COMPREHENSIVE SERVICES TO SUIT ANY ORGANIZATION.
At Wittenberg law our attorneys strive to give the most comprehensive list of services whilst providing a level of service unmatched by any other firm. Not only do we pride ourselves on great service, but our record in-and-out of the courtroom is unparalleled. Led by senior partner Jeffrey Wittenberg, our attorneys can help you with a wide range of investment legal services including, but not limited to: Litigation & Arbritration, Due Dilligence, and handling all your document transactions.
Today’s investment landscape is littered with scam artists, hoaxes, and programs designed to fleece you of your hard earned assets. If you have been the victim of any financial crime including: Advisor Neglect, Investment Fraud, Broker Disputes, or want help revealing information about misconduct, Wittenberg is the law firm to help you navigate the process.
Our services are infinitely scalable and capable of accommodating anyone, from individuals to fortune 500 firms. Want to find out how we can help you? Give us a call today. 310-295-2010
Commercial / Business Litigation
In the business world, the interests of the parties to a contract or other business relationship often conflict and legal issues arise. We represent clients in all types of business and commercial litigation, including:
Securities arbitration is a dispute resolution process, which is an alternative to the traditional lawsuit in court. Rather than have a matter decided by a judge and jury, participants to a securities arbitration proceeding have their dispute resolved by a panel of arbitrators, in a private or semi-private proceeding. Most of these arbitrations are held before FINRA, the industry self-regulatory organization, which was created in 2007 through the consolidation of the National Association of Securities Dealers (NASD) and New York Stock Exchange (NYSE) enforcement and arbitration divisions. Although arbitration and mediation have existed as dispute resolution mechanisms for well over 200 years, it was not until the decision of the United States Supreme Court, in Shearson v. MacMahon, 482 U.S. 220 (1987) that securities arbitration became the most widely used means of resolving disputes in the securities industry. Arbitration of broker-dealer disputes has long been used as an alternative to the courts because it is a prompt and inexpensive means of resolving complicated issues. There are specific laws that govern the conduct of an arbitration proceeding from both the federal government and the various states. One of the most important legal aspects of arbitration is that arbitration awards are final and binding, subject to review by a court only on a very limited basis. Parties should recognize, too, that in choosing securities arbitration as a means of resolving a dispute, they generally give up their right to pursue the matter through the courts. Securities arbitrations may involve many acts of stockbroker misconduct including misrepresentations, churning, unsuitability, unauthorized trading, failure to diversify, breach of fiduciary duty, illegal or excessive markups, selling away, control and domination, ACAT problem, research violations, margin violations, clearing broker liability, books and records violations, supervisory issues and significant others.
Consumer Protection Law
Consumers are often the target of false advertising and other unfair, fraudulent, and unlawful business practices. Likewise, businesses themselves can be the victims of unfair and fraudulent practices by competitors or service providers, resulting in large-scale damages and lost profits. California’s unfair competition law prohibits unlawful, unfair and fraudulent business acts or practices, as well as deceptive advertising. Specifically, California’s false advertising law makes it unlawful to engage in deceptive, false and misleading advertising in connection with the sale or disposition of real or personal property or services. Any person, firm, corporation or association damaged may bring an action to obtain an injunction to stop unfair, unlawful, or fraudulent business practices and false advertising, and to obtain restitution for money lost or gained by the defendants as a result of the wrongful conduct.
Real Estate Disputes
Owners of real estate, buyers, sellers, landlords, tenants, lenders, individuals and business entities may become involved in a wide variety of real estate related disputes. These include eminent domain proceedings (condemnation), real estate tax appeals, quiet title actions, disputes over easements, boundaries, access, roads, liens, zoning, assessments, commercial eviction proceedings and disputes involving development agreements, partnership agreements and property management agreements.
Breach of Fiduciary Duty
A “fiduciary” is someone who has a relationship of trust and confidence with another person. This relationship may arise as a matter of law or may be implied under certain circumstances. There are many instances in which a fiduciary fails to act with the requisite degree of care and loyalty that is owed to another person and this failure leads to damages suffered by the other person.
Individual investors buy and sell securities for their personal account, and not for another company or organization. Individual investors are also commonly referred to as “retail investors.” Individual investors typically have careers outside of the investment field and, therefore, are in a position of having to rely on investment professionals to plan for their retirement, children’s education, etc. Individual investors typically are at a major informational disadvantage in respect of understanding the investment world. Consequently, innocent and trusting individual investors are often subject to misconduct by their financial advisers without even knowing it occurred.
Wittenberg Law has decades of experience in the investment field and is dedicated to leveling the playing field on behalf of individual investors. You are strongly encouraged to consult Wittenberg Law prior to making any investment,or even after an investment has been made, in order to ensure that your nest egg is protected.
