Wall Street Investment Fraud Lawyer Blog

The Financial Industry Regulatory Authority (FINRA) has issued an Alert warning individuals about "modeling" and "mystery shopper" scams. These scams involve checks that appear to be from legitimate companies, but turn out to be counterfeit. In summary, both scams involve an authentic-appearing check that is sent to the individual. This check often has the name of a real company with both account and routing numbers. The scammer instructs the individual to deposit the check into their personal bank account and then to transfer part of the money to another person. In a few days, the individual learns from the bank that the check was counterfeit. This individual is then liable for the amount of money that was withdrawn, which is often several thousand dollars. This becomes a very expensive lesson learned for the individual scammed. Additionally, more than likely, it would be impossible to track down the scammers to recover the loss.

The "mystery shopping" scam leads individuals responding to a classified add to believe that they have been hired as a mystery shopper to "evaluate the services of money transfer companies, such as Money-Gram." The victims are then sent checks that seem to be from real companies, including FINRA. They are then asked to deposit the money in their personal account and then told to withdraw a substantial portion of the money and then wire it to another individual. The remainder of the money, which is generally a few hundred dollars, goes to the victim as compensation for being a mystery shopper. Later, the victim is notified by their bank that the check is counterfeit and the bank seeks reimbursement of the money withdrawn from the victim.

The "modeling" scam convinces victims that they are being hired to model. The victim is sent an email with instructions on what they are to do. A counterfeit check is sent to the victim "model" and then they are told to cash the check and wire the majority of the money to another individual. The victim is told that the remainder of the money is their compensation for being a "model." In the same manner as the "mystery shopper" scam, the bank then notifies the victim that the check is not legitimate and the victim is then liable for the amount of money withdrawn.

Also, this scam also takes place on an individual basis, with individuals running the same scam on sellers on such websites as Craigslist. In this instance, the individual wants to purchase something from you and send you a check for an amount greater than the amount of what is being sold. The seller is then asked to send money left over from the purchase either back to them or to another individual. The check here also turns out to be counterfeit.

FINRA has warned that it is very difficult to determine whether a check is counterfeit. Therefore, they "(urge) consumers to be cautious if someone they don't know asks them to cash a check and then transfer the money." Further, they point out that "no legitimate company will overpay you and ask that you wire the difference back to the company or to some third party."

FINRA does suggest some tips to avoid these scams. Prior to cashing any check you are sent by a seemingly legitimate company, call the company directly to verify the check. However, make sure that you do not use any telephone number on the check, you need to obtain the number via directory assistance. Further, look out for emails that are filled with typographical and grammatical errors. This could also be a red flag that the email is a scam. In addition, compare the name of the company from the posting to the name of the check. If the names don't match, this is also a red flag. Finally, do not be pressured to deposit the check and wire the money quickly. Wait until the bank confirms that the check clears before you withdraw or transfer any money. Remember you will be liable to the bank for any amount withdrawn on a counterfeit check.

In summary, beware of any offers which seem to go to be true. Further, look out for red flags and question any offer prior to agreeing to perform any task involving wiring money to another unknown individual. Ask yourself why! Why is this company giving me money to cash a check and then wire the majority of the money to someone else?

Our firm receives many calls with questions about discrimination claims. However, unfortunately, some individuals miss the time limits for filing a charge of discrimination with the Equal Employment Opportunity Commission, EEOC. Prior to filing a job discrimination lawsuit against your employer, relating to the laws enforced by the EEOC, you are required to file a Charge of Discrimination with the EEOC. It is important to know that you only have a limited amount of time to file this Charge of Discrimination.

As discussed on the EEOC website, you must file a charge within 180 days from the day the discrimination occurred. You will have 300 days "if a state or local agency enforces a law that prohibits employment discrimination on the same basis." Keep in mind, the time rules for filing a charge of age discrimination is different. The filing deadline will only be extended to 300 days "if there is a state law prohibiting age discrimination in employment and a state agency or authority enforcing that law."

