role as co-trustees of a charitable remainder trust. In particular, LFC and Lawson were improperly using the trust funds to indirectly prop up the struggling offerings via transfers of millions of dollars from the charitable remainder trust account – the allegations also extend to Pamela Lawson, LFC’s Chief Operating Officer (COO).

The specific municipal bonds at issue in the cited complaint include a $10.5 million bond offering back in October 2014 for bonds relating to an Arizona charter school – this was underwritten by LFC and peddled to LFC customers.  In addition, LFC had also been involved in secondary market bond sales to its clientele in 2015, involving earlier-issued municipal revenue bonds to the same charter school.  Finally, the complaint details secondary market sales to LFC’s customers between early 2013 and July 2015, concerning two separate assisted living facilities in Alabama.

FINRA has alleged that Lawson and LFC were acutely aware of the financial difficulties faced by the municipal revenue bond conduit borrowers, i.e. the Arizona charter school and the assisted living centers, opting to mask the financial woes facing these groups to its customers. This was further compounded by allegations that Lawson and LFC carried out their securities fraud by transferring millions of dollars from a deceased customer’s charitable trust account to cover up any associated risks endemic in the municipal revenue bonds.

Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock, bond or commodities markets that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of securities laws. 

Investors are protected against fraudulent securities activities by several different civil laws. First, the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.) and Rule 10b-5 protect investors against deceptive and manipulative acts in the purchase or sale of securities. This sweeping legislation is the cornerstone of federal securities laws. Rule 10b-5 makes it unlawful to employ a device or scheme to defraud, to make any untrue statement of material fact or omit to state a material fact not misleading, or to engage in any practice that would operate as a fraud.

If you or someone you know lost money investing in or with Lawson Financial Corporation, Inc., 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 contact@cmdllp.com for a free and confidential case evaluation.

CMD Investigating Clams Arising from Investments in REITs of Inland American Real Estate Trust, Inc., now known as InvenTrust Properties Corp.

Carmel, Milazzo & DiChiara LLP (CMD) is investigating potential claims arising from investments in REITs of Inland American Real Estate Trust, Inc. (Inland American), now known as InvenTrust Properties Corp.  Inland American has been the largest issuer of non-traded REITs in the United States.

Generally, a non-traded Real Estate Investment Trust, or “REIT”, is a company that owns and operates income producing real estate, such as apartment buildings, office buildings and shopping centers.  The company sells shares to investors to raise capital to purchase the underlying assets and operate the company.  Non-traded REITs are not traded on any stock exchange, and are generally, illiquid.  Non-traded REITs are often marketed by brokers to older investors as providing high yields, price stability and a steady income stream through periodic distributions.  What brokers often gloss over when selling these products to clients are the high commissions they receive, the lack of liquidity, high fees and other substantial risks.  Among the risks that are often not adequately disclosed is the fact that a REIT may suspend its shareholders’ ability to redeem his or her shares, or reduce, or entirely suspend distributions – the income stream that many brokers use to entice retirees to invest in a REIT.

Many non-traded REITs, including Inland American Real Estate Trust, have fallen short of brokers’ rosy promises and representations of price stability and a steady income stream.

If you or someone you know lost money or were misled about a non-traded REIT, such as Inland American Real Estate Trust, now known as IvenTrust Properties Corp., you may be entitled to recover your 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 contact@cmdllp.com for a free and confidential case evaluation.

CMD Investigating Claims Against Bahram Mirhashemi and Accelerated Capital Group for Churning, Unauthorized Trading and Unsuitable Recommendations

Burning Money

Carmel, Milazzo & DiChiara LLP (CMD) is investigating potential claims against securities broker Bahram Mirhashemi and Accelerated Capital Group for churning (excessive trading), unauthorized trading and unsuitable recommendations.