Institutional investors, including pension plans, endowments, sovereign wealth funds, insurance companies, banks, family offices, and fund-of-funds face complex legal challenges in successfully managing their investment portfolios: Concerns over the integrity of the credit rating process, the impact of the Dodd-Frank Act on derivative usage and hedge fund investments, significant investment allocations to global emerging markets with varied regulatory practices, expanded authority for Federal and State regulatory agencies and evolving corporate governance standards for public equity investments are just some of the critical challenges lawyers working with institutional investors face today.
Attorneys working with institutional investors play an important role in ensuring that an investor’s portfolio management goals are successfully met, often navigating complex and rapidly changing legal and regulatory issues.
Additionally, the passage of the 1995 Private Securities Litigation Reform Act (PSLRA) established a clear incentive and opportunity for institutional investors to protect their investments and recover losses resulting from securities fraud. The PSLRA provides several benefits to induce institutional investors to actively participate in litigation by acting as Lead Plaintiff. For instance, the Lead Plaintiff can dramatically influence settlement negotiations and allocations, bargain for significantly reduced legal fees and effectuate salient changes in the corporate governance of the defendant, thereby enhancing future value to shareholders. As a result, numerous institutional investors have chosen to proactively pursue securities litigation as Lead Plaintiff.
Wittenberg Law has substantial experience representing institutional investors and is able to provide legal counsel at the highest level and at rates that larger firms cannot replicate given the bloated business models of larger firms.
Securities fraud (or investment fraud)occurs in connection with the purchase or sale of securities. First and foremost, a “security” has been broadly defined under the law (i.e., the Securities Act of 1933, Securities Exchange Act of 1934, each as interpreted by the courts) to include almost any interest that can be characterized as a placement of money today for a sum of money in the future. More specifically, a court will look to see whether the purchasers of the instrument (1) expected profits arising from (2) a common enterprise that (3) depends “solely” for its success on the efforts of others.
Securities fraud, in turn, consists of a material misrepresentation or omission made with the intent to cause reliance by the investor in making the investment decision to transact (i.e., buy or sell), and the investor is justified in relying on that misrepresentation or omission in deciding to transact in a particular security.
Securities fraud occurs both in connection with public companies that have securities traded on public exchanges such as the New York Stock Exchange or Nasdaq, and in private placements of securities by private companies, promoters, finders or financial advisers. Securities fraud includes outright theft from investors and misstatements on a public company’s financial reports. The term also encompasses a wide range of other actions, including insider trading, front running and other illegal acts on the trading floor of a stock or commodity exchange. Studies estimate that civil securities fraud totals approximately $40 billion per year.
If you suspect that you have been a victim of securities fraud, please contact Wittenberg Law to discuss your legal rights and options.
A securities class action lawsuit is a class action lawsuit filed on behalf of investors who suffered economic loss in a stock or security due to the defendant’s misconduct.This misconduct includes such activities as fraudulent stock manipulation, and it usually cause economic injuries to many people, not just one person. These people join together to seek redress as a group by filing a class action. The group consists of all investors who suffered financial loss because they purchased shares in a company during the period when the fraud occurred.
As in class actions generally, the class action format allows investors who suffered losses due to securities violations to bring a case that might have been too expensive or inefficient to litigate individually.This is particularly attractive if you have suffered small losses.If all of you sue as a class, you effectively level the playing field against the more powerful corporation.If your investment was relatively small, you are especially likely to benefit from the class action format. You effectively get to ride the coattails of those shareholders who suffered more significant losses.
The period of time known as the “class period” is the time during which the alleged fraud or other securities law violation occurred.If the defendant artificially inflated the price of the stock, the period that the price was inflated is the class period. If you purchased your shares during the class period, and you sustained a loss, you are automatically part of the class. Only those investors who purchased stock during the class period may participate as class members in the class action lawsuit.
Every person wishing to be part of the class must prove that he or she meets the criteria of class membership. In a securities class action, investors must show ownership of the stock, including when the stock was purchased and for how much. Confirmation slips or brokerage statements are usually sufficient.After the class is formed, the case proceeds much like a typical individual lawsuit.
If you have a portfolio of securities and would like assistance monitoring your portfolio to detect potential securities class action claims, please contact Wittenberg Law to discuss your options.
Misconduct takes many forms in the investment field, and those who engage in misconduct have skills that range from rudimentary to highly sophisticated. Set forth below are some of the more common acts of misconduct engaged in by financial advisers (otherwise known as investment advisers or stockbrokers).
If you suspect that your financial adviser has engaged in misconduct, please contact Wittenberg Law to discuss your legal rights and options.