Please note, however, individuals working for the federal government or those applying for federal jobs have a different process for filing a charge of discrimination. They must contact an EEO counselor within 45 days. There are exceptions that may extend the time limit.

In any event, the EEOC suggests that you file a charge as soon as you have determined that that is what you would like to do. The EEOC warns that even if you attempt to resolve a dispute with your employer through means such as filing a grievance or mediation the time limits for filing a charge will generally not be extended. Alternative forms of resolution can, however, take place at the same time the EEOC processes your charge.

Also, you should keep in mind that the time frame includes holiday and weekends. Further, if your deadline to file a charge falls on a holiday or weekend, you will have until the next business day to file your Charge of Discrimination.

The EEOC suggests that should you have any questions with regard to the amount of time that you have left to file the charge you should contact an EEOC field office.

The lesson in this is that if you are a victim of employment discrimination you must act swiftly if you wish to pursue a lawsuit against your employer. Otherwise, you may miss important EEOC deadlines. If you believe that you are a victim of employment discrimination and would like to consult with one of our attorneys, we welcome your call.

According to the Securities and Exchange Commission (SEC), a father-son investment team has been charged with securities fraud for their role in an extensive hedge fund fraud. It is alleged by the SEC that these men, Neil V. Moody and his son, Christopher Moody, both investment advisers in Sarasota, Florida, mislead investors concerning the financial condition of the three hedge funds they managed. The three hedge funds were, Valhalla Investment Partners L.P., Viking IRA Fund LLC and Viking Fund LLC. Additionally, the SEC claims that Moody and his son represented to individuals that they were in control of the funds' investment and trading activities, when in fact they were not. The funds were alleged to actually be controlled by Arther G. Nadel.

Specifically, the SEC alleges that these men disseminated misleading information to investors misrepresenting the hedge funds' investment returns and overstating the values of the funds by as much as $160 million. These misrepresentations were alleged to have been made in account statements, offering materials, and newsletters prepared by the Moodys. The SEC claims that the Moodys did not independently verify the figures given them by Nadel and failed to notice and/or appreciate the multiple red flags which should have caused them to more carefully review the information given them by Nadel. It should be noted that Nadel was charged with fraud last year by the SEC and his assets were frozen by an emergency court order.

Glenn Gordon, the Associate Director of the SEC's Miami Regional Office, sums it up by stating that the Moodys "abdicated their responsibilities to investors and ignored warning signs that should have alerted them to the fraud that was occurring all around them."

The SEC is seeking permanent injunctions against the Moodys, financial penalties for their acts, and to require the Moodys to disgorge any illegal gains. At this time, without any admission of guilt, the Moodys have agreed to permanent injunctions, preventing future securities fraud violations and they have agreed to not associate with any investment advisor for a period of five years.

Investors justifiably rely on information given them by their investment adviser. If the investment adviser provides misleading information, which causes damage to the investor, the investor may have a legal means to recover their losses. If you believe that you may be a victim of investment fraud, contact our office for a free consultation. You may also visit our website, www.dossfirm.com, for additional information.

According to the New York Times, U.S. Attorney General Eric Holder has announced that a new inter-agency task force has been created to address and "(halt) fraud involving mortgages, securities, economic stimulus programs and government bailouts." In a speech to a civic group in West Palm Beach, Florida, Attorney General Holder had a message for those who commit fraud of this kind. He promised fraudsters that "if (they) fabricate a financial statement, if (they) propagate an investment scheme, if (they) are complicit in an act of financial fraud, (they) are writing (their) ticket to jail."

The numbers of pending fraud investigations at the Justice Department and FBI are astounding. Attorney General Holder indicated that the Justice Department has more than 5,000 financial institution fraud cases pending and that the FBI was handling more than 2,800 cases involving mortgage fraud. Unfortunately, these numbers are up more than 400% from five years ago.

Attorney General Holder was also proud to announce that over 450 individuals who have committed corporate and securities fraud, including Bernie Madoff, have been convicted in 2009, preventing them from further victimizing investors.

