Banks Receives 2016 Distinguished Service Award from PIABA

Last week at the 2016 Annual Meeting of the Public Investors Arbitration Bar Association in San Diego, attorney Bob Banks was honored with PIABA’s Distinguished Service Award. The award is given “in recognition of outstanding, long-term and sustained service to promote the interests of the public investor in securities and commodities arbitration.” Banks has been a member of PIABA for 18 years. He serves on the Board of Directors, is a past president, and previously was honored with the Director Emeritus designation. In response to receiving the award, Banks said “PIABA is a wonderful organization that has helped countless investors and their lawyers over the years. I’m proud to be a member, and am deeply honored that PIABA has chosen me for this year’s Distinguished Service Award.”

Victory – Vindicated By The California Court of Appeals

“The victory benefits investors everywhere by making clear that basic rules of due process do apply in FINRA arbitration”

In August, 2014, I represented Sandra Liebhaber in a FINRA hearing requested by Royal Alliance Associates and its one time financial advisor, Kathleen Tarr. This was an expungement hearing in which Royal Alliance and Tarr asked FINRA to erase any trace of the claim that my client had filed and settled with Royal Alliance. To grant that extraordinary remedy, the FINRA three-person panel had to find essentially that Ms. Liebhaber had filed a false claim. Ms. Liebhaber did not and would not file a false claim, and when I found out about the request, Darlene Pasieczny and I agreed to represent her without charge at the hearing to oppose the expungement. At the hearing, the arbitrators allowed Ms. Tarr to testify that she was a minister’s daughter and had done nothing wrong. When I asked to cross examine Ms. Tarr, the FINRA panel refused to allow me to ask her any questions. I then asked permission to call Ms. Liebhaber as a witness, to testify about what Ms. Tarr really had done. The panel refused to allow her to testify, as well. And, along the way, they told me that they had heard enough from me, despite the fact that I retained my cool and acted with respect through the entire Gulag-like ordeal. When the decision came down, and not surprisingly, the panel granted the expungement.

Yesterday, we were vindicated by the California Court of Appeals. The court found that the panel had acted improperly. It vacated the FINRA panel’s decision granting expungement. Ms. Liebhaber’s claim will remain on Ms. Tarr’s Broker-Check report, as it should.

The victory benefits investors everywhere by making clear that basic rules of due process do apply in FINRA arbitration. It was the product of many hands. I owe a debt of gratitude to my friend and colleague in Beverly Hills, Lenny Steiner, who ably represented Ms. Liebhaber before the California Court of Appeals. I thank FINRA itself for recognizing that the panel had done wrong, and joined us in the request that the court toss the arbitration ruling. I also thank Susan Antilla, whose reporting on this case originally in The New York Times, and again yesterday in TheStreet.com, brought much-needed national attention to the case. And, last but clearly not least, I thank Sandra Liebhaber, who cared enough for future victims of investment abuse to fight the good fight.

A copy of the California Court of Appeals decision, which is scheduled for publication, can be found on the California Courts website.

 

Investor Defenders is a practice group of Samules Yoelin Kantor LLP focused on representing investors in situations where professional misconduct resulted in a financial loss. Lead securities attorney Bob Banks has earned a national reputation for his success fighting on behalf of investors in FINRA arbitration and in court for over 30 years. Consultations are complimentary and most cases are done on contingency fee, meaning that our clients do not pay any attorney fees unless we recover losses.

Aequitas Private Notes

I received a document from a confidential source that was prepared by Aequitas and it is quite enlightening. It is written about the Aequitas Private Notes issued by ACF (Aequitas Commercial Finance), and dated the third quarter of 2015.