Recently, Mr. Mirhashemi submitted an Acceptance, Waiver and Consent (AWC) in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Mirhashemi consented to the sanction and to the entry of findings that he churned customer accounts, engaged in excessive and unauthorized trading and made unsuitable recommendations to customers. Mirhashemi consistently spread mutual fund purchases across multiple fund families, and in so doing, failed to obtain break point discounts for customers. These short-term mutual fund trades were both excessive and unsuitable, and cost the customers more than $150,000 in overall commissions. Mirhashemi also churned customers’ accounts by conducting short-term equity trades in customer accounts. Such trading was unsuitable and cost the customers more than $665,000 in overall commissions. As a result of his conduct, Mirhashemi willfully violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and FINRA Rules 2020, 2111 and 2010. The findings also included that Mirhashemi distributed materially false and misleading communications to customers..

According to Mr. Mirhashemi’s FINRA BrokerCheck, he has been the subject of five (5) customer complaints and three (3) regulatory events.

If you or someone you know lost money investing with Bahram Mirhashemi and Accelerated Capital Group, 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 for a free and confidential case evaluation.

CMD Investigating Claims Against Stuart Horowitz and Securities America, Inc. for Fraud

HC SecuritiesFraud

Carmel, Milazzo & DiChiara LLP (CMD) is investigating potential claims against securities broker Stuart Horowitz of Coral Springs, Florida and Securities America, Inc. for fraud and failure to supervise.

Recently, Horowitz submitted an Acceptance, Waiver and Consent (AWC) with FINRA, in which he was assessed a deferred fine of $100,000 and suspended from association with any FINRA member in any capacity for one year. Without admitting or denying the findings, Horowitz consented to the sanctions and to the entry of findings that he recommended and engaged in unsuitable trading in preferred notes of an unregistered limited partnership investment fund.

The findings stated that his recommendations lacked a reasonable basis because he failed to adequately investigate red flags that the fund was not a viable investment. Shortly after Horowitz’s association with his member firm, he began sending emails to firm personnel requesting a quick approval process for the preferred notes. Horowitz told the firm that it was urgent that there be a quick approval process so that he could begin selling the preferred notes because there may only be a short period in which they could be sold. The offering documents for the preferred notes did not specify a deadline by which conversion requests had to be completed, although they did set a cap on the amount of money that could be converted to preferred notes. In addition, Horowitz attempted to persuade his customers to not participate in this conversion directly with the issuer even though they could have done so without the firm’s and Horowitz’s participation. Horowitz’s previous broker-dealer decided not to allow its representatives to sell the preferred notes to that firm’s customers due to concerns about the fund’s ability to generate income for investors. Horowitz became aware of this decision soon after, while he was associated with his new firm. However, Horowitz’s new firm advised him that it was awaiting an independent third-party due diligence report before approving the preferred notes for sale by the firm. Horowitz then requested that he nonetheless be permitted to sell the preferred notes to his existing customers, notwithstanding that the firm had not received the third-party report. The following day, the firm agreed to allow Horowitz to offer the preferred notes for sale to existing investors in the fund.

Thereafter, Horowitz recommended the conversion of his customers’ interests to the preferred notes although the firm had not obtained the third-party due diligence report and Horowitz had done nothing more than review the preferred notes offering documents and other written and oral representations the fund had made. Horowitz was also aware of red flags that cast doubt on the veracity of the issuer’s representations and the continuing viability of the fund. Within months, Horowitz’s branch office converted just over $8 million of existing interests to the preferred notes, which required additional capital contributions from his customers of just over $2.5 million. Horowitz was responsible for all but $137,500 of these conversions, and he was paid more than $200,000 in net commissions from the conversion process. The fund began making late payments to preferred note holders, and within months stopped making payments altogether. The findings also stated that Horowitz did not apprise his firm of any of the red flags. Despite Horowitz’s increasing knowledge of severe problems the fund had experienced and was experiencing, he continued to recommend that his customers convert their interests to the preferred notes. Horowitz’s staff processed some conversions on behalf of his customers even after he had learned that distributions on existing interests had been reduced to zero.

