Also available at KansasCityLaw.tv In this video, Jason M. Kueser discusses typical causes of action in securities cases. These typical actions are: (1) fraud, (2) securities fraud, (3) breach of fiduciary duty, (4) breach of contract, (5) violation of state securities laws, (6) violation of federal securities laws, and (7) negligence.
This video is provided for informational purposes only and nothing contained herein is or should be constituted as legal advice. If you have questions related to any legal topic, you should consult with an attorney and should not rely solely upon information provided via the internet. The choice of an attorney is an important one and should not be based solely upon advertisements such as this website. Past results afford no guarantee of future results. Every case is different and must be judged on its own merits. *Any information submitted via this website may not be secure and/or confidential. Merely contacting this firm does not establish an attorney-client relationship.
This video is provided for informational purposes only and nothing contained herein is or should be constituted as legal advice. If you have questions related to any legal topic, you should consult with an attorney and should not rely solely upon information provided via the internet. All content provided on this blog are subject to the Disclaimer at the bottom of the page.
How do attorneys decide which securities fraud cases to pursue?
Also available at KansasCityLaw.tv In this video, Jason M. Kueser discusses factors that securities fraud attorneys often evaluate in determining which cases to pursue. This often includes a number of factors, including (1) individual aspects of the customer and the customer’s situation; (2) the amount of investment loss suffered by the investor; (3) the type or types of investments involved; and (4) whether the stockbroker, adviser, or brokerage firm has previously regulatory issues. There are other factors that are involved, as well.
If you feel you have been the victim of investment fraud or securities fraud, please contact an attorney. If you would like to speak with The Kueser Law Firm, please call the firm at (816) 374-5865 or send us an href=”mailto:jason@jmkesquire.com&subject=Contact from Kueser Law Firm blog”>e-mail.
This video is provided for informational purposes only and nothing contained herein is or should be constituted as legal advice. If you have questions related to any legal topic, you should consult with an attorney and should not rely solely upon information provided via the internet. The choice of an attorney is an important one and should not be based solely upon advertisements such as this website. Past results afford no guarantee of future results. Every case is different and must be judged on its own merits. *Any information submitted via this website may not be secure and/or confidential. Merely contacting this firm does not establish an attorney-client relationship.
FINRA recently released its arbitration statistics for the month/year ended December 2010.
For the year, there were 20% fewer cases filed (5,680 v. 7,137 in 2009) and there were 6,241 cases closed (a 37% increase over 2009). Of these cases, 22% were resolved by arbitration hearing, 52% were resolved by direct settlement between the parties, 10% were resolved through mediation, and 16% of cases were either withdrawn or resolved through “other” method.
Results for investors also improved in 2010, as 47% cases that were decided by an arbitration panel resulted in an award of damages to the customer. This reflects a 2% increase over the results in 2009, and a 10% increase compared to arbitration claims decided by arbitration panels in 2007 — the worst year, for investors, in arbitration claims over the past six years.
The overall turnaround time for cases closed during the year also increased to 12.7 months (from 11.5 months in 2009). For cases that are resolved after an arbitration hearing, the turnaround time increased to 15 months (from 14 months in 2009).
The most common claims in arbitration were: (1) Breach of Fiduciary Duty; (2) Negligence; (3) Fraud/Misrepresentation; (4) Failure to Supervise; and, (5) Breach of Contract. The most common type of securities involved in arbitration claims were mutual funds and common stocks.
The Kueser Law Firm represents investors in securities arbitration. If you feel that your investments have been mismanaged, please contact the firm to discuss your rights.
Leveraged ETFs have recently returned to the news as Direxion announced the release of two new funds. As reported on Marketwatch.com, one of these new funds seeks to obtain returns equal to 300% of the two-year Treasury yield, while the other fund seeks to obtain returns equal to 300% of the inverse return of the two-year Treasury yield (in other words, when the Treasury yield declines, the investor profits).
