Securities Arbitration Is Not An Ideal World On July 16, 2012, Stephen J. Choi, Professor of Law, New York University, Jill E. Fisch, Professor of Law, University of Pennsylvania, and A.C. Pritchard Professor of Law, University of Michigan, released their Draft Paper: THE INFLUENCE OF ARBITRATOR BACKGROUND AND REPRESENTATION ON ARBITRATION OUTCOMES. As stated in…
Brookstone Securities Inc. of Lakeland, Fla., was fined $1 million after a hearing panel of the Financial Industry Regulatory Authority (FINRA) found the broker-dealer made fraudulent sales of collateralized mortgage obligations to elderly, unsophisticated investors. Brookstone Hearing Panel Decision Antony L. Turbeville, the firm’s owner and former CEO, and Christopher Kline, one of its brokers,…
Citigroup Global Markets Inc. has agreed to be censured and to pay a fine of $3.5 million for posting inaccurate data on residential mortgage-backed securities on a website it maintains pursuant to federal regulations. Despite possessing information that the data posted on its website was inaccurate, Citigroup Global did not correct the data it was…
A federal court in California dismissed a complaint filed by Charles Schwab Corp. that tried to block regulators from disciplining the brokerage firm for embedding a clause in its customer account agreements that precludes class-action lawsuits. FINRA Complaint Filed The Financial Industry Regulatory Authority (FINRA) alleged in a complaint filed in February with its Office…
The Financial Industry Regulatory Authority (FINRA) has suspended Andrew J. Aragona, a former broker with Newbridge Securities Corp., from associating with any FINRA-registered firm in any capacity for one year for unsuitably recommending that an elderly customer switch variable annuity contracts. Per a default decision entered May 2, Aragona was also fined $15,000, and ordered…
Wells Fargo Advisors and its related firms have agreed to pay a fine of $2.1 million to settle a disciplinary action brought by the Financial Industry Regulatory Authority (FINRA) for the companies’ failure to supervise the sale of complex financial products known as non-traditional exchange-traded funds, as well as for making unsuitable recommendations of these…
Morgan Stanley & Co. LLC has consented to be fined $1.75 million by the Financial Industry Regulatory Authority (FINRA) for its failure to supervise the sale of complex financial products known as non-traditional exchange-traded funds, as well as for making unsuitable recommendations of these funds. In addition to the fine, Morgan Stanley consented to a…
UBS Financial Services Inc. of Puerto Rico and two of its executives have agreed to settle charges of fraudulent conduct related to mutual funds by paying $26.6 million, to be placed into an account for harmed investors. The fraud consisted of misleading statements made to investors, concealment of a liquidity crisis, and the obscuring of…
Harold E. Wilson, a former broker with Ameritas Investment Corp., has been permanently barred from the financial industry for engaging in private securities transactions without disclosing this activity to his firm. In addition, Wilson was barred for failing to respond to repeated requests for information on these transactions from the Financial Industry Regulatory Authority (FINRA)….
In October 2010, Nicholas J. Guiliano, Esquire of the Guiliano Law Group, P.C. in Philadelphia and Jeffrey Sonn of Sonn & Erez in Ft. Lauderdale, Florida filed nine actions in arbitration before the Financial Industry Regulatory Authority against Royal Alliance, Inc. and several of its former agents, in connection with the sale of the unregistered…
The Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) filed a disciplinary proceeding on March 28 alleging that former broker William Bruce Smith misappropriated $100,000 from a customer. Smith, who worked for FINRA-member Triad Advisors in Shrewsbury, Ma., at the time of the misappropriation, was registered as a general securities representative and principal…
As a colleague once said: “if you put them to sleep, you have to wake them up”. However, a New York state court confirmed an $880,000 arbitration award against Merrill Lynch, Pierce, Fenner & Smith Inc. despite allegations that one of the arbitrators repeatedly fell asleep during the hearings. No Basis to Vacate the Award…
Independent/broker-dealer Basis Financial LLC, and its owner and CEO Armen Karapetyan have been charged with defrauding customers of about $1.8 million over a three year span through four private placement offerings involving financially shaky issuers. According to the FINRA Complaint According to a complaint filed by the Financial Industry Regulatory Authority’s (FINRA) Department of Enforcement…
Investment adviser Brenda A. Eschbach has consented to an entry of judgment against her for misappropriating over $3 million in client funds, the Securities and Exchange Commission (SEC) announced on Feb. 15. The SEC Complaint Against Brenda A. Eschbach According to the complaint filed by the SEC in U.S. District Court for the Central District…
State courts must enforce arbitration agreements pursuant to the Federal Arbitration Act (FAA) regardless of public policy concerns or conflicting state laws, the U.S. Supreme Court has held in Marmet Health Care Center Inc. v. Brown, in a per curiam opinion entered Feb. 21. West Virginia’s Supreme Court of Appeals The ruling vacated a decision…
Lloyd Thomas Mincy Jr., a stockbroker registered with Centaurus Financial Inc., has been fined $20,000 and suspended for nine months for fraudulently misrepresenting the guaranteed rates of return for variable annuities he sold to four customers. From October 2004 through 2008, Mincy materially misrepresented the features of the variable annuities, both verbally and in writing….
