FREE INITIAL CONSULTATION WITH ATTORNEYS WHO CAN HANDLE YOUR SECURITIES, COMMODITIES AND INVESTMENT PROBLEMS

The Law Offices of Robert Wayne Pearce, P.A. understands what is at stake in securities, commodities and investment law matters and constantly strives to secure the most favorable possible result. Mr. Pearce provides a complete review of your case and fully explains your legal options. The firm works to ensure that you have all of the information necessary to make a sound decision before any action is taken in your case.

For dedicated representation by a law firm with substantial experience in all kinds of securities, commodities and investment disputes, contact the firm by phone at 561-338-0037, toll free at 800-732-2889 or via e-mail. We may also be able to arrange a meeting with you at offices located in Boca Raton, Fort Lauderdale, Miami and West Palm Beach, Florida and elsewhere.

Dec 9, 2013

2013 Most Effective Lawyers Finalist

Daily Business Review Monday, December 9, 2013 ARBITRATION AWARD AGAINST WELLS FARGO RECOVERS MOST OF FAMILY’S LOSSES Mediation and arbitration are supposed to be faster and more cost-effective than going to court. However, it was neither in a case involving the theft of millions of dollars from College Health and Investment L.P., a family-run limited partnership. The case took more than three years to resolve as attorneys for Wachovia Securities, now part of Wells Fargo, used numerous delaying tactics before ultimately paying a $2.75 million arbitration award, said Boca Raton securities attorney Robert W. Pearce, who represented College Health. The case grew out of Wells Fargo’s failure to detect the alleged theft and unauthorized transactions of millions of dollars by Esther Spero, whose aunt, Shari Jakobowitz, was in charge of the partnership’s accounts. Spero was accused of misusing the family’s financial information to steal about $7 million, which she in turn lost to one-time Miami Beach developer Michael Stern, who was supposed to be investing in real estate. Instead, Stern allegedly used the money to pay off his own debts after the real estate crash while funding a lavish lifestyle. Pearce traced most of the money and made recoveries in state court against Stern, a title company, Spero and Wachovia. “They came up a bit short, but we came close to getting most of their money back,” Pearce said. Then, in July, a Financial Industry Regulatory Authority arbitration panel ordered Wells Fargo to pay $2.75 million in damages and interest for failing to detect Spero’s alleged embezzlement. Pearce alleged bank employees went so far as to create a false power of attorney to give Spero control over the account that held most of the assets. Had the bank enforced its own policies and procedures, as well as FINRA’s rules, it would have detected the embezzlement, Pearce argued. “The bank had numerous red flags. It should have made inquiries to stop the movement of funds,” Pearce said.

Continue Reading

Sep 1, 2013

Municipal Arbitrage Structured Products

The Law Offices of Robert Wayne Pearce, P.A. has handled over 100 cases and investigations involving another form of complex structured products. They are structured credit products crafted from municipal bonds, tender option bonds, swap contracts, swaptions, and sold as “arbitrage”, “hedged” and “fixed income” investments to lure in investors with conservative risk profiles seeking to incrementally increase the yields and risk in their bond portfolio. However, according to Attorney Pearce many of the products were not arbitrage, not fully hedged and not fixed income products. Representing clients throughout Florida and nationwide. Se habla español The so-called municipal bond “arbitrage” strategy was a very complex investment strategy involving multiple investments in the tax exempt and taxable fixed income markets. The fund managers invested in long tax exempt municipal bonds and, in effect, shorted the equivalent of taxable corporate bonds utilizing libor swap contracts and swaptions. The key to the success of the strategy was “market timing” and the “continued correlation” of the tax exempt municipal bond yields and the libor swap contract yields. It was originally used by many banks as a short term trading strategy. But many firms converted it to a flawed long term buy and hold strategy to maximize their own sales commissions and management fees. The largest issuer of the securities Citigroup, under the Smith Barney division and Citibank divisions, marketed these products as MAT and ASTA. Our firm has handled over 100 MAT and ASTA investor cases in the last three years. Other faulty municipal arbitrage structured products include the Anchor Capital, Aravali, Belvedere Tax Advantaged, Blue River, TW Advantaged and 1861 Capital funds. We have helped our clients recover millions of dollars of investment losses in the so-called “municipal arbitrage” funds. For more information about our municipal arbitrage cases and investigations involving Smith Barney, Citibank, Deutsche Bank, Merrill Lynch Pierce Fenner & Smith and other issuers of the so-called municipal arbitrate products, click on the links below: Our MAT/ASTA Cases & Investigation FREE INITIAL CONSULTATION WITH MUNICIPAL ARBITRAGE INVESTMENT DISPUTE ATTORNEYS The Law Offices of Robert Wayne Pearce, P.A. understands what is at stake in securities, commodities and investment law matters and constantly strives to secure the most favorable possible result. Attorney Pearce provides a complete review of your Municipal Arbitrage case and fully explains your legal options. The firm works to ensure that you have all of the information necessary to make a sound decision before any action is taken in your case. For dedicated representation by a law firm with substantial experience in all kinds of securities, commodities and investment disputes, contact the firm by telephone at 561-338-0037 or toll free at 800-732-2889 or via e-mail. We may also be able to arrange a meeting with you at offices located in Boca Raton, Fort Lauderdale, Miami and West Palm Beach, Florida and elsewhere.

