Each case is different, and results in past cases are not in any way indicative of results in future cases. The examples below are offered solely to illustrate the Goldman, Scarlato & Penny, P.C. firm’s experience and areas of practice, not to suggest that the results obtained in those cases may be obtained in any future matters.

Arbitrations
Class Actions
Investor Litigation

 

 


 

FINRA Arbitrations

[Group of Investors in Fraudulent Real Estate Investment Program] vs. [Brokerage Firm]

(parties’ identities protected by confidentiality clause in settlement agreement)

In this matter, a group of investors invested millions of dollars in a family of real estate investment programs at the recommendation of their brokerage firm. Attorney Alan Rosca’s investigation indicated that the brokerage firm that recommended the real estate investment programs failed to conduct adequate due diligence as to those programs before recommending them to its customers. The firm’s inadequate due diligence failed to uncover numerous red flags indicative of misconduct by the programs’ sponsor and manager, such as the transfer of money from one program to another and the likely use of funds from new investors to pay distributions to existing investors, in Ponzi scheme fashion.  Attorney Rosca and his co-counsel filed claims in FINRA arbitration on behalf of the investors, and subsequently negotiated a settlement with the brokerage firm, to the investors’ satisfaction.

[Group of Investors in Fraudulent Oil-and-Gas Investment Program] vs. [Brokerage Firm]

(parties’ identities protected by confidentiality provision in settlement agreement)

In this case, a group of investors invested in a fraudulent oil-and-gas investment program that had been recommended to them by their brokerage firm. Attorney Alan Rosca’s investigation of the oil-and-gas program showed that the program was fraudulent, and a Ponzi scheme. Specifically, the program’s perpetrators created several oil-and-gas securities offerings, raised hundreds of millions of dollars from investors, and used money from new investors to pay supposed returns to existing investors.  Attorney Rosca determined that the brokerage firm failed to adequately investigate the oil-and-gas program before recommending it to its customers, in breach of its duties to investors. He further determined that, had the brokerage firm adequately vetted the program and its management, the firm would have likely identified the evidence of fraud. Attorney Rosca and his co-counsel filed claims against the brokerage firm on behalf of the investors, in FINRA arbitration, and subsequently negotiated a settlement with the firm, to the investors’ satisfaction.

[Group of brokerage firm customers] vs. [Brokerage Firm]

(parties’ identities protected by confidentiality provision in settlement agreement)

In this case, a group of customers of a brokerage firm had their money stolen by a broker who had been affiliated with the firm. The broker, who used to handle those investors’ accounts while at the firm, was caught misusing investor funds and forging customer signatures and was promptly fired by the brokerage firm. However, the firm never informed its customers of the broker’s termination and the reasons for such termination, and they continued to invest with him unaware of his serious misconduct. Later on, the broker had the investors transfer their savings from the firm to his management, with the help of the brokerage firm, which was aware of his background, his lack of license to manage investor money, and the fact that the investors did not know about his past misconduct. Predictably, the broker subsequently stole the investors’ money. He was later sentenced to prison. Attorney Alan Rosca and his co-counsel brought claims on the investors’ behalf against the brokerage firm that had employed the broker, and negotiated a settlement on their behalf, to their satisfaction.

[Group of Investors in Unregistered Investment Program] vs. [Brokerage Firm]

(parties’ identities protected by confidentiality provision in settlement agreement)

In this case, a group of unemployed investors were offered the “opportunity” to get jobs in a reopened auto part factory in exchange for investing in the company that reopened the factory. Attorney Rosca’s investigation determined that the investments were unregistered, fraudulent, and conducted in violation of the securities rules and regulations. He also determined that the investors were offered those investments with the help of several brokers affiliated with a national brokerage firm, and they had to open accounts with the brokerage firm in order to invest in the fraudulent program. Attorney Rosca and his colleagues filed claims on behalf of the investors against the brokerage firm, alleging that the firm failed to supervise its brokers and allowed them to sell a fraudulent investment program to its customers. The case was subsequently settled.

[Group of Investors in Fraudulent Ethanol Program] vs. [Brokerage Firm]

(parties’ identities protected by confidentiality provision in settlement agreement)

In this case, a group of investors were recruited by a licensed stockbroker, who was affiliated with a nationwide brokerage firm, to invest in a fraudulent ethanol program he created and promoted. Attorney Alan Rosca’s investigation determined that the brokerage firm that employed the broker and had a duty to supervise him had become aware of the broker’s fraudulent outside business but failed to warn investors or put the broker out of business. While under the brokerage firm’s supervision, the broker sold fraudulent investments in his ethanol business to dozens of investors across the country and stole millions of dollars from them. He was subsequently sentenced to prison. Attorney Rosca and his co-counsel were hired by a group of the broker’s victims to prosecute claims on their behalf against the brokerage firm that had employed him. They did so, and ultimately negotiated a settlement on the investors’ behalf.

