A FINRA panel this week ruled in favor of former NBA owner Jim Croce in relation to an investment he made with UBS financial services. In particular, Mr. Croce bought a Lehman Brothers Principal Protected Note in 2008, which, as you may know, were not a risk free investment as they were advertised to be.  His attorney, Jacob Zamansky, helped him and his wife, Diane, achieve $2 Million in damages, including $276,000 in interest. UBS has had several arbitration panels rule against them since 2008 in relation to the Lehman Brothers notes.

Zamansky & Associates Continues to File Claims on Behalf of Lehman Brothers Investors

If you have suffered a financial loss from an investment you made in the so-called “100% Principal Protected notes”, Jacob Zamansky may be able to help you recover your losses as well. Call the firm at 212-742-1414.

Kenneth T. Robinson pleaded guilty today to his role in an insider trading scheme spanning 17 years that relied on merger-and-acquisition tips stolen from four law firms to make at least $34 million in illicit profits.

Robinson, 45, admitted in federal court in Newark, New Jersey, to charges of securities fraud and conspiracy to commit securities fraud. He said he was the middleman between attorney Matthew H. Kluger and stock trader Garrett D. Bauer, who were arrested April 6.

Robinson, a mortgage broker who secretly recorded Bauer and Kluger for the Federal Bureau of Investigation, is cooperating with U.S. investigators, U.S. Attorney Paul Fishman said after the plea hearing.

“He is continuing to give information to the government about all of the deals he is aware of,” Fishman said in an interview.

The three men used nonpublic data to trade ahead of at least 15 corporate transactions involving companies such as Sun Microsystems Inc., 3Com Corp. and Acxiom Corp. (ACXM), prosecutors said. Bauer made more than $30 million on the scheme, Robinson more than $875,000 and Kluger more than $500,000, Fishman said last week.

Robinson told U.S. District Judge Katharine Hayden that he conspired with Bauer and Kluger from 1994 to 2011 and that he passed along company secrets stolen by Kluger from law firms. He was released on $2 million bail after today’s hearing. Read the rest of this entry »

Federal authorities have arrested six people in a hedge fund insider trading case that they say led to $20 million in illegal profits.

Prosecutors filed papers in Manhattan charging the people with conspiracy and securities fraud. They say the money was stolen as a result of tips shared by those working at two hedge funds.

A news conference was scheduled Friday afternoon to explain the charges.

The head of the Securities and Exchange Commission was scheduled to attend the news conference as well.

When in need of a NY Securities Lawyer contact Jacob Zamansky.

A former managing director of a California investment brokerage was sentenced to 5 years in federal prison for his role in a $100 million fraud involving William “Boots” Del Biaggio III, owner of the NHL’s Nashville Predators. David Cacchione, of Woodside, who worked for Merriman, Curhan, Ford & Co., was charged with one count of securities fraud.

According to the plea agreement, Cacchione gave financier William “Boots” Del Biaggio III client brokerage statements, which Del Biaggio doctored and used to obtain or renew more than $100 million in fraudulent loans. Cacchione also met with lenders to create the illusion that Del Biaggio was in charge of the client accounts, and signed false account control agreements. Del Biaggio was sentenced in September to 8 years in prison.

Cacchione’s actions caused a $47 million loss, according to court documents. U.S. Cacchione, who is out on bond, was told to surrender on Jan. 8. Here is Courthouse News’ Dec. 5, 2008 story on Boots Del Baggio.

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The SEC announced today that on September 28, 2009 the United States District Court for the Central District of California sentenced Richard M. Harkless, 65, of Riverside, California to 100 years in federal prison. Harkless was convicted in July of three counts of mail fraud, three counts of wire fraud, and one count of money laundering. According to the United States Attorney’s Office, Harkless’s sentence is believed to be the longest ever imposed in a white collar crime in the Central District of California.

