Notwithstanding the fact that these financial advisors were basically forced to leave UBS and their business has suffered as a result, UBS has sent the advisors a demand letter for the amounts they owe on their promissory note agreements and has indicated that they intend to file claims against these financial advisors for breach of contract if the matters are not quickly resolved.

We are investigating whether other UBS financial advisors were similarly forced to leave the firm as a result of the elimination of any trading platforms. Such information would assist us in demonstrating that UBS’s failure to provide these financial advisors with the necessary trading platform to conduct their business was a firm wide issue that impacted many financial advisors.

If you have any information that would assist us in our investigation, please contact our Chicago, Illinois office at 312-238-9650.

The White Law Group is a national securities litigation law firm with offices in Chicago, Illinois and Boca Raton, Florida. The firm is intimately familiar with the unique issues involved in promissory note cases, often representing financial advisors in promissory note litigation matters, and having (in the past) handled promissory note litigation cases on behalf of many of the larger broker-dealers (including Banc of America Investment Services, Morgan Stanley Smith Barney, Wells Fargo, Wachovia, and Ameriprise).

For more information on the firm, please visit our website at http://www.whitesecuritieslaw.com.

According to his FINRA Broker Report (CRD), Robert Lipka was a registered representative with Raymond James in Westport, Connecticut. Prior to working at Raymond James, Mr. Lipka was a registered representative with A.G. Edwards.

If you have any information that may assist The White Law Group in its investigation into Mr. Lipka’s sales practices, please contact our Chicago, Illinois office at 312-238-9650.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions. The firm primarily handles these cases on a contingency fee. For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.

In the case we are investigating, Mr. Adams recommended that the investor purchase a John Hancock annuity.

If you have any information that may assist The White Law Group in its investigation into Mr. Adam’s annuity sales practices, please contact our Chicago, Illinois office at 312-238-9650.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions. The firm primarily handles these cases on a contingency fee. For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.

According to his FINRA Broker Report, Mr. Sheinheit is a financial advisor in Morgan Stanley Smith Barney’s Aventura, Florida office. Prior to working for Morgan Stanley Smith Barney, Mr. Sheinheit was a registered-representative with Citigroup Global Markets and Prudential Securities.

If you have any information that may assist The White Law Group in its investigation into Mr. Sheinheit’s trading practices, please contact our Boca Raton, Florida office at 561-961-5411.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions. The firm primarily handles these cases on a contingency fee. For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.

As many eyes were glued to the financial-overhaul bill as it threaded its way to a Senate vote, the U.S. Court of Appeals for the District of Columbia on Monday of last week ordered a Securities and Exchange Commission rule to regulate equity-indexed annuities as securities to be vacated. The ruling was seen as a victory for a coalition of annuity issuers and some state insurance commissioners, which had battled the rule.

In addition, the sweeping financial-overhaul bill, approved by the Senate on Thursday, includes an amendment that would ensure that indexed annuities remain under the regulation of state insurance departments.

Some advisers say that means inappropriate sales of the products will continue.
Indexed annuities are tied to the performance of stock indexes, but typically are sold by insurance agents. The products sometimes carry high commissions, and agents have been criticized for inappropriate sales of the annuities, particularly to the elderly.
They are currently subject to state regulation as insurance products. However, under the new SEC rule, which was passed in December 2008, indexed annuities issued on or after Jan. 12, 2011, would have been registered with the commission and sold by registered broker-dealers.

The Financial Planning Coalition, a group of financial-planner organizations, said in a statement Thursday it was disappointed the SEC was stripped of its authority to regulate equity-indexed annuities. That reduces investor protection by preventing the SEC from preventing abusive sales practices, it said.

The White Law Group is currently investigating the sales practices of broker-dealers that sell equity indexed annuities. If you have any information that may assist The White Law Group in its investigation into the sales practices of firms marketing and selling equity indexed annuities, please contact our Chicago, Illinois office at 312-238-9650.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions. The firm primarily handles these cases on a contingency fee. For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.

Michael Szafranski, 32, invested tens of millions of dollars with Rothstein at the same time he was supposed to be “verifying” that the legal settlements Rothstein was selling to investors were legitimate, according to court documents. The settlement agreements never existed.

When questioned by attorneys sifting through the wreckage of Rothstein’s $1.4 billion fraud scheme, Szafranski invoked his Fifth Amendment right against self-incrimination more than 1,000 times.

The bankruptcy attorneys had sued Szafranski for $32.8 million in payments he and his investment companies received from Rothstein.

In a settlement agreement filed this week in U.S. Bankruptcy Court, Szafranski agreed to pay $4.7 million within two days of a judge approving the deal with the rest of the money being paid out over a two-year span.

The $6.03 million represents about 86 percent of Szafranski’s total assets, according to court records.

Rothstein was sentenced last month to 50 years in federal prison for running the largest fraud scheme in South Florida history.

In addition to Szafranski, former Rothstein law partner Steven Lippman reached a $700,000 settlement with attorneys representing bankruptcy trustee Herbert Stettin, according to court documents filed Thursday.