Continue Reading

Jan 2, 2013

Private Placements Risks – Considerations For Investing

Private placement or “Regulation D” offerings have become an important source of capital for American enterprises. But what are the risks and things to consider when doing these investments? Since 2008, companies have issued over half a billion dollars a year in securities through the private placement market.

Continue Reading

Nov 12, 2010

Citigroup Affiliates Found Liable for Mismanaging the MAT/ASTA Municipal Arbitrage Funds

In a recent Financial Industry Regulatory Authority (FINRA) arbitration, a South Florida panel specifically found that Respondents Citigroup Global Markets, Inc. f/k/a Citigroup Investment Services, and Citigroup Alternative Investments, LLC were guilty of negligent mismanagement of MAT/ASTA funds, as well as negligent supervision of their registered representatives. This award should open the door for many investors to recover the damages they sustained, particularly in early MAT/ASTA deals. The FINRA arbitration panel awarded more than $1.8 million to Gerald J. Kazma Revocable Trust and Amzak Capital Management, LLC in connection with their purchases of MAT/ASTA municipal arbitrage fund investments. MAT/ASTA was a series of leveraged municipal arbitrage hedge funds offered by Citigroup Fixed Income Alternatives and sold through Smith Barney and Citigroup Private Bankers. MAT/ASTA was marketed only to high net worth clients of the firm as a fixed income alternative. In truth the MAT/ASTA funds were risky investments that exposed investors to a 100 percent or more loss of principal. The funds imploded in early 2008 causing catastrophic losses to investors. The award is particularly noteworthy because the arbitration panel expressly found that Citigroup and its affiliates mismanaged the fund, and also that they failed to supervise. Specific findings like those made by the arbitration panel in this case are unusual, and are suggestive of an intent by the arbitrators to send a message. Despite widespread evidence of material misrepresentations and omissions, Citigroup has elected to employ the “blame the customer” defense, which arbitration panels have rejected. When confronted with evidence that Citigroup misrepresented MAT/ASTA’s risk level to their brokers who passed the misleading information on to their clients, a high ranking Citigroup official said that it would be “unwise” for customers of the firm to rely on what their broker told them about a recommended product. A PRUDENT CASE APPROACH Mr. Pearce, a former SEC attorney with over 45 years experience, focuses his practice on securities matters. He is a member of the Public Investors Arbitration Bar Association and serves as Chairperson of the SPBCBA Securities Committee. He has represented hundreds of investors in securities arbitration and have prosecuted multiple MAT/ASTA arbitration claims. Between them they have already been involved in representing almost 50 clients throughout the country in MAT/ASTA cases. The Law Offices of Robert Wayne Pearce, P.A. follows a multi‑theory approach encompassing three separate bases for recovery, depending on the facts and circumstances of the particular investor’s case. These include: (1) MAT/ASTA was a flawed investment product; (2) Citigroup and its affiliates misrepresented and failed to disclose material facts at the time the investor was sold the investment; and (3) Citigroup and its affiliates were guilty of negligent mismanagement of MAT/ASTA and negligent supervision of their employees. We believe that this approach gives investors three separate bases for recovering damages and enhances the likelihood of an award. We prefer not to put all of our clients’ “eggs in one basket.” If you are seeking a law firm with integrity, dedication, and substantial experience in MAT/ASTA fraud and mismanagement disputes, please schedule a confidential consultation with Mr. Pearce today. Call our firm at 561-338-0037 or toll-free at 800-732-2889, or fill out our intake form to schedule your free consultation.

