Investment Litigation Blog

BDC INVESTOR ALERT: Medley Capital Corp Files for Bankruptcy Protection in the Wake of Portfolio Loan Losses Attributed to the COVID Pandemic

BDC INVESTOR ALERT: Medley Capital Corp Files for Bankruptcy Protection in the Wake of Portfolio Loan Losses Attributed to the COVID Pandemic

On March 7, 2021, Medley Capital Corp. (NYSE: MCC), a direct subsidiary of Medley Management Inc. (NYSE: MDLY), filed for Bankruptcy Protection from creditors – mostly investors.  Medley Management Inc., is an “alternative asset management firm offering yield solutions to retail and institutional investors” through two Business Development Companies (“BDCs”), Medley Capital and Sierra Income Corp., a non-traded BDC. Medley Capital Corp and Sierra Income Corp, invested in non-public companies, under the direction and advice of Medley Management’s affiliate SIC Advisors, LLC.  The two BDCs made loans to non-public companies that did not have access to the traditional publicly traded…

LORDSTOWN MOTORS CORP CLASS ACTION ALERT: Securities Law Firm KlaymanToskes Comments on Recent Class Action Lawsuit in Electric Vehicle Truck Manufacturer

LORDSTOWN MOTORS CORP CLASS ACTION ALERT: Securities Law Firm KlaymanToskes Comments on Recent Class Action Lawsuit in Electric Vehicle Truck Manufacturer

Boca Raton, Florida — March 22, 2021 — The Securities Law Firm of KlaymanToskes (“KT”) provides a Lordstown Motors Corp. (NASDAQ:RIDE) Alert to shareholders concerning the Class Action Lawsuit (Case 21-CV-00616) filed March 18, 2021 in the United States District Court of the Northern District of Ohio, Youngstown Division, for the class period from August 3, 2020 and March 17, 2021.   Lordstown Motors Corp. is a nascent company with a limited history of operating as manufacturer of Electric Vehicle (EV) trucks.  According to the class action lawsuit, “Throughout the Class Period, Defendants made materially false and misleading statements regarding the…

FINRA Fines VALIC Financial Advisors $350,000 for Failure to Supervise Variable Annuity Sales Practices

FINRA Fines VALIC Financial Advisors $350,000 for Failure to Supervise Variable Annuity Sales Practices

On January 8, 2021, VALIC Financial Advisors agreed to a Letter of Acceptance, Waiver and Consent (AWC) (Case No. 2018060548501)  which included a Fine of $350,000 by the Financial Industry Financial Authority (FINRA), the securities industry regulator established to protect investors.  According to the agreement with FINRA, VALIC Financial Advisors “consented to the sanctions and to findings that it failed to establish a reasonably designed system and written procedures for the surveillance of rates of variable annuity replacements and for corrective action in the case of inappropriate replacements”.  FINRA also determined. “The procedures also failed to provide guidance as to…

NOTICE TO WORKHORSE GROUP SHAREHOLDERS: Securities Law Firm KlaymanToskes Comments on Recent Class Action Lawsuit in Electric Vehicle Company

NOTICE TO WORKHORSE GROUP SHAREHOLDERS: Securities Law Firm KlaymanToskes Comments on Recent Class Action Lawsuit in Electric Vehicle Company

Boca Raton, Florida — March 16, 2021 — The Securities Law Firm of KlaymanToskes (“KT”) provides notice to all Workhorse Group, Inc. (NYSE:WKHS) shareholders concerning the Class Action Lawsuit (Case 2:21-cv-02072) filed March 8, 2021 in the United States District Court of the Central District of California, for the class period from July 7, 2020 and February 23, 2021.   Workhorse Group is an Electric Vehicle (EV) stock which represents a highly speculative investment.  According to the class action lawsuit, “Defendants made materially false and/or misleading statements, and failed to disclose that: (1) the Company was merely hoping that USPS…

