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GLOBAL CREDIT CRISIS REVEALS FRAUD BY WALL STREET IN SALES OF INVESTMENTS TO INCOME INVESTORS, CONSERVATIVE INVESTORS AND RETIREES
The nationally recognized Law Firm of Miller & Milove represents investors victimized by financial fraud and mismanagement. Conservative bond, income and stock investors are becoming aware of fraudulent practices of Securities Brokers, Investment Advisors and Wall Street firms in the wake of the national financial crisis. Investors have been misled and suffered substantial losses in various Closed End Bond and Mutual Funds, Structured Investment Products, purported Income Funds and the like that were represented as safe havens for conservative investors. In truth and fact, many of these investments engaged in risky and highly leveraged gambling in Mortgage Backed Securities(MBS) and other derivative debt instruments supported by questionable "virtual" or "notional" pricing. Mortgage Backed Securities (a.k.a. CMOs) created by Wall Street firms such as Lehman Brothers and Bear Stearns have been widely distributed in purported "income","bond" and "money market" funds and investments. Many of these investments were margined or leveraged and have caused the failure of these firms, banks and substantial investor losses.
Many investors are also learning of unusually large losses in their stock and retirement portfolios caused by the fraudulent sales practices and unsuitably risky investing by their brokers or money managers. While brokers have been paid undue commissions, management, advisory and monitoring fees, many portfolios have been allowed to shrink in the face of risks that were known, or should have been known by all financial professionals. Negligent supervision and manipulative trading strategies in accounts by brokers have caused substantial damage in excess of losses caused by market swings.
Get the latest coverage and headlines on other active Bond and Income cases featuring:
- CITIGROUP MAT FIVE - Miller & Milove represesents investors defrauded by Citigroup in connection with the Mat Five and Falcon Hedge Fund investments. Miller & Milove has filed Arbitration claims providing for the individual representation of MAT Five investors seeking the return of all investment funds. Miller & Milove believes that the individual representation of MAT Five investors provides an opportunity to maximize your recovery. Investors opting out of the Class Action are entitled to address their claims in arbitration and elsewhere.
- TD Ameritrade/Reserve Yield Plus Fund - CLASS ACTION ALERT for all TD AMERITRADE/RESERVE YIELD PLUS INVESTORS (Symbols RYPQX, RYPYX, RYPJX and RYPTX)
- Brookstreet Securities including Clifford Popper, National Financial Services and Fidelity Investments.
- Schwab YieldPlus Fund; ALL CHARLES SCHWAB YIELD PLUS INVESTORS SHOULD CONSULT WITH COUNSEL
- UBS Auction Rate Securities
Auction rate securities fraud - UBS, Merrill Lynch, Nuveen, Citigroup/Smith Barney securities fraud claims
Miller & Milove also represents clients of CHARLES SCHWAB and TD AMERITRADE who were advised to deposit cash and conservative investment funds into the SCHWAB YIELDPLUS FUNDS (SWSYX and SWYPX) and TD AMERITRADE RESERVE YIELD PLUS FUNDS (RYPTX, RYPYX, RYPJX and RYPQX) and NUVEEN FUNDS based on misrepresentations concerning the safety and nature of these Funds. Many investors were told that theTD AMERITRADE RESERVE YIELDPLUS FUND and NUVEEN FUNDS marketed by TD AMERITRADE were the same or better than safe money market investments. Similar false representations were made by Charles Schwab & Co. in connection with the SCHWAB YIELD PLUS FUND. CITIGROUP/SMITH BARNEY also induced conservative investor clients to purchase MAT FIVE and FALCON HEDGE FUND investments with misrepresentations concerning the nature and safety of the funds' holdings. Many former Citigroup/Smith Barney brokers have supported investor claims that the parent company made material misrepresentations concerning these investments. Arbitration proceedings against these firms seek redress for fraud, breach of fiduciary duty, misrepresentation, unfair business practices and other violations of the law. .
Investors in SCHWAB YIELDPLUS, TD AMERITRADE RESERVE YIELD PLUS, CITIGROUP/SMITH BARNEY FALCON, MAT THREE and MAT FIVE HEDGE FUNDS and OPPENHEIMER/Deutsche Bank "PIVOT" Certificates suffered losses from risky Mortgage Backed Securities, Collateralized Mortgage Obligations (CMOs), Collateralized Debt Obligations (CDOs), or Commercial Paper and other speculative derivatives. (Please see the discussions below regarding "CMO FRAUD" and HEDGE FUND FRAUD). Miller & Milove also represents investor victims of the BROOKSTREET SECURITIES, CLIFFORD POPPER, NATIONAL FINANCIAL SERVICES and FIDELITY INVESTMENTS FRAUD.
