Securities Fraud: Ex-Broker Jerry McCutchen Under Investigation for REIT Sales, Hedge Fund Manager Must Pay $18M to SEC, and NASAA Steps Up Fight Against Elder Financial Fraud

Former Broker Is Subject of Numerous Securities Claims
If you are an investor who sustained losses after purchased real estate investments trusts with the help of former broker Jerry McCutchen, you may have grounds for a securities claim. According to the Financial Industry Regulatory Authority’s BrokerCheck Report, McCutchen is accused of making unsuitable investment recommendations and he has been the subject of over a dozen broker fraud claims alleging negligence, misrepresentations, and other claims.

In one case, McCutchen, while registered with Berthel Fisher & Company Financial Services, Inc., is accused of placing a couple’s retirement funds in speculative, illiquid, alternative investments that he misrepresented as safe investments in line with the husband and wife’s investment goal to keep their money safe. In reality the Tier REIT, the Icon Leasing Fund Twelve LLC, and others, did not have proper diversity or allocation and were not suitable for the couple.

McCutchen is not registered with any firm at this time nor is he a licensed broker at the moment. He was registered with Berthel Fisher & Co., Bay City Securities, Next Financial Group, First Funds Inc., FSC Securities Corp, Central Brokerage Services, Commonwealth Equity Services, MML Investors, Proequities Inc., and Walnut Street Securities.

NY Hedge Fund Manager Ordered to Pay $18M
Moazzam “Mark” Malik, and his American Bridge Investment Group LLC are facing SEC charges accusing them of bilking 19 clients of over $1M through the sale of limited partnership interests in a fake hedge fund that was run under different names. The SEC said that Malik claimed that the fund held $100M when that amount was never more than about $90,000. Now, the regulator is ordering Malik to pay $18M.

It was just in December that Malik was convicted on 28 criminal charges for bilking investors of more than $800K. He is linked to a number of fake hedge funds, including Seven Sages Capital, LP, Wall Street Creative Partners, American Bridge Investments LP, and Wolf Hedge LLC. Malik did such a good job of convincing the industry and the public that his hedge funds were legitimate that Bloomberg and Barclay Hedge listed a couple of them as among the successful funds. Meantime, investors were sent fake earning statements with inaccurate information.

NASAA Adopts Model Act to Combat Fraud Against the Elderly
The North American Securities Administrators Association announced that its members have voted to adopt a model act to protect vulnerable and elderly adults. The model is called “An Act to Protect Vulnerable Adults from Financial Exploitation.”

Under the act, brokerage firms and advisers would be granted permission to delay disbursements of funds from an account for up to 15 days if financial exploitation was suspected. Advisors and brokers would also be allowed to notify state adult protective services or the state securities regulator if financial exploitation of an older or vulnerable adult were suspected. Third parties who had been previously authorized by an eligible adult would be notified of these suspicions, unless that party was the one suspected of exploitation.

If you suspect that you or your loved one are the victim of elder financial fraud, contact Shepherd Smith Edwards and Kantas, LTD LLP today.

Hedge Fund Manager Ordered To Pay $18M By SEC, Private Wealth, February 10, 2016

NASAA Adopts Model Rule to Fight Senior Financial Abuse, ThinkAdvisor, February 1, 2016