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The SEC filed fraud charges against an Atlanta-based investment firm and two of its executives for their handling of the city’s pension funds for police, firefighters, transit workers, and other employees.

According to the SEC, Gray Financial Group Inc. placed public pension funds into an investment that did not adhere to state law and collected over $1.7 as a result.

The group, its and founder and president, Laurence Gray, and co-Chief Executive Officer Robert Hubbard IV allegedly breached their fiduciary duties by soliciting investments in an alternative fund called GrayCo Alternative Partners II LP.

The group’s attorney responded by stating that the “claims and arguments in the SEC’s filing today are without merit.”

The SEC claims that the investments violate Georgia law because they did not have at least four other investors and did not have a minimum of $100 million in assets.

Also, a Georgia public pension fund’s investment is limited to no more than twenty percent of the capital in an alternative fund, but two of the pension funds’ investments allegedly exceeded the limit.

The firm is accused of making misrepresentations when asked if the investments complied with the law and about the number and identity of prior investors.

“The SEC is once again bringing its charges in an unconstitutional and home-cooked administrative proceeding rather than trying a case before an impartial U.S. district court and a jury of one’s peers,” the group’s attorney said on Thursday. Gray will “vigorously defend itself” in both proceedings, he added.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-390-0036 to discuss your potential legal remedies or visit

Nationwide Life Insurance Company will pay $8 million to settle charges filed by the SEC alleging that the insurance giant consistently violated pricing rules when processing orders of many of its insurance products. A statement by the SEC claims that Nationwide knowingly waited to deliver mail in order to avoid using current-day prices.

“For more than a 15-year period, Nationwide intentionally delayed the delivery of untracked mail containing orders from customers and processed them at the next day’s prices in violation of the law,” said Sharon Binger, director of the SEC’s Philadelphia regional office.

According to a report by the Wall Street Journal, Nationwide requested that the post office separate mail directed to its variable contract business from mail directed to boxes for other lines of business. The company also asked the mail delivery service to travel to the post office at 3 A.M., 5 A.M., and 7 A.M. each business day to retrieve mail for other lines of business. The post office was asked not to collect variable contract mail at those times, however.

If contracts arrived in Nationwide’s parking lot before 4 P.M., the company allegedly told delivery people to wait until 4:01 P.M. to enter the building. According to the SEC, this led “some couriers to intentionally delay their arrival time at Nationwide by stopping to purchase meals or fuel.”

By doing this, Nationwide was able to charge higher prices for mutual fund shares, as rules require an investment company to compute the value of its shares at least once daily at a specific time determined by the board of directors.

Nationwide spokesman Ryan Ankrom told the Journal that “there were no allegations that Nationwide benefited from its PO box mail processing practices or the process benefited certain groups of investors over others.” He also stated that Nationwide chose to settle in order to focus on the needs of its members.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-390-0036 to discuss your potential legal remedies or visit

UBS lost an arbitration case this week pertaining to the offer and sale of a number of Puerto Rico Fixed Income and Bond funds.

The Claimant in the arbitration asserted causes of action for violation of the Puerto Rico Uniform Securities Act, securities fraud, constructive fraud, breach of contract, negligence, negligent supervision, failure to supervise, breach of fiduciary duty, misrepresentation, omission of facts, manipulation, unsuitability, common law fraud, constructive fraud, and respondeat superior.

The Claimant’s allegations related to the her purchase of shares of Puerto Rico Fixed Income Funds I, II, and III and Puerto Rico Investors Bond Fund.

In her statement of claim, the Claimant requested rescission of the closed end funds sold to her and $357,000 to $625,000 in compensatory damages, as well as interest, costs, attorneys’ fees, and punitive damages. In her pre-hearing brief, the Claimant requested compensatory damages between $339,297 and $702,003. UBS requested dismissal of the claims and expungement of the action.

After considering the pleadings, testimony, and evidence, the arbitration panel found UBS liable in the amount of $200,000 and denied UBS’s request for expungement.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-390-0036 to discuss your potential legal remedies or visit

FINRA ordered LPL Financial to pay $11.7 million in fines and restitution for what it called “widespread supervisory failures” pertaining to sales of complex products. According to the regulator authority, from 2007 to April 2015, LPL failed to adequately supervise sales of particular investments, such as exchange-traded funds, variable annuities, and nontraded real estate investment trusts. Additionally, LPL did not properly deliver over fourteen million trade confirmations to customers.

LPL had no system set up to watch the amount of time customers held securities in their accounts or to enforce limits on concentrations of complex products in customer accounts. The systems that LPL did have set up to watch trading activity in customer accounts were ravaged by “multiple deficiencies.” For example, LPL did not create proper anti-money laundering alerts and failed to deliver trade confirmations in 67,000 customer accounts. FINRA also penalized LPL for not supervising advertising and other communications, such as brokers’ use of consolidated reports.