The law firm of Miller & Milove has successfully represented investors for more than 23 years in Court, Arbitration, and Mediation proceedings. One of the leading National Securities Law Firms, partners Brian Miller and Bradd Milove handle a variety of cases and claims ranging from the representation of Individuals, Trusts, IRAs, Pension Plans, Family Partnerships, Retirement Funds, Institutional and other investors in various Arbitration Proceedings, as well as civil litigation proceedings in State and Federal Court.
Securities Attorneys Brian Miller and Bradd Milove professionally and diligently represent investors victimized by unfair business practices and illegal conduct. Not all investment losses are or should be recoverable through legal action. The national and global financial networks have been substantially undermined by the unlawful and immoral practices of some unscrupulous securities firms and brokers. Miller & Milove are staunch proponents of free market practices which are necessary to the capitalization and well-being of our economy. Unfortunately we are now suffering the effects of a lack of enforcement of our securities laws and systemic fraud. We believe that public confidence and the health of our markets and economy will return following the enforcement of investors rights and a period of elucidation of the fraudulent practices that are causing widespread financial harm.
A leading National Law Firm Prosecuting Business and Financial Fraud Cases
The types of schemes which can lead to investment fraud are limited only by the imagination. You are welcome to view the FBI financial fraud reports to become familiar with various types of financial fraud. The following is a discussion of the types of cases that the law firm of Miller & Milove has seen surfacing in recent months.
FRAUDULENT HEDGE FUND and ADVISORY SCAMS-BERNARD MADOFF/IMA HEDGE FUND-
"Hedge Funds" have proliferated in the past several years. Originally intended for highly sophisticated investors with distinct portfolio management needs, "Hedge Funds" have been marketed generally to retail investors without disclosure of risks associated with the Hedge Fund promoters, the Hedge Fund holdings and the Hedge Fund's confirmed track records. One example of a fraudulent Hedge Fund investment scam is International Management Associates ("IMA") operated from Atlanta, Georgia. (Please see the discussion of IMA on the FBI Financial Fraud reports of "Significant Cases", above) IMA and its sales agents targeted unsophisticated investors through the National Football Players Association and otherwise in a $180 million+ nationwide Hedge Fund Ponzi scheme. Simiarly, Former NASDAQ Chairman/Philanthropist Bernard Madoff has admitted to perpetrating a $50 Billion "private" investment scam. Many defrauded investors have been solicited at Country Clubs and social events by various investment advisors and financial planners who position themselves with access to high net worth individuals.
CMO FRAUD
CMO is an acronym short for “Collateralized Mortgage Obligation” and a form of mortgage-backed security. CMOs generate cash flow of principal and/or interest from pools of mortgages and were generally designed for institutional investors (Such as insurance companies and banks) who have the experience and sophistication to independently evaluate the risks unique to this type of complex investment vehicle and the price being charged. Sometimes, unscrupulous brokers market CMOs emphasizing their high credit quality without adequate disclosure of interest rate and prepayment risks and the lack of liquidity or market pricing. Retail investors should not be sold CMOs on margin credit which compounds the risk and may act as a fraud upon the investor. Miller & Milove represents investors damaged by National Financial Services (Fidelity Investments), Clifford Popper and Brookstreet Securities in connection with illegal sales and margining of "inverse floaters" and "interest only" CMOs to conservative and elderly Retail Income Investors.The U.S. Securities and Exchange Commission and FINRA reportedly continue investigations of the CMO program that caused the downfall of Brookstreet and substantial losses in customer accounts.
Government Regulators including FINRA have repeatedly warned members of the Securities Industry that certain derivatives such as "Inverse Floaters", Interest Only(IOs), Principal Only(POs), residuals and swaps should not be sold to retail investors. Unfortunately, recent events prove that many types of risky Mortgage Backed Securities and purportedly safe "Income", "Bond", "Money Market" or "Yield" funds have been unlawfully marketed to Conservative Retail investors and have been misrepresented to Institutional, SIV and Hedge Fund investors resulting in losses to retirement and other essential accounts .