LPL Financial LLC must pay $1.4 million to an elderly couple who claimed they were the victims of fraud in connection with real estate deals. The award was issued by an arbitration panel of the Financial Industry Regulatory Authority (FINRA) on Feb. 10. Heinrich and Araceli Hardt, both 76, bought into real estate deals known…
Tough economic times call for investors to be wary, as financial professionals are tempted toward riskier behaviors, according to the Financial Industry Regulatory Industry’s (FINRA) 2012 report on regulatory and examination priorities, released Jan. 31. The report first lists a few investment characteristics that demand close attention, and then provides a detailed list of products…
The Securities and Exchange Commission today charged former professional baseball player Doug DeCinces and three others with insider trading ahead of a company buyout. The SEC alleges that DeCinces and his associates made more than $1.7 million in illegal profits when Abbott Park, Ill.-based Abbott Laboratories Inc. announced its plan to purchase Advanced Medical Optics…
Since January 2011, David Lerner Associates, Inc. (David Lerner Associates) has recommended and sold over $300 million of a $2 billion real estate investment trust (REIT) — Apple REIT Ten — without performing adequate due diligence in violation of its suitability obligations. Earlier Apple REITs under the same management inappropriately valued the REITs’ shares at…
Hairdressor, Marcy Salandra went to her stockbroker’s office at Investors Capital Corporation in McMurray Pennsylvania to withdraw money to buy a house. However, instead of meeting her broker Patricia S. Miller, she was greeted by three FBI agents. Apparently, instead of the $681,944 that her statements showed her Investors Capital Corporation account was worth, the…
In 2012, The Office of the Whistle-blower was established to administer the SEC’s whistle-blower program formed in accordance with Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Section 21F of the Securities Exchange Act of 1934. The Act provides that the SEC shall pay awards to eligible whistle-blowers who voluntarily…
Nicholas J. Guiliano, Esquire of the Guiliano Law Group will be featured as a Speaker at the 21st Annual Meeting of the Public Investors Arbitration Bar Association this year in Austin, Texas at the Barton Creek Resort and Spa. Discovery Phase of an Arbitration Mr. Guiliano’s presentation will explore the discovery phase of an arbitration…
The Securities and Exchange Commission today charged four brokers who formerly worked on the cash desk at a New York-based broker-dealer with illegally overcharging customers $18.7 million by using hidden markups and markdowns and secretly keeping portions of profitable customer trades. Four Brokers’ Fraudulent Scheme The SEC alleges that the brokers purported to charge customers…
Stockbrokers, or more accurately, their employer brokerage firms are required to report to The Financial Industry Regulatory Authority (FINRA), when their stockbrokers are the subject of customer complaints alleging sales practice violations, criminal actions, bankruptcies, or their conduct forms the basis of an arbitration or civil action by a public customer against the broker or…
The United States Securities & Exchange Commission, as required by Section 917 of the Dodd-Frank Wall Street Reform and Consumer Protection Act issued a report today on Investor Literacy. Retain Investors Lack Knowledge to Prevent Fraud Not surprisingly, the study found that U.S. retail investors lack basic financial literacy and that investors have a weak…
The Financial Industry Regulatory Authority (FINRA) has expelled a Texas-based broker dealer from membership for selling $23 million in private placement offerings without having a reasonable basis to believe that the offerings were suitable for its customers. Letter of Acceptance, Waiver and Consent Cambridge Legacy Securities LLC consented to the expulsion as part of a…
The Securities and Exchange Commission today announced that a non-profit corporation that offers securities to fund mortgage and construction loans to young Amish families in Ohio will ensure that its investors receive more timely and accurate information under an agreement reached with the SEC. SEC Investigates Amish Helping Fund The SEC investigated the Amish Helping…
Brokers and financial advisors of JP Morgan Chase have said they were encouraged by the investment bank to favor JP Morgan’s own products even when the product of competitors were less expensive or better-performing, according to a report in the New York Times. Some advisers told the newspaper they felt pressured to recommend proprietary products as…
Brokerage firm Merrill Lynch, Pierce, Fenner & Smith Inc. has agreed to pay $2.8 million to settle charges by the Financial Industry Regulatory Authority (FINRA) that the firm’s failure to supervise led to over-billing. From April 2003 to December 2011, Merrill Lynch charged a total of about $32 million in unwarranted fees to roughly 95,000…
Sometimes the moral decay that leads financial professionals to steal from their clients runs deeper than anyone could expect. Robert Bales’ Crimes For instance, the news is out that Robert Bales, the U.S. Army staff sergeant accused of massacring 16 Afghan civilians, was a former stockbroker on the losing end of a 2003 arbitration before…
Merrill Lynch Pierce Fenner & Smith has been censured and fined $1 million for its failure to arbitrate disputes with its employees over retention bonuses. The fine was part of a settlement with Merrill Lynch announced by the Financial Industry Regulatory Authority (FINRA) on Jan 25. A full-service broker-dealer with its principal offices located in…
The U.S. Supreme Court issued an opinion on Jan. 10 ruling in favor of a credit card company that sought to enforce a mandatory arbitration provision in its agreement with a class of consumers that sued the company for making misleading statements and charging excessive fees. The class of consumers who sued, called respondents in…
Wells Fargo Investments LLC has been fined $2 million for failure to supervise the conduct of one of its brokers who sold unsuitable reverse convertible securities to elderly customers, the Financial Industry Regulatory Authority, or FINRA, announced on Dec. 15. The firm was also censured. The fine also covered Wells Fargo’s also failure to provide…
Charles B. Rowley III, a stockbroker with Boston-based Detwiler Fenton & Co., has been sanctioned by the Financial Industry Regulatory Authority, or FINRA, for engaging in churning and unsuitable trading in the accounts of two customers. Letter of Acceptance, Waiver and Consent Charles B. Rowley agreed to pay restitution of roughly $24,000 plus interest to…