FINRA Fines Cetera $1 Million for Failure to Supervise Private Securities Transactions in Client Accounts

FINRA Fines Cetera $1 Million for Failure to Supervise Private Securities Transactions in Client Accounts

FINRA recently disclosed that Cetera Advisor Networks LLC, Cetera Advisors, LLC and Cetera Financial Specialists, LLC, (Cetera Firms) agreed to an Acceptance, Waiver and Consent (AWC) Case #2015046716901.  The Cetera Firms were fined $1 million and were ordered to review and revise, their systems, policies and procedures with respect to the supervision of “private securities” transactions in client accounts, for brokers who were dually-registered. According to FINRA, “From January 2011 through December 2018, Networks and Advisors, and from November 2012 through January 2018, Specialists (the relevant time periods) each failed to establish, maintain and enforce a supervisory system and written…

FINRA Suspends Madison Avenue Securities Broker for Mutual Fund Sales Practice Violations

FINRA Suspends Madison Avenue Securities Broker for Mutual Fund Sales Practice Violations

In November 2020, the securities industry watchdog, the Financial Regulatory Industry Authority (“FINRA”) suspended, Vincent Anthony Virga, after an Acceptance, Waiver and Consent (AWC) Order was accepted, (FINRA Case #2019061187801).  According to FINRA, an AWC was issued in which Virga was fined $5,000, suspended from association with any FINRA member in all capacities for one month, and ordered to pay $19,687, plus interest, in restitution to a customer.  The suspension is in effect from December 21, 2020, through January 20, 2021. According to the AWC, “Without admitting or denying the findings, Virga consented to the sanctions and to the entry…

Stanford Law School Cornerstone Research Report Released with New Developments for IPOs  and SPACs

Stanford Law School Cornerstone Research Report Released with New Developments for IPOs and SPACs

In February 2021, the Stanford Law School in collaboration with Cornerstone Research published the Class Action Filings, 2020 Year in Review, Report which detailed a wide range of statistics related to class action filings and upcoming trends.  In particular, the increase in Initial Public Offerings (IPOs) for Operating Companies and Special Purpose Acquisition Companies (SPACs) has grown substantially during 2020 when compared to recent periods which portends an increase in class action lawsuits related to IPOs. During 2020, Operating Company IPOs increased from 112 in the previous year to 165 for a 47% increase in class action filings compared to…

FINRA Orders Worden Capital Management LLC to Pay More than $1.2 Million in Restitution to Customers Whose Accounts Were Excessively Traded and Fined $350,000 for Failing to Reasonably Supervise Recommended Securities Transactions and Other Violations

FINRA Orders Worden Capital Management LLC to Pay More than $1.2 Million in Restitution to Customers Whose Accounts Were Excessively Traded and Fined $350,000 for Failing to Reasonably Supervise Recommended Securities Transactions and Other Violations

On December 31, 2020, FINRA announced today that it sanctioned Worden Capital Management LLC (WCM) more than $1.5 million, including approximately $1.2 million in restitution to customers whose accounts were excessively traded by the firm’s representatives, and a $350,000 fine for supervisory and other violations. As part of the settlement, WCM must also retain an independent consultant to conduct a comprehensive review of the relevant portions of the firm’s supervisory systems and procedures. According to the Acceptance, Waiver and Consent accepted and signed by Worden Capital Management, “FINRA found that from January 2015 to October 2019, WCM and the firm’s…

DAVID LERNER INVESTOR ALERT: KlaymanToskes Announces Preparation to File FINRA Arbitration Claim seeking more than $1,000,000 on Behalf of Investor who Purchased Spirit of America Fund

DAVID LERNER INVESTOR ALERT: KlaymanToskes Announces Preparation to File FINRA Arbitration Claim seeking more than $1,000,000 on Behalf of Investor who Purchased Spirit of America Fund