Do you believe that you are a vicitm of an investment scheme or fraud? It may be that you have a legal remedy to recover your loses. If you would like to discuss your legal rights, please contact our firm for a free consultation. If you would like further information about our firm or investment fraud in general, please visit www.dossfirm.com.

With all of the talk these days about the need to find alternative energy sources, there is a real demand for "Green" energy. There are a lot of legitimate entrepreneurs out there looking for investors to put up money to fund new energy-saving environmentally-friendly ideas. With every legitimate entrepreneur however, comes a hundred scam artists also looking to make a buck from unsuspecting potential victims.

On December 29, 2009, FINRA, the organization tasked with regulating the financial services industry, issues an Investor Alert entitled, Save Your Greenbanks - Don't Fall for Green Energy Scams. The Investor Alert provides a great discussion on ways to avoid becoming a victim of these scams.

Some tips include:
1. Beware of investment opportunities promises high returns;
2. Beware of unsolicited recommendations communicated through methods such as faxes, emails, text messages, etc.;
3. Don't invest in things you do not understand.

The most unfortunate part of these scams is that when something goes wrong, there is rarely a chance to recover the losses from the fraudster because they are almost always insolvent. As a result, the best approach is to stay away altogether.

Our office often receives calls from individuals regarding employment discrimination and we thought it may help our blog readers if we outlined several federal laws which prohibit job discrimination. As you will see, these laws are meant to protect individuals from discrimination in the workplace, whether it be in the private realm or within the local, state, or federal government.

1) Title VII of the Civil Rights Act of 1964 (Title VIII): This act specifically prohibits employment discrimination on the basis of race, color, religion, sex, or national origin.

2) Equal Pay Act of 1963 (EPA): The act addresses the situation where men and women who perform substantially the same work in the same establishment and prohibits unequal pay based upon sex.

3) Age Discrimination in Employment Act of 1967 (ADEA): Age discrimination aimed at individuals who are 40 years of age are older are protected by this act.

4) Title I and Title V of the Americans with Disabilities Act of 1990 (ADA): This act prohibits employment discrimination against qualified individuals who have disabilities. This act applies to the private sector as well as in state and local governments.

5) Section 501 and 505 of the Rehabilitation Act of 1973: These laws specifically protect disabled individuals from employment discrimination by the federal government.

6) The Civil Rights Act of 1991: This act provides monetary damages where there is intentional employment discrimination.

Unfortunately, individuals often do not realize that there are specific laws which protect them from workplace discrimination. If you believe that you may have been discriminated against in your workplace, please do not hesitate to contact our office to discuss your legal rights. We offer a free initial consultation and welcome your call.

According to the United States Equal Employment Opportunity Commission (EEOC), Sears, Roebuck and Co. (Sears) has agreed to settle a class lawsuit for the sum of $6.2 million and other remedial relief. It was alleged by the EEOC that "Sears maintained an inflexible workers' compensation leave exhaustion policy and terminated employees instead of providing them with reasonable accommodations for their disabilities, in violation of the (Americans with Disabilities Act)."

This lawsuit arose after the EEOC investigated a charge of discrimination filed by a former Sears service technician, John Bava. It is said by the EEOC that after Bava was injured on the job, leaving him with a disability, Sears did not provide Bava with an accommodation to return to work, despite Bava's repeated attempt to return to work. In fact, once Bava's leave expired, it is said that Sears terminated Bava's employment. The EEOC says that Pre-trial discovery concerning Bava's claims uncovered the fact that Sears had terminated hundreds of other employees who had taken workers' compensation leave, failing to consider reasonable accommodations to return these employees to work.

Sears has agreed to an injunction preventing future violations of the ADA and retaliation against employees. Sears has also agreed to "amend its workers' compensation leave policy, provide written reports to the EEOC detailing its workers' compensation practices' compliance with the ADA, train its employees regarding the ADA, and post a notice of the decree at all Sears locations."

