The Florida Office of Financial Regulation announced on January 14, 2015 that they had arrested Gus Papathanasopoulos, owner of Neofat Industries, Inc., a/k/a Microlipid Technologies. Mr. Papathanasopoulos was arrested on one count of securities fraud, 18 counts of selling unregistered securities and 18 counts of selling securities as an unregistered agent.
Mr. Papathanasopoulos solicited more than 100 investors located throughout the United States and Europe. In return for their investments, individuals were told they would receive stock in his Orlando based company, Neofat Industries, Inc. According to the Office of Financial Regulation (â€œOFRâ€), the company is alleged to be an empty shell with no legitimate business activity. It was suggested by the OFR that all of the money raised by Mr. Papathanasopoulos was used for his personal benefit.
Mr. Papathanasopoulos was being held in the Orange County Jail, but it is not known if he is still there at this time.
This is just another example of why we here at the Coleman Law Firm recommend that you check out who you are really doing business with BEFORE you make that investment. It is so important to check with www.finra.org to ensure that your broker is duly registered with a broker dealer, and that you also check out the broker dealer where your broker is employed. You want to go to the â€œBROKER CHECKâ€ box on the main page of the FINRA website. You can see how long your broker has been in the business, if he has had any regulatory issues in the past or is currently involved in one, and if he has had other customer complaints. You don’t want to hand over your life savings to someone that was selling used cars just a month before you became his client unless you find he is under the careful eye of an experienced manager.
If you have any additional questions on how to check out your broker, please do not hesitate to give us a call or drop us an email. Our phone number is (727) 461-7474 or email us at jeff@coleman law.com. We would much rather be assisting you with your estate planning asset management than trying to recover lost assets.
Just before the holidays, the State of Florida Office of Financial Regulation issued a Press Release describing what they believe are the new products in classic schemes identified as top emerging threats for investors in 2015.
According to OFR Commissioner Drew J. Breakspear, â€œwe are seeing classic investor threats morph into new or altered dangers, many involving the internet. Encompassing each of these threats are unlicensed individuals selling unregistered products to unsuspected investors.â€
This is where we at the Coleman Law Firm can’t emphasize enough for investors to do some investigation or â€œdue diligenceâ€ before handing over their hard earned savings to something that sounds too good to be true. Due diligence would include determining if the individual or company pitching their sale is registered with the FINRA (Financial Industry Regulatory Association) which can be found at www.finra.org. There is an easy to find box on their home page where you can perform a â€œbroker check.â€ Even if you have determined they ARE a registered broker dealer, it is important that you review that report for indications of prior customer complaints or regulatory issues. Another resource for checking out a potential investment would be with the Office of Financial Regulation (â€œOFRâ€). You can find more information about the OFR at www.flofr.com.
The Enforcement Section of the North American Securities Administrators Association (NASAA), of which the Office of Financial Regulation is a member, has compiled the following list of investments that threaten unwary investors.
- Marijuana Industry Investments
- Stream of Income Investments
- Digital Currency and Cybersecurity Risks
- Binary Options
- Fraudulent Private Placement Offerings
- Pyramid and other Ponzi Schemes
- Real Estate Schemes (including those using promissory notes)
- Online Fraud (including crowd funding and social media)
- Gas & Oil in the Fracking Era
To quote Mr. Breakspear, â€œit pays to investigate before you invest.â€
The Coleman Law Firm does not provide investment advice but can assist you if you have any additional questions on how to determine if an individual or firm is properly registered.
FINRA Releases (January 6, 2015) Regulatory A EXAM PRIORITIES LETTER
Five Challenges Firms Should Address Highlighted in 10th Anniversary Letter
Richard G. Ketchum, FINRA’s Chairman and CEO admitted that in the decade since publishing the first exam priorities letter, there have been tremendous changes in broker-dealer operations, the markets and the regulatory landscape. Mr. Ketchum acknowledged that some firms have made great progress in keeping up with these changes, but more attention has to be paid to addressing specific challenges that have been pinpointed as their areas of concern.
A Clearwater Securities Litigation Attorney comments: What is most concerning to us is what those â€œareas of concernâ€ are by FINRA. The Release goes on to specify five key areas of broker-dealer activity:
- Alignment of firms’ interests with those of this customers;
- Standards of ethical behavior;
- Development of strong supervisory and risk management systems;
- Development, marketing and sale of novel products and services; and
- Management of conflicts of interest.
