CHICAGO, March 15, 2011 (GLOBE NEWSWIRE) -- Stoltmann Law Offices and Higgins and Burke, P.C. announce they filed an arbitration claim on behalf of a Linsco Private Ledger (LPL) client who sustained losses because of investments made in Malarz Equity Investment, LLC (MEI").
According to the Statement of Claim, LPL financial advisor Arthur Lin sold notes in MEI to the Claimant. MEI's business purpose was to purchase apartment buildings in suburban Chicagoland area and convert the buildings to condominium ownership which MEI would sell to purchasers. To finance its purchase of apartment buildings, on May 30, 2007 MEI issued $3,000,000 in 15% Subordinate Notes due on May 28, 2008. The MEI offered the Notes as unregistered securities. MEI sold Notes in minimum investments of $100,000.
According to the Statement of Claim, Arthur Lin was involved in selling the securities in the form of promissory notes of MEI to both Linsco clients and non-Linsco clients. According to the Statement of Claim, at least $2.8 million in MEI promissory notes were sold to at least 7 Illinois residents.
As alleged in the Statement of Claim, the investments were repeatedly represented as posing little to no risk. The investors were informed that their investments in MEI promissory notes were "safe" and "guaranteed" and a "surefire investment." According to records from the Illinois Securities Department, in April of 2010 Lin's license was temporarily suspended by the Illinois Securities Department related to the sale of promissory notes of Malarz Equity Investment Notes.
According to attorney John S. Burke of Saint Charles, Illinois, "The selling of these sort of unapproved, unregistered notes to brokerage firm clients are much more common than people think. These scams have taken dozens of clients in Illinois and nationally and have devastated many investors. The good news for investors is that some, or all of these losses may be recoverable through lawsuits or FINRA arbitration claims."
Chicago attorney Andrew Stoltmann states "We believe common sense supervision could have prevented these sales from taking place. We have been contacted by multiple other Linsco clients who were solicited the same investment and we will be filing additional FINRA arbitration claims against Linsco in the near future. Linsco has tried to convince some clients to sign self serving declarations that help the firm defend these claims. We counsel against victims signing these and rather talk to a lawyer to learn about how to recover the Lin related losses."