The EEOC says that the significant cost of the settlement to Sears was warranted, as they found "well over a hundred former employees who wanted to return to work with an accomodation, but were terminated by Sears." The court has approved the consent settlement decree and is scheduled to hold another hearing to determine the fairness of the distributions that will be made to individuals.

It is unfortunate that often workers injured while working with a company have a hard time returning to work because the company refuses to offer them accommodations. The disabled worker, disabled as a result of their employment, is thereafter considered a burden to the company and often fired as a result. Our law firm has experience representing injured workers in workers' compensation disputes as well as employees who have been discriminated against. If you would like to discuss your legal rights, we welcome your call and will provide a free consultation.

The Securities and Exchange Commission (SEC) has charged Frank Bluestein, of Detroit, Michigan, with fraud, alleging that he scammed many elderly investors into investing into a $250 million ponzi scheme. It is claimed by the SEC that Bluestein focused his efforts on elderly investors, costing many of them their retirement and even their homes.

Bluestein is said to have been the largest salesperson at E-M Management, the ponzi scheme operated by Edward May. The SEC has already filed charges against both Edward May and E-M Management. The SEC alleges that Bluestein would use investment seminars to reach potential investors, often convincing elderly investors to refinance their homes to invest. The SEC says that Bluestein falsely assured investors that these "investments" were safe. Additionally, the SEC claims that Bluestein mislead investors into believing that he conducted a thorough investigation of the investments, when in fact he did little, if anything, to determine the legitimacy of E-M Management's offerings. The SEC also alleges that Bluestein did not disclose the compensation he was receiving from E-M Management for touting their investments. It is said that Bluestein received $1.4 million in compensation from investor funds and $2.4 million in the form of commissions.

The SEC alleges that Bluestein, through his company Maximum Financial's investment seminars, was able to raise approximately $74 million dollars from over 800 investors over the course of five years.

The SEC is seeking a permanent injunction to prevent Bluestein from engaging in future fraudulent conduct, as well as disgorgement of ill-gotten gains and financial penalties.

According to WRAL.com, AARP along with the North Carolina Secretary of State Elaine Marsall and Financial Industrial Regulator Authority Foundation President John Gannon are joining forces in an effort to protect elderly investors from investment fraud. They have begun a statewide campaign to educate investors and assist them in avoiding investment scams.

This type of education is critical and it is hoped that this campaign will provide investors with the tools to determine whether they are being marketed a fraudulent investment. Each day individuals, both young and old, fall victim to investment schemes. No one is safe and all investments should be screened with the same intensity.

If you would like more information on investment fraud, please go to our website at www.dossfirm.com. If you feel as though you may be a victim of an investment scheme, do not hesitate to contact our office to discuss your legal rights. An initial consultation with one of our lawyers is free. Remember time is of the essence when you are considering a legal remedy.

According to the Courthouse News Service, the Securities and Exchange Commission (SEC) has fined Regions Bank $1 million for its role in an investment scam. SEC claims that Regions Bank's participation with an investment scam raised $255 million of funds through "exorbitant, undisclosed commissions and fees" from 14,000 investors. These investors were mostly from Latin America.

Specifically, it is alleged that Regions bank allowed U.S. Pension Trust to use its name in their marketing and sent individuals to Latin America to meet with potential investors. Regions allegedly served as the trustee of the investment plans of U.S. Pension Trust, which the SEC used deceptive sales practices to entice investors. It is said by the SEC that the U.S. Pension Trust "took up to 85 percent of initial contributions for those who paid annually, and as much as 18 percent for single-contribution plans.

The SEC says that Regions allowed the scheme to continue with an "air of legitimacy" and that Regions should have been aware of the deceptive sales practices of U.S. Pension Trust. Unfortunately, the SEC alleges that Regions continued with their participation despite the deceptive sales tactics. Additionally, the SEC adds that Region Bank failed to disclose the fees and commissions to the investors.

The SEC announced that the day the SEC filed suit against the bank the bank agreed to the fine.