The document states, “ACF uses proceeds from Private Notes primarily to repay prior investors.” I interpret this to mean that the company did not have the assets to pay prior investors from its regular course of business. I define a Ponzi Scheme as an investment scheme that operates by using new investor money to pay prior investors, and creating the illusion that distributions are from operations, when they are not. It is beginning to sound a lot like Ponzi at Aequitas. Investors in the ACF Private Notes who were unaware of this fact when they made their purchases have legitimate reason to complain, and file claims against Aequitas principals and the advisors who sold those notes. The law requires that investors be told all of the material facts if they are solicited to make a purchase.

So far we don’t know whether the other Aequitas programs also used new investor money to pay existing investors, but we will find out.

Samuels Yoelin Kantor securities attorneys Robert Banks and Darlene Pasiczny are heading up the Aequitas investigation. Banks recently updated concerned investors with information regarding their choices for pursuing recovery. Please contact our office to discuss your situation confidentially. You can call 800-647-8130 or reach us by email at bbanks@samuelslaw.com or info@investordefenders.com.

Information About The Aequitas Investigation

Looking for Information about the Aequitas Investigation and Investors?

Investors looking for information about their investment funds and private promissory notes issued by one of the Aequitas companies operating out of Lake Oswego, Oregon have come to the right place. We have created a site specifically designed for those seeking more information about the Aequitas investigation. We are prepared to answer individual and institutional investor questions and we invite you to use this site as a resource for information and investigation updates. Regular updates will be posted in the Aequitas Updates section of this site. We welcome calls from anyone with information that might assist us in recovering money for aggrieved investors at 800-647-8130. E-mail us at bbanks@samuelslaw.com or info@samuelslaw.com.

Recent Concerns:

In the last two weeks, we have been contacted by investors  around the country who were sold investments in the Aequitas Income Opportunity Fund II, LLC in 2015 and into 2016.  This was at a time when the Securities and Exchange Commission was investigating Aequitas, when Aequitas was unable to make payments on its private notes to lenders, and when the Consumer Financial Protection Bureau was investigating Aequitas for its lending practices. We are at a loss to understand how professional Registered Investment Advisory firms and their investment advisors would put their clients’ retirement money into the Income Opportunity Fund II (or any Aequitas investment) in 2015 and 2016 in light of those events.   We also question how Aequitas and its accountants and legal advisors could offer those investments without amending or supplementing their written disclosures to reflect Aequitas’s list of new problems.

Early Aequitas Warnings

Investor rights attorney Bob Banks (click here for full biography) has been following Aequitas since 2011, when a high net worth client asked for advice on whether an investment in secured subordinated promissory notes issued by Aequitas Commercial Finance, LLC Fund was a safe investment. After reviewing the prospectus for that investment, Banks strongly advised his client not to make the investment. Among other things, Banks told his client that, contrary to the oral statements that were made to him, the Aequitas fund was not comprised of truly “secured” notes because other creditors would be paid before investors per the subordination agreements tied to the notes. Additionally, Banks noted, the Commercial Finance LLC notes involved loans to companies that were not able to get financing from traditional financial institutions, making them more of a credit risk. The “security” that was touted on some of the loans was equipment whose true value was not disclosed and may have been worth less than the loans they secured. And, the “security” was based on personal guarantees from persons of unknown credit reliability. Finally, Banks advised his client of the levels of fees charged to investors in the Commercial Finance LLC Fund, which is a common denominator running through all of the Aequitas investments Banks has reviewed.

Since then, Mr. Banks, associate attorney Darlene Pasieczny, and others on the team at Samuels Yoelin Kantor have followed Aequitas’s growth decline.

What Now? Primer On The Laws Governing Investment Advisors and Issuers of Investment Securities

It is against the law to sell investments by means of misrepresentations of fact or by omitting to state important facts that a reasonable investor would want to know about. The rules governing FINRA-licensed financial advisors requires that the advisor understand any investment he or she recommends, and state that advisors cannot recommend any investment that is not suitable to the investment objectives and risk tolerance levels of the investor. The law also provides that Registered Investment Advisors have a fiduciary duty to their clients. This means, first and foremost, that they must place their clients’ interests ahead of their own interests.  In other words, they cannot recommend investments that pay high commissions and fees if it is not in their clients’ best interest.  We believe that Aequitas investments were sold in violation of the securities laws and the fiduciary responsibility laws, and that the investors we have agreed to represent are entitled to a refund of their investments, together with interests and their attorney fees. We are preparing to pursue those claims for investors in the Aequitas Income Opportunity Fund II and all other Aequitas investments that were misrepresented to individuals and institutions.