Continue Reading

Nov 10, 2010

Questions Raised About SEC’s Delayed Prosecution of Citigroup For MAT/ASTA Fraud

MAT/ASTA LAWYER The recent front page Wall Street Journal article (“Citi Debt Funds Probe By SEC,” 11/8/10) highlights the ongoing SEC MAT/ASTA fraud investigation of Citigroup, Inc. and its affiliates. The WSJ reported about several former Citigroup/Smith Barney financial advisors sharing information with the SEC about the sales practices associated with the MAT/ASTA funds that lost more than 75% of their value between 2007 and 2008. The brokers who were mentioned in the WSJ article “blew the whistle” on Citigroup because they obviously believed that it had falsely marketed a flawed product to the brokers’ best customers and engaged in other misconduct. The recent $1.8 million arbitration award obtained by Robert Pearce in Kazma v. Citigroup and mentioned in the WSJ article may provide support for the brokers’ efforts. In Kazma, Mr. Pearce proved the MAT/ASTA funds were marketed as a low risk fixed income alternative but they were actually a very high risk equity type alternative investments. He also proved that Citigroup made representations about how it would invest the funds and deviated from those investment guidelines to suit its own financial interests. In Kazma, the arbitrators specifically found that Citigroup was guilty of “negligent mismanagement” and “negligent supervision.” The $1.8 million dollar Kazma Award obtained by Mr. Pearce proved the MAT/ASTA debacle was a “product problem” and not a “broker problem.” Mr. Pearce reports that Citigroup has even stipulated in one recent arbitration Award that this was a “product problem.” It has been over two and a half years since the SEC began its investigation and yet it has done nothing for MAT/ASTA investors. In the last year, Mr. Pearce has prosecuted over two dozen MAT/ASTA fraud arbitration claims to final resolution. He has reviewed millions of pages of the same documents Citigroup produced to the SEC that evidence misrepresentation and mismanagement of the MAT/ASTA funds. Mr. Pearce, a former SEC prosecutor, states: “there is no plausible explanation for the SEC’s delayed prosecution of Citigroup” and urges all Citigroup financial advisors to take the action necessary to get justice for their best customers. Although Mr. Pearce’s offices are located in Boca Raton, Florida, he represents MAT/ASTA investors nationwide. You may contact Mr. Pearce by telephone toll free 800-732-2889, by e-mail to Pearce@RWPearce.com or via his website at www.secatty.com for a free MAT/ASTA Investor Report. A PRUDENT CASE APPROACH Mr. Pearce, a former SEC attorney with over 45 years experience, focuses his practice on securities matters. He is a member of the Public Investors Arbitration Bar Association and serves as Chairperson of the SPBCBA Securities Committee. Mr. Pearce has represented hundreds of investors in securities arbitration and have prosecuted multiple MAT/ASTA arbitration claims. He is currently representing almost 50 clients throughout the country in MAT/ASTA cases. The Law Offices of Robert Wayne Pearce, P.A. follows a multi‑theory approach encompassing three separate bases for recovery, depending on the facts and circumstances of the particular investor’s case. These include: (1) MAT/ASTA was a flawed investment product; (2) Citigroup and its affiliates misrepresented and failed to disclose material facts at the time the investor was sold the investment; and (3) Citigroup and its affiliates were guilty of negligent mismanagement of MAT/ASTA and negligent supervision of their employees. We believe that this approach gives investors three separate bases for recovering damages and enhances the likelihood of an award. We prefer not to put all of our clients’ “eggs in one basket.” If you are seeking a law firm with integrity, dedication, and substantial experience in MAT/ASTA fraud and mismanagement disputes, please schedule a confidential consultation with Mr. Pearce today. Call our firm at (561) 338-0037 or toll-free at 1-800-732-2889, or fill out our intake form to schedule your free consultation. FREE CONSULTATION WITH ATTORNEYS WHO CAN HANDLE YOUR SECURITIES AND COMMODITIES PROBLEMS Contact The Law Offices of Robert Wayne Pearce, P.A., in Boca Raton to discuss your MAT / ASTA claim. The firm can be reached by phone at 561-338-0037, toll free at 800-732-2889 or via e-mail.