According to The Daily Breeze, church members of Hope Chapel Christian Church, which is located in Hermosa Beach, California, are suing a former pastor, alleging that he has scammed them out of thousands of dollars. The church members have also sued the church, alleging that they were discouraged from filing a lawsuit, having been told it is "un-Christian" to sue.

The former pastor is Mike Maffe, who served as an associate pastor of the church for 16 years. Church leaders have stated that after being made aware of the alleged fraud and meeting with the alleged victims, Maffe was fired in January of 2008 from the 2,500 member church. It is alleged by the plaintiffs that Maffe promised high returns on a real estate investment in Texas. Further, it is alleged that Maffe prepared and distributed false documents each quarter showing 7 percent returns on the investment. It is claimed by the plaintiffs that rather than investing the money as promised Maffe used the money to buy risky stocks that ultimately lost all value. The plaintiffs further allege that Maffe did not disclose to them that he had filed for bankruptcy after gambling away his family's money.

Plaintiffs allege that the church has attempted to downplay the situation and sought to convince the plaintiffs not to file suit. Rev. Dale Turner, an associate pastor and administrator, believes that this matter should be resolved among the church members rather than with court intervention. Turner has stated that Maffee has admitted to the wrongdoing and promised to pay the members back. However, the plaintiffs say that that has not happened. The plaintiffs' attorney believes that the church has not acted in the best interest of his clients.

Unfortunately, investment fraud can occur anywhere, even within a church membership. It is important to remember that as a victim of investment fraud you may be able to recover investment losses as a result of the fruad. Please contact our firm to discuss your legal rights. If you would like further information on investment fraud, please visit our website at www.dossfirm.com.

The Securities and Exchange Commission (SEC) has charged a North Carolina couple with an investment scheme that allegedly scammed approximately 500 investors out of $32.5 million dollars. It is alleged that Sidney Hanson and his wife Charlotte Hanson promised extraordinarily high returns to investors that they met at church gatherings and in other face-to-face meetings. These investors were allegedly persuaded to cash out retirement funds and invest in private loan agreements that the Hansons offered through companies that they controlled. These dozen or so companies were collectively referred to as Queen Shoals Entities.

The SEC alleges that the Hansons had a sales force of at least 45 "consultants" that promised yearly returns to investors of between 8 and 30 percent. The consultants allegedly boasted that the investments were safe and were in a diversified portfolio including treasury bills, foreign currency, and precious metals. However, the SEC claims that the investment funds were not invested as promised and that the majority of the funds went into very risky private investments and were also used to pay commissions to the consultants, pay personal expenses, and to other investors in prior failed business ventures operated by the Hansons.

It is also alleged by the SEC that the Hansons, 61 and 62 respectively, used their knowledge and experience to appeal to elderly investors, and caused these investors to "make all the wrong decisions with their retirement savings."

The United State District Judge granted the SEC's request to freeze the assets of the Hansons' and granted the SEC's request for other emergency relief on behalf of the investors on September 3, 2009. The defendants consented to the asset freeze and have agreed to settle the SEC's charges. They have agreed to permanent injunctions and disgorgement of profits. Additionally they have agreed to financial penalties which will be determined at a later date.

The Commodity Futures Trading Commission (CFTC) also filed charged against the defendants. Further, the U.S. Attorney has entered into a plea agreement with Sidney Hanson where he has plead guilty to securities fraud, mail fraud and promotion of money laundering. The agreement requires that Mr. Hanson face a minimum of 12-year prison sentence.

It is unfortunate that there are individuals who will prey on retirees who have saved their whole lives for retirement. These folks often are not employed or are close to retirement and do not have the time or the means to recover their losses. If you feel as though you have been a victim of investment fraud, you may have a legal claim and a potential avenue for recovery. If you would like to discuss your legal rights, please do not hesitate to contact our firm. Furthermore, if you would like additional information on investment fraud please visit our Investor Resource Center at www.dossfirm.com.

