Featured Investigations

Malecki Law Announces an Amendment to the Civil Complaint with FINRA Against MetLife Securities, Inc. in Connection with Alleged Ponzi Schemer Robert H. Van Zandt

March 7, 2012 | Malecki Law Team

Malecki Law announces the filing of an Amended Statement of Claim against MetLife Securities in connection with the real estate investments solicited by Robert H. Van Zandt of The Van Zandt Agency in the Bronx, NY as part of an alleged Ponzi scheme currently under investigation by the New York State Attorney General’s Office.

This past December, Malecki Law announced the filing of a civil arbitration complaint with the Financial Industry Regulatory Authority against MetLife Securities for more than $4 million on behalf of twenty-four investors. The attorneys at Malecki Law continue to take calls and anticipate either adding future victims to the existing claim or commencing a second action, if necessary.

In the following months, many more investors contacted the attorneys at Malecki Law requesting to be part of that action. So, on March 5, 2012, Malecki Law amended their complaint with FINRA to add an additional nineteen investors to the action. In total, Malecki Law’s forty-three clients have suffered losses of over $9.2 million as a result of their investments through Mr. Van Zandt and the Van Zandt Agency.

Investor Complains About Behringer Harvard REIT

February 9, 2012 | Malecki Law Team

We recently posted about the Behringer Harvard family of REITs and the devastation that these funds have had on investors’ portfolios. Some investors have now begun to seek answers. Investment News reports that a 70 year old woman who has seen her share in Behringer Harvard Short-Term Opportunity Fund drop 96% has recently filed a letter with the Financial Industry Regulatory Authority (FINRA) to complain about her investment.

The shares of BH Short-Term Opportunity Fund have dropped to $.40 from $6.48 just one year ago, and from the $10 per share they were offered at just six years ago. Since the BH Short-Term Opportunity Fund had $130 million in total assets, it is clear that this investor is not alone. Many firms, such as Capital Financial Services, Inc. sold these products to senior citizens.

Since REITs can deliver regular income of up to 7-8% a year, they are attractive to seniors who live off the income generated by their investments. Since these products offer high commission, they are very attractive to the brokers who sell these products. However, all too often, the risks involved with investing in REITs are hidden from investors by their brokers, and these same seniors can see their entire life’s savings disappear in the blink of an eye. Downplaying and failing to fully disclose the risks of an investment to a client is illegal, and investors who have suffered losses as a result may have the right to recover their entire loss.

Trouble with Behringer Harvard REIT Family

January 18, 2012 | Malecki Law Team

Recently in the news have been stories about the devastation that the Behringer Harvard family of Real Estate Investments Trusts (REITs) has had on investors’ portfolios. It was reported by Investment News that the value of the popular Behringer Harvard Opportunity REIT I is down 46% from its value this time a year ago, with prices down to just over $4 per share. The value of the Behringer Harvard REIT I has also seen substantial declines as well.

Unfortunately for many investors, a quick recovery does not appear to be in store. According to Investment News, Mr. Robert Aisner (Behringer Harvard’s Chief Executive) “said in an interview … that since the REIT is shedding assets, its valuation will go down in the long run.” That is bad news for investors.

Investors who bought into this fund , believing it to be a safe investment, are now seeing substantial portions of their savings disappear. Too often, investors in REITs do not fully understand the risks of investing in these illiquid and oftentimes speculative products. These products often require investors to “lock in” their money for a set time period and are difficult if not impossible to sell in the interim, even amid sharp declines in value. For more information on the risks of REITs and other investments, click here.

Malecki Law Announces Filing of a Civil Complaint with FINRA Against MetLife Securities, Inc. in Connection with Alleged Ponzi Schemer Robert H. Van Zandt

December 6, 2011 | Jenice L. Malecki, Esq.

Malecki Law announces the filing of a civil arbitration complaint in excess of $4 million, plus punitive damages, against MetLife Securities, Inc. The case is being filed with the Financial Industry Regulatory Authority (“FINRA”) today for alleged improper supervision and selling away, relating to an alleged Ponzi scheme that devastated a Bronx community. The complaint alleges that the firm failed to properly supervise and maintain the compliance of one of their registered representatives, Mr. Robert H. Van Zandt, in violation of federal and state securities laws, as well as financial industry rules and regulations. Robert H. Van Zandt is apparently already under investigation by the New York State Attorney General’s Office. “I believe there are a lot of victims out there who don’t know what is going on, nor their rights under the rules and regulations of the securities industry,” securities fraud attorney Jenice Malecki indicates.

