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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 frankowskifirm.com.

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 frankowskifirm.com.

Timothy Lowell Franks of Winfield, Alabama was arrested earlier this month for allegedly violating the Alabama Securities Act. The arrest was the result of a March 2015 Marion County Grand Jury indictment, which charged him with six counts of violations: one count of Sale of Unregistered Securities, one count of Sale of Securities by an Unregistered Agent, three counts of Fraud in Connection with the Sale of Securities, and one count of Theft by Deception, First Degree.

If convicted, for the first two charges, which are Class C felonies, Franks is facing punishment of up to ten years imprisonment and a fine of $15,000 for each count. For the last two charges, which are Class B felonies, Franks faces a punishment of up to twenty years imprisonment and a $30,000 fine for each count.

Franks’ indictment alleges that he offered and sold securities in a coal mining operation. In connection to the securities transactions, Franks represented to investors that he owned the mine and the mineral rights needed to run the mine. He then sold contracts or interests in the mining operation. Franks was later released after posting $15,000. His trial date has not yet been set.

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 frankowskifirm.com.

Will Allen, a former National Football League cornerback, was charged with fraud by the SEC for allegedly running a Ponzi scheme that bilked investors out of $31 million. Allen allegedly worked with Susan Daub to create a number of companies, including Boston-based Capital Financial Partners, offering loans to professional athletes.

Allen and Daub allegedly told athletes they could receive interest of up to 18% from Major League Baseball, National Basketball Association, National Hockey League, and NFL players. They marketed the business as giving athletes access to at least $75,000 loans in the off-season or early in the season, when they may be strapped for cash based on their contracts.

Between 2012 and early 2015, Allen and Daub raised $31 million from at least 40 investors but allegedly misled them about the terms of the loans. They used investor funds to pay for personal expenses, including charges at pawn shops, casinos, and nightclubs. The SEC accuses Allen of paying some of his investors from funds received from later investors instead of from legitimate business income.

According to Paul Levenson, who runs the SEC’s Boston office that investigated the case, “As in any Ponzi scheme, the appearance of a successful investment was only an illusion sustained by lies.”

Allen was drafted in the first round of the 2001 NFL draft out of Syracuse University by the New York Giants. He played five years with the Giants and five years with the Miami Dolphins before playing his last season in 2012 for the New England Patriots.

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 frankowskifirm.com.

Securities regulators from New Hampshire want LPL Financial to pay $3.6 million in fines and repayments to investors for allegedly unsuitable sales of real estate investments to elderly clients. The New Hampshire Bureau of Securities Regulation, in an action filed earlier this week, claims that it wants $2.4 million from LPL in buybacks and restitution for clients in 48 sales of nontraded real estate investment trusts that go back as far as 2007. The Bureau is also seeking a $1 million fine and wants LPL to pay $200,000 in investigative costs.

The claim arises from an 81 year old New Hampshirite who purchased a nontraded REIT from LPL in January of 2008 and thereafter lost a significant amount on the investment, which typically is not liquid and is accompanied by high fees. The client invested $253,000 in the REIT and had a liquid net worth of $2.5 million. New Hampshire claims that the investment, as well as a number of others, made elderly clients hold a higher percentage of their portfolios in risky alternative investments than is allowed by LPL’s own internal rules.

It its petition, the New Hampshire Bureau of Securities wrote that the 48 REIT sales that amounted to about $2.4 million “resulted in an [alternatives] concentration that blatantly exceeded LPL guidelines.”

As no decision has been made on the case, LPL will seek a hearing before a bureau hearing officer. LPL spokesman Brett Weinberg stated that LPL was “unable to reach a mutually agreeable resolution with the state. LPL has dedicated substantial resources to addressing these legacy issues and enhancing our practices around the sale and supervision of alternative investments.”

Adrian LaRochelle, a staff attorney in the New Hampshire Bureau of Securities who has been communicating with LPL throughout the investigation, believes that “there’s a serious enough problem that a hearing is necessary.”

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 frankowskifirm.com.