LPL Financial LLC has been fined $100,000 for failing to supervise Jack Kleck, a broker who sold unsuitably risky investments to clients in their 80s, the Oregon Department of Consumer and Business Services announced on Nov. 22. Boston-based LPL is a broker-dealer licensed by the State of Oregon and responsible for the activities of Jack…
The Financial Industry Regulatory Authority (FINRA) issued a regulatory notice this month that contained the results of a survey of retail broker-dealer firms regarding the use and oversight of senior designations in an effort to better understand their approach to a vulnerable segment of the population. One area of particular focus was the use of…
An analysis by The New York Times of the Securities and Exchange Commission (SEC) enforcement actions during the past 15 years has found that Wall Street firms have broken anti-fraud laws they had pledged not to breach in at least 51 cases. The New York Times Report These cases involved 19 different firms, according to…
A New Jersey investment advisor was sentenced to 14 years in prison recently after pleading guilty to one count of securities fraud and use of manipulative and deceptive devices plus one count of transacting in criminal property. According to Court Documents Sandra Venetis, 60, the founding principal and president of Systematic Financial Associates Inc., a…
UBS Securities LLC was fined $12 million and censured by the Financial Industry Regulatory Authority, or FINRA, for widespread system deficiencies and a failure to supervise that led to tens of millions of improper short sales. The firm violated federal securities laws and FINRA rules at various times from January 2005 through March 2010, with…
Everyone who represents injured investors knows that they often lose more than just money. Defrauded investors, generally early retirees, are often older, penniless, and have little to no prospect for re-employment. They lose everything and have nothing. Some take on menial minimum wage jobs, are forced to sell their homes, and move in with their…
Everyone knows, and has known, including apparently the US Congress, that Wall Street’s Kangaroo Court, also known as FINRA Securities Arbitration, is a sham. In 2008, based upon the perceived unfairness of arbitration, and particularly, the “unwillingness” of the judiciary to earnestly examine “egregious” arbitration awards, motivated Congress to seek to make these arbitrations “voluntary.”…
Last week, United States Representative Keith Ellison introduced the Investor Choice Act of 2015 (H.R. 1098), a bill to end pre-dispute mandatory or “forced” arbitration agreements and ban prohibitions on class action lawsuits in customer service contracts between investment advisers and broker-dealers and their clients. “Working Americans shouldn’t have to sign away their rights in order…
H.D. Vest Investment Securities, Inc. operates a network of over 4,500 independent registered representatives located in branch offices throughout the United States. One such individual, Lewis J. Hunter was a registered representative of HD Vest when he stole more than $300,000 from his customers. According to Hunter, his customers would be investing ion high yield…
Thomas Keough of North Reading, Massachusetts was barred by the United States Securities & Exchange commission for the sale of unregistered securities whil Keough was a registered representative with Raymond James Financial Services, Inc. and Morgan Stanley. The SEC found that beginning in approximately 2002 and continuing through 2009, Keough raised approximately $110 million from investors…
Malcolm Segal was a registered representative, and operated his own branch office of Aegis Capital Corp. in Langhorn, Pennsylvania operating under the name J&M Financial. Segal also controlled or operated another company, National CD Sales. Beginning sometime in 2013, it appears that Segal began to sell investors bank certificates of deposit, which at least according…
Brian Williamson, the Managing Director of the sub-advisor to the Oppenheimer Global Resource Private Equity Fund Manager consented to the entry of an Order finding that he willfully violated Section 17(a) of the Securities Act; Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; and Section 206(4) of the Advisers Act and Rule 206(4)-8….
Last week, a California Superior Court Judge refused to certify class action claims by investors against MetLife Securities and New England Securities in connection with the fraudulent recommendation and sale of the securities of Diversified Lending Group Inc. to public customers. Representatives of New England Securities including Lawrence E. Bagby Jr., James C. Davidson Scott…
Welcome to America! You Can’t Make This Stuff Up America is the land of opportunity. Pakistani citizen and New York resident, Moazzam “Mark” Malik worked as a waiter, and NYPD traffic agent, and a security guard. After “working” at Lehman Brothers, JP Morgan Chase and Merrill Lynch, since 2002. Mark Malik manages more than $1…
For more than a decade, from at least February 1998 until June 2012, Dennis Fern Wright, a Lewistown, Pennsylvania stockbroker and insurance salesman associated with AXA Advisors, LLC., and, was entrusted with handling his customers’ retirement funds. However, at least according to the Securities & Exchange Commission, Wright lied to and stole over $1.5 million…
What practitioners have known for a long time: The Financial Industry Regulatory Authority’s Arbitration forum is unfair to investors. However, at least this time, there is empirical evidence to back up these claims of unfairness. Some History of Investor Unfairness By way of background, since 1987 and the Supreme Court’s holding in Shearson v. McMahon,…
Today the New York Attorney General Released the the False Claims Act case filed by Plaintiff-Relator David Danon against The Vanguard Group, Inc. (“VGI”), subsidiaries of VGI (collectively with VGI, “Vanguard”) and the Vanguard group of mutual funds (the “Funds”, and, collectively with Vanguard, the “Vanguard Group”). According to the unsealed complaint, Vanguard has operated…
Each year in Pennsylvania investors conservatively lose $3 billion as the result of securities fraud, Ponzi schemes and the sale of unregistered securities. Among the 50 states that are part of the North American Securities Administration Association, Pennsylvania is and always has been lowest on the list in terms of enforcement actions. Notwithstanding three lawyers,…
Former executives of ChinaCast Education Corp. (CAST) (“ChinaCast” or the “Company”) have been sued by the U.S. Securities Exchange Commission (the “SEC”) for securities fraud and insider trading. Chan Tze Ngon & Jiang Xiangyuan Sued by SEC The action, which was filed in the U.S. District Court for the Southern District of New York, was…
FINRA enforcement actions are rare because generally the offending broker or brokerage firms settles allegations of misconduct before a formal enforcement action is brought by entering into a Letter of Acceptance, Waiver and Consent or AWC, where offending broker or brokerage firm consents or admits to a narrow finding of facts, pays fines or penalties,…