Continue Reading

Nov 8, 2010

Brokers May Reap Big Rewards for Reporting Alleged Fraudulent Conduct By Citigroup

BROKERS MAY REAP BIG REWARDS FOR REPORTING ALLEGED FRAUDULENT CONDUCT BY CITIGROUP IN THE MAT/ASTA MUNICIPAL ARBITRAGE FUNDS The Wall Street Journal reports that several former Citigroup/Smith Barney brokers have been sharing information with the SEC about alleged fraudulent practices associated with the MAT/ASTA municipal bond arbitrage funds that lost more than 75% of their value between 2007 and 2008. (“Citi Debt Funds Probed by SEC,” 11/8/10). These brokers may stand to be compensated handsomely if the SEC imposes big financial penalties against Citigroup for misrepresenting the risks of MAT/ASTA funds. That is because of an obscure provision in the recently enacted Dodd-Frank Financial Reform Act creating a financial rewards program that can pay a large sum of money to any person who provides “original information” to the SEC that leads to a successful enforcement action relating to the violation of federal securities laws. The Act provides for payments to “whistleblowers” ranging between 10% and 30% of the amount recovered by the SEC. Given that recent SEC fines have been in the hundreds of millions of dollars, there is the potential for a lot of money to be made by both whistleblowers and their lawyers, who typically handle such cases on a contingent fee or percentage basis. The new law allows whistleblowers represented by lawyers to present their information and claims anonymously, and it also contains legal prohibitions against industry retaliation as well as the right to sue any employer in the industry who retaliates against a whistleblower. According to Atlanta attorney Craig T. Jones of Page Perry LLC, “it is crucial that the whistleblower have a lawyer to not only protect his or her legal rights, but to confidentially funnel the information to the appropriate officials while protecting the client’s anonymity and negotiating for the best possible reward.” The new law also makes it illegal for brokerage firms to retaliate against whistleblowers, giving whistleblowers the right to sue their employers if they are fired, demoted, or blackballed for reporting misconduct to management or regulators. Robert Pearce represents dozens of investors who lost money in the MAT/ASTA funds and were marketed as being a low-risk fixed income alternative but which were actually a very high risk investment as Citigroup well knew. Mr. Pearce’s “recent MAT/ASTA arbitration awards against Citigroup including a $1.8 million award in the Kazma v Citigroup where arbitrators specifically found that Citigroup was guilty of negligent mismanagement and negligent supervision which are clearly not individual broker problems may provide support for the brokers’ efforts.” The brokers who were mentioned in the Wall Street Journal article ‘blew the whistle’ on Citigroup because they obviously believed that it had falsely marketed a flawed product to the brokers’ best customers and engaged in other misconduct, causing the brokers to lose business, suffer damage to professional reputation, and be subjected to legal action. While The Law Offices of Robert Wayne Pearce, P.A. only represents investors in the Citigroup MAT-ASTA cases, “we regularly talk with brokers and other financial industry whistleblowers in cases where we are not representing customers.” Mr. Pearce, a former SEC attorney with over 45 years experience, focuses his practice on securities matters. He is a member of the Public Investors Arbitration Bar Association and serves as Chairperson of the SPBCBA Securities Committee. Mr. Pearce has represented hundreds of investors in securities arbitration and have prosecuted multiple MAT/ASTA arbitration claims. He is currently representing almost 50 clients throughout the country in MAT/ASTA cases. The Law Offices of Robert Wayne Pearce, P.A. follows a multi‑theory approach encompassing three separate bases for recovery, depending on the facts and circumstances of the particular investor’s case. These include: (1) MAT/ASTA was a flawed investment product; (2) Citigroup and its affiliates misrepresented and failed to disclose material facts at the time the investor was sold the investment; and (3) Citigroup and its affiliates were guilty of negligent mismanagement of MAT/ASTA and negligent supervision of their employees. We believe that this approach gives investors three separate bases for recovering damages and enhances the likelihood of an award. We prefer not to put all of our clients’ “eggs in one basket.” If you are seeking a law firm with integrity, dedication, and substantial experience in MAT/ASTA fraud and mismanagement disputes, please schedule a confidential consultation with Mr. Pearce today. Call our firm at 561-338-0037 or toll-free at 800-732-2889, or fill out our intake form to schedule your free consultation.

