FINRA arbitration filed against Alliance Affiliated Equities Corp. to recover investment losses

CHICAGO - Nov. 5, 2014 - PRLog -- The White Law Group announces that it has filed a Financial Industry Regulatory Authority (FINRA) arbitration statement of claim against Alliance Affiliated Equities Corp.  The claim seeks to recover alleged losses in excess of $500,000.

The claim, filed by The White Law Group, was submitted to FINRA Dispute Resolution on behalf of an Illinois investor alleging claims for violation of common law fraud, breach of fiduciary duty, negligence, and negligent supervision. The claim further alleges that Alliance Affiliated unsuitably invested the client in the following alternative investments:

CORE Series 2007 8% Debenture

DBSI

Cawley Partners

Thompson National Properties

Clearwater

Passco Younan

Rice

Two of these investments appear to have suffered catastrophic losses, Core Series 2007 *% Debenture and DBSI.

In late 2008, DBSI filed for chapter 11 bankruptcy in the United States Bankruptcy Court for the District of Delaware.  The bankruptcy trustee’s report details a company riddled with problems.  According to the report, not only did the company commit countless acts of fraud, but also it commingled investors’ funds and misrepresented company profits.  DBSI has also subsequently been the subject of an investigation into fraud and gross mismanagement by the Securities and Exchange Commission and a number of its principles are in prison.

CORE Series 2007 8% Secured Debenture were issued starting September 1, 2007. The maturity date of the offering was April 11, 2014.

In May 2010, CORE requested that the Indenture holders approve a Modification Plan that essentially deferred all base interest payments until Maturity. With the approval of this modification, investors in CORE Series 2007 8% Secured Debentures were informed that back interest payments were to be paid in April 2014.

However, on April 11, 2014, the maturity date, CORE officially notified the Indenture holders that CORE would not be in a position to repay the debentures.

Before recommending an investment, a broker-dealer has a fiduciary duty to adequately disclose the risks involved in the investment and to perform the necessary due diligence to determine whether the investment is suitable for the investor.  It is alleged that Alliance Affiliated failed to perform the necessary due diligence on these investment prior to recommending them to this particular investor.  The investor's financial advisor with Alliance Affiliated was also named in the suit.

FINRA Dispute Resolution is an arbitration venue for investors with claims against their brokerage firm or financial professional.  It provides investors with an opportunity to attempt to recoup their investment losses and is an alternative to filing such claims in court.

For more information on the claim filed by The White Law Group, please contact the firm's Chicago office at 312-238-9650.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.

For more information on The White Law Group and its representation of investors in FINRA arbitration claims, visit http://www.whitesecuritieslaw.com.