The $700,000 constitutes “a large percentage of the Lippmans’ non-exempt net worth,” wrote Charles Lichtman, one of the attorneys working for Stettin.

Equity Indexed Annuities are annuities that are typically tied to a particular stock market index such as the S&P 500 or the Dow Jones Industrial Average. An equity indexed annuity typically guarantees that your principal investment will not go down in value, and offers the potential for higher returns if the stock market index to which it is linked performs well.

The way the annuity is marketed is typically to assure investors that if the index to which the annuity is tied goes down, the annuity owner has a safety net – the equity indexed annuity’s value at the beginning of the year (plus, in some cases, a guaranteed minimum rate of return). There are, however, enormous downsides to equity indexed annuities and these investments are not appropriate for all investors.

First, equity indexed annuities are investments, and, as such, there are no guarantees and the investments can go down. Also, equity indexed annuities are complex, and the manner in which they work varies widely among the insurance carriers that issue them. An individual carrier may also offer differing products, and revise its products from time to time. Here are a few examples of the variety and complexity:
• Principal Guarantee: Many equity indexed annuities provide that you’ll receive at least 100% of your invested funds; others guarantee only 90%.
• Participation Rate: This is the percentage of the stock market index’s gain that is credited to the annuity. One equity indexed annuity might offer a return equal to 85% of the gain; another might offer 45%.
• Participation Rate Changes: Insurers often reserve the right to change the participation rate from year to year. If the insurer lowers the rate, this could reduce your return.
• Caps: Caps create limits on the gain regardless of the performance of the index. Even though an equity indexed annuity might provide a 100% participation rate, a cap would limit any gain to a certain figure (like 7% a year).
• Spread / Margin / Asset Fee: Some equity indexed annuities subtract this type of fee each year from equity indexed annuities’ gain.
• Returning Customers: Some carriers offer lower returns to returning customers than they do to new customers.
• Guaranteed Minimum Rate: Some equity indexed annuities offer a guaranteed minimum rate of return. A guaranteed minimum is sometimes adjustable in the future, and in some cases only applies to funds withdrawn in a certain manner. For example, an equity indexed annuity might guarantee a minimum 3% return over a certain number of years, but only if you withdraw funds in the form of lifetime monthly income.
• Method of Calculating Index Changes: Equity indexed annuities employ differing methods for calculating yearly changes in a stock market index. Differing methods (e.g., monthly averages and annual point-to-point calculations) can produce wide disparities in calculating equity indexed annuities returns.
• Deducting Expenses: A few companies deduct expenses from the gains before calculating the equity indexed annuities’ net return.

The biggest problem with equity indexed annuities (and the reason that annuities are so closely monitored by regulators) is the enormous costs associated with purchasing and owning annuities. In addition to their complexity, equity indexed annuities often include high surrender charges in the early years, which tend to lock in the investor for several years. These surrender charges make equity indexed annuities largely unsuitable for elderly or retired investors because it significantly limits the investors’ ability to access their funds if an unforeseen expense (like a medical expense) arises.

The other problem with these equity indexed annuities is the representations made by brokerage firms and insurance companies regarding the investments safety and suitability.

We are currently investigating the equity indexed annuity sales practices of brokerage firms and insurance companies, including but not limited to the following firms: Midland Life, Investors Insurance, Lincoln Benefit Life, Jefferson Pilot Life, ING USA Annuity and Life, Amerus Life, Great American Life, Fidelity and Guarantee Life, and Allianz Life.

If you have any information that may assist The White Law Group in its investigation into the sales practices of firms marketing and selling equity indexed annuities, please contact our Chicago, Illinois office at 312-238-9650.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions. The firm primarily handles these cases on a contingency fee. For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.

As a result of misrepresentations regarding these funds, many investors who thought they were receiving a conservative high income fund have suffered extraordinary losses. The Oppenheimer Champion Fund dropped 55% in November of 2008 alone. The Core Bond Fund lost more than 35 percent of its value in 2008 and another 10 percent in the first three months of 2009.

The verbal representations made by financial advisors, the marketing material used by these stockbrokers, and even the prospectus issued by Oppenheimer, portrayed the Oppenheimer Champion Income Fund and Oppenheimer Core Bond Fund as no riskier than the average high income fund. As such, the funds were improperly marketed to many investors (including retirees) that could not afford the risk to which they were then subjected.

The losses incurred in the Champion fund appear to be the result of large bets in high risk derivatives in the form of mortgage backed securities and credit default swaps. These are highly illiquid, speculative and complex agreements between parties to exchange cash flows in the future based on how a set of securities performs. It appears that the Champion Fund was betting that top-rated commercial mortgage-backed securities would rally in 2008. The Fund took an extraordinary risk that was not in line with the objectives set forth in the Prospectus, and a risk that was not disclosed to the investing public.

