South Florida Accounting, Fraud, Negligence, Breach of Contract and Misrepresentation Litigation and Arbitration Attorney:
Securities and Exchange Commission v. Michael H. Taber, CPA, Civil Action No. 13-mc-0282 (S.D.N.Y. filed Aug. 8, 2013)
SEC Awarded $400,000 in Disgorgement from Certified Public Accountant for His Violations of Commission Suspension Order
South Florida Prime Bank and Overseas Debt Instruments Fraud and Misrepresentation Litigation and Arbitration Attorny:
Securities and Exchange Commission v. Malom Group AG, Martin U. Schläpfer, Hans-Jürg Lips, et al., Civil Action No. 2:13-cv-2280 (D. Nev. Dec. 16, 2013)
SEC Charges Perpetrators of Prime Bank Schemes in Las Vegas and Switzerland
South Florida Unregistered Securities, Joint Venture and Securities Misrepresentation and Litigation Attorney:
Securities and Exchange Commission v. Arcturus Corporation, et al., Civil Action No. Civ. Action No. 3:13-cv-04861-K (N.D. Tex., Dallas Division, filed December 12, 2013)
SEC Charges Texas Oil and Gas Promoters for Securities Fraud
Florida Shareholder Notice and Consent Requirements and Dissenters’ Rights – South Florida Corporate Litigation and Arbitration Attorney:
Shareholder notice and consent requirements and dissenters’ rights statutes are intended to insure that directors do not fundamentally change the nature of the shareholders’ investments without the check and balance of informed shareholder approval, and the opportunity for dissenters to withdraw from the corporation. A critical part of Florida’s statutory scheme giving dissenters the right to withdraw from the corporation is section 607.1301(2), which defines the term “fair value” for purposes of the dissenters’ rights statute. ‘Fair value,’ with respect to a dissenter’s shares, means the value of the shares as of the close of business on the day prior to the shareholders’ authorization date, excluding any appreciation or depreciation in anticipation of the corporate action unless exclusion would be inequitable.
Please keep in mind that this 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 consult a qualified professional.
Margin Abuse – South Florida FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.
A margin account is a type of brokerage account that allows customers to buy securities with money borrowed from their brokerage firm. Margin accounts are governed by Regulation T, adopted by the Federal Reserve, by various rules adopted by the Financial Industry Regulatory Authority and by the individual brokerage account terms that are set forth in the Margin Agreement. Many brokerage firm margin agreements allow the firm to change margin rules, without prior notice, at their election. Margin requirements can be met with cash or with eligible securities.
The use of margin, especially by the unsophisticated investor, may result in substantial losses to the investor. This is especially true if the investor is buying or selling options, short selling or using some type of other exotic trading strategy.
Florida Oil and Gas Fruad, Misrepresentation and Ponzi Scheme Litigation and Arbitration Attorney:
The Securities and Exchange Commission recently announced charges and an emergency asset freeze against the perpetrators of a Texas-based Ponzi scheme involving purported investments in oil and gas projects.
The SEC alleges that Robert A. Helms and Janniece S. Kaelin, who work out of an office in Austin, misled investors about their experience in the oil and gas industry while raising nearly $18 million for supposed purchases of oil and gas royalty interests. Despite representations that nearly all of the money they raised would be used to make oil and gas investments, Helms and Kaelin actually used only a fraction of the offering proceeds for that purpose. Instead, the vast majority of investor funds were used to make Ponzi payments and cover various personal and business expenses.
The Securities and Exchange Commission recently charged a New York-based penny stock financier and his firms with violating the federal securities laws when they purchased billions of shares in a pair of microcap companies and failed to register them before they were re-sold to investors for sizeable profits.
Curt Kramer and his firms Mazuma Corporation, Mazuma Funding Corporation, and Mazuma Holding Corporation agreed to disgorge those profits in paying a total of $1.4 million to settle the SEC’s charges.
An SEC investigation found that Kramer and his firms obtained unregistered shares in penny stock issuers Laidlaw Energy Group and Bederra Corporation. For the Laidlaw transactions, they claimed to rely on an exemption in Rule 504 of Regulation D that permits certain companies to offer and sell up to $1 million in unregistered shares. However, the Mazuma firms’ purchases of Laidlaw shares exceeded Rule 504’s $1 million limit, so the shares were restricted and not exempt from the registration requirements of the securities laws when they were re-sold. Mazuma Holding Corporation’s acquisition and sale of more than one billion unregistered shares of Bederra that had been misappropriated from the issuer by its transfer agent also were not exempt from registration.
Securities and Exchange Commission v. Charles H. Merchant, Sr. and Southern USA Resources, Inc., Civil Action No. 1:13-cv-3879-SCJ (N.D. Ga.)
SEC Charges Alabama Based Defendants with Securities Fraud and Reporting Violations
Recently, the Securities and Exchange Commission filed an action in federal court in the Northern District of Georgia, charging Charles H. Merchant, Sr. (Merchant), an Anniston, Alabama resident, and his company Southern USA Resources, Inc. (Southern USA), a Delaware corporation based in Ashland, Alabama, with violations of the antifraud provisions and various reporting violation of the federal securities laws.
South Florida Elder Abuse Insurance and Annuity Fraud and Misrepresentation Attorney Russell L. Forkey, Esq.
The Securities and Exchange Commission (SEC) recently charged a self-described institutional trader in Colorado with defrauding elderly investors into making purported investments in government-secured bonds as he used their money to pay his mortgage.
The SEC alleges that Gary C. Snisky of Longmont, Colo., primarily targeted retired annuity holders by using insurance agents to sell interests in his company Arete LLC, which posed as a safe and more profitable alternative to an annuity. Investors were told their funds would be used to purchase government-backed agency bonds at a discount, and Snisky as an institutional trader would use the bonds to engage in overnight banking sweeps. However, Snisky did not purchase bonds or conduct any such trading, and he misappropriated approximately $2.8 million of investor funds to pay commissions to his salespeople and make personal mortgage payments.
Margin Abuse, Margin Miscalculation and Excessive Margin – South Florida FINRA Arbitration and Litigation Attorney:
“Margin” is borrowing money from your broker to buy a stock and using your investment as collateral. Investors generally use margin to increase their purchasing power so that they can own more stock without fully paying for it. But margin exposes investors to the potential for higher losses. Consequently, the use of margin is not appropriate for all investors, especially the unsophisticated or those who are risk adverse.
The Federal Reserve Board and many self-regulatory organizations (SROs), such as the NYSE and FINRA, have rules that govern margin trading. Brokerage firms can establish their own requirements as long as they are at least as restrictive as the Federal Reserve Board and SRO rules. Here are some of the key rules you should know:
South Florida Arbitration & Litigation Lawyer Blog