Monthly Archives: April 2010

Some Wall Street executives still don’t get it. Credit Suisse Group AG’s CEO Brady Dougan took home nearly $18 million in 2009 – more than six times what he received in 2008. And the 2009 payout occurred during a time when the nation experienced a financial meltdown, bank bailouts courtesy of the Troubled Asset Relief Program and mounting public criticism over Wall Street bonuses and compensation levels.

As reported March 25, 2010, by the Wall Street Journal, Dougan’s 2009 annual pay, which includes a cash bonus, salary and stock, was nearly twice the $9.6 million that Goldman Sachs paid CEO Lloyd Blankfein. And, to top it off, Goldman made 40% more in net income in 2009 than Credit Suisse.

In a letter to Credit Suisse shareholders, Dougan and Chairman Hans-Ulrich Doerig justified the 2009 payout, stating that “a skilled workforce is key to maintaining high levels of client satisfaction … which is why we will continue to attract … talented people while remaining sensitive to the public debate about compensation.”

Perhaps a better way to “remain sensitive” might be to roll back the bonuses and excessive compensation packages for some of Wall Street’s top earners.

Rhonda Breard, the former Seattle broker for ING Financial who made a name for herself by dispensing investment advice via television infomercials and seminars, will plead guilty to mail fraud. Breard is accused of stealing $9.4 million from her clients.

As reported April 2 by the Associated Press, prosecutors are seeking to have Breard forfeit several properties, cars, boats, watercraft and jewelry.

Breard has a shady past when it comes to her professional conduct. In 1991, she resigned from Smith Barney over allegations of unauthorized trading in clients’ accounts. One year later, she faced similar claims, according to records with the Financial Industry Regulatory Authority (FINRA), and eventually paid a $15,000 fine. In 1993, Breard settled an investor complaint for $74,493 while employed at Prudential Securities,

The Washington State Department of Financial Institutions, the Washington State Office of the Insurance Commissioner, and the FBI continue to investigate Breard’s alleged fraud.

If you are a current or former investor with Rhonda Breard and/or Breard & Associates and Wealth Management, we encourage you to contact Maddox Hargett & Caruso P.C. Your case may be eligible for recovery.

Private placements, which have made news in connection to Medical Capital Holdings and Provident Royalties, are becoming an increasingly questionable investment for ordinary investors.

Private placements are securities in stocks, bonds or other instruments that a corporation issues to investors. The investments are riskier than traditional securities because many of the issuing companies don’t have to register their placements with the Securities and Exchange Commission (SEC).

Former schoolteacher Adrianne Cross found this out the hard way. According to a March 27 article in the Wall Street Journal, Cross, 64, invested her life savings in private placements. She thought the investments were safe. Now she’s lost everything.

According to the Wall Street Journal, Cross’ broker worked for Ameriprise Financial’s Securities America unit in Los Angeles. Cross says the broker persuaded her to invest more than $1 million in private-placement securities issued by Medical Capital Holdings and Provident Royalties LLC in 2007. The broker allegedly told Cross that the investments were a safe alternative to stocks.

The Securities America broker was wrong. Both Medical Capital and Provident Royalties, which face fraud charges by the SEC, collapsed in 2009. For Cross and thousands of other investors, it meant their investments became essentially worthless.

Cross has since filed an arbitration claim with the Financial Industry Regulatory Authority (FINRA) in an attempt to recover her losses.

In January, Massachusetts’ Secretary of State William Galvin brought the first state enforcement case against Securities America over the broker/dealer’s sales practices of Medical Capital securities. According to the complaint, Securities America’s representatives failed to disclose the risks to customers, many of whom were retirees.

If you have a story to tell involving Medical Capital Holdings, Securities America and/or Provident Royalties, please contact a member of our securities fraud team.

It’s official – former ING Financial broker Rhonda Breard has been permanently barred from the securities industry by the Financial Industry Regulatory Authority (FINRA). The Washington State investment advisor is accused of stealing $8 million from clients.

Breard neither admits nor denies the charges, but “consented to the entry of FINRA’s findings,” according to a statement by FINRA.

Breard currently is facing federal charges, as well as civil lawsuits. If convicted on the federal charges, Breard faces a sentence of up to 20 years in prison and a fine of up to $1 million.

Breard’s scheme came to light during a surprise visit from an ING auditor to her offices at Breard & Associates Wealth Management. As reported March 11 by Investment News, the auditor uncovered a locked file cabinet in the office. Contents from the cabinet purportedly revealed that Breard had misappropriated money from her clients.

Meanwhile, some of Breard’s clients have invested with Breard for more than 20 years. A few years ago, they reported that Breard began asking them to liquidate their accounts and write her checks for Breard to invest in new accounts.

Maddox Hargett & Caruso P.C. is investigating investors’ allegations against Rhonda Breard and ING Financial. If you suffered investment losses through Breard, contact us with your story. You may have a claim for recovery.