New York City comptroller Scott M. Stringer is pushing the state legislature to pass a law that would clarify the distinction between brokers and investment advisers to investors. Stringer’s proposal would mandate that all financial advisers directly state whether they must act in their clients’ best interests.

“We need a uniform, national fiduciary standard, but we can’t wait to give New Yorkers the common sense reforms they need to make informed investment choices,” Mr. Stringer stated. “This new law will ensure that New Yorkers know whether the investment advice they receive is in their best interest.”

Currently, investment advisers must operate under a fiduciary standard, but brokers must only recommend products that are suitable to the investor.

Stringer’s proposal would mandate the following disclosure orally and in writing at the outset of a financial relationship, at frequent intervals, and in advertising: “I am not a fiduciary. Therefore, I am not required to act in your best interests, and am allowed to recommend investments that may earn higher fees for me or my firm, even if those investments may not have the best combination of fees, risks and expected return for you.”

A report from Stringer’s office claims that “[r]equiring this plain-language, unambiguous statement in advertising and at frequent intervals during the advisory relationship can help reduce consumer confusion and improve the investment security of all New Yorkers.”

Stringer wants this proposal to move ahead, while federal regulators are still moving slowly on the issue. As Knut Rostad, President of the Institute for the Fiduciary Standard, stated, “This is what states are supposed to do as laboratories of democracy. It’s urgently needed, and the feds won’t do it.”

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 frankowskifirm.com.

Mary Jo White, Chairwoman of the SEC, told legislators that the agency will continue at its own pace, over an extended period of time, to address raising investment advice standards for brokers. The agency will not be rushed by a similar Department of Labor rule currently pending.

White stated before the House Financial Services Committee that the SEC and DOL are discussing the issue together but are working separately as different agencies with different jurisdictions and mandates.

White warned not to expect change any time soon: “We really are at the beginning of this process. I’ve reached my own personal conclusion. But the next step is for me to be discussing in detail all the aspects of my thinking with my fellow commissioners. It’s a long process, with lots of complex issues.”

She noted that despite her support of a fiduciary-duty rule for brokers, she still needs support from at minimum two other members of the five-person commission to pass the rule: “It’s still a ‘whether’ question, because it’s a five-member commission. I’m one of five votes.” Republican members, Daniel Gallagher Jr. and Michael Piwowar, have already expressed opposition to such a rule.

The DOL is expected later this spring to release for comment a rule that would mandate brokers to act in the best interest of their clients, or in other words to meet a fiduciary duty, when handling 401(k)s and individual retirement accounts. The opposition to this rule wants the DOL to wait for the SEC to act first, but White stands by her claim that the timing of the SEC’s action will not be affected by the DOL: “We are separate agencies, and we need to proceed separately when we think that the time is right and we have something that we think should advance.”

A number of legislators asked White whether a fiduciary-standard for retail investment advice would raise regulatory costs for brokers and make them abandon investors with modest assets. White countered that the fiduciary rule would aid small investors: “It’s to the benefit of retail investors. That’s who we’re acting for.”

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 frankowskifirm.com.

Over a five year span, former Hoover, Alabama financial broker Bryan Anderson found eighteen people to invest $8.4 million in a number of investments and guaranteed that the investments were completely risk free. Roughly two thirds of those investors watched Anderson at the federal courthouse in downtown Birmingham plead guilty to operating a Ponzi scheme that lost them $3.1 million. Anderson pleaded guilty to wire fraud, money laundering, and securities fraud before U.S. District Judge Virginia Emerson Hopkins. He will be sentenced on June 16.

According to the plea deal with the U.S. Attorney’s Office, Anderson will pay restitution of almost $3.1 million to investors and surrender an extra $3.4 million to the federal government. The prosecutors agreed to recommend a sentence at the low-end of the spectrum.

Richard Frankowski, who is representing the investors in their FINRA arbitration suits against Anderson, stated that the majority of the twelve investors identified as victims were at the courthouse for the plea. Frankowski said, “Many of the investors we represent were financially devastated by the activities of Anderson and we believe the lack of supervision at MetLife and Pruco.”

