SEC Charges Investment Advisory Firm With Defrauding Retirees

Investor Alerts Attorney Jared Levy December 30, 2019

The SEC recently charged Springer Investment Management, Inc. dba Springer Financial Advisors (SFA) and its owner, Keith Springer, with defrauding hundreds of clients, including many retirees.

SFA is an investment advisory firm based in California. The SEC alleges that SFA recommended certain investment products to its clients, for which it received millions of dollars in secret compensation. According to the SEC, not only did SFA fail to disclose its conflict of interest, but it falsely claimed it had none.

The SEC also alleges that SFA took substantial measures to try to hide prior securities-related misconduct committed by SFA’s owner, Keith Springer – including prior SEC charges against him. According to the SEC, SFA went so far as to retain internet search-suppression companies and direct employees not to disclose Springer’s past to potential clients.

The SEC alleges that many retail clients initially learned of SFA through “Smart Money with Keith Springer,” a radio show with SFA’s owner. Springer allegedly misled listeners (i.e., potential clients) that he was picked to host the show due to his industry expertise. According to the SEC, SFA paid to host the show.

Erin E. Schneider, director of the SEC’s San Francisco Regional Office, stated: “Our complaint alleges that Springer actively targeted vulnerable retirees by misleading them about his prominence in the industry and promising to act in their best interests. Investment advisers must be truthful about their background and fully disclose all conflicts of interest.”

The SEC filed its complaint against SFA and Mr. Springer in federal court in California. The SEC has charged SFA and Springer with violating federal securities antifraud provisions and SEC rules regarding advertisements, compliance, and disclosures, among others. The SEC seeks injunctions, disgorgement, and civil penalties.

The Business Trial Group Fights For Investors

Please contact one of our Business Trial Group attorneys at 800-816-1031 if you believe you have a claim relating to the alleged fraud committed by Springer Financial Advisors.

The Business Trial Group at Morgan & Morgan is part of the largest contingency law firm in the nation, with more than 500 lawyers and 50 offices. We help investors recover their financial losses on a contingency basis – meaning we are only paid if we successfully recover money for you. We regularly battle against brokerage firms, investment advisory firms, and banks, and have helped investors recover tens of millions of dollars of investment losses.

How Investors Can Recover Harvest Volatility Management Losses

Investor Alerts Attorney Jared Levy December 24, 2019

Several brokerage firms have been selling customers a supposedly conservative investment strategy offered through Harvest Volatility Management that apparently wasn’t so conservative after all. In fact, Harvest engaged in speculative options trading pursuant to a Collateral Yield Enhancement Strategy that resulted in significant losses.

Multiple brokerage firms – including Morgan Stanley, Fidelity, J.P. Morgan, and Merrill Lynch – sold Harvest as a safe, income-generating strategy. But in reality, Harvest was trading options aggressively.

The firms that sold Harvest, of course, had an obligation to accurately represent the products and strategies sold to their clients. They also had an obligation to recommend only suitable investments. In this case, the brokerage firms that sold Harvest may have breached these obligations.

If you suffered losses in the Collateral Yield Enhancement Strategy offered through Harvest, please contact Morgan & Morgan’s Business Trial Group at 800-816-1031.

As part of the largest contingency law firm in the nation, the Business Trial Group at Morgan & Morgan helps investors recover their monetary losses on a contingency basis. If we don’t successfully recover money for you, you won’t owe us anything.

Our attorneys regularly fight for justice against brokerage firms, investment advisory firms, and banks. We have helped investors recover tens of millions of dollars of investment losses.

Investors Have Little Knowledge of Investing Principles: FINRA

Investor Alerts Attorney Jared Levy December 17, 2019

The FINRA Investor Education Foundation recently released a new research study, finding that investors have low knowledge of important investing principles. The FINRA Foundation further found that many investors are perplexed or unsure about the fees charged in their investment accounts. Approximately one-third of investors believe they do not pay any fees for their accounts or don’t know the amount they pay.

Approximately 2,000 people with investment accounts responded to the survey. The study contains the following findings, among others:

Investors have low knowledge about investment principles and practices. For example, 46% of the survey respondents believe an investment’s past performance is a reliable indicator of future results. And only 30% understand that index funds charge lower fees than actively managed funds.
Younger investors and small portfolio holders are more likely to invest in cryptocurrency. For example, investors between the ages of 18 and 34 and investors whose portfolios are valued under $50,000 are more likely to invest in cryptocurrency.
17% of respondents are using social media for investment information. Although we don’t think it’s a good idea for anyone to make investment decisions based solely on information contained in social media, 17% of the investors surveyed said they use social media to obtain investment information.
Investor tools like BrokerCheck or Investor.gov are being used by less than 10% of investors. The study found that investors are not very concerned about investment fraud and that investors are confident that regulators can prevent fraud. Unfortunately, regulators have limited resources and it’s impossible for them to catch every fraud. We urge all investors to use investor tools like BrokerCheck to view the background and disciplinary history of their stockbroker.
Investors are more likely to overestimate than underestimate their portfolio’s performance. While only 4% believe their portfolio will underperform the market, 29% believe their portfolio will outperform the market.

Gerri Walsh, president of the FINRA Foundation and FINRA’s Senior Vice President for Investor Education stated, “These research findings underscore the need for researchers, policymakers, advocates and industry stakeholders to continue to develop innovative investor tools and resources to better educate investors and to help protect them from fraud.”

To access the full study, datasets, survey instrument and methodology, visit USFinancialCapability.org. The study is entitled “Investors in the United States: A Report of the National Financial Capability Study.”

The Business Trial Group helps investors recover their investment losses on a contingency basis. This means that you won’t owe us anything if we don’t successfully recover money for you. We regularly battle against brokerage firms, investment advisory firms, and banks, and have helped investors recover tens of millions of dollars of investment losses. If you have suffered investment losses, you may have a viable legal claim. Please contact us at 800-816-1031 for a free consultation.

SEC Charges Investment Advisor Engaged in $60 Million Fraud

Investor Alerts Attorney Jared Levy December 12, 2019

The Securities and Exchange Commission recently charged investment advisor International Investment Group LLC (IIG) with securities fraud for hiding losses in its hedge fund and selling at least $60 million in fake loan assets to clients. The SEC also has revoked IIG’s registration.

The SEC alleges that IIG artificially inflated the value of defaulted loans it was holding in order to hide losses in its hedge fund. The SEC further alleges that IIG doctored its records to falsely show that the defaulted loans had been satisfied and that the proceeds had been used to make new loans. The SEC alleges that the loans, in actuality, had not been satisfied and the new loans were phony.

The SEC also alleges that IIG sold $60 million in fake loans to clients in order to meet redemption requests. As part of the scheme, the SEC alleges that IIG created phony promissory notes and a forged credit agreement.

Daniel Michael, chief of the SEC’s Complex Financial Instruments Unit, stated: “This case shows that even sophisticated professional investors can fall victim to Ponzi schemes. The revocation of IIG’s registration is necessary to protect the public in light of IIG’s egregious breaches of its fiduciary duty as an investment [advisor].”

IIG has consented to a bifurcated settlement enjoining it from future violations of securities laws’ antifraud provisions. A preliminary asset freeze also has been entered.

If you believe you have a claim relating to IIG’s misconduct, please contact one of our attorneys at 800-816-1031. The attorneys in the Business Trial Group have helped investors recover tens of millions of dollars of investment losses. And, as part of the largest contingency law firm in the nation, we help investors recover their financial losses on a contingency basis, which means that we are only paid if we successfully recover money for you.