KlaymanToskes (“KT”) announces that it is preparing to file a claim against David Lerner Associates (“David Lerner”) on behalf of an investor who sustained losses due to investment and sector concentrations in proprietary products invested in non-traded Oil & Gas Investments offered exclusively to David Lerner clients.  Specifically, this case focuses on Spirit of America Fund (NASDAQ:SOAEX), one of three David Lerner proprietary funds that have recently seen a precipitous decline. According to the claim, the investor was seeking to preserve his investment principal, while earning supplemental income to provide for his growing family, including his children’s educations and other…

KlaymanToskes Investigates JP Morgan in Light of OCC $250 Million Civil Money Penalty Against JP Morgan Chase Bank, N.A. for Inadequate Supervision of Investment Advisory Business

KlaymanToskes Investigates JP Morgan in Light of OCC $250 Million Civil Money Penalty Against JP Morgan Chase Bank, N.A. for Inadequate Supervision of Investment Advisory Business

On November 24, 2020, the Office of the Comptroller of the Currency (“OCC”) announced it would assess a $250 million civil money penalty against JPMorgan Chase Bank, N.A.  The OCC is responsible for the regulatory oversight of all Commercial Banks, including Bank Holding Companies such as JP Morgan Chase, which has under its umbrella of financial companies, broker dealer JP Morgan.  According to the news release, OCC “intends to initiate civil money penalty proceedings against the Bank pursuant to 12 U.S.C. § 1818(i), through the issuance of a Notice of Assessment of a Civil Money Penalty, for engaging in unsafe…

DAVID LERNER INVESTOR ALERT: KlaymanToskes Investigates Unsuitable Concentration in Proprietary Products Invested in Energy 11 LP, Energy Resource 12 LP and Spirit of America Fund Which Resulted in Losses in Excess of $250,000

DAVID LERNER INVESTOR ALERT: KlaymanToskes Investigates Unsuitable Concentration in Proprietary Products Invested in Energy 11 LP, Energy Resource 12 LP and Spirit of America Fund Which Resulted in Losses in Excess of $250,000

National securities fraud law firm, KlaymanToskes (“KT”), announces  its investigation into David Lerner Associates for the unsuitable concentration in proprietary products invested in non-traded Oil & Gas Investments offered exclusively to its clients.  The concentrated investments include the Energy 11 LP, Energy Resource 12 LP, and Spirit of America Fund (NASDAQ:SOAEX).  In addition to the precipitous loss in value, most of the interest payments received by investors are now considered return of capital. According to securities attorney, Lawrence L. Klayman, “David Lerner Associates recommended proprietary products that were unsuitable for most conservative or retired investors.”  According to the Energy 11…

KlaymanToskes Investigates David Lerner Associates Recommended Investments in Proprietary Non-Traded Investments Concentrated in Energy Sector

KlaymanToskes Investigates David Lerner Associates Recommended Investments in Proprietary Non-Traded Investments Concentrated in Energy Sector

National securities fraud law firm, KlaymanToskes (“KT”), announces  its investigation into David Lerner Associates for the unsuitable concentration in proprietary products invested non-traded Oil & Gas Investments offered exclusively to its clients.  The concentrated investments include the Energy 11 LP, Energy Resource 12 LP and Spirit of America Fund (SOAEX).  In addition to the precipitous loss in value, the majority of the interest payments received by investors are now considered, return of capital. According to securities attorney, Lawrence L. Klayman, “David Lerner Associates recommended proprietary products that were unsuitable for most conservative or retired investors”.  According to the Energy 11…

SEC Charges Broker-Dealers and Investment Advisory Firms for the Sales of Complex Exchange-Traded Products With More than $3 Million Returned to Retail Investors

SEC Charges Broker-Dealers and Investment Advisory Firms for the Sales of Complex Exchange-Traded Products With More than $3 Million Returned to Retail Investors