From January 2009 to January 2014, Anderson allegedly made false representations and promises that caused about 18 individual and family investors to give him more than $8.4 million. He then deposited the money into an account he and his wife held at BancorpSouth, a bank based in Tupelo, Mississippi. After the investment scheme collapsed in May 2014, about 12 investors had lost almost $3.1 million, and one investor alone lost nearly $1.1 million.

According to prosecutors, Anderson solicited investors to invest in stock options that he claimed utilized a number of trading strategies. However, the stock options he discussed were not registered securities, and Anderson was not authorized to solicit investor money for the funds. Additionally, Anderson offered investments in 360 Properties, a company he owned, telling investors their returns would come from leased property income. Yet, no such leased properties existed. A number of investors believed that these investments were affiliated with MetLife, and Anderson took no action to correct these untrue beliefs.

Anderson’s scheme began to unravel in early 2014. According to his plea deal, “As the scheme began to fall apart, Anderson repeatedly missed deadlines to pay investors. He made up stories and gave explanations which he knew were not true about why he had not been able to pay their money in order to lull them into not taking legal action.”

The investigation of Anderson was performed by the Alabama Securities Commission, Hoover Police Department, FBI, and the U.S. Attorney’s Office for the Northern District of 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 frankowskifirm.com.

Jacob Robert Craton of Palm Beach Gardens, Florida submitted an AWC in which he was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in any capacity for 45 days. Craton did not admit or deny FINRA’s findings but consented to the sanctions and to the entry of findings that he knowingly circumvented his firm’s supervisory system and procedures, pertaining to penny stock transactions, by altering the conditions of an order to bypass principal review and approval. He also deprived the firm of the chance to review, approve, and otherwise supervise the transaction in accordance with its system and procedures.

Stephen Young Dealy of Port Orange, Florida submitted an AWC in which he was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in any capacity for four months. Dealy did not admit or deny FINRA’s findings but consented to the sanctions and entry of findings that he willfully failed to timely amend his Form U4 to disclose a federal tax lien. He additionally failed to report written complaints he received from his customers to the firm, thereby causing his firm to violate its obligation to report the complaints to FINRA.

Michael A. Greer of Mechanicsville, Virginia submitted an AWC in which he was assessed a deferred fine of $7,500 and suspended from association with any FINRA member in any capacity for six months. Greer did not admit or deny FINRA’s findings but consented to the sanctions and to the entry of findings that he falsified records and his firm’s books. After submitting change of broker forms to the custodian of customers’ mutual fund accounts, Greer was alerted that his customers had signed the wrong form. Instead of having his customers sign new forms, Greer electronically affixed, without the customers’ knowledge or authorization, copies of their signatures on the correct form, which he then submitted to the custodian and his member firm.

Shannon S. Hampton of Bossier City, Louisiana submitted an Offer of Settlement in which she was suspended from association with any FINRA member in any capacity for four months. Hampton did not admit or deny FIRNA’s findings but consented to the sanction and to the entry of findings that she engaged in check kiting by writing checks totaling $2,675 against her personal bank account that she knew contained insufficient funds, and depositing each check into a retail bank checking account. Hampton deposited the checks to benefit temporarily from the “float” on them and derive the use and benefit of the funds from the time they were credited to her account until other funds were deposited into the accounts.

Thomas Lucian Hines III of Pine Knoll Shores, North Carolina submitted an AWC in which he was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in any capacity for one month. Hines did not admit or deny FINRA’s findings but consented to the sanctions and to the entry of findings that he falsified an insurance document by signing an insurance customer’s signature on the document without the customer’s knowledge, authorization or consent. Hines signed the customer’s name on a form that falsely acknowledged the customer’s receipt of an insurance policy when in fact the customer had not yet received delivery of the policy.

Russell Darin Hurley of Signal Mountain, Tennessee submitted an AWC in which he was fined $5,000 and suspended from association with any FINRA member in any capacity for 30 days. Hurley did not admit or deny FINRA’s findings but consented to the sanctions and to the entry of findings that he loaned $30,000 to a customer of his member firm but failed to notify the firm or obtain its advance written approval of the loan. Hurley made an inaccurate statement on his firm’s annual compliance questionnaire related to his outside activity of lending to the customer.