Fort Lauderdale, Florida, February 4, 2012 (Globe Newswire) –Royal Alliance Associates, an AIG Advisor Group division owned by American International Group (NYSE: AIG), sued victims of a Ponzi scheme to block pending FINRA arbitration claims, where the victims have alleged that Royal Alliance Associates failed to supervise the sales agents who sold the fraudulent investments,…
A report released today by the Stanford Law School Securities Class Action Clearinghouse in cooperation with Cornerstone Research finds the number of securities fraud class actions filed in 2005 decreased more than 17 percent compared to 2004 levels, falling from 213 filings to 176. The 2005 filing rate is nearly 10 percent below the 1996 -…
A group of investors filed a class-action lawsuit on January 15, 2008 seeking nearly $500 million dollars in damages from Morgan Stanley, alleging their broker, Michael James Kazacos, gave them fraudulent investment advice and made false promises to Eastman Kodak retirees that never materialized. The plaintiffs are all former employees of Eastman Kodak Co in…
Fort Lauderdale, Florida, February 4, 2012 (Globe Newswire) –Royal Alliance Associates, an AIG Advisor Group division owned by American International Group (NYSE: AIG), sued victims of a Ponzi scheme to block pending FINRA arbitration claims, where the victims have alleged that Royal Alliance Associates failed to supervise the sales agents who sold the fraudulent investments,…
The Securities and Exchange Commission today charged Morgan Stanley and one of the firm’s former investment adviser representatives with securities law violations for misleading clients about the money managers being recommended to them and failing to disclose conflicts of interest. According to the SEC’s orders in the case, Morgan Stanley breached its fiduciary duty to…
Sixteen specialist panels will examine Cultural Considerations in International Arbitration: Bridging the Divide – Civil vs. Common Law Ad-hoc or Institutional Arbitration – The Good and the Bad Procedure Under the UNCITRAL Model Rules Drafting the Arbitration Clause – Addressing the Issues Anti-suit Injunctions – Protection of Legal and Equitable Rights Arbitration and the Feeling…
The US Securities and Exchange Commission issued cease-and-desist proceedings against Michael A. Horowitz and Moshe Marc Cohen from as the result of a fraudulent scheme to profit from the imminent deaths of terminally ill hospice and nursing home patients through the purchase and sale of more than $80 million in deferred variable annuities. The Scheme Michael…
The Financial Industry Regulatory Authority or FINRA announced today the it had entered into a regulatory settlement agreement, or Letter of Acceptance, Waiver and Consent with Berthel Fisher & Company Financial Services, Inc. As part of the settlement, FINRA found that from approximately 2007 through 2012, Berthel Fisher had an inadequate supervisory system and written…
Gone are the days of the penny stock and the “chop stock.” In the old days, in addition to house stocks, brokers would trade “lunch-time” stocks. A lunch time stock is a stock that trades “a quarter to one,” i.e. the bid is a quarter or 25 cents, but the offer is $1. So if…
The United States Securities and Exchange Commission, after an investigation, instituted administrative proceedings against Roy Dixon, Jr., a former registered representative of Professional Asset Management, Inc., a licensed broker dealer in Bloomfield Hills, Michigan Roy Dixon, Jr., age 50, resides in Atlanta, Georgia and was the owner and founding general partner of Onyx Capital Advisors,…
Samuel Delshaul Shoemaker was recently barred from associating with any FINRA member for allegedly disclosing personal confidential information of bank customers to a third party who was not authorized to receive it and for failing to provide information and testimony in the course of a FINRA investigation. In a default decision, the FINRA department of…
FINRA barred Scott Donovan Schroeder, formerly a broker at Milkie Ferguson Investments, for making unsuitable investment recommendations to elderly customers. According to FINRA, Scott Schroeder also made material misrepresentations and omitted to disclose material facts to customers. Schroeder also allegedly went against Milkie Ferguson policies by facilitating a loan application for a customer who used…
Arthur Lin was the branch manager of an LPL Financial office in Itasca, Illinois. According to the US Securities and Exchange Commission, Arthur Lin, and two others, Marcin Malarz and Jacek Sienkiewicz, both of whom have apparently fled to Poland, raised at least $14,380,000 from investors through the fraudulent unregistered offer and sale of promissory…
Lynn A. Simon was arrested for swindling investors of over a $1 million. Once authorities were alerted to his swindle, because investors stopped receiving their interest payments, Simon disappeared and was later traced to Alabama and New Mexico. During the course of his association with CFD Investments, Inc., while operating his own office under the…
Steven B. Heinz, of Provo, Utah, a registered stockbroker of Ogilvie Security Advisors Corp. was charged by the United States Securities and Exchange Commission for multiple violations of federal securities laws. According to the SEC, beginning in January 2012, during his association with Ogilvie Security Advisors Corp., Heinz provided investment advice and offered and sold…
Donald Richard Dahn (aka, “Rick” Dahn) was barred from associating with any FINRA member for borrowing money from bank customers to pay the operating expenses of a company Dahn ran with his brother. On October 14th, Donald Dahn submitted a Letter of Acceptance, Waiver and Consent (“AWC”), neither admitting nor denying FINRA’s findings but accepting…
The United States Securities Exchange Commission and the Department of Justice filed charages against Gurudeo “Buddy” Persaud. According to documents filed by the SEC from no later than July 2007 until at least January 2011, Persaud, directly and through his company, While Elephant Trading Company LLC, operated an offering fraud that, by November 7, 2007,…
Glen A. Galemmo, a Cincinnati stockbroker associated with Landmark Investment Group, Inc., plead guilty in United States District Court to criminal charges that between 2005 and July 2013, he operated a Ponzi scheme that took in at least $100 million from investors. According to the federal indictment Galemmo operated the Queen City Investment Fund, along…
Martin John Maloney (A.K.A. Marty Maloney, and Martin J. Maloney), previously associated with MetLife Securities Inc. at 150 Essjay Rd., in Williamsville, NY 14221, was barred from association with any FINRA member in any capacity in October of 2013 for converting $220,000 of a MetLife customer’s money. Marty Maloney led a customer and his wife…