The penalty includes a $10 million fine and restitution of $1.7 million to customers who were sold certain ETFs. FINRA said the firm may pay additional compensation to ETF purchasers “pending a review of its ETF systems and procedures.”

Brad Bennet, FINRA’s chief of enforcement, stated, “LPL’s supervisory breakdowns resulted from a sustained failure to devote sufficient resources to compliance programs integral to numerous aspects of its business. With today’s action, FINRA reaffirms that there is little room in the industry for lax supervision and that it will not hesitate to order firms to review and correct substandard supervisory systems and controls, and pay restitution to affected customers.”

This penalty is merely the latest in a string of regulatory actions that have haunted LPL over the last year. In late October, CEO Mark Casady apologized to shareholder for the delay in fixing its compliance issues, and the firm took a $23 million charge to resolve yet undisclosed regulatory issues.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-390-0036 to discuss your potential legal remedies or visit

FINRA has filed a complaint against broker Vito Balsamo alleging that Balsamo was “selling away” ownership interests in a limited liability company named V.W. Industries, LLC without getting prior written approval from his member firm. Selling away occurs when an investment professional sells or offers securities not held or offered by the brokerage firm with which he is affiliated. FINRA also accuses Balsamo of failing to provide testimony asked for by FINRA staff.

According to FINRA’s BrokerCheck records, customers have complained about Balsamo on at least four occasions; he has also been involved in two criminal matters, one regulatory action, and one judgment and lien throughout his career. Balsamo’s customers have accused Balsamo of a number of securities law violations, including selling unsuitable investments, unauthorized trading, breaching his fiduciary duty, making misrepresentations and false statements, and churning.

By industry standards, Balsamo has received a substantial number of complaints. Only roughly twelve percent of financial advisors have any type of disclosure event on their records. Much fewer brokers have numerous customer complaints.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-390-0036 to discuss your potential legal remedies or visit

The Alabama Securities Commission intercepted $16,000 worth of redeemed stock owned by Harry H. “Woody” Duncan from Huntsville, Alabama and successfully rerouted the cash to assist in the payment of restitution to victims of an illegal securities scheme operated by Duncan in 2011. In August 2012, Madison County, Alabama Circuit Court Judge James P. Smith sentenced Duncan to twenty years’ imprisonment for violating the Alabama Securities Act. Duncan is serving the first five years of his sentence, but the latter fifteen years will be suspended on the condition that he make complete restitution to all victims and file sworn quarterly financial reports accounting for the sources of funds used to make the payments.

An investigation by the Commission discovered that, despite the fact that Duncan is in the custody of the Alabama Corrections Department, he received stock dividends, which the Court considers personal assets/income, that should be allocated to pay restitution to his victims.

In January 2015, the Commission’s legal division was notified that a Florida-based corporation was trying to tell all of its shareholders that it was planning to redeem all shares of stock to them. Duncan was identified as a shareholder, and the company was trying to tell him that he would acquire a $16,000 dividend for shares of the stock he had. The Commission filed a motion seeking to enforce the restitution order detailed in Duncan’s sentencing hearing, requesting the Court to order the proceeds of Duncan’s stock redemption to be used for the payment of restitution to his victims. In April, the Court ordered Duncan to endorse the stock proceed check to be applied toward restitution.

In August 2012, Duncan pleaded guilty to one count of Scheme or Artifice to Defraud in connection with the Sale of Securities and to Theft of Property, for which the Court ordered Duncan to serve an extra fifteen year sentence to run concurrent with the fraud charge. The Court also ordered Duncan to pay $512,063 in restitution to seven investors named in the original indictment and $179,000 to an extra victim identified in the Commission’s investigation.

Alabama Securities Commission Director, Joseph Borg, stated, “I want to make it clear to scam artists that, even after financial criminals are prosecuted, our legal and investigative professionals will continue to watch out for the interests of our state’s main street investors by doing everything we can to strip assets from criminals anytime we can, and for no matter how long it takes.”

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-390-0036 to discuss your potential legal remedies or visit

A judge in Madison County, Alabama has granted a continuation for the trial scheduled for May in an alleged tomato farming scandal.

James Lawhorne is alleged to have defrauded investors of Cypress Creek Organic Farms. The Alabama Securities Commission charged Lawhorne in December claiming that, while going by the alias “Jim Gilley,” he conned investors by guaranteeing returns so that they would give him their funds.

Judge James Smith granted the continuation on Wednesday until August 10 with the pretrial docket on August 7.

As of now, Lawhorne is being held in Madison County Jail after his previous bond was revoked after an escape. He removed his ankle monitor in January and fled to Lake Mary, Florida, where it is believed he tried to start up a similar scam with organic pickles.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-390-0036 to discuss your potential legal remedies or visit

The Ohio Supreme Court ruled today that ex-Evergreen Corporation President David Willan will serve his full ten year prison sentence for securities violations under the state’s racketeering laws. Writing for the 5-2 court, Justice Judith L. French noted that the court found that the three convictions unambiguously apply and subject Willan to a mandatory RICO sentence of ten years.