Additionally, the Champion Fund was also concentrated in credit-default swaps (CDSs). CDSs are basically insurance contracts that protect investors against bond and loan defaults. As the market for commercial properties deteriorated amid the slowing economy, the Fund’s value dropped precipitously. It appears that the Fund was even selling CDSs on troubled companies like Lehman Brothers Holdings Inc., American International Group Inc., General Motors Corp. and the Tribune Co. Many of those firms have since collapsed or filed for bankruptcy.

Investors from throughout the country have been affected by this Oppenheimer securities fraud, including investors in North Carolina, Florida, Georgia, Illinois, Texas, California, Washington, and New York. Many of the investors purchased the investment at the recommendation of their broker-dealer or financial advisor, and these entities have potential liability for failing to properly perform due diligence regarding the Oppenheimer funds prior to recommending them to their clients. Other investors purchased shares of the Oppenheimer Core Bond Fund through their 529 college savings plans, such as those in Oregon, Texas, Maine, Illinois and New Mexico, or through their retirement plans or annuities.

If you have any information that may assist The White Law Group in its investigation into these Oppenheimer funds, please contact our Chicago, Illinois office at 312-238-9650.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions. The firm primarily handles these cases on a contingency fee. For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.

The firm has offices in Chicago, Illinois and Boca Raton, Florida because of the obvious benefits of being located so close to the FINRA Dispute Resolutions offices in those cities (FINRA’s Southeast headquarters is located at Boca Center Tower 1, 5200 Town Center Circle, Boca Raton, FL 33486- less than one mile from our office, and FINRA’s Midwest headquarters is located at 55 West Monroe Street, Suite 2600, Chicago, IL 60603-1002- close to the firm’s Chicago office).

Having our offices located so close to FINRA’s regional headquarters has its advantages, particularly since all cases filed in the southeast portion of the United States are administered out of FINRA’s Boca Raton, Florida Dispute Resolution office, and all cases in the Midwest portion of the United States are administered out of FINRA’s Chicago, Illinois Dispute Resolution office.

Although located in Chicago, Illinois and Boca Raton, Florida, The White Law Group handles securities fraud cases throughout the country and Colorado, including reviewing securities fraud cases in Vail, Aspen, Telluride, Keystone, Winterpark, Breckenridge, Golden, Boulder, and Denver. With over 30 years of securities law experience, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions. To contact The White Law Group, please call 312-238-9650. Or, for more information about The White Law Group or securities fraud, you can also visit our website at http://www.whitesecuritieslaw.com.

As such, anyone contemplating an investment in a REIT (particularly a private or unlisted Real Estate Investment Trust), should consider the motivations of the broker and brokerage firm selling it.

Unlisted REITs are particularly problematic investments because they are not traded on the New York Stock Exchange or Nasdaq market. Accordingly, they can be difficult for investors to sell and difficult for investors (or brokerage firms) to accurately value.

To overcome marketplace concerns, the managers and operators of private REITs typically offer brokers and brokerage firms higher commissions to sell their products to retail investors.

This strong commission-based motivation to sell unlisted and listed REITs has not gone unnoticed by regulators. In March 2009, the Financial Industry Regulatory Authority (FINRA), began questioning multiple brokerage firms about their sales and promotion practices related to private or non-traded REITs.

In 2009, the Securities and Exchange Commission charged Ameriprise Financial Services, Inc. with fraud and accused the Minneapolis, Minnesota-based broker-dealer of receiving millions of dollars in secret payments as a condition of offering and selling certain REITs to its brokerage clients.

Ameriprise agreed to settle the charges without admitting wrongdoing and pay $17.3 million, the SEC said.

According to the SEC order: “Ameriprise received approximately $30.8 million in undisclosed compensation in connection with Ameriprise’s offer and sale to its brokerage customers of certain real estate investment trusts (‘REITs’) between 2000 and May 2004 … Ameriprise demanded this undisclosed compensation, which it referred to as ‘revenue sharing,’ in exchange for including the REITs on Ameriprise’s brokerage platform.”

FINRA also issued a regulatory notice (09-09) in February 2009 regarding additional concerns about post-sale representations surrounding private and unlisted REITs. In the regulatory notice, FINRA reminded brokers and brokerage firms of some of their obligations to investors: Specifically, once unlisted REIT customers have owned their investment for a while, their monthly statements should begin to contain a reasonably current estimated per share value of the unlisted REIT investment.

FINRA also reminded brokers and brokerage firms that they are prohibited from using a per share estimated value that’s based on data that’s more than 18 months old compared to the customer’s account statement date. According to FINRA, “ … firms must not use par value in a customer account statement more than 18 months following the conclusion of an offering, unless an appraisal of the program’s assets and operations yields the same value.”

The staleness of data used to value these unlisted REITs is particularly important due to the illiquid nature of these investments.

Notwithstanding the SEC and FINRA’s actions, abuse of unlisted and listed REITs is ongoing. If you have questions regarding a REIT investment you made, or if you believe that you have been the victim of a securities fraud, The White Law Group may be able to help. The White Law Group is a national securities fraud, securities arbitration and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida. The firm has over 30 years of experience reviewing securities fraud claims throughout the country. To contact the firm, please call 312-238-9650. Or, for more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.