On October 16, 2013 FINRA barred David C. Key from association with any FINRA member in any capacity. Without admitting or denying the findings, Mr. Key consented to the sanction by submitting a Letter of Acceptance, Waiver and Consent (“AWC”), which FINRA accepted. David Key was a registered Principal with PFS Investments Inc. (PFSI, also…
FINRA has accused James Arnold Busch, a former Wells Fargo & Co. (WFC) broker, of stealing at least $1.3 million from customers in Georgia. Most of these customers were elderly women. Without admitting or denying the findings, prior to a regulatory hearing, and without an adjudication of any issue, Busch submitted a Letter of Acceptance,…
Wellesley Massachusetts stockbroker Paul J. Dumouchel was barred from the securities industry for life because he used an 82 year old Alzheimer’s patient to make $63,000 in commissions. According to the FINRA The Financial Industry Regulatory Authority notes, Dumouchel while associated with the brokerage firm, H. Beck, drove the woman to five local banks and…
Investment fraud rarely involves actual theft. Investors may lose their savings as the result of the tainted recommendation to purchase defective financial products, brokers may “sell away” or engage in the sale of unregistered promissory notes or other Ponzi schemes, but actual theft is generally quite rare. However on December 3, 2013, the Financial Industry…
Charles Vista, LLC, formerly known as D.C. Evans & Co. (“DCE”), was a registered broker-dealer with its principal place of business at 100 Williams Street, 18th Floor, New York, New York 10039. DCE was acquired by Gregg C. Lorenzo, through GJL Holding Company, LLC, following his departure from John Thomas Financial in 2009. Lorenzo is…
Jinesh Brahmbhatt also known as “Hodge,” was permanently barred by the Financial Industry Regulatory Authority or FINRA in connection with an alleged $18 million fraud perpetrated against a number of high profile National Football League and National Basketball Association players. Brahmbhatt, also conducting business under the name Jade Private Wealth Management, agreed to an a…
The Securities and Exchange Commission today sanctioned three investment advisory firms Modern Portfolio Management Inc., Equitas Capital Advisers LLC, and Equitas Partners LLC for repeatedly ignoring problems with their compliance programs. The enforcement actions arise from the agency’s Compliance Program Initiative, which targets firms that have been previously warned by SEC examiners about compliance deficiencies but…
According to Cerulli Associates Inc., the big wire-houses manage over $4.7 trillion in client assets. However, it is estimated that $50 billion is wasted each year by clients paying undisclosed and unnecessary fees or losses based on inappropriate product choices and high expense levels. When customer go from one brokerage firm to another, the practice…
Nicholas J. Guiliano, Esquire of the Guiliano Law Group, P.C. is scheduled to speak at the Rutgers Law School Camden on April 12, 2013 on the history and practice of federal securities arbitration law, including recent developments in the law, as part of a course entitled Securities Litigation and Enforcement. His lecture will focus on…
FINRA Publishes 2012 Year in Review highlighting enforcement actions, including non-traded REITS, Reverse and Leveraged ETF Funds, and Structured Products. FINRA claims that it initiated 1,846 routine examinations, more than 800 branch office examinations, and 5,100 cause examinations in response to events such as customer complaints, terminations for cause and regulatory tips. How many of these…
A putative class action was filed Monday against Behringer Harvard REIT I, a $4.4 billion real estate investment trust in U.S. District Court for the Northern District of Texas by any investor who purchased 1,275 shares of the trust from 2004 to 2008. Behringer Harvard is one of more than a half dozen large non-traded…
On September 10, 2012, Judge Koeltl of the United States District Court for the Southern District of New York dismissed a class action complaint against ProShares based upon the sale of its inverse and leveraged ETF funds. ProShares created and operated three types of ETFs: “Inverse ETFs,” the goal of which was for the net asset…
This week the SEC Charged J.P. Turner & Co. with the failure to supervise and three brokers for Churning. The Securities and Exchange Commission charged three brokers Ralph Calabro, Jason Konner, and Dimitrios Koutsoubos with the churning of customer accounts while they were associated as registered representatives of JP Turner. JP Turner has approximately 513…
In 2011 Bank of America Merrill Lynch, in conjunction with ETF Securities, launched the first Exchange Traded Fund (ETF) linked to European equity volatility, listed on the London Stock Exchange. The ETFX-BofAML IVSTOXX ETF is linked to the EURO STOXX 50 Investable Volatility Index (the Investable VSTOXX, or IVSTOXX), an investable index which reflects the…
Broker William Thomas Johnson Jr. has been permanently barred by the Financial industry Regulatory Authority (FINRA) for misappropriating about $100,000 in customer funds. On June 1, Johnson submitted a Letter of Acceptance, Waiver and Consent (AWC) to settle a number alleged FINRA rule violations. He accepted and consented to an entry of findings by FINRA…
On July 13, a three-person arbitration panel of the Financial Industry Regulatory Authority (FINRA) handed down a $1.7 million arbitration award against JHS Capital Advisors Inc. and one of its former brokers. Claimant John Sisk claimed excessive trading and churning, common law fraud, ordinary negligence, gross negligence, breach of contract, negligent retention and hiring, control…
The Financial Industry Regulatory Authority (FINRA) implemented a new suitability rule on July 9 that broadens the list of factors firms and brokers need to analyze before recommending securities or investment strategies. The SEC Approves New FINRA Rule The Securities and Exchange Commission (SEC) approved the new FINRA Rule 2111 in November 2010. Since then,…
The Financial Industry Regulatory Authority (FINRA) has filed a complaint against Charles Duane Lewis, a broker with H.D. Vest Investment Services who misappropriated more than $500,000 from an elderly customer. The complaint, filed by FINRA’s Department of Enforcement on June 25, states that Lewis misappropriated the money between December 2007 and May 2010 from an…
Merrill Lynch, Pierce, Fenner & Smith Inc. has been fined $450,000 by the Financial Industry Regulatory Authority (FINRA) for failure to supervise operations to prevent unsuitably high concentrations of structured products from building up in customer accounts. The firm submitted a Letter of Acceptance, Waiver and Consent (AWC) to settle alleged violations of FINRA rules….