Despite the repeated warnings issued by FINRA and the SEC as to the tremendous risk presented by leveraged ETFs, it appears that these fund families are forging “full steam ahead.” The announcement from Direxion comes only weeks after its rival, ProShares, released eight additional leveraged ETFs. Four of the new ProShares funds seek to obtain returns equal to 300% of the daily return of the Nasdaq 100, Dow Jones Industrial Average, Standard & Poors 400 Index, and the Russell 2000 Index. The other four funds seek returns equal to 300% of the inverse daily return of these same indices (again, investors in these funds profit when the value of the respective index declines).
Leveraged ETFs invest their shareholders’ money in futures and/or derivatives in order to multiply the daily return of an index. Some leveraged ETFs seek a return that is 200% or even 300% of the daily performance of the index. Inverse ETFs work in much the same way, except that these funds seek a return that is equal to 100%, 200%, or even 300% of the opposite of the daily performance of the index. With these funds, an investor actually profits when the index declines in value. Typical leveraged ETFs and inverse ETFs reset each day and therefore, over periods longer than one day, their performance can vary considerably from the index.
Leveraged ETFs may be appropriate investments for professional asset managers and highly sophisticated investors; however, in this author’s opinion, leveraged ETFs are inappropriate for the vast majority of individual investors. Given the level of volatility in the stock markets in recent times, leveraged ETFs expose investors to tremendous potential for loss in a short period of time. Furthermore, in various instances in the retail setting, leveraged ETFs have been sold to investors without full disclosures related to these risks.
The Kueser Law Firm represents investors who have lost money in leveraged ETFs. If you are concerned that your investments have been mismanaged, contact us to learn more about your rights.
ProFunds Group, one of the largest issuers of leveraged and inverse ETFs recently issued a warning that some of its leveraged and inverse ETFs may not be suitable for all investors. In the prospectus dated October 1, 2009, the company repeatedly states:
The Fund is different from most exchangetraded funds in that it seeks leveraged returns and only on a daily basis. The Fund also is riskier than similarly benchmarked exchange-traded funds that do not use leverage. Accordingly, the Fund may not be suitable for all investors and should be used only by knowledgeable investors who understand the potential consequences of seeking daily leveraged investment results. Shareholders should actively monitor their investments.
(See, e.g., prospectus at pp. 49, 54, 59, 64, 69, 74, 79.)
While additional disclosures are an improvement, this disclosure is still somewhat vague. It is similar to telling someone that an investment is suitable for them if they are seeking growth of their investment. Whoisn’t seeking growth of their investments? I have never heard anyone say “I am looking for an investment that will cause me to lose money.”
In addition, many investors who are sold leveraged ETFs such as these never receive a copy of the prospectus. If an investor does not receive the prospectus, the disclosure does not protect them (however, it could protect the fund company from liability).
Leveraged ETFs invest their shareholders’ money in futures and/or derivatives in order to multiply the daily return of an index. Some leveraged ETFs seek a return that is 200% or even 300% of the daily performance of the index. Inverse ETFs work in much the same way, except that these funds seek a return that is equal to 100%, 200%, or even 300% of the opposite of the daily performance of the index. With these funds, an investor actually profits when the index declines in value. Typical leveraged ETFs and inverse ETFs reset each day and therefore, over periods longer than one day, their performance can vary considerably from the index. In addition to ProFunds, the most popular leveraged ETFs and inverse ETFs are managed by Rydex and Direxion.
FINRA has already declared that leveraged ETFs are typically unsuitable for retail investors. Therefore, the announcement by ProFunds is not a revelation. If your stockbroker or financial advisor has sold you any leveraged ETFs or inverse ETFs, or purchased any leveraged ETFs or inverse ETFs in your accounts, you may be entitled to recover any losses on these investments. The Kueser Law Firm represents investors who were sold leveraged ETFs and inverse ETFs. If you are concerned that your investments have been mismanaged, contact us to learn more about your rights.
On October 1, 2009, Colorado Securities Commissioner Fred Joseph announced that the Securities Division had filed a complaint against Stifel, Nicolaus & Company. According to the Division’s news release, the complaint alleges:
Stifel Nicolaus falsely represented auction rate securities as liquid, short-term investments to Colorado investors without discussing the risks. These representations gave investors a false sense of security that the investments would always be liquid when auction rate securities, in fact, faced significant, inherent liquidity risks.