The securities industry watchdog, the Securities and Exchange Commission (“SC”) filed settled actions against three investment advisory firms and two dually-registered broker-dealer and advisory firms for violations that related to unsuitable sales of complex exchange-traded products (“ETFs”) to retail investors for the period between January 2016 and April 2020. According to SEC, “The actions were filed against American Portfolios Financial Services/American Portfolios Advisors Inc., Benjamin F. Edwards & Company Inc., Royal Alliance Associates Inc., Securities America Advisors Inc., and Summit Financial Group Inc. – will result in the return of over $3 million to harmed investors’.  According to a news release by the SEC on…

FINRA Barred, NPB Financial Group Ex-Broker, Cynthia Diane Cowden for Unsuitable Investment Recommendations in Illiquid Non-Traded Securities

FINRA Barred, NPB Financial Group Ex-Broker, Cynthia Diane Cowden for Unsuitable Investment Recommendations in Illiquid Non-Traded Securities

The securities industry watchdog, the Financial Regulatory Industry Authority (“FINRA”) barred, NPB Financial Group’s, Ex-Broker Cynthia Diane Cowden, for Unsuitable Investment Recommendations to a retired couple and an individual senior investor.  The recommended investments at issue were illiquid non-traded REITs and non-traded closed end funds.  According to FINRA, the barred broker’s recommendations resulted in unsuitable, securities concentration in illiquid securities that exceeded concentration limits established by the California State Regulations designed to protect investors. FINRA required that Cynthia Diane Cowden’s investment advice should have had reasonable basis for her recommendations, based on the investor’s “age, other investments, financial situation and…

ATTENTION CUSTOMERS WITH ACCOUNTS SERVICED BY FINANCIAL ADVISOR JOSEPH IJONG CHU – KlaymanToskes Files FINRA Arbitration Claim against Merrill Lynch and RBC Seeking $1,000,000 on Behalf of Investors

ATTENTION CUSTOMERS WITH ACCOUNTS SERVICED BY FINANCIAL ADVISOR JOSEPH IJONG CHU – KlaymanToskes Files FINRA Arbitration Claim against Merrill Lynch and RBC Seeking $1,000,000 on Behalf of Investors

KlaymanToskes (“KT”) announces that it recently filed a claim for breach of fiduciary duty seeking $1,000,000 against Merrill Lynch (NYSE: BAC) and RBC Capital Markets (“RBC”) on behalf of investors who had discretionary accounts mishandled by Joseph Ijong Chu (“Chu”).  A discretionary account is one that allows an authorized broker, in this case Chu, to buy and sell securities without client consent on each trade and is based on a client consent granting this authorization in writing.  This type of relationship is especially one of trust. According to the claim, the investors gave Chu discretion to invest their hard-earned savings…

ATTENTION UPS EMPLOYEES WITH MERRILL LYNCH ACCOUNTS: KlaymanToskes Continues to Investigate Claims for UPS Employees with Losses from Unsuitable Covered Call Writing Strategies

KlaymanToskes (“KT”) continues to investigate and pursue FINRA arbitration claims against Merrill Lynch on behalf of UPS (NYSE: UPS) current and former employees for losses sustained from an unsuitable recommendation to employ a covered call writing strategy. Many UPS employees were solicited to invest with Merrill Lynch after UPS stock went public in 1999.  Merrill Lynch and its financial advisors recommended to many UPS employees a covered call options writing strategy, sometimes recommending the Rampart Options Management Services Program (“Rampart”) to facilitate the strategy that would generate income to help cover the cost of the UPS employees’ hypo loans.  The…

ATTENTION MERRILL LYNCH CUSTOMERS WITH ACCOUNTS AT BOSTON BRANCHES:  KlaymanToskes Commences Investigation for Potential Negligent Supervision of Financial Advisors and Customer Accounts

ATTENTION MERRILL LYNCH CUSTOMERS WITH ACCOUNTS AT BOSTON BRANCHES: KlaymanToskes Commences Investigation for Potential Negligent Supervision of Financial Advisors and Customer Accounts

