NAPLES, Fla., Nov. 21, 2012 (GLOBE NEWSWIRE) -- Vernon Healy, along with the law firm of Dovin, Malkin & Ficken has now filed its fifth FINRA arbitration claim against the brokerage firm responsible for the actions of and supervision of former broker Paul Larsen. The total dollar amount of the claims against the brokerage firm now exceeds $3 million. Paul Larsen bounced his registration through eight different brokerage firms before being permanently barred by regulators (FINRA) from the stockbrokerage industry in 2011.
In the most recent filing today, Paul Larsen met the claimants while still working for ProEquities, another firm currently mired in a similar FINRA arbitration claim recently filed by the law firms of Vernon Healy and Dovin Malkin & Ficken. In today's filing, Larsen's license transferred to VSR where VSR failed to properly supervise Mr. Larsen according to the claim. By allowing Larsen to register his license with VSR, the brokerage firm accepted the responsibility to oversee and supervise Mr. Larsen to make sure that he was complying with the securities laws and related regulations of the industry. As a result, our law firms are currently pursuing claims against VSR for their liability for Mr. Larsen's activities as well as for VSR's failure to supervise Mr. Larsen, according to the Claim filed today.
All five claims have been filed in FINRA arbitration, which is a less public and usually quicker process than one typically finds in court. In fact, in these FINRA arbitrations no depositions of our clients or Mr. Larsen are allowed. And, since Mr. Larsen is no longer associated with the industry, FINRA has little jurisdiction over him. Our clients who dealt with Mr. Larsen range in age and background from an entrepreneur in his '50s to a retired and widowed schoolteacher in her '90s.
According to the claims, Larsen channeled his clients into speculative and illiquid so-called "alternative investments" ranging from non-traded REITs to coal and natural gas speculation. The claim filed today alleges that Larsen encouraged his client to invest KBS REIT I. This non-traded REIT was a high-risk investment, unsuitable for a retired, conservative investor. In fact, in its latest quarterly report filed with the SEC, KBS REIT I revealed that its shares have declined in value to approximately $5.16 per share, which represents a staggering 49 percent loss in value from the original purchase price of $10 per share. Regrettably, KBS REIT I has also suspended all redemptions except in cases of death or qualified disability, which means that investors cannot redeem their shares unless they sell them at an even deeper discount in a secondary market.
Paul Larsen also encouraged the client to invest in Atlas 14 and Atlas 15, both speculative natural gas and oil drilling venture for which the broker was paid a 7 percent commission. The VSR broker also recommended to the client that he put a portion of his finances into Yokam Land Holdings, a business that sought to take advantage of Colorado's complicated water rights rules. Larsen misrepresented the upside of this investment and omitted any disclosure of the downside of this investment, according to the claim filed today. The claim also alleges that Larsen failed to disclose that he was a manager in Gulf Winds Income Ventures, LLC, one of the Yokam project's creditors.
"One of the big problems in this case is an ongoing lack of oversight by VSR," said Claimant's Counsel Chris Vernon, a securities fraud lawyer in Naples, FL and founding partner at Vernon Healy.
He added that "VSR's inadequate and grossly negligent oversight of those working for it, allowed our client to be defrauded by an advisor looking toward high commissions rather than looking out for the best interest of those entrusting their money to him."
For more information regarding Vernon Healy's fight against investor fraud, contact the firm at:
Vernon Healy, attorneys at law
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CONTACT: Vernon Healy, attorneys at law (239) 649-5390
Source: Vernon Healy