Harkless was charged by the United States Attorney’s Office for the Central District of California with orchestrating a multi-million dollar Ponzi scheme between 2000 and late 2003. Harkless and his sales agents fraudulently induced investors nationwide to invest in Mx Factors’ notes, which purportedly paid a “guaranteed” return of up to 14% every two to three months. Mx Factors claimed that it would use the investor funds to provide its clients – construction contractors, wholesalers, and manufacturers – with accounts receivable financing. Instead, Harkless operated a Ponzi scheme and skimmed investor funds to finance a Mexican crab fishing business, pay personal expenses, and fund overseas bank accounts. In February 2004, the Commission obtained a restraining order against Harkless, Mx Factors, and the sales agents, and federal criminal authorities executed search warrants. Harkless fled to Mexico shortly thereafter. Harkless was arrested by special agents with IRS-Criminal Investigation two years ago when he traveled to Phoenix.

In a related proceeding, the Commission obtained a final judgment against Harkless on February 6, 2006. That judgment permanently enjoins Harkless from future securities law violations and orders him to pay over $42 million in disgorgement, prejudgment interest, and civil penalties. The Commission also obtained a judgment by default against Mx Factors and its sales agents BBH Resources and JTL Financial. Mx Factors, BBH Resources, and JTL Financial have been under the control of a court-appointed receiver since the Commission’s action was filed on February 26, 2004 in federal district court in Riverside, California. And, on June 2, 2006, the Commission obtained a final judgment against Harkless’s three sales agents, Daniel Berardi, Jr., Thomas Hawkesworth, and Randall W. Harding ordering disgorgement, prejudgment interest, and civil penalties. The judgment orders Berardi and Hawkesworth, managing members of BBH Resources, LLC, to pay over $11 million in disgorgement, prejudgment interest, and civil penalties. The judgment orders Harding, managing member of JTL Financial Group, LLC, to pay over $17 million in disgorgement, prejudgment interest, and civil penalties. Berardi, Hawkesworth, and Harding received sentences of up to six years as part of the criminal proceeding.

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The Investment Adviser Association supports the Obama’s administration’s efforts to ban mandatory arbitration clauses in securities contracts.

In draft legislation for the Investor Protection Act of 2009, the administration issued guidelines that would give the Securities and Exchange Commission authority to prohibit or restrict mandatory arbitration clauses that brokerage firms typically include in customer contracts.

“We support the administration’s proposal,” said David Tittsworth, executive director and executive vice president of the IAA, which represents SEC-registered investment advisers. “We think that investors should have the choice to select a dispute resolution forum.”

The arbitration issue will likely to be debated next Tuesday at a House Financial Services Committee hearing at which industry groups will testify on adviser and other regulatory reform issues.

Predictably, the brokerage industry is opposed to a ban on mandatory arbitration agreements.

The SEC should study the issue, said Kevin Carroll, managing director and associate general counsel of the Securities Industry and Financial Markets Association.

However, “It wouldn’t make any sense to give the SEC unfettered power to ban pre-dispute arbitration agreements without the benefit of study,” he said in an e-mail. “It would be unfair to investors and securities firms.”

Most investment advisory firms do not use mandatory arbitration agreements, Mr. Tittsworth said.

The arbitration forum operated by the Financial Industry Regulatory Authority Inc. “can create a perception of unfairness, regardless of its actual results,” he said.

The North American Securities Administrators Association Inc. also supports banning mandatory arbitration clauses in securities industry contracts. The Arbitration Fairness Act of 2009 (H.R. 1020 and S. 931) was introduced earlier in the year by Rep. Hank Johnson, D-Ga., and by Sen. Russell Feingold, D-Wis. The legislation would ban mandatory arbitration clauses widely used in many industries.

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Regions Bank, based in Birmingham, Alabama, has agreed to pay a $1 million penalty to settle an SEC complaint that it played a role in stock scheme that charged outrageous commissions to many unwitting Latin American investors.

The bank acted as trustees for a pair of unregistered investment brokers — U.S. Pension Trust Corp. and U.S. College Trust Corp. — that have previously been charged as deceptive by the SEC. Regions allowed its name to be used in marketing materials, helped prepare a promotional video and met with prospective investors and some of the schemes’ 2,000 unregistered sales agents.