Continue Reading

Nov 6, 2010

The UBS Lehman Brothers “100% Principal Protection” Note Fraud

In April 2011, the Financial Industry Regulatory Authority (FINRA) fined UBS Financial Services, Inc. (UBS) $2.5 million and ordered the broker dealer to pay $8.25 million in restitution for false and misleading representations regarding the so-called “principal protection” feature of the 100% Principal-Protection Notes issued by Lehman Brothers Holdings, Inc. (Lehman PPNs) .

Continue Reading

Sep 20, 2010

MAT/ASTA Municipal Arbitrage Funds – Citi’s Latest Product Problem

Citigroup misled its representatives who sold the firm’s MAT/ASTA municipal arbitrage hedge funds, and arbitrators are placing the blame squarely on the firm, according to a September 5 article by Bruce Kelly in Investment News (“Arbitrators: B-Ds Kept Brokers in the Dark on Private Deals”). Brokers at Citigroup’s former brokerage unit, Smith Barney, sold more than $2 billion of the MAT/ASTA funds as low-risk, fixed-in-come alternative investments, beginning in 2002. Those funds lost between 30% and 100% of their value, according to the article. Last month, a Financial Industry Regulatory Authority (“FINRA”) arbitration panel specifically found that Citigroup Global Markets Inc. was liable for “negligent management” of the MAT/ASTA funds, and ordered the firm to pay $1.82 million in damages. The arbitrators’ finding of mismanagement by Citigroup is an indication of the severity of the problem at that firm, according to attorney Robert Pearce, who represented the client in that claim. “There are tons of conflicts in these products and how they’re offered,” Mr. Pearce was quoted as saying, adding: “The financial advisers are the tools to sell these products, and they don’t get the full scoop on who’s managing them. The blow-up was due to management, who then passed it along to the advisers.” “The best advisers at Smith Barney sold MAT and ASTA to their best clients and wound up feeling totally betrayed by Smith Barney,” an industry recruiter was quoted as saying, adding: “in terms of a loss of faith in the firm, this is as big as anything.” The financial advisors who sold MAT/ASTA Funds to their clients trusted Citigroup to honestly inform them about the nature and risks of the funds and to manage the funds within established guidelines. That trust was betrayed. Based on our analyses and evaluations of the facts, we have made a conscious decision not to name financial advisors in these cases. The brokers will not be named in MAT/ASTA arbitrations filed by our law firm. A PRUDENT CASE APPROACH Mr. Pearce, a former SEC attorney with over 45 years experience, focuses his practice on securities matters. He is a member of the Public Investors Arbitration Bar Association and serves as Chairperson of the SPBCBA Securities Committee. Mr. Pearce has represented hundreds of investors in securities arbitration and have prosecuted multiple MAT/ASTA arbitration claims. He is currently representing almost 50 clients throughout the country in MAT/ASTA cases. The Law Offices of Robert Wayne Pearce, P.A. follows a multi‑theory approach encompassing three separate bases for recovery, depending on the facts and circumstances of the particular investor’s case. These include: (1) MAT/ASTA was a flawed investment product; (2) Citigroup and its affiliates misrepresented and failed to disclose material facts at the time the investor was sold the investment; and (3) Citigroup and its affiliates were guilty of negligent mismanagement of MAT/ASTA and negligent supervision of their employees. We believe that this approach gives investors three separate bases for recovering damages and enhances the likelihood of an award. We prefer not to put all of our clients’ “eggs in one basket.” If you are seeking a law firm with integrity, dedication, and substantial experience in MAT/ASTA fraud and mismanagement disputes, please schedule a confidential consultation with Mr. Pearce today. Call our firm at 561-338-0037 or toll-free at 800-732-2889, or fill out our intake form to schedule your free consultation.