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 frankowskifirm.com.

Bulltick, LLC of Miami, Florida submitted an AWC in which the firm was censured and fined $20,000. Despite not admitting or denying FINRA’s findings, Bulltick consented to the sanctions and to the entry of findings that it failed to adequately implement and enforce its written supervisory procedures on reporting TRACE-eligible securities, pursuant to a Uniform Service Bureau/Executing Broker Agreement executed by the firm and its affiliate that required Bulltick to report the affiliate’s transactions in TRACE-eligible securities to TRACE. Subsequently, Bulltick failed to report the right contra-party identifier for transactions in TRACE-eligible securities of the affiliate to TRACE, and Bulltick also reported transactions in TRACE-eligible securities to TRACE that it did not have to report.

Transamerica Financial Advisors, Inc. of St. Petersburg, Florida submitted an AWC in which the firm was censured and fined $50,000. Despite not admitting or denying FINRA’s findings, Transamerica consented to the sanctions and to the entry of findings that it filed with FINRA an inaccurate Form U5 on behalf of a former registered representative who failed to disclose that she had been charged with a felony prior to her termination. Transamerica knew that the representative had been charged with the felony while she was employed and registered with the firm. Transamerica also filed with FINRA an inaccurate and misleading Amended Form U5 for the representative that claimed she had not been charged with a felony before her termination and that she had not disclosed her arrest at the time of her resignation.

Worth Financial Group, Inc. of Dallas, Texas submitted an AWC in which the firm was censured and fined $10,000. Without admitting or denying FINRA’s findings, Worth consented to the sanctions and to the entry of findings that it failed to establish adequate supervisory systems or written supervisory procedures to monitor sales of life settlement investments by the firm’s registered representatives and non-associated individuals for whom the firm received override commissions. Worth failed to have any supervisory systems or written supervisory procedures in effect to discover if the states in which its licensees sold life settlements deemed them to be securities or required individuals who sold life settlements to have a specific registration or license. Worth also failed to have supervisory systems or written supervisory procedures in effect to make sure that registered representatives were performing reasonable-basis and customer-specific suitability analyses and disclosing both the risks and rewards associated with investing in life settlements. Worth further did not have a training program in effect to make sure that registered representatives understood the important features, risks, and suitability of life settlements.

Naveen K. Bhagwani of West Palm Beach, Florida submitted an Offer of Settlement in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the allegations, he consented to FINRA’s sanction and to the entry of findings that he engaged in unauthorized trading in customers’ non-discretionary accounts without the knowledge, authorization, or consent of the clients or anyone with trading power over the accounts. Bhagwani excessively traded, made quantitatively unsuitable investments, and churned customer accounts with the motive of creating commissions for himself and his member firm. He also misrepresented material facts to clients and created and forged customers’ signatures on a letter that authorized the transfer of their funds without their knowledge or consent.

Michael Vincent Borja of Miami, Florida submitted an AWC in which he was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in any capacity for 45 days. Despite not admitting or denying the findings, Borja consented to the sanctions and to the entry of findings that he engaged in wire transfer requests, from an imposter posing as a customer, without first obtaining verbal confirmation from the customer, which was against his member firm’s policies and procedures. Borja falsely represented in his firm’s records that he verbally confirmed wire requests with the customer and also gave false reasons for the customer’s transfer instructions. He additionally caused his firm to keep false books and records regarding the wire transfer requests.

William David Crain of Little Rock, Arkansas submitted an AWC in which he was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in any capacity for one month. Crain did not admit or deny the findings but consented to the sanctions and to the entry of findings that he exercised discretion in a customer’s account without first obtaining written authorization to do so. The customer had given Crain discretionary trading authority in an invest-advisory agreement. Yet, Crain continued to exercise trading authority in the account after discovering the customer had died and the subsequent expiration of his discretionary trading authority. Crain executed trades with the knowledge and implicit consent of the surviving spouse, who was the account’s sole beneficiary, but she had not given Crain written discretionary authority.

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 frankowskifirm.com.