MML INVESTOR SERVICES SUBPOENAED BY MASSACHUSETTS REGULATORS OVER SALES OF ALTERNATIVE INVESTMENTS TO SENIORS

MML Investor Services LLC was subpoenaed by Massachusetts in connection with a sweep investigation, which is looking into sales practices involving alternative investments sold to seniors. MML Investor Services' principal office is located in Springfield, Massachusetts. On July 10, 2013, the state's securities division sent the subpoena to MML Investor Services asking for information on sales of the products to state residents who are 65 or over. Some of the non-traditional investments include oil and gas partnerships, private placements, structured products, hedge funds, and tenant-in-common offerings. The state demanded information from MML Investor Services on any such products that have been sold over the past year, the investors who purchased them, the commissions generated, how the sales were reviewed, and all relevant compliance, training and marketing materials MML Investor Services has until July 24 to respond. The state added that being on the list of targeted firms does not indicate wrongdoing.

Although non-traded REITs were not part of the information request, Massachusetts has expressed its heightened concern "that the senior marketplace is being targeted for the sales of these high-risk, esoteric products," Massachusetts Secretary of the Commonwealth William F. Galvin said in a statement. The state has already cracked down on a number of firms for alleged improper sales of non-traded REITs. In February 2013, the state reached a settlement with LPL Financial to pay at least $2 million in restitution and $500,000 in fines related to the sale of non-traded REITs. In May 2013, it settled REIT cases with Ameriprise Financial Services Inc., Commonwealth Financial Network, Lincoln Financial Advisors Corp., Royal Alliance Associates Inc. and Securities America Inc. The five firms agreed to pay a total of $6.1 million in restitution to investors and fines totaling $975,000.

Senior investors have become the targets of unscrupulous brokers, investment advisors and insurance agents. This is due in part to the fact that as we age, our ability to understand newer and complex investments diminishes every year. Therefore, senior retirement savings are ripe for picking and an epidemic of fraud is underway all across America. As a result many states, such as Massachusetts, have enacted laws with harsh penalties and are performing investigative sweeps to protect senior investors.

Broker-dealers have a duty to protect senior investors from broker misconduct by establishing and implementing an adequate supervisory system to oversee sales practices. If broker-dealers do not so, they may be liable to senior investors for damages flowing from an unreasonable recommendation and sale. Are you a senior investor suffering losses in your MML Investor Services LLC account due to an unreasonable recommendation and sale by your broker? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against MML Investor Services stockbrokers who may have engaged in misconduct and caused investors losses.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

COMMONWEALTH FINANCIAL NETWORK SUBPOENAED BY MASSACHUSETTS REGULATORS OVER SALES OF ALTERNATIVE INVESTMENTS TO SENIORS

Commonwealth Financial Network was subpoenaed by Massachusetts in connection with a sweep investigation, which is looking into sales practices involving alternative investments sold to seniors. Commonwealth Financial Network's principal office is located in Waltham, Massachusetts. On July 10, 2013, the state's securities division sent the subpoena to Commonwealth Financial Network asking for information on sales of the products to state residents who are 65 or over. Some of the non-traditional investments include oil and gas partnerships, private placements, structured products, hedge funds, and tenant-in-common offerings. The state demanded information from Commonwealth Financial Network on any such products that have been sold over the past year, the investors who purchased them, the commissions generated, how the sales were reviewed, and all relevant compliance, training and marketing materials - Commonwealth Financial Network has until July 24 to respond. The state added that being on the list of targeted firms does not indicate wrongdoing.

Although non-traded REITs were not part of the information request, Massachusetts has expressed its heightened concern "that the senior marketplace is being targeted for the sales of these high-risk, esoteric products," Massachusetts Secretary of the Commonwealth William F. Galvin said in a statement. The state has already cracked down on a number of firms for alleged improper sales of non-traded REITs. In February 2013, the state reached a settlement with LPL Financial to pay at least $2 million in restitution and $500,000 in fines related to the sale of non-traded REITs. In May 2013, it settled REIT cases with Ameriprise Financial Services Inc., Commonwealth Financial Network, Lincoln Financial Advisors Corp., Royal Alliance Associates Inc. and Securities America Inc. The five firms agreed to pay a total of $6.1 million in restitution to investors and fines totaling $975,000.

Senior investors have become the targets of unscrupulous brokers, investment advisors and insurance agents. This is due in part to the fact that as we age, our ability to understand newer and complex investments diminishes every year. Therefore, senior retirement savings are ripe for picking and an epidemic of fraud is underway all across America. As a result many states, such as Massachusetts, have enacted laws with harsh penalties and are performing investigative sweeps to protect senior investors.