According to The New York Times, the Equal Employment Opportunity Commission (EEOC) has filed an age discrimination lawsuit against AT&T. Specifically, it is alleged by the EEOC that AT&T, the largest telecommunications provider in the United States, "discriminate(s) against older employees by denying them the chance to be rehired solely because they left under early retirement plans." This discrimination caused older workers to not have the same opportunities when applying for re-employment as younger workers would have with AT&T.

The EEOC alleges that AT&T has had this policy of discrimination since 2006, causing the exclusion of older workers from being re-employed with the company solely as a result of their age, with no regard to their qualifications. It is unknown how many workers this discriminatory practice harmed; however, the early retirement programs have involved over 50,000 individuals. Of course, the workers affected would be only those who sought re-employment with AT&T.

The lawsuit was filed in the United States District Court in Manhattan. Although AT&T would not comment specifically on the lawsuit, they did note that "AT&T makes diversity and inclusion a top priority."

Especially in this economy, many older workers are having to return to the workforce after retirement. These workers should be afforded the same opportunities as younger workers. Do you believe that you are a victim of age discrimination or are you unsure? If you would like to discuss your legal rights, contact our office for a free consultation.

According to the Atlanta Journal Constitution (AJC), Eldon A. Gresham, of The Gresham Company, a Peachtree City based company, has been charged with running a multimillion dollar Ponzi scheme. The U.S. Commodity Futures Trading Commission charges Gresham with soliciting more than $15 million from at least 75 investors to further his scheme. Particularly, it is alleged that he preyed on Christian individuals by telling him that he was successful as a result of the Lord's blessings and was going to offer his program to a limited number of Christians.

Gresham allegedly promised monthly returns of 5 to 10 percent with very little risk. He would then allegedly pay off certain individuals with money invested by new individuals. It is said by the Commission that Gresham would communicate the bogus returns of the scheme to investors through emails.

Gresham's longtime friend, Werner H. Beiersdoerfer, of Calera, Alabama, and his son, Kirk Gresham, have also been named as "relief defendants." A "relief defendant" is defined as "a person who is not accused of wrongdoing in a securities enforcement action where that person: (1) has received ill-gotten funds; and (2) does not have a legitimate claim to those funds." S.E.C. v. Cavanagh,155 F.3d 129, (C.A.2,1998).

Assets of all three individuals have been frozen by a federal judge. A hearing has been set for July 23.

For more information about investment fraud, please visit our website at www.dossfirm.com. If you would like a personal consultation with a lawyer regarding potential claims that you may have, please call our investment abuse hotline, 1-800-939-8879.

Due to the long overdue need for investor-friendly reform in the financial services industry, the Obama administration has proposed legislation that would require broker-dealers who provide investment advice to assume fidicuary duties to their clients. In case you do not know, a fiduciary is someone that is held in a position of trust. As a result of this trust relationship, the person acting as a fiduciary owes his or her client a higher duty of care. This makes common sense in the brokerage industry given that investors who hire financial advisors typically rely on their expertise to make sound investment decisions.

A recent Investment News article entitled, Insurance-affiliated brokers face major changes under Obama plan, highlighted a glaring problem in the financial services industry, particularly regarding brokers whose firms are affiliated with life insurance companies. The article stated that if the Obama plan is passed, "broker defections, a loss of market share and spin-offs could be on the horizon." According to the article, the reason for this anticipated consequence is that brokers who are affiliated with life insurance companies have an inherent conflict of interest with their clients because they are often incentivized to sell investments and life insurance products (eg. annuities) that are issued by the affiliated life insurance company.

In my opinion, this is reason enough to stay away from brokers who work for insurance companies. Based on my own experience representing aggrieved investors in lawsuits against brokerage firms, a disproportionate percentage of my clients who are customers of these brokers ultimately are sold variable annuities in their portfolios. These products are rarely appropriate for investors, particularly retirees who are withdrawing living expenses from the annuities. This article only confirms my distaste of mixing investments with insurance products.

For more information about common investor claims brought against brokerage firms, please visit our Investor Resource Center. In addition, for more information about our law firm, please click here.