“Regions Bank provided a false air of legitimacy to this scheme,” said Glenn S. Gordon, associate director of the SEC’s office in Miami.

Without telling investors, the two investment plans deducted between 18 percent and 85 percent of contributions to pay large sales commissions and enhance the plans’ own profits. The SEC claims that $255 million was raised illicitly from about 14,000 investors.

The SEC charged that Regions’ did not adequately disclose the fees to investors in its trust agreement papers, which were called “misleading” in court papers.

In a statement, Regions said it cooperated with the SEC investigation and that the investment arrangement “does not represent our current business focus or practices.” The statement also said the clients were fully informed of the bank’s own fees as part of trust agreements.

The trust arrangement was begun in 2001 by Union Planters, which merged with Regions in 2004.

Regions stopped accepting new clients from the investment plans in January 2008 and halted processing contributions and renewals for existing plans last month. The accounts currently hold about $95 million in mutual fund assets for 11,000 investors, according to the SEC.

The $1 million penalty will go into a fund created to compensate investors harmed by the fraud.

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Thomas Etheredge’s securities fraud trial has been postponed. He is facing nine counts of securities fraud from his efforts to raise capital for Wild West World. The trial was scheduled to start today, but will now start as early as December.

The defendants securities attorney Steve Joseph says he requested a continuance until Oct. 19, but it will likely be longer than that due to Joesph’s recent heart attack.

“The target date is sometime early in December,” says Joseph, who has been back to work for about a week.

Joseph says he is one of three attorneys working on the case. That will not change, but the extent of his involvement probably will.

Etheredge is accused of misleading investors about the financial solvency of Wild West World and failing to disclose information about his prior securities convictions ( convicted of securities fraud in the 1980s and sentenced to 4 years in prison) as he attempted to raise money for the park between 2005 and 2007. He pleaded not guilty in July.

Etheredge remains in jail on a $1 million bond. He has filed bankruptcy $24 million in debt.

If you have been victimized by someone like Etheredge you should contact a securities fraud lawyer to talk about your specific set of circumstances. You may be surprised you can be compensated for some if not all of the losses you were swindled out of.

William J. “Boots” Del Biaggio was sentenced to 97 months in prison and ordered to pay approximately $67.5 million in restitution for his role in a $100-million fraud scheme, the U.S. Attorney’s Office announced this week.

“I would hope this sentence and those imposed by the courts in other recently publicized investment fraud cases will make it clear that the federal government will prosecute to the fullest extent permitted by law those who defraud their investors, in particular, and perpetrate a fraud on the market, in general,” U.S. Attorney Joseph P. Russoniello said. “Mr. Del Biaggio caused substantial harm to his victims, in some cases jeopardizing their future financial sustainability. The sentence imposed should be a warning to others that the prospect of easy profits is not worth the risk of loss and shame that detection and prosecution is certain to bring.”

Del Biaggio, 42, of San Jose, was charged of one count of securities fraud on Dec. 4, 2008. He pleaded guilty on Feb. 4.

According to the plea agreement, Del Biaggio admitted to using doctored brokerage statements to defraud banks and other lenders to obtain or renew approximately $100 million in loans. He also admitted to his role in the misappropriation of investors’ funds in three investment funds at which he was a principal: Sand Hill Capital Partners III; BDB Management LLC; and BDB Management III. For his conduct related to these investment firms, Del Biaggio agreed to pay approximately $19.9 million in restitution. Were you a victim of San Jose securities fraud? If this is the Case you should talk to a San Jose Securities fraud lawyer, many of which offer free consultations.

The SEC will host a one and a half day conference, on Sept. 29-30, to solicit the views of investors, issuers, financial services firms, self-regulatory organizations and the academic community regarding securities lending and short sales. The roundtable will include a comprehensive overview of securities lending and also analyze possible short sale pre-borrowing requirements and additional short sale disclosures.  The roundtable discussion will be available via webcast on the Commission’s Web site.  The Commission will accept comments regarding issues addressed in the roundtable discussion until October 30, 2009.  Here is the agenda and the notice for comments.