In November of this year FINRA and the U.S. Securities and Exchange Commission jointly released Regulatory Notice 11-54 stressing the importance of supervision over registered representatives. Shortly before the release of Regulatory Notice 11-54, FINRA filed a regulatory action against Merrill Lynch and fined the firm $1 million for failing to properly supervise a registered representative and catch a Ponzi scheme that he was running out of a San Antonio, Texas branch office that victimized clients and non-clients of Merrill Lynch, all to which Merrill Lynch was responsible for its failure to supervise.

The complaint filed by Malecki Law relates to the alleged conduct of Robert H. Van Zandt of the Van Zandt Agency, who is believed to have sold unregistered securities in the form of promissory notes that were represented to prospective investors as part of a secured real estate investment, which appears improperly set up and not secured at all. It is alleged that these notes were part of yet another “Ponzi” scheme in what Ms. Malecki opines to be “an era filled with ponzi schemes for which the industry should closely monitor to avoid harm to unwitting victims,” this alleged ponzi scheme one run through a series of shell companies including Burke and Grace Avenue Corp.

Malecki Law Announces Investigation into Leveraged and Inverse ETFs

November 2, 2011 | Malecki Law Team

Malecki Law is currently investigating Financial Industry Regulatory Authority (FINRA) brokerage firms who have advised customers to purchase leveraged and inverse ETFs (Exchange Traded Funds), including those issued by Direxion, ProFunds (ProShares) and Rydex. Some of these ETFs trade under the symbols FAS, FAZ, UPRO, SDOW, SPXU, UDOW, RSU and RSU, among many others.

From 2007 through 2010, the market for inverse and leveraged ETFs such as these has grown from $1 billion to $30 billion, in large part due to these products being solicited in the accounts of normal, unsophisticated investors.

These products are highly complex, using various trading strategies in an attempt to deliver their promised returns, and are oftentimes not suitable for the investment portfolio of a conservative or retired investor.

Malecki Law Announces Investigation of Citigroup’s FALCON and ASTA-MAT Hedge Funds

November 2, 2011 | Nick Curley

Malecki Law takes a proactive and informed approach to the financial news of today: actively engaging in fact-finding analysis on prospective cases from around the world. Our thorough knowledge of securities law’s history and fine points makes us ideal consultants for investors who have suffered losses due to misadvice from their broker or other financial counsel. Information on a selection of funds and companies currently under investigation by Malecki Law can be found below. Our pursuit of excellence is constant, but our opportunities to make lasting positive change to the securities industry begin and end with determined clients who seek justice.

Malecki Law is currently investigating the potential for recovery of losses from Citigroup’s FALCON and ASTA-MAT hedge funds, as sold by its broker-dealer Smith Barney in the years spanning from 2005 to 2008. It is alleged that Citigroup presented the funds as affordable options, with fair-to-little risk and low volatility.

If the group failed to disclose crucial information about dangerous aspects of the funds and potential for severe losses, a claim may be warranted. Both funds were increasingly and excessively invested in real estate, leading to both funds reporting upward of 80% losses in 2008. Investors’ legal claims against Citigroup have included but are not limited to Fraud, Failure to Supervise, Unsuitability, Misrepresentations & Omissions, Breach of Contract, and Breach of Fiduciary Duty.

Malecki Law Announces Investigation of 1861 Capital Management

November 2, 2011 | Nick Curley

Malecki Law takes a proactive and informed approach to the financial news of today: actively engaging in fact-finding analysis on prospective cases from around the world. Our thorough knowledge of securities law’s history and fine points makes us ideal consultants for investors who have suffered losses due to misadvice from their broker or other financial counsel. Information on a selection of funds and companies currently under investigation by Malecki Law can be found below. Our pursuit of excellence is constant, but our opportunities to make lasting positive change to the securities industry begin and end with determined clients who seek justice.