According to Mr. Horowitz’s FINRA BrokerCheck, he has been the subject of a staggering thirty-six (36) customer complaints and one (1) regulatory event.

Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of securities laws. 

Investors are protected against fraudulent securities activities by several different civil laws. First, the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.) and Rule 10b-5 protect investors against deceptive and manipulative acts in the purchase or sale of securities. This sweeping legislation is the cornerstone of federal securities laws. Rule 10b-5 makes it unlawful to employ a device or scheme to defraud, to make any untrue statement of material fact or omit to state a material fact not misleading, or to engage in any practice that would operate as a fraud.

If you or someone you know lost money investing with Stuart Horowitz and/or Securities America, Inc., 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 for a free and confidential case evaluation.

CMD Investigating Claims Against Clay Emerson Hoffman and Summit Brokerage Services, Inc. for Unauthorized Trading

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Carmel, Milazzo & DiChiara LLP (CMD) is investigating potential claims against securities broker Clay E. Hoffman and Summit Brokerage Services, Inc. for engaging in the unauthorized trading of securities.

Recently, Mr. Hoffman submitted an Acceptance, Waiver and Consent (AWC) in which he was fined $5,000 and suspended from association with any FINRA member in any capacity for 15 business days. Without admitting or denying the findings, Mr. Hoffman consented to the sanctions and to the entry of findings that he executed discretionary transactions in a customer’s account without the customer’s prior written authorization to exercise discretionary trading power and without his member firm’s written approval of the account as discretionary.

According to Mr. Hoffman ‘s FINRA BrokerCheck, he has been the subject of fourteen (14) customer complaints and one (1) regulatory event.

Prior to placing an order to buy or sell securities for an investor a broker or advisor must obtain the express permission of that investor on the day the transaction occurs.  If not, the transaction is unauthorized.

NYSE Rule 408(a) and FINRA Rules 2510(b) and 2020 explicitly prohibit brokers from making discretionary trades in a customers’ non-discretionary accounts. The SEC has also found that unauthorized trading violates just and equitable principles of trade and constitutes violations of Rule 10b and 10b-5 due to its fraudulent nature.

If you or someone you know lost money investing with Clay Emerson Hoffman or Summit Brokerage Services, Inc., 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 for a free and confidential case evaluation.

CMD Investigating Claims Against Ross Cammarata, the Ross Group and UBS for Unsuitable Recommendations and Unauthorized Trading

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Carmel, Milazzo & DiChiara LLP (CMD) is investigating potential claims against securities broker Ross (Rosario) Cammarata, the Ross Group which is based in Florida, and UBS who may have recommended unsuitable investments and over-concentrated customer accounts in precious metals, such as gold, as well as various energy securities.  Further, Mr. Cammarata may have engaged in the unauthorized trading of these securities.

In making an investment recommendation, a broker must make recommendations that are consistent with the customer’s risk tolerance, needs and investment objectives.  A broker has a duty to know his client and only recommend investments and trading strategies that are suitable for that specific client.  An investment may be unsuitable if a customer does not have the financial ability to incur the risk associated with a particular investment, if the investment was not in line with the investor’s financial needs, if the customer did not know or understand risks associated with certain investments or if the customer’s investment account was over-concentrated in a single type of asset or sector.

A broker has a duty to gather essential information in order to understand the risk tolerance of an investor, the tax considerations for the client, the client’s prior experiences and appetite for risk, and the level of return desired. It is the duty of a broker to make recommendations that are appropriate and suitable given his client’s circumstances. If a broker breaches those duties and makes unsuitable recommendations for a client, the broker may be liable for damages to that client.

If you or someone you know lost money after Ross Cammarata or the Ross Group made unsuitable recommendations to purchase precious metals such as gold, and energy securities, or engaged in trading without your authorization, 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 for a free and confidential case evaluation.