A copy of the Notice of Charges is available in pdf format here.
Auction rate securities, which are also referred to as auction rate preferred shares, ARS, ARPS, and MARS, to name a few, have been at the epicenter of regulatory investigations across the country. Auction rate securities are long-term (or perpetual) investments that traded in periodic “auctions.” They are designed to allow companies, mutual funds, municipalities, and other organizations to borrow money for a long-term period while paying short-term rates of interest, which were reset during the periodic auctions. It was in these auctions that investors who held the securities could also sell their holdings if they needed to have access to cash. Because these auctions occurred on a relatively frequent basis (i.e., weekly, bi-weekly, or monthly), investors had the ability to sell their positions and obtain cash in a relatively short period of time.
For years, Wall Street firms sold auction rate securities as short-term, cash equivalent investments that paid marginally higher rates of interest as compared to other short-term investments. What these firms did not tell their customers was that the liquidity of the auction rate securities markets was entirely dependent on the ability and willingness of these same firms to participate in the auctions — in other words, these firms had to be willing and able to purchase the securities that were not purchased by the other auction market participants. In most cases, these firms were purchasing more securities than the other market participants. The firms (and their representatives) did not disclose these critical facts, but rather, only disclosed that the interest rates paid on the securities was reset at the auctions. In addition, these firms generally failed to inform investors that they would not be able to access their invested capital if the auctions froze.
In 2007, these Wall Street firms came under massive liquidity problems. As a result, these firms made a decision to cease participation in the auction rate markets, leaving investors across the country with illiquid investments that typically paid short-term rates of interest. In some cases, the auction rate securities paid no interest for months at a time. Therefore, investors were left holding a bag of illiquid long-term securities that paid little, if any interest.
Several class actions have been filed across the country on behalf of auction rate securities investors. In addition, numerous securities arbitration claims have been filed by investors. Some of these cases, as well as action by state regulators, has resulted in redemption of some investors’ auction rate securities. However, many investors remain stuck with these illiquid investments.
If you own auction rate securities that have not been redeemed, you may want to contact an attorney to discuss your rights. The Kueser Law Firm is a boutique legal practice that focuses its practice on protecting the rights of investors and recovering investment losses for companies and individuals. You may contact us by completing the form to the right, or by visiting our website.
On September 21, 2009, Missouri Secretary of State Robin Carnahan announced that her office had finalized a consent order with JP Morgan Chase & Co. related to the firm’s marketing and sale of auction rate securities (ARS) to Missouri investors.
According to the press release, Missouri investors will receive more than $28 million. In addition, JP Morgan will pay $86,000 to the Missouri Investor Education and Protection Fund, which is used to educate Missourians about potential investment fraud and other fraudulent schemes.
JP Morgan, like many of the other investment firms across the country marketed auction rate securities as “safe,” “liquid,” and “same as cash,” when, in fact, the investments were subject to the willingness of many of the same firms to provide the necessary liquidity to sustain the auction rate securities market. As these firms’ liquidity began to diminish in late 2007 and early 2008, they became unable to support the market with the necessary liquidity. As a result, in mid-February 2008, the auctions failed and investors were stuck holding long-term and perpetual investments that paid short-term interest rates.
The Kueser Law Firm represents investors in securities arbitration and litigation. If you were sold Auction Rate Securities and your positions have not been redeemed or repurchased, you should contact an attorney to discuss your rights. Feel free to contact us if you have any questions or would like additional information.
Earlier this week, the Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) issued a joint warning cautioning investors on the dangers in investing in leveraged ETFs and inverse ETFs. The two regulators issued the warning because they “believe individual investors may be confused about the performance objectives of leveraged and inverse exchange-traded funds (ETFs).”
The warning also notes that leveraged ETFs are designed to achieve their investment performance objectives on a daily basis, rather than a long-term basis as with typical exchange-traded and mutual funds. In fact, the performance of these funds can vary significantly from their stated objectives over long-term periods. The joint warning contains a detailed description of leveraged and ETFs, as well as examples of how the funds generally operate. The SEC also included a link to a NYSE “Informed Investor” Bulletin entitled “What You Should Know About Exchanged Traded Funds.”
