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LPL Financial

LPL FInancial Agreed To Pay $541,000 To Investors For Faulty Variable Annuity Switches

Massachusetts securities regulators announced on October 14, 2014, that LPL had agreed to reimburse senior citizens $541,000 for surrender charges they paid when they switched variable annuities, marking the second time in four months that the firm has been in state securities regulators’ cross hairs over sales and exchanges of variable annuities.

This was just the latest issue with regulators. LPL Financial at the end of June was hit with a $2 million fine and ordered to pay $820,000 in restitution, for failing to maintain adequate books and records documenting variable annuity exchanges, known as 1035 exchanges. The fine and settlement were part of an agreement with the Illinois Securities Department.

The Massachusetts agreement covers 157 transactions, all involving persons 65 or older at the time of the transaction and living in Massachusetts. LPL has 15 days to offer the reimbursement to the senior citizens, according to the statement.

LPL Financial, which is based in Boston and San Diego, has drawn the attention of Massachusetts Secretary of the Commonwealth William Galvin’s office in the recent past. In December 2012, Mr. Galvin sued LPL Financial over the sales practices of its brokers regarding real estate investment trusts. He charged LPL Financial with failure to supervise registered representatives who sold the nontraded REITs under terms that violated both state limitations and the company’s rules.

LPL Financial later was one of a half dozen broker-dealers that eventually settled with Mr. Galvin and the Massachusetts Securities Division over the sales practices. LPL agreed to pay $4.8 million in restitution to clients.

In a memorandum of understanding with the Massachusetts Securities Division, LPL Financial “acknowledged that certain annuity switch transactions were conducted in the absence of accurately disclosed surrender charges or in which other determinations were not properly documents,” according to a statement regarding LPL’s variable annuity reimbursement from Mr. Galvin.

“During the Securities Division’s review of the company’s variable annuity switch practices, LPL Financial implemented policies to ensure that customers receive necessary and required disclosure of transactions fees,” according to the statement.

LPL Financial, which has boosted staff and spending on compliance since the beginning of last year, has recently been the focus of regulators for sales of high commission products such as variable annuities and nontraded REITs.

Medical Capital Holdings

Medical Capital is a Tustin, California, lender that issued private placements to purchase medical receivables. Meanwhile, investors reportedly lost more than $1 billion with their purchases of Medical Capital notes.
In July 2009, the Securities and Exchange Commission (SEC) charged Medical Capital and its two top executives with securities fraud. After raising $2.2 billion in capital, the firm is now in receivership. Regulators have since discovered that Medical Capital’s assets included not only medical receivables and loans but also a 118-foot yacht and a $20 million stake in the movie, “Perfect Game.”

Securities America was one of Medical Capital’s biggest distributors, selling an estimated $700 million of the private placements from 2003 to 2008. Other firms that sold Medical Capital private placements included QA3, Workman Securities, and NEXT Financial.

If you invested in Medical Capital, please call the Law Offices of Nicholas Taldone for a free consultation at 727-712-1400727-712-1400 or complete an intake form and we will contact you.

Provident Royalties and Shale Oil and Gas

Provident Royalties, LLC of Texas issued preferred stock and limited partnership interests in a series of 23 private placements offered by. Its broker dealer Provident Asset Management’s only business line was acting as the wholesaling broker-dealer for the Provident Royalties’ offerings, including Shale offerings, which were sold to customers through more than 50 retail broker/dealers nationwide. In total, more than $480 million was raised through approximately 7,700 individual investments made by thousands of investors. The Law Offices of Nicholas Taldone is handling several cases of this nature.

If you invested in Provident or Shale, please call the Law Offices of Nicholas Taldone for a free consultation at 727-712-1400727-712-1400 or complete an intake form and we will contact you.

Fisher Investments

The Law Offices of Nicholas Taldone is investigating  possible claims against Fisher Investments, an investment advisory firm based in California. If you are a current or former Fisher client, have losses in your Fisher account,  and believe you may have a claim against Fisher, please contact the Law Offices of Nicholas Taldone at 727-712-1400727-712-1400 for a free consultation or complete an intake form and we will contact you.

Preferred Stock In Financial Institutions

Throughout the period 2000-2008, several broker-dealers hyped the purchase of preferred stock of financial institutions to conservative investors, as designed to provide them with consistent above-average dividends. Specifically the broker dealers recommended preferred stock in Fannie Mae, Freddie Mac, Citigroup, Merrill Lynch, and Lehman Brothers. Many of these investors initially purchased huge concentrations of these publicly traded preferred stock based on misleading information from their brokerages or financial advisers. The Law Offices of Nicholas Taldone is investigating several cases of this nature.

If you have suffered preferred stock losses, please contact the Law Offices of Nicholas Taldone at 727-712-1400727-712-1400 for a free consultation or complete an intake form and we will contact you

Principal Protection Notes

Structured notes are booming with sales reaching $45 billion in 2010. Despite their growth, structured notes can be a risky venture for investors, especially as more and more brokerages sell these products with the promise of little risk. However, most of these notes are not 100% principle protected products. Instead they typically offer only partial or limited protection, meaning they provide a fixed amount of contingent protection. Losses are covered only up until the point that the underlying asset drops below a certain level. Once that happens, the protection is canceled and investors bear the brunt of the losses.

100% principal protected notes were sold by many brokerages to conservative investors who typically put their money in low-risk financial products like certificates of deposit. Many investors quickly became disenchanted with their decision to buy into principal protected notes, especially those who bought notes issued by Lehman Brothers Holdings. Those investments are now worth mere pennies on the dollar following the company’s bankruptcy filing in September 2008.

If you have suffered losses in your account in connection with principal protection notes, please contact the law offices of Nicholas Taldone at 727-712-1400727-712-1400 for a free consultation or complete an intake form and we will contact you.