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Badge - Super Lawyers Jenice L. Malecki
Super Lawyers 2021
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Southern California

Securities Fraud In the Proximity of Hollywood

Well-known for Hollywood celebrities, beautiful coastlines, Southern California is a bustling tourist destination and home for over 23 million people. Being a geographic and cultural landmark, Southern California is a breeding ground for both fame and fraud.

SoCal has unfortunately been home to some of the large securities frauds in U.S. history, including the $200 million Ponzi Scheme allegedly operated by J. David & Company in the early 1980s. In 2014, it has been reported that FBI agents arrested 2 people in Southern California for allegedly running a $110 million Ponzi scheme through their firm, Pacific Property Assets. In another instance, an LA pastor was allegedly charged with bilking more than 82 people out of nearly $7 million.

In 2020, Paul Horton Smith Sr. reportedly faced an asset freeze for carrying out a Ponzi scheme in Southern California that targets senior citizens. For over 2 years, Smith Sr. would allegedly sell securities from his company namely Northstar communications LCC and would subsequently market these securities using his investment advisory firm names eGate LLC. Supposedly, Smith Sr would market his securities guaranteeing interest payments between 3-10.5% if they decided to invest in a misleading program labeled private annuity contracts. According to reports, Smith failed to invest funds that were raised in securities and instead used those incoming investments to pay returns. This Ponzi scheme reportedly accumulated $5.6 million dollars from 35 investors and paid out about $5.2 million in interest payments and principle to investors. In addition, Smith purportedly used investor capital to settle other investor lawsuits. According to reports, Smith, Northstar, and eGate were in violation of the Securities Act of 1933, Securities Exchange Act 1934, and the Investment Advisors Act. The SEC is reportedly pursuing disgorgement, injunctions, and penalties as well as criminal charges against Smith.

Recently, in 2019, the SEC reportedly announced a settlement deal made by Equal Earth, CEO Andrew J Duggan and COO Ghassan “Mark” Hamade bilked over $5 million dollars from at least 266 investors. A green energy company, Equal Earth, and its directors allegedly made misleading statements to its various investors that falsely exaggerated the stability of the company’s financial security as well as lied that the company would soon broadcast its supposed historical revenues as it acquired multiple other establishments securing future revenue and had significant power generation capacity through future business endeavors. As a majority of these claims were purportedly false, they were able to drain hundreds of investors from about $5.6 million dollars. In addition to these claims, Duggan reportedly sold some of his stock from the company and embezzled almost 40,000 in investor capital. According to the United States District Court for the Southern District of California, the defendants were ostensibly in violation of the Securities Exchange Act of 1934 as well as the Securities Act of 1933. They did not accept or deny any of the allegations against them but reportedly agreed on judgments in which they are enjoined from violating any anti-fraud regulations. Equal Earth, Duggan, and Hamade reportedly agreed to pay about $7 million dollars, $900,000 as well as $167,500 respectively alongside other future employment restrictions in the securities industry.

Just like that fraud can impact the normal routine of establishments and everyday citizens that invest trustingly expecting a fair return. Malecki Law has worked with both Fortune 500 companies, senior citizens, whistleblowers as well as clients from various geographic regions. Malecki Law handles a diverse set of securities cases including but not limited to unsuitability claims, commercial litigation, arbitration, business contract negotiations, and whistleblower claims. Jenice Malecki’s understanding and comprehension of the complexities in the securities industry allow her to guide her firm in a manner that has proven critical to her success in reaching favorable results for various clients. Jenice Malecki has received numerous accolades specifically being named as a Top Attorney by Super Laws and the National Law Journal as well as being featured in prominent publications such as the New York Times Magazine, National Law Journal, and New York Magazine.

To schedule a free initial consultation with Malecki Law, please call 212-943-1233, or email jenice@maleckilaw.com.

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Client Reviews
★★★★★
Jenice Malecki, is one of the most helpful individuals Ive had the pleasure of speaking with. She is super knowledgeable. She helped me navigate the ever changing world of securities law. You will find her understanding of complex matters helpful and insightful. She is straightforward and candid. She makes your options easy to understand. I would recommend her without any hesitation. 10/5 stars! Enrique Tiburcio
★★★★★
I highly recommend Jenice and her team for any securities matters. She is a true professional and a pleasure to work with. She responds quickly to emails and listens to your concerns/questions. Jenice makes sure you're always informed and in the know about your case. Great experience and also very fairly priced! Jeff
★★★★★
An excellent professional who represented us in trial regarding a bank fraud, an unexpected and difficult time. A professional that worked hard, persevering and who stood toe to toe against firms that had a team of excellent lawyers backing them up. Her unflinching determination really stands out, it makes you feel you have someone who really cares about trying to recover what you lost from the people that wronged you. Salomon Levi
★★★★★
It is difficult to thank you in words when gratitude comes from the heart, so I will try to link feelings with writing. It is essential for us to mention your excellence as a professional, your aptitude on legal fields, and your unavoidable persistence. All of these virtues that elevate the profession you exercise in such an admirable way, go hand in hand with your sense of ethics, your human warmth and the transparency in your actions. To sum up, thank you for being a listening ear and for having the right word while transmitting information about the legal process. Having you as our representative during such an adverse situation was a privilege and enough reason for our eternal gratitude. Angeles Aparain
★★★★★
To say that my securities litigation was complex would be a severe understatement. With multiple parties involved and spanning many years, trying to understand the issues was daunting to say the least. Jenice and her team broke down the transactions by segment and by party uncovering every hidden expense. In the end, I was more than happy and could not thank Jenice and her team enough. I would not hesitate to recommend Jenice to anyone. She is highly professional, incredibly knowledgeable, well connected to industry experts, has a tireless work ethic and is so pleasant and easy to communicate with. Five stars for sure! Andrew Loughrane