Securities & Investment Fraud

Mr. Betts has extensive experience litigating cases involving claims of securities and investment-related fraud. Many of those cases have involved claims under the federal securities laws, including Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78a et seq., and Rule 10b-5, arising from deceptive and manipulative conduct in connection with the purchase or sale of securities. Many of the securities cases handled by Mr. Betts also have involved claims under Pennsylvania statutes, such as the Pennsylvania Securities Act of 1972, 70 P.S. §§ 1-101, et seq., and the Unfair Trade Practices and Consumer Protection Law, 73 P.S. §§ 201-1, et seq., and common law claims (e.g., fraudulent misrepresentations and nondisclosures and breach of fiduciary duties). Securities litigation can arise in a variety of contexts, given the broad interpretations of courts and securities regulators concerning products and transactions that can constitute “securities” under federal and state laws.

One of the many securities litigation matters handled by Mr. Betts was his representation of the two largest school district claimants in the multi-faceted securities fraud proceedings arising from a massive fraud allegedly committed by Devon Capital Management and Financial Management Sciences, Inc. (FMS) that victimized Mr. Betts’s clients and numerous other school districts in Pennsylvania. In an injunctive proceeding, the SEC alleged that Black, acting through two entities he owned and controlled, Devon Capital and FMS perpetrated an ongoing fraudulent scheme that resulted in the loss of millions of dollars of municipal bond proceeds invested by school districts throughout western and central Pennsylvania. The SEC’s complaint alleged that Devon Capital represented to the school districts that the investment contracts in which their funds would be invested, so-called “Collateralized Investment Agreements,” were fully collateralized by a pool of securities equaling the amount of each client’s principal investment. In fact, the complaint alleged, Devon Capital and FMS misrepresented the value of the assets held as collateral, overstating the actual value of those assets by approximately $71 million. When it became apparent that the SEC proceeding would provide a recovery of only a small percentage of the school districts’ losses, Mr. Betts was retained to represent the two largest school district claimants. Mr. Betts then pursued claims against others, including a bank and a law firm that had been involved in Devon Capital’s and FMS’s investment program, and successfully recovered the vast majority of his school district clients’ losses – in excess of $10 million.

In addition to his experience in litigating cases in federal and state courts, Mr. Betts also is experienced in handling securities and investment-related claims that proceed in arbitration. Most cases that are brought against brokerage firms and their registered representatives (brokers and financial advisors) are subject to arbitration because of arbitration provisions commonly found in brokerage firms’ account agreements. Most securities arbitrations are administered by the Financial Industry Regulatory Authority (FINRA) and Mr. Betts has handled numerous FINRA arbitration cases. Learn More