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The Frankowski Firm is one of the few law firms in the country whose practice is dedicated to representing consumers against stock brokers and brokerage firms. Our attorneys are passionate about helping investors who have been taken advantage of by their financial advisors. While we are based in... More
My company:
The Frankowski Firm, LLC
My blog:
Frankowski Firm Blog
My book:
The Practitioner's Guide to Securities Arbitration
  • Florida Brothers Charged In TigerDirect Kickback Scheme

    Gilbert and Carl Fiorentino, two brothers from Coral Gables, Florida, were charged in federal court this week with operating a scheme to acquire $9 million in kickbacks and other benefits to conceal their illicit profits from the IRS during their tenure as senior executives at Systemax Inc. and its TigerDirect Inc. subsidiary. The brothers were charged with receiving millions of dollars of kickbacks from suppliers, which they used to buy luxury homes, furniture, and yacht equipment.

    Allegedly, the brothers completed false conflict of interest questionnaires for the two companies. The charges also state that Carl Fiorentino completed a fraudulent tax return, underreporting his taxable income by $4 million. Specifically, Carl was charged with one count of conspiracy to commit mail and wire fraud and one count of tax evasion. He faces a maximum sentence of 25 years imprisonment. Gilbert was charged with one count of conspiracy to commit securities fraud and to impede the lawful functions of the IRS. He has a maximum sentence of 20 years imprisonment.

    "Gilbert and Carl Fiorentino put their financial gain and lavish lifestyle ahead of their responsibilities as corporate officers and directors," Wifredo Ferrer, U.S. Attorney for the Southern District of Florida, said in a news release. "They accepted kickbacks, driving up the price of the consumer electronics and passing the price increase to customers."

    Nov 21 4:05 PM | Link | Comment!
  • Six Banks Fined Over $4B In Currency Probe

    Six banks-Citibank, HSBC, JPMorgan Chase, RBS, Bank of America, and UBS-will pay, as a group, $1.4 billion to the U.S. Commodity Futures Trading Commission and roughly $1.75 billion (£1.1 billion) to the U.K's Financial Conduct Authority. UBS will additionally make a payment to Switzerland. The British regulator has never before levied such large fines and says that the investigation into possible wrongdoing at Barclays is ongoing. The U.S. Office of the Comptroller of the Currency stated that Citbank, Bank of America, and JPMorgan Chase will pay a total of $950 million in fines.

    From 2008 and 2013, relaxed controls at the banks made it possible for traders to share confidential information and collude with those at other institutions in order to fix rates and increase profits. According to the regulators, traders utilized private chatrooms online to arrange their buying and selling to shift currency prices in their favor with the goal of turning a profit for their employer banks at the expense of their clients.

    The traders went by the monikers of "the players," "the 3 musketeers," and "the A-team." The group made agreements to take certain positions in order the manipulate what is known as the 4 p.m. fix, which is a one-minute snapshot of afternoon trading in London that is used as the basis of a vastly used benchmark.

    The Financial Conduct Authority stated the banks did not manage blatant risks and that traders were allowed to continue their misconduct. The banks and the employees who engaged in this scheme will possibly face criminal charges in both the United Kingdom and the United States for attempting to manipulate rates.

    Reportedly, all of the banks have cooperated in the investigations and a few have even taken preventive measures to ensure this does not happen again.

    The banks' fines will be distributed as such: JPMorgan Chase and Citibank will each pay $1 billion, UBS will pay $800 million, RBS will pay $634 million, HSBC will pay $618 million, and Bank of America will pay $250 million.

    Nov 19 11:09 AM | Link | Comment!
  • California Man Sentenced In $2.7M Ponzi Scheme

    Earlier this week, a federal judge in Sacramento, California sentenced James Berghuis for operating a Ponzi scheme that bilked friends, family, and others out of over $2.7 million. Berghuis was found guilty of four counts of mail fraud, four counts of wire fraud, and one count of money laundering in connection with the operation.

    According to U.S. Attorney Benjamin Wagner, Berghuis persuaded investors to take out home-equity loans to make investments from 2005 to 2008, claiming that he would use the funds to invest in real estate. He also offered several victims a deed of trust on his commercial property, promising each that they would be in second position on the title. However, Berghuis never used the money for his stated purposes and instead used funds from new investors to pay back earlier investors, the classic element of a Ponzi scheme, as well as to purchase luxury items for himself.

    Berghuis would make a series of excuses to investors as to why he could not pay them back on the promised dates. Some victims lost their homes or continue to pay on mortgages they took out to make their investments with Berghuis.

    On one occasion, Berghuis used a check acquired from an investor to purchase a $200,000 Mercedes Benz later on that same day.

    The case resulted from an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation.

    Nov 18 12:09 PM | Link | Comment!
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