Senior and Retirement Fraud, Misrepresentation and Breach of Fiduciary Duty Litigation and FINRA Arbitration Attorney:
Commission Charges Indiana Resident with Conducting Ponzi Scheme Targeting Retirement Savings of Investors
The Securities and Exchange Commission (“Commission”) recently charged a Noblesville, Ind., resident and his company with defrauding investors in a Ponzi scheme that targeted retirement savings.
High Yield – Junk Bond Investment Loss – Florida Litigation and FINRA Arbitration Attorney:
A High Yield or Junk Bond is a bond with a credit rating of BB or lower by a recognized rating agency such as Fitch Ratings, Moody’s Investors Services, Morningstar Rating System and others. Although the term Junk Bond is commonly used, issuers and holders of such securities prefer the securities be call high yield bonds. Junk Bonds are usually issued by companies without long track records of sales and earnings, or by those with questionable credit strength. Since they are more volatile and pay higher yields than investment grade bonds, many risk-oriented investors specialize in trading them. The phrase “risk-oriented” being the operative term.
If you are an average investor, with fairly conservative investment objectives, these types of bonds are not for you. If you own these bonds, the current yield section of your statement, more likely than not, reflects a yield of around 10% or higher but compare that against the current market value. At the end of the day, especially when comparing the maturity of the bond to your age or when you might need the principal returned, what is more important, high risk yield or the protection of your principal.
South Florida Precious Metals Fraud, Misrepresentation and Breach of Fiduciary Duty Litigation and Arbitration Attorney:
The Manhattan District Attorney’s Office recently announced that three Florida men who operated an investment scheme through a precious metals company have been indicted in New York City on charges they defrauded scores of investors out of millions of dollars.
Manhattan District Attorney Cyrus Vance said Tuesday Sean Robert Stropp, Karl Spicer, Ricardo Garcia and PMCO Services Inc. were charged with grand larceny and violation of the Martin Act among other charges.
South Florida Retirement and Elder Care Misappropriation and Theft FINRA Arbitration and Litigation Attorney:
Securities and Exchange Commission v. Blake Richards, Civil Action No. 1:13-CV-1729 (N.D. Ga.)
Federal Court Permanently Enjoins Atlanta-Area Registered Representative Blake Richards from Securities Fraud Violations
Cash Basis of Accounting, Accrual Method of Accounting and Modified Cash Basis: South Florida Accounting Negligence and Breach of Contract Commerical Litigation Attorney, Russell L. Forkey, Esq.
The Cash Basis accounting method recognizes revenues when cash is received and recognizes expenses when cash is paid out. In contrast, the Accrual Method of accounting recognizes revenues when goods or services are sold and recognizes expenses when obligations are incurred. A third method, called Modified Cash Basis uses accrual accounting for long-term assets and is the basis usually referred to when the term cash basis is used.
Please keep in mind that the above information is being provided for educational purposes only. It is not designed to be complete in all material respects. Thus, it should not be relied upon as legal or investment advice. If the reader has any questions concerning the contents of this post, you should contact a qualified professional.
Municipal, Corporate and Revenue Bond – South Florida Breach of Fiduciary Duty, Breach of Contract and Negligence FINRA Arbitration and Litigation Attorney:
A premium bond is a bond (Corporate, Revenue and Municipal) with a selling price above face or redemption value. For example, a bond with a face value of $1,000 would be called a premium bond if it sold for $1,100. This price does not include any accrued interest due when the bond is purchased. When a premium bond is called before scheduled maturity, bondholders are usually paid more than face vale, though the amount may be less than the bond is selling for at the time of the call.
Please keep in mind that the above information is being provided for educational purposes only. Thus, it is not designed to be complete in all material respects. It should not be relied upon as legal or investment advice. If the reader has any questions concerning this post, you should contact a qualified professional.
Preliminary Prospectus, Preliminary Offering Document, Preliminary Official Statement – South Florida Fraud, Misrepresentation and Omission FINRA Arbitration and Litigation Attorney:
A preliminary prospectus also known as a “red herring” is the first document released by an underwriter of a new issue to prospective investors. The document offers financial details and other information about the issue but does not contain all of the information that will appear in the final prospectus, and parts of the document may be changed before the final prospectus is issued.
Please keep in mind that the above information is being provided for educational purposes only. Thus, it is not designed to be complete in all material respects. Further, this post should not be relied upon as legal or investment advice. If the reader has any questions concerning the contents of this post, you should contact a qualified professional.
Put and Call Option Premium Income – South Florida Option Abuse, Excessive Activity, Breach of Fiduciary Duty, Negligent Supervision FINRA Arbitration and Litigation Attorney:
Option premium income is income received by an investor who sells a put option or call option. An investor collects premium income by writing a covered option, if the investor owns the underlying stock, or a naked option, if he or she does not own the stock. An investor who sells options to collect premium income hopes that the underlying stock will not rise very much ( in the case of a call) or fall very much (in the case of a put).
Please keep in mind that the above information is being provided for educational purposes only. Thus, it is not designed to be complete in all material respects. It should not be relied upon as legal or investment advice. If the reader has any questions relative to this post, you should contact a qualified professional.
In the Matter of Steven J. Brewer:
On July 12, 2013, the Securities and Exchange Commission announced the issuance of an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 (Exchange Act) and Section 203(f) of the Investment Advisers Act of 1940 (Advisers Act), Making Findings and Imposing Remedial Sanctions (Order) against Steven J. Brewer.
The Order finds that from June 2009 through October 2010, Steven J. Brewer was engaged in the business of effecting transactions in securities for the accounts of others by offering and selling promissory notes to investors. During that time, Brewer was associated with a registered broker dealer and with a registered investment adviser. On April 22, 2013, a judgment was entered by consent against Brewer, permanently enjoining him from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and from aiding and abetting future violations of Section 15(c) of the Exchange Act and Sections 206(1) and 206(2) of the Advisers Act, in the civil action entitled Securities and Exchange Commission v. Steven Brewer, et al., Civil Action Number 10-cv-6932-BMM-AK, in the United States District Court for the Northern District of Illinois. The Commission’s complaint alleged that, from June 2009 through at least the end of September 2010, Brewer and others participated in fraudulent, unregistered offerings of promissory notes issued by FPA Limited, an Isle of Man company, in the aggregate amount of $5.6 million to at least 74 investors. The offering materials created and used for the offerings misrepresented the risk of the investment and misrepresented the use of proceeds of the offering. The complaint alleged that Brewer originated the fraudulent offerings and participated in creating the fraudulent offering documents. Brewer also controlled the bank account into which the proceeds of the offerings were deposited and then disbursed, primarily to BIG.
Yield to Maturity (YTM) – South Florida Breach of Fiduciary Duty, Negligent Supervision and Breach of Contract Litigation and FINRA Arbitration Attorney, Russell L. Forkey, Esq.
“Yield to Maturity” is a concept used to determine the rate of return an investor will receive if a long-term, interest-bearing investment, such as a bond is held to it maturity date. It takes into account the purchase price, redemption value, time to maturity, coupon yield, and the time between interest payments. Recognizing time value of money, it is the discount rate at which the present value of all future payments would equal the present price of the bond, also known as the internal rate of return. It is implicitly assumed that coupons are reinvested at the yield to maturity date.
Please keep in mind that the above referenced post is being provided for educational purposes only. It is not designed to be complete in all material respects. Thus, it should not be relied upon as legal or investment advice. If the reader has any questions concerning the contents of this post, you should contact a qualified professional.
South Florida Arbitration & Litigation Lawyer Blog