Broker-dealers have a duty to protect senior investors from broker misconduct by establishing and implementing an adequate supervisory system to oversee sales practices. If broker-dealers do not so, they may be liable to senior investors for damages flowing from an unreasonable recommendation and sale. Are you a senior investor suffering losses in your Commonwealth Financial Network account due to an unreasonable recommendation and sale by your broker? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Commonwealth Financial Network stockbrokers who may have engaged in misconduct and caused investors losses.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

AZIM NAKHOODA FINED AND SUSPENDED FOR FALSE AND MISLEADING STATEMENTS IN CONNECTION WITH PRIVATE PLACEMENT OFFERINGS

Azim Nakhooda, a former broker with La Vista, Nebraska based Securities America, Inc., submitted a Letter of Acceptance, Waiver and Consent in which he consented to the entry of the Financial Industry Regulatory Authority's (FINRA) findings that he sent emails to Securities America customers in connection with their purchases of units in the IMH Secured Loan Fund (IMH) and Medical Provider Funding Corporation V (Med Cap V) promissory notes that contained false and misleading statements, including material misrepresentations regarding the liquidity and safety of IMH and the safety of Med Cap V notes. FINRA said that Mr. Nakhooda's statements to customers relating to the IMH's liquidity directly contradicted the disclosures in IMH's private placement memorandum (PPM) about the illiquidity of IMH and the significant limitations on redemptions. Mr. Nakhooda's statements regarding the safety of IMH also directly contradicted the disclosures of significant risks in IMH's PPM. Mr. Nakhooda, of Chagrin Falls, Ohio, was fined $50,000 and suspended from association with any FINRA member in any capacity for nine months - the suspension is in effect from March 18, 2013 through December 17, 2013.

Mr. Nakhooda's representations to the customers regarding the liquidity and safety of IMH and the principal protection afforded by the Med Cap V notes were false and misleading. FINRA said that the Med Cap V notes executive summary that Mr. Nakhooda emailed stated that the notes provided principal protection, which was directly contrary to disclosures in Med Cap V's PPM about the potential risks to principal. FINRA also found that Mr. Nakhooda sent the Med Cap V note's executive summary to customers who did not purchase the notes. FINRA also said that the IMH executive summary that Mr. Nakhooda emailed stated that IMH was completely liquid after 60 days or completely liquid after 90 days, which were false statements. Other statements in IMH's executive summary exaggerated the safety of the fund in light of the risks presented by the fund's PPM. Consequently, Mr. Nakhooda's representations to customers regarding the safety of the fund were misleading.

Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and implement a reasonable supervisory system, they may be liable to investors for damages flowing from the misconduct. In this case, Securities America should have overseen and prevented Mr. Nakhooda's communications, which omitted any discussion of the significant risks associated with an investment in IMH and Med Cap V. As a result, investors who have suffered damages due to Mr. Nakhooda's false and misleading communications can bring forth claims to recover losses against Securities America, which should have prevented Mr. Nakhooda from committing the described prohibited acts. Have you suffered losses in your Securities America, Inc. account due to private placements or any other investments your broker sold you? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com,  post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

FINRA SANCTIONS EIGHT FIRMS AND TEN INDIVIDUALS NATIONWIDE FOR SELLING INTERESTS IN PROVIDENT ROYALTIES

After previously announcing that it sanctioned two firms and seven individuals for selling interests in private placements, the Financial Industry Regulatory Authority (FINRA) has added eight more firms and 10 more individuals to its investigation. The firms and individuals sold interests in high-risk private placements such as Provident Royalties without conducting a reasonable investigation, therefore having no reasonable basis to recommend the investments. FINRA has ordered the firms to pay $3.2 million in restitution due to significant investor losses.

Between September 2006 and January 2009, Provident Asset Management, LLC, marketed and sold preferred stock and limited partnership interests in a series of 23 private placements offered by its affiliate, Provident Royalties. The Provident offerings were sold to customers through more than 50 retail broker-dealers nationwide and raised approximately $485 million from over 7,700 investors. Although a portion of the proceeds of Provident Royalties' offerings was used for the acquisition and development of oil and gas exploration and development activities, millions of dollars of investors' money was transferred from the later offerings' bank accounts to the Provident operating account in the form of undisclosed and undocumented loans, and were used to pay dividends and returns of capital to investors in the earlier offerings, without informing investors of such activities. In July 2009, the SEC filed a civil injunctive action in the Northern District of Texas naming Provident and others for violations of the federal securities laws. While the SEC action was pending, FINRA announced that it had expelled Provident Asset Management, LLC, a Dallas based broker-dealer, for marketing a series of fraudulent private placements offered by its affiliate, Provident Royalties.

FINRA's findings revealed that the broker-dealers did not have adequate supervisory systems in place to identify and understand the inherent risks of the offerings and, as a result, many of the firms failed to conduct adequate due diligence of the offerings. Also, many firms did not have reasonable grounds to believe that the private placements were suitable for their customers. Furthermore, the sanctioned principals did not have reasonable grounds to permit the firms' registered representatives to continue selling the offerings, regardless of the numerous red flags or signals that existed regarding the private placement. The following firms have been sanctioned by FINRA for failing to conduct a reasonable investigation or for failing to enforce procedures with respect to the sale of private placements offered by Provident Royalties: NEXT Financial Group, Investors Capital Corporation, Capital Financial Services, National Securities Corporation, Securities America, and Meadowbrook Securities.

FINRA has vowed to continue to look closely at sales of private placements to determine whether the selling firms are fulfilling their responsibilities to customers. These efforts reinforce that any firm or person who fails to conduct reasonable investigations of offerings, especially when there are multiple red flags, will not be permitted to shift all the responsibility to the issuers of fraudulent private placement investments.

Have you suffered losses in Provident Royalties? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.