Willan’s attorney, Andrea Whitaker, called the ruling “extremely disappointing” and stated that the case will be appealed to the United States Supreme Court on the question of whether the mandatory sentence is constitutional. The appeal will be grounded in a 2013 United States Supreme Court case that held that all facts in a mandatory sentence case must be submitted to and found true by a jury, rather than leaving it to a judge’s discretion.

Justice Judith Anne Lanzinger dissented, noting that the jury at the trial was not asked whether the crime of false representation supported the most grave racketeering conviction. Further, the verdict form given to the jury provided an unclear instruction to find that at least one of the incidents of corrupt activity was false representation, aggravated theft or theft from the elderly.

Before reaching the Ohio Supreme Court, the case was heard by Akron’s 9th District Court of Appeals, which ordered a resentencing hearing for Willan after overturning all except six of his seventy convictions for insufficient evidence.

Willan was the primary figure in a 147-count Summit County, Ohio indictment alleging him of massive mortgage and securities fraud while operating his Evergreen businesses in Akron.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-390-0036 to discuss your potential legal remedies or visit

Hendrickx Toussaint, a former attorney from Atlanta, Georgia, has pleaded guilty in Madison County, Alabama Circuit Court to one count of Conspiracy to Commit Securities Fraud by employing a device, scheme or artifice to defraud, a Class C felony punishable by up to ten years and no less than a year and a day in prison as well as a fine of up to $15,000 upon conviction.

Circuit Court Judge Alison S. Austin will sentence Toussaint on September 17 of this year. Toussaint’s sentence will run concurrently with a federal prison sentence. Earlier this year, Toussaint pleaded guilty in federal court in the United States District Court for the Northern District of Georgia to Conspiracy to Commit Wire Fraud. His federal sentencing will occur on August 4.

Toussaint was indicted by a Madison County, Alabama Grand Jury in June 2014. His co-conspirator, Richard David Hall of Huntsville, Alabama fraudulently solicited investors’ funds to be used in a managed gold “buy-sell” program. He told investors that their funds would be used to buy gold in Ghana, Africa to be traded internationally, which would make a profit for the investors. This trading, however, never occurred, and investor funds were wired through Toussaint’s trust account.

Toussaint used his position as an attorney to lend credibility to the operation. Hall had even gone so far as to write an “attorney attestation letter” supposedly from Toussaint. The letter guaranteed that the operation was legitimate and safe, assuring investors that their investments would be fine.

None of the conspirators were registered with the Alabama Securities Commission to legally conduct securities business within, into, or from Alabama.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-390-0036 to discuss your potential legal remedies or visit

Yesterday, the United States Department of Labor released a hotly anticipated and controversial proposal that would make financial advisers put their clients’ interests before their own when recommending retirement investment products.

The rule, which is staunchly opposed by numerous people in the brokerage community, will broaden the number of financial advisers subject to the fiduciary standard created by the Employee Retirement Income Security Act (ERISA) by removing a couple of exemptions that permitted advisers to push clients toward investment products that give brokers a tremendous upside, even if it is not in the best interest of the clients.

The goal of the rule is to end such conflicts by making broker-dealers who provide one-time advice to fall under the definition of investment advisers under ERISA. The second exemption that the rule will end is a clause stating that for a broker to be considered a fiduciary, the adviser and the client must agree that information provided by the broker was the primary basis for an investment decision.

“This boils down to a very simple concept: If someone is paid to give you retirement investment advice, that person should be working in your best interest,” Secretary of Labor Thomas E. Perez stated. “As commonsense as this may be, laws to protect consumers and ensure that financial advisers are giving the best advice in a complex market have not kept pace.”

The White House Council of Economic Advisers released a study finding that borrowers lose up to $17 billion a year on their independent retirement accounts due to their advisers’ conflicts of interests.

Among the changes included in the proposed rule is the creation of a so-called “best interest contract exemption” that would require retirement advisers and their firms to formally acknowledge their fiduciary status and commit to impartial conduct. The exemption, combined with clear disclosures of fees and other information, would allow investment advisers to collect fees that otherwise would be exempted from the law.

Despite this allowance, the financial industry and many members of Congress from both parties oppose the rule. The industry argues that the changes sought by the Obama administration would eliminate many products and services that are currently available to lower- and middle-income Americans and make it harder for them to save for retirement.

The Labor Department sent the rule to the Office of Management and Budget for a review in February, and industry groups blasted that short review. A typical OMB review takes approximately 117 days, according to the Financial Services Institute.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-390-0036 to discuss your potential legal remedies or visit