San Francisco, CA (PRWEB) March 28, 2011
The Law Offices Of Jeffrey A. Feldman currently represents a retiree who lost a substantial portion of his retirement funds when investment advisor Scott Hunter Garbutt allegedly sold him two unsuitable, non-conventional investments, apparently without engaging in the required due diligence to ensure that the investments were bona fide, as alleged in an arbitration statement of claim filed with FINRA (FINRA Case No. 11-00885). According to the FINRA arbitration claim, Garbutt allegedly recommended the client purchase LBS Fund, and a private placement called Paradise Dental, both described as very safe. LBS Fund turned out to be a conduit for a Ponzi scheme, and to the best of Mr. Feldman’s knowledge, Paradise Dental has never returned a dime to investors and does not look like it ever will. The Los Angeles Superior Court, in case number SC101916, determined that GJB Enterprises, Inc., where the LBS Fund was putting investor money, was a Ponzi scheme. More information about the Law Offices of Jeffrey A. Feldman can be found at http://www.jeffreyfeldman.com
Neither investment was what it had been portrayed be to, according to allegations in the FINRA arbitration claim. “We can only surmise that the motivation in selling these two investments to my client was the fact that they paid substantial undisclosed commissions to the financial advisor” Mr. Feldman said. According to the FINRA statement of claim LBS Fund was represented as a safe and legitimate investment with a solid return, when in fact, the LBS Fund was investing 100% of its funds into GJB Enterprises, Inc. As was eventually determined by the Los Angeles Superior Court, in case number SC101916, there was no business being conducted by GJB Enterprises, Inc., which was merely a Ponzi scheme, whereby GJB Enterprises, Inc. would pay back old investors with new investor money, and keep a large chunk of the funds for the company founder’s own extravagant lifestyle.
Mr. Feldman went on to say “In my opinion, it is clear that neither of these alternative investments were suitable for my client given his age, the amount of assets that he had, and his need for safety of principal.”
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