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Pearce Law Firm Client Wins $2.55 Million Against Investment Advisor

This was a sad case of financial abuse by an ex-spouse of another taken to arbitration by Robert Pearce and Adam Kara of The Law Offices of Robert Wayne Pearce, P.A.  (the “Pearce Law Firm”) for one of its clients. The Pearce Law Firm represented Elizabeth Snyder who filed claims against her ex-husband, Barry Snyder, for allegedly mismanaging her investment accounts through highly speculative, excessive and unsuitable trading strategy when he was employed as her stockbroker and later when he acted as her investment adviser at Glenwick Capital Holdings, LLC. In the Spring of 2015, in breach of his fiduciary duties as an investment adviser, Mr. Snyder allegedly misrepresented that Mrs. Snyder needed to transfer almost all of the Snyder Trust to a new investment vehicle, Linkster Holdings, LLC, for estate planning purposes when Mr. Snyder was about to be fired and become unemployable in the securities industry and setting up a “family office” to avoid registration with the regulators.  No one told Mrs. Snyder that he was fired and under investigation for misconduct even though he still continued to manage her accounts with the assistance of other employees at his former employer’s brokerage firm. Shortly after being terminated at that brokerage firm, Mr. Snyder caused Claimants’ accounts to be transferred to Montecito Advisors, Inc. and another brokerage firm where he allegedly crushed Mrs. Snyder financially through the same highly speculative, excessive and unsuitable at those brokerages.  Within a few short months, Mrs. Snyder’s life savings were wiped out. Mrs. Snyder alleged that Mr. Snyder’s actions were in contravention of his “fiduciary duty”  to act in his investment advisory clients’ “best interest” and industry standards of conduct such as FINRA Rules of Conduct 2110, 2111 (f/k/a 2310), and 2120, which state: 2110. Standards of Commercial Honor and Principles of Trade A member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade. 2111. Suitability (a) A member or an associated person must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile.  A customer’s investment profile includes, but is not limited to, the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, risk tolerance, and any other information the customer may disclose to the member or associated person in connection with such recommendation.                                  * * * 2120.      Use of Manipulative, Deceptive or Other Fraudulent Devices No member shall effect any transaction in, or induce the purchase or sale of, any security by means of any manipulative, deceptive or other fraudulent device or contrivance.                                  * * * Mr. Snyder’s recommendations and trading in Mrs. Snyder’s accounts were allegedly breaches of FINRA’s suitability rule, which has long been applied to recommended “investments” and “investment strategies.”  Mr. Snyder allegedly misrepresented the “investments” and “investment strategies” to Mrs. Snyder as safe and suitable.  The over-concentration, over-leverage, and excessive risks taken in the accounts were allegedly not fully disclosed to Mrs. Snyder until it was too late. Mr. Snyder’s acts and omissions not only allegedly violated his fiduciary duties, the FINRA standards of commercial honor and principles of trade, but also included the alleged use of manipulative, deceptive, and fraudulent devices and other FINRA Conduct Rule violations. As we indicated above, Mr. Snyder lost every dollar in Mrs. Snyder’s accounts.  She was forced to sell her home, jewelry, etc. to support herself and children after the suffering the investment losses. No law firm other than the Pearce Law Firm was willing to take the case on a contingency fee basis, and we did so, successfully! The Pearce Law Firm sought an award of over $ 4,093,067 in market adjusted compensatory damages, or alternatively, $3,495,883 in net-out-of-pocket compensatory damages plus pre-judgment interest, attorney fees, expert witness fees, and costs. The arbitration award indicates the Panel was apprised of the amounts of settlements with other Respondents and requested to deduct those amounts from the compensatory damages before the award was entered. The Panel then entered an Award of $2,554,896 in compensatory damages but denied Claimants request for prejudgment interest, attorney fees, expenses, etc. Free Initial Consultation With Securities, Commodities and Investment Dispute Lawyers Serving Investors Nationwide If you have had your accounts mismanaged by Barry Snyder or any other stockbroker, investment adviser and/or trustee, and heard similar misrepresentations, received unsuitable recommendations, please call our office. The Law Offices of Robert Wayne Pearce, P.A. understands what is at stake in securities and commodities law matters and investment disputes, and works tirelessly to secure the best possible result for you and your case.  Mr. Pearce provides a complete case review, identifies the strengths and weaknesses of your case, and fully explains all of your legal options.  The entire law firm works to ensure that you completely understand the ins and outs of the legal process to give you complete peace of mind knowing that you have chosen the best possible representation for your case.

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Investors With “Blown-Out” Securities-Backed Credit Line and Margin Accounts: How do You Recover Your Investment Losses?

If you are reading this article, we are guessing you had a bad experience recently in either a securities-backed line of credit (“SBL”) or margin account that suffered margin calls and was liquidated without notice, causing you to realize losses. Ordinarily, investors with margin calls receive 3 to 5 days to meet them; and if that happened, the value of the securities in your account might have increased within that period and the firm might have erased the margin call and might not have liquidated your account. If you are an investor who has experienced margin calls in the past, and that is your only complaint then, read no further because when you signed the account agreement with the brokerage firm you chose to do business with, you probably gave it the right to liquidate all of the securities in your account at any time without notice. On the other hand, if you are an investor with little experience or one with a modest financial condition who was talked into opening a securities-backed line of credit account without being advised of the true nature, mechanics, and/or risks of opening such an account, then you should call us now! Alternatively, if you are an investor who needed to withdraw money for a house or to pay for your taxes or child’s education but was talked into holding a risky or concentrated portfolio of stocks and/or junk bonds in a pledged collateral account for a credit-line or a margin account, then we can probably help you recover your investment losses as well. The key to a successful recovery of your investment loss is not to focus on the brokerage firm’s liquidation of the securities in your account without notice. Instead, the focus on your case should be on what you were told and whether the recommendation was suitable for you before you opened the account and suffered the liquidation.

