Global Payout, Inc. Convertible Promissory Notes

December 11, 2018.   The California Department of Corporations issued a Desist and Refrain (“D&R”) Order against San Diego, California based Global Payout, Inc.

According to the D&R, Global Payout issued “Convertible Promissory Notes” to investors. The “Convertible Promissory Notes” indicated that interest would accrue at 15% per year with no interest being paid during the first year and accumulated interest paid after that as a stock dividend. Additionally, the lender could convert the outstanding stock at the price of two cents a share if the price of the common stock averaged 12 cents ($0.12) a share for the previous fifteen trading days. Convertible Promissory Notes” were sold to fifty-four investors without any effort to determine if those investors were properly accredited and suitable to invest in an unregistered security. These “Convertible Promissory Notes” were securities, offered or sold in this state. The Department of Business Oversight has not issued a permit or other form of qualification authorizing any person to offer and sell these securities in this state.

See, http://www.dbo.ca.gov/ENF/pdf/2018/Global-Payout-12-11-18.pdf



Kyle Patrick Harrington (CRD #2282328) San Diego, California

December 31, 2018 – An OHO decision became final in which Harrington was barred from association with any FINRA member in all capacities, ordered to pay $105,000, plus interest, in restitution to his member firm and ordered to pay disgorgement in the amount of $190,974.64, plus interest, to FINRA. The sanctions were based on the findings that Harrington converted customer funds, intentionally causing the customer to wire $19,874.64 of her funds into his account. The findings stated that Harrington took the funds for his own use, without the customer’s authorization, and never returned them. The findings also stated that Harrington attempted to obstruct FINRA’s investigation into his conversion by contacting the customer and asking her to sign a false document stating that she had stayed at his vacation rental property. The findings also included that Harrington engaged in private securities transactions, for which he was compensated, without giving prior notice to or receiving prior written approval from his firm and without the firm’s supervision. FINRA found that Harrington made misstatements and provided false documents to his firm in connection with its investigation into whether he had engaged in outside business activities. Harrington intentionally misrepresented the nature of payments he received and deposited into his bank accounts as rental income and a payment from his former broker dealer. In fact, the payments were for the purchase of stock in Harrington’s outside business. Harrington knowingly caused falsified rental contracts to be sent to his firm in order to conceal the true purpose of the funds he had received. FINRA also found that Harrington provided false and misleading documents and information to FINRA in connection with its investigation of the private securities transactions and the conversion. Harrington produced a bank statement to FINRA that his sales assistant, under his direction, altered to remove a customer’s name as the originator of a wire transfer. Harrington also submitted a written response to FINRA that falsely represented that he was entitled to the funds he directed the customer to wire to him, claiming it was payment for investment advisory fees rendered to the customer. Harrington also falsely testified that the purported rental agreements with another customer were authentic and represented legitimate rental transactions. See, FINRA Case #2015047303901.


VelocityShares Daily Inverse VIX Short-Term ETN (NASDAQ: XIV)

After recently closing down 93 percent and shedding approximately $3 billion in value, the VIX ETN underwritten by Credit Suisse, was effectively killed.   Exercising their right to accelerate all of the outstanding ETNs, GS announced that the last day of trading for the VIX ETN will be February 20.

ETN’s like VIX are high risk are only suitable for sophisticated investors who are capable of losing their entire investment.    If you invested in VIX based upon the advice of a broker or investment advisor and you believe such may have been inappropriate for your investment needs or sold to you in a misleading way you may have the right to recover your investment losses.

The law firm of Richard A. Nervig, P.C. represents individual investors who have suffered financial losses as a result of investment fraud or misconduct, Ponzi schemes, unsuitable investment recommendations, or abusive securities sales practices.


If you have investment losses in VIX or any other investment in excess of $100,000 please call my office at (800) 837-0441 for a free consultation.

Woodbridge Group of Companies, L.L.C.


(December 5, 2017, San Diego, CA) The securities fraud and elder financial abuse law firm of Richard A. Nervig, P.C. has launched an investigation on behalf of note, equity holders and private placement investors of the Woodbridge Group of Companies, L.L.C..    