While this warning is welcome, it unfortunately has come after many investors have sustained significant losses in these risky and unsuitable investments. As previously discussed in this blawg, FINRA has already declared that leveraged ETFs are typically unsuitable for retail investors. The most popular of these investments are managed by Rydex, Direxion, and ProShares. If your stockbroker or financial advisor has sold you any leveraged ETFs, or purchased any leveraged ETFs in your accounts, and you have lost money on these investments, you may be entitled to recover these losses. The Kueser Law Firm represents investors who were sold leveraged and inverse ETFs. If you are concerned that your investments have been mismanaged, contact us to learn more about your rights.
Yesterday, August 17, 2009, the Attorney General of the state of New York announced that it had filed a lawsuit against Charles Schwab & Co. for its sales of auction rate securities. According to the press release, the Complaint charges Schwab with violations of the Martin Act for:
falsely representing auction rate securities as liquid, short-term investments without discussing the risks. These representations gave investors a false sense of security that their investments would always be liquid when auction rate securities, in fact, faced significant, inherent liquidity risks.
This is another action by Mr. Cuomo’s office to remedy the massive fraud perpetrated by Wall Street firms relating to auction rate securities. In fact, late last month, the Attorney General announced a $456 million settlement with TD Ameritrade related to its sales of auction rate securities.
Auction rate securities, which are also referred to as auction rate preferred shares, ARS, ARPS, and MARS, to name a few, have been at the epicenter of regulatory investigations across the country. Auction rate securities are long-term (or perpetual) investments that traded in periodic “auctions.” They are designed to allow companies, mutual funds, municipalities, and other organizations to borrow money for a long-term period while paying short-term rates of interest, which were reset during the periodic auctions. It was in these auctions that investors who held the securities could also sell their holdings if they needed to have access to cash. Because these auctions occurred on a relatively frequent basis (i.e., weekly, bi-weekly, or monthly), investors had the ability to sell their positions and obtain cash in a relatively short period of time.
For years, Wall Street firms sold auction rate securities as short-term, cash equivalent investments that paid marginally higher rates of interest as compared to other short-term investments. What these firms did not tell their customers was that the liquidity of the auction rate securities markets was entirely dependent on the ability and willingness of these same firms to participate in the auctions — in other words, these firms had to be willing and able to purchase the securities that were not purchased by the other auction market participants. In most cases, these firms were purchasing more securities than the other market participants. The firms (and their representatives) did not disclose these critical facts, but rather, only disclosed that the interest rates paid on the securities was reset at the auctions. In addition, these firms generally failed to inform investors that they would not be able to access their invested capital if the auctions froze.
In 2007, these Wall Street firms came under massive liquidity problems. As a result, these firms made a decision to cease participation in the auction rate markets, leaving investors across the country with illiquid investments that typically paid short-term rates of interest. In some cases, the auction rate securities paid no interest for months at a time. Therefore, investors were left holding a bag of illiquid long-term securities that paid little, if any interest.
Several class actions have been filed across the country on behalf of auction rate securities investors. In addition, numerous securities arbitration claims have been filed by investors. Some of these cases, as well as action by state regulators, has resulted in redemption of some investors’ auction rate securities. However, many investors remain stuck with these illiquid investments.
If you own auction rate securities that have not been redeemed, you may want to contact an attorney to discuss your rights. The Kueser Law Firm is a boutique legal practice that focuses its practice on protecting the rights of investors and recovering investment losses for companies and individuals. You may contact us by completing the form to the right, or by visiting our website.
The choice of an attorney is an important one and should not be based solely upon advertisements such as this website. Past results afford no guarantee of future results. Every case is different and must be judged on its own merits.
*Any information submitted via this website may not be secure and/or confidential. Merely contacting this firm does not establish an attorney-client relationship.