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FINRA Arbitration: What To Expect And Why You Should Choose Our Law Firm

If you are reading this article, you are probably an investor who has lost a substantial amount of money, Googled “FINRA Arbitration Lawyer,” clicked on a number of attorney websites, and maybe even spoken with a so-called “Securities Arbitration Lawyer” who told you after a five minute telephone call that “you have a great case;” “you need to sign a retainer agreement on a ‘contingency fee’ basis;” and “you need to act now because the statute of limitations is going to run.”

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A Stockbroker’s Introduction to FINRA Examinations and Investigations

Brokers and financial advisors oftentimes do not understand what their responsibilities and obligations are and what may result from a Financial Industry Regulatory Authority (FINRA) examination or investigation. Many brokers do not even know the role that FINRA plays within the industry. This may be due to the fact that FINRA, a self-regulatory organization, is not a government entity and cannot sentence financial professionals to jail time for violation of industry rules and regulations. Nevertheless, all broker-dealers doing business with members of the public must register with FINRA. As registered members, broker-dealers, and the brokers working for them, have agreed to abide by industry rules and regulations, which include FINRA rules.

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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 40 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.

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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 40 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.

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Kazma MAT/ASTA Award is Subject of a Front Page Wall Street Journal Story

A recent front-page Wall Street Journal entitled “Citi Debt Funds Probed by SEC,” which concerns Citi’s disastrous MAT/ASTA municipal arbitrage fund, features a highly significant $1.8 million award issued against Citigroup in a MAT/ASTA case by a Financial Industry Regulatory Authority (FINRA) arbitration panel. The case is Gerald J. Kazma Revocable Trust and Amzak Capital Management, LLC vs. Citigroup Global Markets, Inc. f/k/a Citigroup Investment Services, and Citigroup Alternative Investments, LLC, Case No. 09-02697. The Kazma family was represented by Robert Pearce of Boca Raton, Florida. Mr. Pearce attributes his success in the Kazma arbitration to an intensive two year investigation and access to millions of pages of documents produced by Citigroup to the SEC in the probe. The WSJ reported: In Miami, Gerald Kazma, a retired cable-TV system developer, invested $4 million in MAT funds in early 2006. According to an arbitration claim he later filed, a Citigroup private banker had told him the return and risk were “slightly greater” than a typical municipal-bond portfolio. Citigroup told the securities-industry arbitration panel the funds’ risks were disclosed to Mr. Kazma. The panel this year awarded Mr. Kazma $1.8 million, two-thirds of his loss, citing “negligent management and negligent supervision” by Citigroup. Three other investors have won a total of $2.1 million from Citigroup in arbitrations this year. The Kazma case is significant because the arbitrators found that Citigroup and Citigroup Alternative Investments, LLC negligently mismanaged the MAT/ASTA funds and negligently supervised their employees. Because Citigroup’s mismanagement of MAT/ASTA began during 2006 through 2007 and continued through early 2008, even early investors in the funds are now eligible to pursue their claims. Thus, claims based on mismanagement and negligent supervision in 2006 and 2007 remain actionable under the laws of most states. The impact of the decision is that it greatly expands the number of potential clients who can pursue valid claims against Citigroup and its affiliates. The Kazma award also strongly suggests that any MAT/ASTA investor, even a Citigroup employee who had no involvement with the funds, can file a claim for negligent management and may well recover his losses. Mr. Pearce along with Page Perry law firm in Atlanta, Georgia are prosecuting many other MAT/ASTA fund cases and accepting new clients. A PRUDENT CASE APPROACH Mr. Pearce, a former SEC attorney with over 40 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.” 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.

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Kazma Citigroup Arbitration Award

AWARD FINRA DISPUTE RESOLUTION In the Matter of the Arbitration Between: Names of the Claimants Case Number: 09-02697 Gerald J. Kazma Revocable Trust Amzak Capital Management, LLC Names of the Respondents Hearing Site: Boca Raton, Florida Citigroup Global Markets, Inc. f/k/a Citicorp Investment Services Citigroup Alternative Investments, LLC Nature of the Dispute: Customer vs. Member and Non-Member. REPRESENTATION OF PARTIES For Gerald J. Kazma Revocable Trust (“Kazma”) and Amzak Capital Management, LLC (“ACM”), hereinafter collectively referred to as “Claimants”: Robert Wayne Pearce, Esq., Robert Wayne Pearce, P.A., Boca Raton, Florida. For Citigroup Global Markets, Inc. f/k/a Citicorp Investment Services (“CGM”) and Citigroup Alternative Investments, LLC (“CAI”), hereinafter collectively referred to as “Respondents”: Jason M. Fedo, Esq., Greenberg Traurig, P.A., West Palm Beach, Florida.

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