On December 4, 2017, the Woodbridge Group of Companies, L.L.C. (“Woodbridge”) and its affiliates filed for bankruptcy in the U.S. Bankruptcy Court for the District of Delaware.  See, In re: Woodbridge Group of Companies, L.L.C., U.S. Bankruptcy Court District of Delaware, Case 17-12560-KJC.  Woodbridge has been under formal investigation from the Securities and Exchange Commission (“SEC”) since September 2016 and which is looking at the company for potential violations relating to the offer and sale of unregistered securities, the sale of securities by unregistered brokers, and the commission of fraud in connection with the offer, purchase, and sale of securities.   According to the SEC, Woodbridge has raised more than $1 billion from several thousand investors nationwide through multiple investment offerings using various forms and structures.  See, SEC v. Woodbridge Group of Companies, LLC, U.S. District Court for the Southern District of Florida, Case 1:17-mc-22665-CMA  


Although the SEC’s investigation and action against Woodbridge is warranted, the harsh reality is that most securities and investment scheme victims usually receive little if any meaningful recovery of funds from such actions and/or from subsequent bankruptcy proceedings filed by the issuer of the securities.     Instead, most meaningful recoveries for investors typically come from the pursuit of third party liability claims against the banks, brokers, brokerage firms and other financial service providers who may have either aided and abetted or assisted the unlawful schemes and/or who negligently failed to detect and prevent such schemes in the face of suspicious circumstances.       

If you are a Woodbridge note, equity holder or private placement investor and are interested in learning more about your legal rights and remedies, please contact Richard A. Nervig (info@nerviglaw.com) at (800) 837-0441 or (760) 451-2300. If you email, please include your phone number.  Also see our website at www.nerviglaw.com.  


655 West Broadway, Suite 1400 

San Diego, CA  92101

Stock Manipulation Scheme


(June 14, 2017, San Diego, CA) The securities fraud and elder financial abuse law firm of Richard A. Nervig, P.C. has launched an investigation on behalf of victims of the stock manipulation scheme involving shares of stock in National Waste Management Holdings, Inc. (“NWMH”), CES Synergies, Inc. (“CESX”), Grilled Cheese Truck (“GRLD”), Hydrocarb Energy Corporation (“HECC”) and Intelligent Content Enterprises, Inc. (“ICEIF”).

On July 12, 2017, the US Attorneys’ Office unsealed a nine-count indictment filed in federal court in Brooklyn, New York, against 14 defendants including San Diego resident Lawrence Isen and Tarzana California resident Robert Gleckman.


According to the indictment, between January 2014 and July 2017, the defendants, together with others, engaged in a $147 million scheme to defraud investors, including the elderly, in one or more of the following publicly traded companies: NWMH, CESX, GRLD, HECC, and ICEIF by artificially controlling the price and volume of traded shares in the Manipulated Public Companies through, among other things, (a) artificially generating price movements and trading volume in the shares, and (b) material misrepresentations and omissions in their communications with victim investors about the stock of the Manipulated Public Companies, relating to, among other things, the advisability of purchasing such stock.   The defendants also fraudulently concealed their control of shares of the Manipulated Public Companies that were held in brokerage accounts in the names of other individuals or entities.  See, Press Release, Department of Justice, U.S. Attorney’s Office, Eastern District of New York (7/12/2017).


Although the criminal prosecution of perpetrators of such schemes is certainly warranted, the harsh reality is that victims of such schemes more often than not receive little if any recovery of funds from the criminal prosecution.    Instead, most meaningful recoveries typically come from the pursuit of third party liability claims against the banks and/or brokerage firms who may have either aided and abetted the unlawful schemes and/or who negligently failed to detect and prevent such in the face of suspicious circumstances.

If you are an investor who has lost money purchasing one or more of the above stocks and are interested in learning more about your legal rights and remedies, please contact  Richard A. Nervig (info@nerviglaw.com) at (800) 837-0441 or (760) 451-2300. If you email, please include your phone number

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