OppenheimerFunds Inc. agreed to pay roughly $35 million to settles charges by the Securities and Exchange Commission (SEC) that it made misleading statements to investors in two mutual funds that rapidly lost value during the 2008 financial crisis. The settlement consists of a $24 million penalty, disgorgement of about $9.8 million and prejudgment interest of…
Occupy Wall Street filed an amicus curiae brief on May 21 urging the 2nd U.S. Court of Appeals to affirm the district court’s rejection of a $285 million settlement agreement Citigroup reached last year with the Securities and Exchange Commission (SEC) to resolve charges that the giant bank had gamed the mortgage bond market. The…
Two subsidiaries of Morgan Stanley were fined by the Financial Industry Regulatory Authority (FINRA) earlier this month for negligently making material misrepresentations to investors regarding the call price and yield of certain fixed-income securities, as well as negligently failing to disclose that these securities were interest-only. The misrepresentations were the result of incomplete information that…
Scott B. Hostutler, formerly a broker with Edward Jones, was suspended for 10 days by the Financial Industry Regulatory Authority (FINRA) for trading in a customer’s account without authorization. Hostutler was fined $5,000 in addition to his suspension from association with any FINRA member in any capacity. The sanctions were set out in a Letter…
UBS Financial Services Inc. has agreed to pay a $1.5 million fine after the Financial Industry Regulatory Authority (FINRA) charged the firm with failure to supervise the sale of complex financial products known as non-traditional exchange-traded funds, as well as for making unsuitable recommendations of these funds. In addition to the fine, UBS Financial Services…
Citigroup Global Markets Inc. has been fined $2 million by the Financial Industry Regulatory Authority (FINRA) for failure to supervise and for making unsuitable recommendations in connection with the sale of complex financial products known as non-traditional exchange-traded funds. The firm submitted a Letter of Acceptance, Waiver and Consent (AWC) to settle a FINRA disciplinary…
After he misappropriated $734,000 from various customers, Joel W. Carlson, a former broker with Sagepoint Financial Inc., was permanently barred from the business by the Financial Industry Regulatory Authority (FINRA). Carlson is also facing a civil lawsuit alleging $50,000 in damages stemming from fraudulent indexed annuity sales and misappropriation. The litigation is pending 2nd Judicial…
Thomas R. Fortino, a former broker with First Allied Securities Inc., was fined and suspended by the Financial Industry Regulatory Authority (FINRA) after he engaged in business outside his firm, often called selling away, and misled his firm about these activities. Fortino submitted a Letter of Acceptance, Waiver and Consent (AWC) that resolved the FINRA…
AXA Advisors LLC has been fined $50,000 by the Financial Industry Regulatory Authority (FINRA) and censured for its failure to supervise a broker who misappropriated $122,000 from the money market account of a customer, 70 percent of the account’s value. Letter of Acceptance Waiver and Consent The firm submitted a Letter of Acceptance Waiver and…
Timothy David Cochrane has been permanently barred from the financial industry as part of a settlement of an action against him for misappropriating $600,000 in customer funds. On March 30, the Financial Industry Regulatory Authority (FINRA) accepted a Letter of Acceptance, Waiver and Consent (AWC) submitted by Cochrane to resolve alleged rule violations. Cochrane neither admitted…
Raymond James Financial Services Inc. has agreed to pay a $400,000 fine to settle allegations that it failed to supervise a customer who used accounts he had with the firm to operate a multi-million-dollar Ponzi scheme.The firm submitted a Letter of Acceptance Waiver and Consent (AWC) to resolve a disciplinary action brought by the Financial…
Last month, brokerage firm Stifel, Nicolaus & Co. Inc. settled a disciplinary action brought against it by the Financial Industry Regulatory Authority (FINRA) after one of the firm’s brokers ran a Ponzi scheme that defrauded customers. The terms of the settlement included a $350,000 fine and a censure. Stifel Nicolaus also agreed to pay restitution…
Roland Craig Matatics, a former broker with MetLife Securities Inc. in Keene, N.H., has been permanently barred from the financial industry for misappropriating $10,000 from a customer suffering from dementia. Roland Craig Matatics Submits an AWC The money was later returned and Matatics submitted a Letter of Acceptance, Waiver and Consent (AWC) to settle an action…
Last month Leland O. Stevens, a former broker with Great American Advisors Inc., settled a disciplinary action against him after he served up his unwitting customers to a Ponzi scheme. The Financial Industry Regulatory Authority (FINRA) filed a complaint against Stevens last year for his role in the sale of promissory notes that turned out…
Cornerstone Core Properties REIT Inc., a non-traded real estate investment trust, has sent a letter to its shareholders bearing some bad news: The REIT’s valuation has plunged from the original issue price of $8.00 per share down to $2.25, a dive of about of 72 percent. Cornerstone’s Letter to Shareholders The company reported the revised…
Last month, the Financial Industry Regulatory Authority (FINRA) issued an investor alert to remind investors that a careful review of their periodic brokerage account statements is an important way for them to stay informed about what brokers are doing with their money. The alert, titled “It Pays to Understand Your Brokerage Account Statements and Trade Confirmations,”…
Jimmy Wayne Freeman, a broker with Texas-based PlanMember Securities Corp., was ordered by the Texas Securities Board to pay more than $500,000 in restitution to investors after he sold them securities issued by an outside firm without his firm’s permission and without holding the appropriate securities license. Freeman was also suspended for 12 months from…
Robert Bales, the US Army staff sergeant accused of massacring 16 Afghan civilians, was a former stockbroker, who enlisted in the U.S. Army to apparently avoid paying an elderly Ohio couple of their life savings in a stock fraud. According to FINRA records, from 1996 through 2000, Bales was associated with at least seven brokerage…