Unauthorized transactions are trades your broker makes in your account without your permission or authorization. But if you have a margin account and the value of the account falls below your firm’s requirements, your broker may be able to sell your securities without consulting you first. This would not be an unauthorized transaction if your account agreement allows your broker to sell your securities, even without notice to you, to collect the money you have borrowed.
The major securities industry self-regulatory organizations have rules prohibiting unauthorized transactions. If you believe your broker made unauthorized transactions in your account or engaged in another sales practice abuse, please contact Wittenberg Law to discuss your legal rights and options.
Financial advisers often find themselves the target of an overzealous broker-dealer when the financial adviser does not act in accordance with the broker-dealer’s inappropriate demands or when the financial adviser decides to move his or her business to another firm. Wittenberg Law will vigorously protect your rights in connection with these types of disputes, including claims regarding Form U5 defamation, non-compete agreements, non-solicitation agreements, forgivable loans, promissory notes, TROs and other injunctive relief, discrimination, retaliation, whistle-blowing, and breach of employment agreements.
If you suspect that your firm has unlawfully treated you as an employee of their firm, please contact Wittenberg Law to discuss your legal rights and options.
Under the securities fraud whistleblower program enacted by Securities and Exchange Commission (SEC), individuals who provide the SEC with “original information” about federal securities fraud violations may be entitled to receive a financial award ranging from 10 percent to 30 percent of any monetary sanctions obtained by the SEC. There are, of course, limitations and conditions—some of which are discussed below.
A whistleblower must be an individual, not a company or other entity. To be eligible, the information must be voluntarily provided. In other words, the individual must come forward with the information before receiving an inquiry from the SEC or other designated authority.
There are additional requirements and limitations on the ability of certain categories of individuals to become whistleblowers including: attorneys, accountants, company officers, directors, trustees, partners and compliance personnel.
The information submitted must relate to a violation of federal securities laws (or SEC rules/regulations), rather than state or foreign laws. The information provided must be original and lead to the successful enforcement of a judicial or administrative action. The information should be based on the whistleblower’s independent knowledge, experiences or observations and cannot be derived from publicly available sources. However, an individual who provides information already known to the SEC may still be eligible if the individual’s own analysis materially adds to the information that the SEC has.
The whistleblower bounty provision kicks in once the SEC receives monetary sanctions totaling more than $1,000,0000. The total award paid must be at least 10% and no more than 30% of the total monetary sanctions collected. Congress gave the SEC complete discretion to decide the percentage amount that a whistleblower can be awarded. If there are several whistleblowers, this percentage may be split. For example, it is possible for a whistleblower to receive an award of 25% and another to receive an award of 5%. Although there are no mathematical criteria for determining award percentages, the SEC will consider the following positive and negative factors:
Positive factors that will increase an award –
Negative factors that will decrease an award –
Participation in an employer’s internal compliance program is not a requirement to receive an award. However, as noted above, it is a factor considered by the SEC when determining the percentage amount that will be awarded. For this reason, whistleblowers need to carefully weigh the benefits of reporting a potential securities violation to their employer.
A whistleblower that provides information to the SEC or assists in an investigation may not be discharged, demoted, suspended, threatened, harassed or discriminated by their employer. Employers who violate the anti–retaliation rules must: (1) reinstate the employee to the same seniority status; (2) pay the employee 2 times the amount of their back pay; and (3) pay interest, attorney fees and costs.
An attorney is not required to participate in the SEC’s whistleblower program. However, if a whistleblower wants to submit information to the SEC anonymously, they must be represented by an attorney. In addition to allowing a whistleblower to submit their information anonymously, an attorney can help ensure that the whistleblower qualifies for the maximum award possible by providing ongoing guidance and assistance throughout each step of the process, including the following:
Wittenberg Law supports private citizens who become aware of a securities fraud. Wittenberg Law works hard to achieve maximum compensation for our clients in return for their time and honesty. If you have information regarding securities fraud, including insider trading, please contact Wittenberg Law to discuss your legal rights and options.
When looking for additional capital, many companies consider working with third parties who offer to find investors and to serve as an intermediary between the company as an issuer of securities and potential investors. Such intermediaries often refer to themselves as “finders,” “business brokers,” “investment facilitators,” “investment consultants” or even “specialized investment bankers,” and their backgrounds vary from individuals with interesting rolodexes (celebrities, former politicians, and retired corporate executives) to bankers, venture and investment fund professionals, and other experienced securities market professionals.
Most finders, especially those who are paid based on a percentage of the amounts invested or based on the outcome or size of any transactions resulting from their assistance, are required under applicable federal and state laws to be registered as broker-dealers with the Securities and Exchange Commission (the “SEC”), state securities regulators and the Financial Industry Regulatory Authority (“FINRA”). Many finders are not appropriately registered, however.
