Read the latest news relating to investor claims and broker fraud.

Ohio Division of Securities April Enforcement Actions

The Ohio Department of Commerce Division of Securities ("Division") recently released a summary list of official actions taken during the month of April. The Division issued the following orders in April:

Valhalla Investment Advisory, Inc. (11-016)
The Division issued a Notice of Opportunity for Hearing (NOH) to Valhalla Investment Advisory, Inc., of Cincinnati. The NOH alleges several record keeping deficiencies including the failure to retain cancelled checks for the required period of five years, to keep financial statements, and to post deposits to the firm's general ledger. The NOH states that the Division intends to suspend or revoke the investment adviser license of Valhalla.

James T. Johnson and SMC Portfolio Management LLC (11-017)
The investment adviser representative (IAR) license of Mr. Johnson, and the investment adviser license of his company, SMC Portfolio Management, was suspended for thirty days by the Division for numerous violations of the Ohio Securities Act and regulations of the Division. Johnson is the sole member, and only IAR, of SMC. During an examination of SMC's office in 2009, the Division found several deficiencies which Johnson and SMC failed to correct. For instance, Johnson failed to provide the Division with evidence that his insurance agency, Safe Money Concepts, is legally authorized to do business in Ohio. Mr. Johnson and SMC consented to the suspension by the Division.

Merrill Lynch, Pierce, Fenner & Smith Inc. (11-018)
Several states launched an investigation into Merrill Lynch's licensing practices. The investigation revealed that Merrill Lynch failed to require certain of its employees to be licensed in the appropriate jurisdiction before conducting securities sales. These employees, called Client Associates, function as sales assistants and provide administrative and sales support to Merrill's Financial Advisors. Merrill Lynch has agreed to make changes to its licensing practices and also agreed to pay $589,050 to Ohio's Investor Education and Enforcement Expense Fund.

UBS Securities, LLC and UBS Financial Services Inc. (11-019)
A multistate task force conducted an investigation into UBS's activities in connection with sales of auction rate securities (ARS). As alleged, UBS marketed ARS as "safe, liquid money-market instruments." Of course the market for ARS froze in mid-2007, resulting in customers holding illiquid instruments. UBS has agreed to implement certain changes with respect to its sales of ARS and also agreed to pay $1.8 million to Ohio's Investor Education and Enforcement Expense Fund.

Stifel, Nicolaus & Company, Inc. (11-020)
A multistate task force conducted an investigation into Stifel's activities in connection with sales of auction rate securities (ARS). As alleged, Stifel recommended ARS as safe, liquid investments, and compared ARS to cash alternatives (such as certificates of deposit or money market accounts). Stifel has agreed to implement certain changes with respect to its sales of ARS and repurchase certain ARS from its customers.

James E. Miller and On Track Financial Services (11-021)
The investment adviser representative (IAR) license of Mr. Miller, and the investment adviser license of his company, On Track Financial Services, was suspended for five days by the Division for numerous violations of the Ohio Securities Act and regulations of the Division. The suspension resulted from an examination of Miller's office conducted by the Division in mid-2010 (Miller is the President and only IAR of On Track). During the examination, the Division found potentially misleading and inaccurate statements in the firm's marketing materials and on its website. Additionally, account balances shown in financial records did not match the amounts from the general ledger, and the percentages shown on the income statements were unclear. Mr. Miller and On Track consented to the suspension by the Division.

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The Ohio-based law firm of Meyer Wilson represents individuals in Ohio and throughout the country who have been harmed by investment fraud. All of our cases are handled on a contingency fee basis and we never request a retainer of any kind. Contact us toll-free at 1.866.429.2360 for more information or complete the online form on the top of this page and we will respond promptly.

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