The Financial Industry Regulatory Authority (FINRA) has sanctioned Christine L. Cantone and her firm for their failure to supervise a broker who sold fictitious investments to customers through which he misappropriated over $1.6 million. Cantone & Cantone Research Inc. Censored & Fined Pursuant to an FINRA order dated Feb. 22 that accepted an offer of…
Anthony L. Semadeni, a former stockbroker with World Group Securities, has been barred from the financial industry for two years and ordered to pay up to $60,000 in restitution plus interest to customers for borrowing money from them and never fully paying it back. Semadeni also lied to World Group about the loans he received…
A former Edward Jones administrator has been permanently barred from the financial industry after misappropriating a total of $63,000 from 21 customers. According to a default decision issued by the Financial Industry Regulatory Authority (FINRA) on Feb. 15, Carolyn Avia Harmon misappropriated $63,000 in customer funds between November 2006 and September 2009. She also failed…
A federal judge in Los Angeles has ordered Stanley C. Brooks, the former CEO of Brookstreet Securities Corp., to pay the maximum civil penalty of $10 million in a securities fraud case that goes back to the financial crisis, the Securities and Exchange Commission (SEC) announced on March 2. According to the docket, Judge David…
Over five years, former broker James Scott McKee defrauded the customers of the brokerage firms where he worked out of nearly $1 million, using lies and omissions to induce them to invest in various real estate ventures in which he had a direct or indirect financial interest, according to a complaint filed by the Financial…
Evidently, it slipped the mind of one New York stockbroker that dead men can’t trade. Eric Anthony Foster, a stockbroker with Halcyon Cabot Partners Ltd., has been fined $10,000 by the Financial Industry Regulatory Authority (FINRA) and suspended for three months for unauthorized trading in the account of a deceased customer while he worked for…
Broker-dealer Stone & Youngberg have been fined $350,000 and censured by the Financial Industry Regulatory Authority (FINRA) for charging excessive markups on trades of collateralized mortgage obligation securities (CMOs) for retail customers. The firm was also required to pay about $206,000 in restitution to customers, without interest, per the terms of a Letter of Acceptance,…
Clyde M. Thornburg, a former stockbroker with NEXT Financial Group Inc., was charged earlier this month with unsuitable short-term trading and switching in the accounts of elderly and unsophisticated investors. The FINRA Complaint On Feb. 9, the Financial Industry Regulatory Authority (FINRA) filed a complaint against Thornburg, a Florida-based registered representative with NEXT. The affected…
Philip Eckstein, a former MetLife Securities Inc. broker, was permanently barred from association with any members of the Financial lndustry Regulatory Authority (FINRA) after he converted $10,000 of an elderly customer’s money to his own use. FINRA announced the sanction in a February 8, 2012 Order accepting Eckstein’s offer of settlement after a disciplinary proceeding…
In a striking example of the ineffectiveness that can plague securities regulation, investment adviser Robert Pinkas allegedly misappropriated $800,000 from a client to pay for disgorgement and costs resulting from a previous case brought against him by the Securities and Exchange Commission (SEC). On Feb. 15, the SEC issued an order to start administrative and…
A former stockbroker for Wells Fargo Advisors LLC has been fined $5,000 and suspended from the financial industry for six months for changing dates and account numbers on forms without customers’ permission. In June 2010, Judith Martin altered the dates and account numbers on 25 Initial Public Offering (IPO) Certification Forms that the Wells Fargo…
Family members may want to stay informed about this aspect of their relatives’ lives, to make sure unscrupulous financial professionals do not take advantage of senior citizens who are cognitively impaired. About 5.2 million Americans over the age of 65 suffer from Alzheimer’s, according to a 2011 report from the Alzheimer’s Association. About 200,000 people…
Florida-based brokerage firm 1st Discount Brokerage Inc. has been censured and fined $40,000 by the Securities and Exchange Commission (SEC) for its failure to supervise a broker who defrauded investors of nearly $9 million. In addition, Michael R. Fisher, executive-vice president of the firm at the time, was ordered to pay $10,000, according to the…
Citigroup Global Markets Inc. was censured and fined $725,000 this month by the Financial Industry Regulatory Authority (FINRA) for its failure to comply with disclosure requirements. From January 2007 through about March 2010, Citigroup Global failed to comply with the disclosure requirements of Rule 2711 of the National Association of Securities Dealers (NASD), a predecessor to…
Penny stock promoter First Resource Group LLC and its principal David H. Stern were charged with three counts of fraud by the Securities and Exchange Commission (SEC) in a complaint filed on Jan. 26. The SEC Complaint Stern and his Florida company fraudulently manipulated the market for the stock of two small, thinly traded companies,…
Former stockbroker Ralph Edward Thomas Jr., who pleaded guilty to mail fraud in September, has been barred for life by the Financial Industry Regulatory Authority (FINRA) for conversion of more than $800,000 in customer funds to his own use. According to FINRA, Thomas misappropriated the money from three vulnerable customers between December 2001, and July…
Former LPL Financial Corp. stockbroker Amrita Holden has been permanently barred by the Financial Industry Regulatory Authority (FINRA) for wrongfully converting about $187,000 in customer funds to her own use. While employed by LPL, Holden forged the signature of an elderly customer on distribution request forms for the customer’s Individual Retirement Account (IRA). These forms…
A purported class-action lawsuit brought by a broker-dealer against the predecessor to the Financial Industry Regulatory Authority Inc., or FINRA, went out meekly this week, when the U.S. Supreme Court denied without explanation the plaintiff’s petition for the case to be heard. The suit, Standard Investment Chartered Inc v. National Association of Securities Dealers, was…
Morgan Stanley & Co. LLC has been censured and fined $600,000 by the Financial Industry Regulatory Authority, or FINRA, for failure to supervise its stockbrokers to ensure compliance with its own guidelines regarding structured products. As a result of this failure of supervision, the firm’s stockbrokers recommended a total of 14 unsuitable structured product investments…