Continue Reading

Sep 10, 2010

Citigroup’s Mismanagement of MAT/ASTA Funds Produces

In his September 9, 2010 article in The Bond Buyer entitled “Judgment Aids Investors in Citi Case,” author Dan Seymour describes a recent Financial Industry Regulatory Authority (FINRA) arbitration award of more than $1.8 million in favor of MAT/ASTA investors as “[a] grand-slam judgment [that] has emboldened the lawyers and investors seeking to recoup losses on $2 billion in municipal arbitrage funds run by Citigroup.” The amount of the award, while very substantial, is not the focus of the article. The reason why it is making news is the arbitration panel’s specific finding that Citigroup was guilty of negligent mismanagement of the MAT/ASTA funds, as well as negligent supervision of their employees. Citing J. Boyd Page, senior partner of Page Perry, LLC, Mr. Seymour noted that this was the first time that arbitrators explicitly found that Citigroup mismanaged the funds. The decision is pivotal because it opens the door to claims by earlier investors that might otherwise be barred by statutes of limitation. Mr. Page estimates that these claims represent $500 million to $700 million of the total $2 billion invested in the MAT/ASTA funds, according to the article. “It tells a lot of people that there are still very viable claims,” Mr. Page was quoted as saying. MAT/ASTA was a series of leveraged municipal arbitrage hedge funds offered by Citigroup Fixed Income Alternatives and sold through Smith Barney and Citigroup Private Bankers. MAT/ASTA was marketed only to high net worth clients of the firm as a fixed income alternative. In truth the MAT/ASTA funds were risky investments that exposed investors to a 100 percent or more loss of principal. The funds imploded in early 2008 causing catastrophic losses to investors. Citigroup told MAT/ASTA investors that it would adhere to a strategy of buying municipal bonds when the prices were low (i.e., when the yield spread of munis over Treasuries was high) and selling them when prices were high (i.e., when that spread ratio was low). Mr. Page and Robert Wayne Pearce, who represented the claimants in the arbitration that is the subject of Mr. Seymour’s article, uncovered evidence that Citigroup departed from these guidelines, buying when it should have been selling. As a result of those efforts, they are in a unique position to establish that Citigroup mismanaged the MAT/ASTA funds. A PRUDENT CASE APPROACH Mr. Pearce, a former SEC attorney with over 45 years experience, focuses his practice on securities matters. He is a member of the Public Investors Arbitration Bar Association and serves as Chairperson of the SPBCBA Securities Committee. He has represented hundreds of investors in securities arbitration and have prosecuted multiple MAT/ASTA arbitration claims. He is currently representing almost 50 clients throughout the country in MAT/ASTA cases. The Law Offices of Robert Wayne Pearce, P.A. follows a multi‑theory approach encompassing three separate bases for recovery, depending on the facts and circumstances of the particular investor’s case. These include: (1) MAT/ASTA was a flawed investment product; (2) Citigroup and its affiliates misrepresented and failed to disclose material facts at the time the investor was sold the investment; and (3) Citigroup and its affiliates were guilty of negligent mismanagement of MAT/ASTA and negligent supervision of their employees. We believe that this approach gives investors three separate bases for recovering damages and enhances the likelihood of an award. We prefer not to put all of our clients’ “eggs in one basket.” If you are seeking a law firm with integrity, dedication, and substantial experience in MAT/ASTA fraud and mismanagement disputes, please schedule a confidential consultation with Mr. Pearce today. Call our firm at 561-338-0037 or toll-free at 800-732-2889, or fill out our intake form to schedule your free consultation.

Continue Reading