Malecki Law is currently investigating the potential for recovery of losses from 1861 Capital municipal bond arbitrage funds sold by brokerage firm UBS. 1861 Capital Management is an investment firm based in New York, NY. It has been alleged that 1861 Capital Discovery Domestic Fund, LP was marketed and sold by UBS and other broker dealers as a sound and secure addition to a portfolio of municipal bonds. It may be more accurate to say, however, that 1861 would be better described as a leveraged municipal arbitrage fund.

In marketing such funds to investors, it has been alleged that UBS and their peers sought investors who were not only wealthy, but also cautious: those avoiding risk, making slow-but-steady investments, who would be drawn to the tax free municipal bonds to which the leveraged fund was coupled.

Malecki Law Announces Investigation of Reverse Convertible Notes

November 2, 2011 | Nick Curley

Malecki Law takes a proactive and informed approach to the financial news of today: actively engaging in fact-finding analysis on prospective cases from around the world. Our thorough knowledge of securities law’s history and fine points makes us ideal consultants for investors who have suffered losses due to misadvice from their broker or other financial counsel. Information on a selection of funds and companies currently under investigation by Malecki Law can be found below. Our pursuit of excellence is constant, but our opportunities to make lasting positive change to the securities industry begin and end with determined clients who seek justice.

Malecki Law is currently investigating the potential for recovery of losses from reverse convertible securities. Reverse convertible notes can be defined as complex, short-term bonds. At the end of one year, the owner receives either a 100% return on their investment or a predetermined amount of stock should the value of the note drop by a set figure (typically 70-80%). Their high-interest rates (recently set at as much as 13%) make them an alluring prospect for quick and significant gains.

Such notes are widely discussed in the finance industry today, both because of their popularity ($6.76 billion worth of reverse convertibles were sold in the U.S. in 2010) and because of growing concerns that the industry is selling such notes to unsuitable investors, and failing to supervise investments properly once funds have been transferred. RCNs have thus received increased regulatory attention from FINRA and other regulators.

Malecki Law Announces Investigation of Desert Capital REIT

November 2, 2011 | Nick Curley

Malecki Law takes a proactive and informed approach to the financial news of today: actively engaging in fact-finding analysis on prospective cases from around the world. Our thorough knowledge of securities law’s history and fine points makes us ideal consultants for investors who have suffered losses due to misadvice from their broker or other financial counsel. Information on a selection of funds and companies currently under investigation by Malecki Law can be found below. Our pursuit of excellence is constant, but our opportunities to make lasting positive change to the securities industry begin and end with determined clients who seek justice.

Malecki Law is currently investigating the potential for recovery of losses in Desert Capital REIT, a Henderson, Nevada based real estate investor, and its co-owned brokerage firm CM Securities.

Desert Capital is a real estate investment trust (REIT) that is believed to have been financing short-term high interest mortgage loans. These types of loans and any dividends are believed to have been paid to investors through real estate transactions, and are today generally thought to be risky investments, with potential for high gains due to their interest rates, but with equal if not unwarranted potential for resolute failure, and a possible lack of accountability toward investors.

Malecki Law Announces Investigation of Fannie Mae and Freddie Mac “Preferred Stock”

November 2, 2011 | Nick Curley

Malecki Law takes a proactive and informed approach to the financial news of today: actively engaging in fact-finding analysis on prospective cases from around the world. Our thorough knowledge of securities law’s history and fine points makes us ideal consultants for investors who have suffered losses due to misadvice from their broker or other financial counsel. Information on a selection of funds and companies currently under investigation by Malecki Law can be found below. Our pursuit of excellence is constant, but our opportunities to make lasting positive change to the securities industry begin and end with determined clients who seek justice.

Malecki Law is currently investigating preferred stock of Fannie Mae and Freddie Mac, as sold by an array of investment firms throughout 2007 and 2008, including but not limited to UBS, CitiGroup, Morgan Stanley, and Merrill Lynch.

Preferred stock can be defined as a hybrid of equity and debt instruments: it is prioritized over common stock when paying dividends and/or after liquidation. Preferred stock has been considered an appealing financing tool: selling such stock allows companies to defer dividends without affecting their credit or defaulting.