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Articles Posted in FIRM NEWS

Blum Law Group has filed a class action lawsuit against Regions Bank (“Regions”), a banking subsidiary of Regions Financial Corporation (NYSE: RF). The securities class action filed in the United States Southern District of Florida alleges claims for violation of the Florida Securities and Investor Protection Act. The basis for the lawsuit is that Regions personally participated or aided in the sale of securities by dealers that were not registered with the State of Florida.

Specifically, U.S. Pension Trust Corp. (“USPTC”) and U.S. College Trust Corp. (“USCTC”) (collectively, “USPT”) sold securities from offices located in the State of Florida without registering as a broker-dealer with the Securities and Exchange Commission (“SEC”). The class is defined as all persons and entities who contributed money to the investment plans sold by USPT between September 21, 2006 and August 31, 2009, inclusive.

A U.S. District Judge in the Southern District of Florida already has ruled that USPT violated federal law by failing to register as a broker-dealer, and another federal court judge entered a final judgment against Regions for aiding and abetting USPT’s violations of federal registration laws. Regions agreed to pay a $1 million penalty to settle those charges.

USPT also failed to register as a dealer with the State of Florida, which the class action lawsuit alleges USPT was required to do pursuant to the Florida Securities and Investor Protection Act. The class action lawsuit seeks to hold Regions liable under Florida law for personally participating or aiding in USPT’s sales of securities when USPT was not registered as a dealer with the State of Florida.
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Blum Law Group is pursuing claims against National Financial Services, LLC (“NFS”) for investors who lost money investing over $100 million in more than 20 unregistered debt offerings sold by McGinn, Smith & Co., Inc., (“McGinn Smith”) and other entities under its ownership or control. McGinn Smith was a New York based securities broker-dealer with its principal place of business in Albany, NY. The firm also had many clients in Pennsylvania.

Chief among the investments sold by McGinn Smith were notes issued by four limited liability companies: First Independent Income Notes, LLC., First Equity Income Notes, LLC, First Albany Income Notes, LLC., and Third Albany Income Notes, LLC ( collectively, “Income Notes”). Each of these companies was wholly-owned by an extension of McGinn Smith.

McGinn Smith began using NFS, a Fidelity company, as its clearing firm in or about 2005. Many McGinn Smith clients were required to maintain an account with NFS which provided significant clearing and back office operations for McGinn Smith.

The claims allege, in part, that NFS was negligent in its pricing of the notes and breached duties it owed to the investors in negligently clearing for McGinn Smith.

In April 2010, both the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) filed lawsuits against McGinn Smith and its principals, alleging that from 2003 through April 2010, McGinn Smith committed an ongoing fraud against over 900 investors.
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The Law Offices of Blum Law Group is currently investigating the LaeRoc Funds, including the Laeroc 2002 Income Fund LP, Laeroc 2004-2005 Income Fund LP, Laeroc 2005-2006 Income Fund LP, Laeroc Edge Fund LP and Laeroc Income Fund 007, LP.

The Laeroc funds are real estate private placements (under Regulation D) that were sold by brokerage firms like LPL Financial LLC and Commonwealth Financial Network. According to its website, Laeroc Funds is a real estate investment firm managing over $650 million in assets in the last 23 years and has created 14 funds. The Company focuses on income producing properties in the western US with a concentration in southern California.

Many of the Laeroc funds have suffered substantial declines in value. Laeroc 2002 Income Fund, L.P. recently announced the dissolution of the fund to its investors. While the Laeroc 2005-2006 Income Fund LP is currently attempting to raise another $11 million to $14.5 million to pay off at least $49 million of debt. This fund recently issued a cash call to investors, asking investors to contribute additional money for preferred partnership status.
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