If you have questions about your investment and what you should do, or if you have information to share, please contact our office at 800-647-8130 or by email at bbanks@samuelslaw.com

New Article – Retirement Savings Lost to Investments in Oil, Gas, & Energy?

The SYK Investor Defenders Team published a new article.

Investment Losses in Oil, Gas, and Energy Driving Down Your Retirement Savings?

You might have a claim to recover your loss in oil, gas, or energy stocks.

If you have concerns about the effect that oil, gas and energy stocks and investments are having on your retirement savings, we are happy to provide a free and confidential review of whether claims may exist based on your investments, and whether you have a right to recover your losses.

Be sure to check the Investor Defenders website for the full article. If you have concerns about your financial advisor or investment portfolio, please contact our SYK Investor Defenders team at 800.647.8130 or visit our website at www.investordefenders.com for more information.

New Article – Form U5 Information Gets to BrokerCheck Faster with New FINRA Rule Change

Investor Defenders have published a new article.

Form U5 Information Gets to BrokerCheck Faster with New FINRA Rule Change

Effective December 12, 2015, certain information provided on the registration termination paperwork (Form U5) for a brokerage firm or terminated broker will be accessible on BrokerCheck in 3 business days instead of 15.

Be sure to check the Investor Defenders website for the full article. If you have concerns about your financial advisor or investment portfolio, please contact the SYK Investor Defenders team at 800.647.8130 or visit our website at www.investordefenders.com for more information.

New Article – Banks Quoted in Investment News Article

Investor Defenders have published a new article.

Banks Quoted in Investment News Article Regarding Expungement Language

Investor Defender attorney Robert S. Banks, Jr. was recently quoted by Investment News, in an article about FINRA arbitration expungement procedures.

Be sure to check their website for the full article. If you have concerns about your financial advisor or investment portfolio, please contact the SYK Investor Defenders team at 800.647.8130 or visit our website at www.investordefenders.com for more information.

New Article – FINRA Examines Broker Compensation Conflict

Investor Defenders have published a new article.

FINRA Examines Conflict in Broker Compensation

As reported by Investment News recently, FINRA has sent letters to brokerage firms asking about Broker Compensation. The goal is to discourage firms from selling products that benefit the brokerage firm and the broker at the expense of the customer.

Be sure to check their website for the full article. If you have concerns about your financial advisor or investment portfolio, please contact the SYK Investor Defenders team at 800.647.8130 or visit our website at www.investordefenders.com for more information.

New Article – Asset Allocation

Investor Defenders have posted a new article.

Asset Allocation – The Life Raft in a Stock Market Storm

Stock market decline should not rattle investors who are properly asset allocated. Asset allocation as a predictor of stock performance. The recent plunge in the stock market is grabbing headlines and making investors anxious.

Be sure to check their website for the full article. If you have concerns about your financial advisor or investment portfolio, please contact the SYK Investor Defenders team at 800.647.8130 or visit our website at www.investordefenders.com for more information.

New Article – Banks Speaks to DFCS About FINRA Arbitration

Investor Defenders have posted a new article.

FINRA Arbitration 101

Securities attorney Robert S. Banks, Jr. traveled to Salem, Oregon today to discuss FINRA arbitration with a select group of regulators at the Department of Finance and Corporate Securities (DFCS). Banks’ presentation detailed the arbitration process from start to finish.

Be sure to check their website for the full article. If you have any questions about FINRA arbitration, please contact the SYK Investor Defenders team at 800.647.8130 or visit our website at www.investordefenders.com for more information.