A Rancho Santa Fe stock promoter pleaded guilty to committing security fraud at a federal courthouse in San Diego on Monday. David F. Bahr, 54, admitted that he and others attempted to artificially inflate the price of shares of iTrackr, a penny stock ...See all stories on this topic » […]
WASHINGTON--U.S. securities regulators plan to require certain defendants to admit to wrongdoing as a condition of settling securities fraud charges, Securities and Exchange Commission Chairman Mary Jo White said Tuesday. The move marks the most ...See all stories on this topic » […]
Bailey was accused of paying over $1 million worth of company stock to a businessman for consulting work that was never performed. The businessman later liquidated the shares and wired a substantial sum to escrow accounts owned by Gateway, which ...See all stories on this topic » […]
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According to the latest numbers from the Federal Trade Commission, 26 percent of all securities fraud is perpetrated against seniors, but seniors only represent 14 percent of the nation's population. “They obviously attract the attention of criminals ...See all stories on this topic » […]
James Alexander Shepherd is charged with one count of securities fraud involving the misuse of approximately $6 million over several years, according to a news release issued by Anne M. Tompkins, the U.S. Attorney for the western district of North ...See all stories on this topic » […]
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An investment fund owner and operator that defrauded investors of approximately $6 million has agreed to plead guilty to securities fraud charges filed by the U.S. Attorney for the Western District of North Carolina. 1 ...See all stories on this topic » […]
LawFuel.com – Law Newswire – Richard A. Bailey, 57, of Las Vegas, Nevada has been convicted of securities fraud involving the willful distribution of unregistered shares in Gateway Distributors, Ltd., United States Attorney André Birotte Jr. announced ...See all stories on this topic » […]
Jonathan Gracia, 24, was charged with one count of wire fraud stemming from the investment fraud scheme, according to a statement by the U.S. Department of Justice. According to court documents and statements made in court, Gracia falsely told friends ...See all stories on this topic » […]
Court documents indicate that Shepherd perpetrated the fraud by promising his victims returns on their investments in funds Shepherd owned and controlled, including The Shepherd Major Play Option Fund and the Shepherd's Model Hedge Fund. In addition ...See all stories on this topic » […]
Biju Radhakrishnan, the prime suspect in the solar and wind energy projects investment fraud, had collected money from at least a score of city residents in the name of a second firm he had launched here early this year. The second accused in the case ...See all stories on this topic » […]
Kerala Chief Minister Oommen Chandy Monday rejected the Opposition demand for his resignation over the solar panel investment fraud. Two of Chandy's personal aides were recently sacked for to their alleged links with 'fraudster' Saritha S Nair. Chandy ...See all stories on this topic » […]
The surviving mastermind behind a multi-million dollar investment scam, Brian Anthony Bjork, was sentenced to prison on Friday (June 14). At a hearing in February, Bjork pleaded guilty to only one count of wire fraud, but then admitted to a complex ...See all stories on this topic » […]
Rothman's presentation, “Preventing Elderly Investment Fraud,” was tailored to health care professionals, focusing on how to spot and report fraud and financial abuse within the elderly and vulnerable adult populations. “Minnesota's seniors are often ...See all stories on this topic » […]
CHARLOTTE — A North Carolina man is pleading guilty to bilking more than 100 people in a $6 million investment scam. Fifty-eight-year-old James Shepherd of Vass pleaded guilty Monday to securities fraud. He faces a maximum of 20 years in prison and a ...See all stories on this topic »Burlington Times News […]
Like Taylor, many perpetrators of investment fraud take advantage of the bonds of trust and obligation among religious and ethnic communities to grow their pool of victims. These schemes are called “affinity fraud” by experts, and they make up a ...See all stories on this topic »Deseret News […]
Summary. Many perpetrators of investment fraud take advantage of the bonds of trust among religious communities to grow their pool of victims. However, avoiding a scheme is relatively easy if an investor keeps her eyes open and does some basic research.See all stories on this topic »Deseret News […]
Residents in three Southwest Virginia counties have been defrauded of several hundred thousand dollars by a con artist presenting a legitimate-looking investment package. Friday morning, the Smyth County Sheriff's Office (SCSO) reported that its ...See all stories on this topic » […]
