Dimond Kaplan & Rothstein, P.A. has filed a class action lawsuit against Regions Bank (“Regions Bank” or “Regions”) alleging claims for violation of the Florida Securities and Investor Protection Act. The basis for the lawsuit is that Regions personally participated or aided in the sale of securities by dealers that were not registered with the State of Florida.
Specifically, U.S. Pension Trust Corp. (“USPTC”) and U.S. College Trust Corp. (“USCTC”) (collectively, “USPT”) sold securities from offices located in the State of Florida without registering as a broker-dealer with the Securities and Exchange Commission (“SEC”). A U.S. District Judge in the Southern District of Florida already has ruled that USPT violated federal law by failing to register as a broker-dealer, and another federal court judge entered a final judgment against Regions for aiding and abetting USPT’s violations of federal registration laws. Regions Bank already has agreed to pay a $1 million penalty to settle those charges.
USPT also failed to register as a dealer with the State of Florida, which the class action lawsuit alleges USPT was required to do pursuant to the Florida Securities and Investor Protection Act. The class action lawsuit seeks to hold Regions Bank liable under Florida law for personally participating or aiding in USPT’s sales of securities when USPT was not registered as a dealer with the State of Florida.
USPT offered and sold investment plans (the “Investment Plans”) to approximately 14,000 investors. The investors primarily reside in Latin America, although some investors reside in the United States. The Investment Plans required investors to execute trust agreements, whereby the trustee (Regions Bank) would serve as trustee on behalf of each of the investors. USPT sold the Investment Plans to investors from 1995 through January 2008, when Regions, as trustee, stopped accepting Investment Plan contributions from new USPT investors. USPT and Regions continued to accept Investment Plan contributions from existing investors through August 2009.
Regions Bank is an Alabama state-chartered bank. It became the trustee in connection with the Investment Plans after it merged with Union Planters Corp. in July 2004. Union Planters began serving as trustee in October 2001. Union Planters and then Regions served as trustee in connection with the Investment Plans from October 2001 through October 2010. USPT’s sales materials used Regions’ name and logo, and the sales materials were subject to Regions’ prior written approval. Regions’ representatives also helped draft those materials, and Regions created a video that USPT posted on its website to help sell the Investment Plans. Finally, Regions’ personnel attended USPT sales conferences where Regions taught USPT agents how to market the Investment Plans. In serving as the trustee, Regions received Investment Plan “contributions” from each investor, collected a trustee fee, and other fees associated with the Investment Plans.
As a result of other fraudulent conduct by USPT, Investment Plan investors have lost most or all of their money. The class action lawsuit seeks to rescind investors’ investments in the Investment Plans so that investors get their money returned to them.