A finder’s failure to be appropriately registered poses significant risks for the company issuing the securities and the finder. Under Section 15(a) of the Securities Exchange Act of 1934 (the “1934 Act”), any person acting as a “broker” must be registered with the SEC; the same is true under the California securities laws. According to the 1934 Act, a “broker” is “any person engaged in the business of effecting transactions in securities for the account of others.”
There are multiple factors that will be taken into account by regulators and courts in determining whether an unregistered finder is acting as a broker, each of which should be carefully considered by a company that is considering using a finder. The most important of factor, and most common, is the receipt of transaction-based compensation. Regulators believe that such compensation gives the finder a “salesman’s stake” in the transaction, and could therefore lead to the kind of abuses that broker-dealer registration and regulation is intended to prevent.
Recent decisions by courts and regulators appear to indicate that anyone involved in finding investors for securities issuers in return for compensation can be held to be acting as an unregistered broker, with dire consequences for both the finder and the issuer of the securities involved.
The consequences to an issuer of using a finder that is an unregistered broker can be severe. In the worst case scenario, the issuer could find itself the target of enforcement action by the SEC or state securities regulators, facing civil penalties, restrictions on future investment activities, and possibly prosecution for aiding and abetting the security law violations of the finder.
However, from a practical perspective, it is more likely that the negative consequences of the use of an unregistered broker will not stem from enforcement action, but instead will arise in the context of a dispute with investors.
Simply put, purchasers of securities sold in the offering in which the finder was involved would have the right to rescind their purchase and have their investment returned to them, with interest. This right of rescission would apply to any purchaser in the transaction, and not just those purchasers located by the finder. The issuer would have no assurances that any investor who is or later becomes dissatisfied with the direction of the company would not exercise the right of rescission.
If you have used, are considering the use of, or are uncertain about whether the person you dealt with is, a finder in the placement of securities, please contact Wittenberg Law to discuss your legal rights and options.
Keeping track of your retirement savings can seem difficult enough in your pre-retirement years. What will happen in later retirement, when you might find this task more confusing? The worst scenario is that your retirement savings could become more vulnerable to fraud.
Although not pleasant to think about, the reality is that pre-retirees, retirees and their families need to address these important issues:
Even if you do not fear becoming a victim of financial abuse, there are other good reasons to take precautions for the day when you become less able to make sound financial decisions:
Here are some early warning signs of financial abuse from the Alberta Elder Abuse Awareness Network:
Steps to protect yourself include:
“Victory awaits him who has everything in order — luck, people call it. Defeat is certain for him who has neglected to take the necessary precautions in time; this is called bad luck.”Ronald Amundsen, The South Pole (1912)
Your finances are too important to rely upon luck. Contact Wittenberg Law to discuss how we can help you plan for success.
A “derivative” is a financial contract whose value is derived from the performance of underlying market factors, such as interest rates, currency exchange rates, and commodity, credit, and equity prices. Derivative transactions include an assortment of financial contracts, including structured debt obligations and deposits, swaps, futures, options, caps, floors, collars, forwards, and various combinations thereof.
Financial derivative instruments are highly complex investment products. Recently, many investment banks and broker-dealers have been charged with fraud relating to their sale of these products to institutional investors. Each of the institutional investors (including municipalities, states and educational institutions) relied upon representations from their “trusted” financial advisers when entering into the transaction. Clearly, investment banks and broker-dealers cannot be trusted to be acting in your best interests. Once the money changes hands, it is difficult, if not impossible to obtain a full recovery of your investment funds.
Whether you are a savvy investment professional or a novice investor, you are encouraged to seek experienced derivative counsel to help you understand the product that you may, or already have, purchased from a financial adviser. Wittenberg Law has years of experience counseling investment advisers, banks and individuals in these matters.
A private placement is a non-public offering used to raise capital (rather than an initial public offering). An offering that is not a public offering is exempted under Regulation D of the Securities Act from SEC registration.
These investments are often sold to “accredited investors” by various broker-dealers and financial advisers. Private placement investments are generally illiquid, meaning they cannot be readily sold and are not traded on the open market. Private placements are typically promissory notes or shares of common stock or preferred stock.
Private placements have come under intense scrutiny following highly publicized cases of misconduct in the issuance of these securities. Broker-dealers who sold these private placements typically earn large commissions along the way. These broker-dealers and their representatives commonly place their own interests ahead of their clients.
The private placements are often sold to clients as low-risk, safe investments suitable for retirees and as part of the fixed-income component of a client’s portfolio. In reality, these investments were not low-risk as represented; in reality, these private placements are often among the highest risk investments an investor can purchase.
Broker-dealers often also failed to perform even the most basic due diligence into the companies whose securities they were selling.
If you have purchased, or are considering the purchase of, private placement securities, please contact Wittenberg Law to discuss your legal rights and options.