INVESTOR LOSSES CAUSED BY FRAUD IN INCOME FUNDS
Some investors learned they were invested in risky and unsuitable CMOs only after the funds in which they were invested suffered losses. The CHARLES SCHWAB YIELDPLUS BOND FUND and the MAT FIVE and FALCON Hedge Funds sold by Smith Barney and CITIGROUP Private Investor Services are prime examples of the dangerous effects of CMO, CDO and derivatives held on margin in funds marketed as safe and conservative. Indeed, CMO losses have been blamed for huge drops in Charles Schwab’s YIELDPLUS BOND Fund which, although marketed as a safe, short term money Market Alternative, has lost over 24% of its value this year. Similarly, the SMITH, BARNEY/CITIGROUP losses in MAT and FALCON HEDGE FUNDS reportedly surpass 70%.
Given the volatile nature of many CMO investments, if you have suffered loss in a money market or bond fund, it may very well be the result of unsuitable and risky CMOs. You should consider consulting with experienced legal counsel if you believe you have suffered losses as a result of CMO investments.
BROKER MISREPRESENTATION AND UNDISCLOSED COMPENSATION
A broker owes a fiduciary duty to his or her clients when rendering investment advice to place the client’s interests first. Too often investments are sold by brokers who are motivated by their own compensation rather than the client’s best interests. The investor is often unaware of all of the ways in which a broker is compensated for an investment sale, and may require the expertise of experienced counsel to determine the salesman’s compensation and to examine representations which are inconsistent with the results of the investment. Miller & Milove currently represents an investor damaged by a Municipal Bond churning scheme perpetrated by the Century City (Los Angeles) branch of UBS Financial (formerly known as PaineWebber). Municipal Bonds are not intended to be actively traded. However unscrupulous brokers will encourage "swapping" or actively trading Municipal Bonds to generate unnecessary and excessive commissions. The practice, known as "churning", is a form of securities fraud outlawed by Federal and State statutes.
UNLICENSED SALESMAN, UNREGISTERED INVESTMENT PRODUCTS AND ILLEGAL DISTRIBUTIONS OF SECURITIES
Federal and State laws require that salesman who sell investments that meet the legal definition of a “security” be licensed to sell securities. Investments which meet the definition of security are also REQUIRED TO BE REGISTERED under Federal and State law (or satisfy technical exemptions), as are "offerings" and "distributions" of securities that are sold to groups of investors pursuant to a sales program. Generally, a security is a passive investment in which the investor does not contribute his skill or expertise to the investment venture and relies upon someone else’s skill and expertise in structuring the investment and/or managing the investment. Offerings or distributions are typically mass marketings of a particular investment to investors. The types of investments, offerings and distributions which might raise issues of licensing and/or registration are too numerous to list.
Miller & Milove has successfully represented clients who invested in various investment programs, promissory notes, life insurance financing, alternative energy programs and real estate investment schemes amongst others based upon licensing and registration claims.
Generally, licensed securities brokers are required to be affiliated with a licensed broker-dealer registered with FINRA (formerly known as the National Association of Securities Dealers (NASD)) and are required to be licensed in every state in which they do business.
Licensing and registration requirements and misrepresentation prohibitions included within Federal and State law exist for the protection of investors and the public generally, as there is a public benefit to a regulated financial industry which provides balanced and accurate information to the investing public.
Usually, licensed salesman and unregistered investment product cases also include misrepresentations claims as well. Typically, the investment promoter fails to properly segregate or allocate investment funds and seeks to create a track record of success by paying substantial returns to early investors from investments of subsequent investors. This scenario is sometimes referred to as a “”Ponzi” or “pyramid scheme.”
You should consider consulting with experienced legal counsel if you believe a salesman or an investment might not have been licensed or registered or that you were misled in any way.
If you have questions about an investment please contact the law offices of Miller & Milove. In most cases we provide a free initial consultation and case evaluation.
THIS WEB SITE IS DESIGNED FOR GENERAL INFORMATION ONLY. THE INFORMATION PRESENTED AT THIS SITE SHOULD NOT BE CONSTRUED TO BE FORMAL LEGAL ADVICE NOR THE FORMATION OF AN ATTORNEY/CLIENT RELATIONSHIP.
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