Isn’t this exactly what the crux of the securities industry is all about? When you think of a business that is built totally on the trust of it’s customers, what relationship could be more based on trust than the broker/client relationship? Ordinary people bring their irreplaceable life savings or retirement funds and entrust it to their broker already believing they are DOING the exact things that FINRA has highlighted in their 10th Anniversary letter as needing improvement.
A Securities Litigation Attorney in Clearwater Warns:
The letter goes on to say that FINRA â€œalso notes its focus on high risk brokers and removing bad actors who prey on vulnerable investors from the securities industry in an expeditious manner. What that sentence doesn’t say that it’s usually those rogue brokers that bring in the largest commissions and bonuses for their supervisor, or, in other words, in most cases, the fox is left to watch the chicken coop. Without a customer complaint to spark an investigation, many of these â€œbad actorsâ€ and their supervisors are most likely not aligning their firms’ interest with those of their customers.
Senior Clients Are The Most Victimized by Rogue Brokers
Sometimes, those rogue brokers aren’t caught until they have fully taken advantage of their senior clients. I have been hired by the families of their deceased relatives that wondered where their loved one’s money went? They didn’t realize they were victims of high frequency trading or the purchase of investments that weren’t suitable for them.
It’s a sad day when FINRA announces they are continuing to observe shortcomings in one of the most trusted business relationships most people have with a single person.
If you want to read the entire News Release: Click Here
Have you lost $50,000 or less and been turned away by other securities litigation attorneys? Did you know that FINRA has a rule change that would allow those customers with losses up to $50,000 or less to file a Simplified Arbitration.
Did your broker make a trade without your permission, and you lost money? Did your broker fail to execute a trade you ordered and it ended up with you losing the profit you would have made if the broker had done his or her job.
Yes, brokers are people too, and they make mistakes. But, that doesn’t mean that you have to suffer losses just because your broker mishandled your account unintentionally. There are rules and protections in place to protect you from such unintentional mistakes.
The simplified process is streamlined, and in some cases there is no actual hearing. You tell your story of whatever alleged wrongdoing has occurred in written form and it is provided to a single arbitrator and to the legal department of the firm you believe has wronged you. The brokerage firm will respond to your claim. There will be a request to provide certain documents by each party. This is the option to have a single arbitrator, and a decision can be rendered based solely on the pleadings and materials provided. There is always an option to have a hearing, if desired, but our experienced has demonstrated to us that most people would rather NOT go to a hearing, which is why they do nothing.
We at the Coleman Law Firm believe that every investor should have the assistance and experience of a proven law firm behind them. We have assisted individuals in the preparation of their simplified claims.
For more information on this proposed Simplified Arbitrations, you can check with FINRA.org, or contact our offices at (727) 461-7474.
It is our experience that the majority of the victims of securities fraud simply do not take action for a number of reasons. Such inaction is often the result of uncertainty as to what constitutes securities fraud or uncertainty as to what things brokers can, cannot, or are required to do. Additionally, we find that many victims of securities fraud are understandably embarrassed or ashamed and often forgo taking action to hide their losses from family members and friends. Furthermore, many victims of securities fraud may even refrain from taking action because they recall arbitration language in the account paperwork they signed and are intimidated or uncertain as to what steps to take to pursue a claim.
Investments are complicated, so investors often entrust, confide in, and compensate investment professionals to act on their behalf. Investors, therefore, should expect to be treated by their investment professionals and investment firms in accordance with the high standards imposed upon them by the brokerage securities profession. Unfortunately, investment professionals and firms often engage in egregious conduct that breaks investors’ trust and confidence, thus leaving investors no choice but to protect themselves.
If you have questions regarding securities fraud and the conduct of your representative and/or investment firm, DO NOT contact the representative or investment firm. Please contact us at (727) 461-7474 or visit our Investor FAQs page and fill out the Do I Have a Case form at www.colemanlaw.com.
For more information about Securities fraud, or estate planning, particularly if you are in Clearwater, Palm Harbor, Tarpon Springs or the Tampa Bay, Florida area, go to our website www.colemanlaw.com.
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