National investment fraud law firm, KlaymanToskes (“KT”), has commenced an investigation in light of a recent regulatory action concerning Merrill Lynch (NYSE:BAC) and its Boston Financial Center branch, which also oversees the Back Bay, Cambridge, Andover, and Beverly branches.  The New Hampshire Department of State, Bureau of Securities Regulation recently began an investigation into the trading practices of Merrill Lynch. Merrill Lynch paid one investor $40 million, the largest settlement to an individual in recent FINRA history, based on the allegations that eventually lead to the termination of Merrill Lynch financial advisor, Charles Ernest Kenahan (“Kenahan”) from its Boston Financial…

FSKR INVESTOR ALERT: KlaymanToskes Continues Investigation into Full-Service Brokerage Firms for Recommended Investments in Excess of $250,000 in Franklin Square KKR Capital II Fund Predecessors Prior to the IPO

FSKR INVESTOR ALERT: KlaymanToskes Continues Investigation into Full-Service Brokerage Firms for Recommended Investments in Excess of $250,000 in Franklin Square KKR Capital II Fund Predecessors Prior to the IPO

New York–(BUSINESS WIRE)–National investment fraud law firm, KlaymanToskes (“KT”), continues its investigation into full-service brokerage firms for the unsuitable recommendations to purchase non-traded Business Development Companies (“BDCs”) including:  FS Investment Corp II (“FSIC II”), FS Investment Corp III (“FSIC III”), FS Investment Corp IV (“FSIC IV”), and Corporate Capital Trust (“CCTII”).  These four BDCs merged into the Franklin Square KKR Capital II Fund (NYSE:FSKR) on December 18, 2019.   On June 17, 2020, FSKR announced the listing on the NYSE.  These investments, and other non-traded BDCs, may have been marketed and sold to investors who were risk averse, such as retirees…

ATTENTION EXERCISE AND HOLD STRATEGY INVESTORS WITH EMPLOYER COMPANY STOCK:  KlaymanToskes Commences Investigation into Full-service Brokerage Firms for Mismanagement of Concentrated, Leveraged Positions in Employer Company Stock

ATTENTION EXERCISE AND HOLD STRATEGY INVESTORS WITH EMPLOYER COMPANY STOCK: KlaymanToskes Commences Investigation into Full-service Brokerage Firms for Mismanagement of Concentrated, Leveraged Positions in Employer Company Stock

National investment fraud law firm, KlaymanToskes (“KT”), commences an investigation into full-service brokerage firms for the mismanagement of concentrated, company stock positions accumulated through employer sponsored plans.  The investigation focuses on whether full-service brokerage firm recommendations for an “exercise and hold” strategy represents unsuitable investment advice and a failure to supervise the management of concentrated, leveraged positions in employer company stock. Investment portfolios holding large concentrated stock positions carry significant downside risks, especially when leveraged by a margin loan.  Full-service brokerage firms whose customers hold large concentrated stock positions have a duty to ensure that their customers understand the risks…

GPB CAPITAL INVESTOR ALERT: KlaymanToskes Continues to Investigate and Pursue Millions of Dollars in FINRA Arbitration Claims for Investors

GPB CAPITAL INVESTOR ALERT: KlaymanToskes Continues to Investigate and Pursue Millions of Dollars in FINRA Arbitration Claims for Investors

National investor fraud law firm, KlaymanToskes (“KT”), continues to investigate and pursue FINRA arbitration claims on behalf of investors who were solicited to purchase millions of dollars of private placement securities in GPB Capital Holdings (“GPB”) in the form of notes.  Brokerage firms were required to perform due diligence prior to recommending GPB to their customers and the failure to do so may result in liability.  More than 60 broker-dealers sold GPB funds, including Ascendant Alternative Strategies, LLC, Royal Alliance Associates Inc., Sagepoint Financial Inc., FSC Securities Corp., and Woodbury Financial Services Inc. Investors who have lost more than $100,000…