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Class Actions

Attorney Alan Rosca was appointed co-class counsel or serves as counsel in numerous class actions on behalf of investors, including:

Aleem v. Pearce & Durick

A case brought on behalf of investors in a $65 million fraudulent investment scheme, alleging that the defendants violated their fiduciary duties to the investors and assisted in the scheme’s securities violations by serving as escrow agents for the investors’ investments and offering materially false opinions to the investors regarding their investments in the scheme. The investors were located in over 60 countries. The case was successfully settled by attorney Rosca and his co-counsel.

Hanson v. Berthel Fisher & Company Financial Services, Inc., et al.

A securities class action filed on behalf of investors in a real estate investment program that raised approximately $26 million from the investing public. Claims were predicated upon the role played by Berthel Fisher, the managing broker-dealer of the program that allegedly organized and oversaw the securities offering by the Program while aware of misrepresentations and omissions in the Program’s offering documents. The case was successfully settled by attorney Rosca and his co-counsel.

Booth et al. v. Strategic Realty Trust, Inc., et al.

A securities class action against an investment program that raised over $90 million from investors. Plaintiffs contended that throughout the offering period, the defendant’s offering materials contained materially inaccurate and incomplete statements about the company’s investment strategy, internal controls, and governance mechanisms. Plaintiffs, represented by attorney Rosca and co-counsel, alleged that their investments lost value as a result of defendants’ acts and omissions. The case was settled.

Hay v. United Development Funding

A class action lawsuit filed on behalf of investors in a real estate investment scheme that raised over $300 million from investors, against entities including the scheme, its principals and affiliated entities, as well as the alleged scheme’s underwriter and auditor. Plaintiffs, represented by attorney Rosca and his co-counsel, alleged that the defendants raised money through misrepresentations and omissions and engaged in Ponzi-like activities.

Elliott v. Bank of Oklahoma

A class action lawsuit on behalf of investors in a $198 million allegedly fraudulent investment scheme, perpetrated through a series of municipal bond offerings, against the trustee bank for the bond offerings and the underwriters of some of the offerings. The investors, represented by attorney Rosca and his co-counsel, alleged that the trustee bank breached its duties to them and assisted the fraud perpetrated by the muni bond scheme.

Yao-Yi Liu et al. v. Wilmington Trust Company

A class action lawsuit on behalf of investors in a $145 million fraudulent scheme against the scheme’s trustee bank. The investors, located chiefly in Taiwan represented by attorney Rosca and his co-counsel, alleged that the bank breached its duties as an escrow agent and aided the perpetrators of the scheme.

Ezeude et al. v. PayPal et al.

A class action lawsuit on behalf of victims of a “pay-to-click” fraudulent investment program perpetrated through the Internet, that raised over $400 million from over 160,000 investors around the world. The victims, represented by attorney Alan Rosca and his co-counsel, alleged that the defendants knowingly assisted the scheme’s perpetrators defraud the investors.

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Investor Litigation

Holbrook et al. v. DKAM et al.

A case on behalf of a group of investors in a fraudulent investment program that purported to invest in Canadian equities. The plaintiffs alleged that the defendants assisted the MC2 Canadian Fund promoters in defrauding investors and breached their own duties owed to the investors by, among others, failing to disclose to the investors that defendants parted ways with the Fund. The case is currently pending.

Kaliannan et al. v. Liang

A case on behalf of a group of Singapore plaintiffs who invested in a fraudulent real estate investment program in the United States, against their Singapore broker who recruited them to invest in that program. Attorney Alan Rosca and his co-counsel successfully argued that the US federal court had jurisdiction over the Singapore broker as a result of his alleged misconduct involving American securities. The case is pending.

Cole III Real Estate Investment Trust

A derivative case on behalf of Cole III REIT investors against Cole III and certain of its affiliates, directors, and principals. The Complaint alleged the defendants have sought to engage in an “internalization” transaction that lacked economic substance, was detrimental to Cole III REIT shareholders, and only benefitted certain Cole III principals. Cole III REIT was a leading real estate investment trust that manages more than $12 billion in real estate assets across the country. The case was successfully resolved.

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