ISRAELS & NEUMAN, PLC – Michigan Securities Attorneys
The Michigan Uniform Securities Act
Israels & Neuman are securities arbitration and investment fraud attorneys that represent Michigan residents who have lost money through the actions of their stockbrokers and brokerage firms. Our investment fraud attorneys have previously represented investors throughout the State of Michigan, including investors who lost money as a result of their broker running a PONZI like scheme (including the Christopher Tolmacs / Harbinger Financial / Triad Advisors PONZI Scheme in Portage, Michigan).
Michigan residents are protected by the provisions of the Michigan Uniform Securities Act of 2008 (hereinafter “the MUSA”). The MUSA provides for the regulation of the sales of securities in the State of Michigan, including the securities industry. The enforcement division of the Securities Section investigates complaints related to securities and their sales, including complaints about brokers, brokerage firms, and investment advisors. The enforcement division has offices in Lansing, Michigan. You can file a complaint against your broker or brokerage firm HERE.
The Michigan Uniform Securities Act, M.C.L. § 451.2501, et seq., in pertinent part, provides that:
It is unlawful for a person, in connection with the offer, sale, or purchase of a security or the organization or operation of a Michigan investment market under article 4A, to directly or indirectly do any of the following:
(a) Employ a device, scheme, or artifice to defraud.
(b) Make an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.
(c) Engage in an act, practice, or course of business that operates or would operate as a fraud or deceit on another person.
See M.C.L. § 451.2501.
Michigan Compiled Laws § 451.2502 states that:
(1) It is unlawful for a person that advises others for compensation, either directly or indirectly or through publications or writings, as to the value of securities or the advisability of investing in, purchasing, or selling securities, or that, for compensation and as part of a regular business, issues or promulgates analyses or reports relating to securities, to do any of the following:
(a) Employ a device, scheme, or artifice to defraud another person.
(b) Engage in an act, practice, or course of business that operates or would operate as a fraud or deceit upon another person.
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(c) Participate in the offer, purchase, or sale of a security in violation of section 301. However, if the investment adviser makes a reasonable effort to ascertain if a registration has been effected or an exemption order granted in this state or to ascertain the basis for an exemption claim and does not have knowledge that the proposed transaction would violate section 301, his or her activities as a finder do not violate section 301.
The Michigan Uniform Securities Act addresses the sale of unregistered securities at M.C.L. § 451.2301, which states:
A person shall not offer or sell a security in this state unless 1 or more of the following are met:
(a) The security is a federal covered security.
(b) The security, transaction, or offer is exempted from registration under sections 201 to 203.
(c) The security is registered under this act.
The remedy for violations of the Michigan Uniform Securities Act is set forth in M.C.L. § 451.2509, which states:
2) A person is liable to the purchaser if the person sells a security in violation of section 301, or by means of an untrue statement of a material fact or an omission to state a material fact necessary in order to make the statement made, in light of the circumstances under which it is made, not misleading, the purchaser not knowing the untruth or omission, and the seller not sustaining the burden of proof that the seller did not know and, in the exercise of reasonable care, could not have known of the untruth or omission. All of the following apply to an action under this subsection:
(a) The purchaser may maintain an action to recover the consideration paid for the security, less the amount of any income received on the security, and interest at 6% per year from the date of the purchase, costs, and reasonable attorney fees determined by the court, upon the tender of the security, or for actual damages as provided in subdivision (c).
In addition, M.C.L. § 451.2509 provides for joint and several liability of a broker-dealer and its agents when it states:
(7) The following persons are liable jointly and severally with and to the same extent as persons liable under subsections (2) to (6):
(a) A person that directly or indirectly controls a person liable under subsections (2) to (6), unless the controlling person sustains the burden of proving that the controlling person did not know, and in the exercise of reasonable care could not have known, of the existence of the conduct by reason of which the liability is alleged to exist.
Thus, under Michigan law, a brokerage firm is liable for each and every bad act committed by agents and brokers, jointly and severally, to the same extent that its agents would be liable for the bad act.
If your financial advisor or stockbroker makes misrepresentations to you when selling securities or sells you fraudulent investments, he or she may be liable for your losses. In addition, the brokerage firm that your advisor works for may also be liable.
Israels & Neuman PLC is a securities arbitration and investment fraud law firm with offices in Denver, Colorado and the Seattle area. One of our attorneys, Aaron Israels, is from Holland, Michigan and spent 10 years living in the Detroit Metro Area. We represent investors in FINRA arbitration and securities arbitration proceedings in all 50 states, including representing investors previously throughout Michigan, and in Grand Rapids, Holland, Kalamazoo, Traverse City, Lansing, Ann Arbor, Detroit, Royal Oak, Portage, Bloomfield, Bloomfield Hills, Birmingham, Southfield, Novi, Warren, Rochester Hills, Grandville, St. Joseph, Canton, Westland, Dearborn, Muskegon, and Livonia.
Our securities attorneys have represented over one thousand investors against many brokerage firms in the past, including LPL Financial, Merrill Lynch, Morgan Stanley, Smith Barney, Stifel Nicolaus & Company, UBS Financial Services, Oppenheimer, Charles Schwab, Wells Fargo Advisors, Ameriprise Financial Services, Raymond James, ProEquities, Securities America, National Securities Corp., and many others.