Block & Landsman Represents Clients Defrauded by Results One Adviser Steven Salutric

Block & Landsman is currently prosecuting a securities fraud lawsuit arising out of a fraudulent investment scheme that has been the target of the Securities and Exchange Commission. In July, 2012, the SEC imposed sanctions against Charles Rizzo and Gina Hornbogen, the owners of Results One Financial, LLC, for their failure to supervise adviser Steven Salutric after he misappropriated $7 million from fifteen clients. The SEC Order can be viewed here.

Salutric was employed by Results One Financial, which held client funds and securities at Charles Schwab & Co. Between 2002 and 2009, Salutric's fraudulent scheme involved his diversion of millions of dollars from the Schwab accounts by forging client signatures on wire transfer requests, which Schwab honored. In 2005, Schwab itself was sanctioned by the New York Stock Exchange for failing to properly supervise client accounts managed by such independent investment advisers who engaged in the same type of fraud.

If you believe you have been defrauded by Results One Financial, or if you believe that Charles Schwab & Co. failed to properly protect your accounts from fraudulent withdrawals, you may have a right to recover your losses. Please contact the securities fraud attorneys at Block & Landsman to discuss your case. 

Charles Schwab Must Pay $18 Million to Investors for Improper Sales Practices Concerning YieldPlus Bond Fund

Earlier this year the regulatory agency that oversees brokerage firms ordered Charles Schwab to reimburse investors in its YieldPlus ultra short-term bond fund a total of $18 million through a fund to be set up by the Securities and Exchange Commission ("SEC").

The Financial Industry Regulatory Authority ("FINRA") determined that Schwab misrepresented the YieldPlus fund as a low risk alternative to money market funds despite the disproportionate impact the upheaval in the mortgage-backed securities market had on the YieldPlus portfolio.

Between September 2006 and February 2008, Schwab sold more than $3.3 billion of YieldPlus shares to its customers, including a significant percentage who were over 65 years of age. At the beginning of this period, Schwab changed the classification of non-agency mortgage-backed securities to allow the fund manager to increase the percentage of these volatile securities to over 50 percent of the fund's assets. According to FINRA, while YieldPlus' NAV declined through 2007, Schwab internal records admitted that YieldPlus was a higher-risk investment than it had been before this change. Despite this understanding, Schwab continued to market the fund to customers "as a cash alternative with minimal risk and price fluctuation."

While neither admitting or denying any wrongdoing, Schwab has now settled FINRA's charges by agreeing to pay $18 million into the SEC's "Fair Fund" to compensate investors with the fees Schwab earned in selling the fund.

Investors who believe they have lost money because of Schwab's improper sale of YieldPlus funds, or any other actions, should contact an investment fraud lawyer to investigate their claims.