The receiver appointed to handle the fallout from one of the largest Ponzi schemes in Minnesota history has filed suit in federal court in Minneapolis against NRP Financial Inc. for its failure to supervise a registered broker who participated in the fraud that bilked investors out of $150 million. NRP was a registered broker-dealer with…
On October 4, 2011, a FINRA Arbitration Panel sitting Portland, Oregon, in the matter of James D. Brogden, et. al. v. Merrill Lynch Pierce Fenner & Smith, Inc., FINRA Arbitration Number 10-01725 rendered an arbitration award against Merrill Lynch for $96,049 of the $309,358 in damages sought in connection with the recommendation to purchase Federal…
The Financial Industry Regulatory Authority, or FINRA does not take kindly to stockbrokers who fail to disclose tax liens, perhaps because such behavior can signal un-trustworthiness, the last thing you want to see in a stockbroker. If you are a stockbroker who fails to timely disclose such liens per FINRA rules, you are likely to…
The migration of stockbrokers into the advisory arena through the marketing of brokers as “trusted advisers” and “financial advisors” over the years has fueled confusion among investors as to the services provided by stockbrokers and investment advisers as well as the level of protection. The dirty secret is that aside from filling out an Investment…
Welcome to the age of the Ponzi Scheme, the result of the non-regulation of “hedge funds.” Madoff, Nagel, Stanford, Spitzer, the list goes on and on, millions, tens of billions of dollars swindled by Ponzi scheme scam operators, always, or at least most often leaving investors with nothing, except whatever meager sum the government may…
The Financial Industry Regulatory Authority, recently filed a proposed rule change with the U.S. Securities & Exchange Commission to to adopt NASD Rule 2830 (Investment Company Securities or mutual fund shares) as FINRA Rule 2341 (Investment Company Securities) with certain important changes. NASD Rule 2830 NASD Rule 2830 regulates brokerage firms’ activities in connection with…
The Guiliano Law Group. P.C. has announced the filing of securities arbitration claims before the Financial Industry Regulatory Authority (FINRA) on behalf of investors suffering losses in Inverse and Leveraged Exchange Traded Funds or ETFs. Many investors were sold these securities based upon the notion that they could be a long term hedge. Most ETFs track…
The United States Securities and Exchange Commission announced that Wells Fargo Securities LLC consented to an $11.2 million fine in connection with the sale of collateralized debt obligations (CDOs) in late 2006 and early 2007. The SEC found that Wachovia Capital Markets violated the securities laws by fraudulently charging undisclosed and excessive markups in the…
Just when you thought that you heard it all. The New York Stock Exchange disciplined former Morgan Stanley stockbroker Charles Winitch of Scarsdale, New York, for unauthorized trading, churning or excessive activity, and breach of fiduciary duty with respect to the accounts of his customers. Mr. Winitch’s fraudulent conduct, however, relates to the accounts of…
Following the 2003 Global Settlement with FINRA and the Securities & Exchange Commission, were Morgan Stanley paid $125 million in fines, disgorgement, and “procurement of Independent Research,” it seems Morgan Stanley has been caught again publishing inaccurate and misleading investment research report, which fail to disclose Morgan Stanley?s financial interests, and conflicts of interest to…
The man who predicted in March 2007 the collapse of the mortgage-backed securities market now predicts that Wall Street banks are creating the next investment bubble by selling opaque and unregulated structured notes to investors hunting for yield. Richard Christopher Whalen Whalen wrote today in a report, using the same “loophole” that allowed over-the-counter sales…
Securities arbitration results from the Financial Industry Regulatory Authority (“FINRA”) Office of Dispute Resolution reporting the outcomes of customer initiated investment related arbitrations against stockbrokers and investment firms has been released for 2009. Not surprisingly, the number of FINRA customer initiated arbitration cases filed in 2009 increased 43% from 4,982 cases in 2008 to 7,137…
John Edward Mullins and wife allegedly drained their client’s trust while she was in a nursing home. A former Morgan Stanley broker was barred today by the Financial Industry Regulatory Authority Inc. for allegedly misappropriating $11,156.47 from the charitable foundation of a 97-year-old nursing home resident who was his client for more than 20 years….
FINRA Fines Bank Broker-Dealers $1.65 Million for Supervisory Failures in Variable Annuity, Mutual Fund and UIT Transactions. Five Firms Sanctioned, One Charged with Unsuitable VA Sales to the Elderly Washington, D.C. — The Financial Industry Regulatory Authority (FINRA) announced today that it fined five bank broker-dealers a total of $1.65 million for deficient supervision and…
Financial crises have a way of jolting investors into seeing that perhaps their brokers weren’t such trustworthy advisers after all. Requests for arbitration hearings are up 85 percent so far this year at the Financial Industry Regulatory Authority, the only place investors can go when they think they have been fleeced. Going to court isn’t…
According to the latest figures from the Financial Industry Regulatory Authority (FINRA), through October 2008, investment arbitration claims are up 49% from 2007. In addition, during the first 10 months of 2008, more cases have been already been filed than were filed in all of last year. Most brokerage agreements contain provisions that any disputes…
Last week I told you about what happened to Hal and his wife, both 67, retired, and long time readers. From more than a million dollars in their 401K account as of January, 2006, their investments have lost close to $750,000. Why? What Went Wrong? “In our final preparations for retirement, in early 2006 even…
If your stockbroker sold you improper, excessively risky investments, or — failed to disclose the riskiness of what appeared as an otherwise conservative investment, and as a result you lost your shirt — then today’s story will be especially relevant. For my readers who are stockbrokers, I’ll tell you right now that I’m going to…
Philadelphia, PA (MarketWire) November 6, 2008 –The Guiliano Law Group, P.C., a leading securities lawyer firm in Philadelphia, Pennsylvania announced today it is actively investigating and pursuing securities fraud claims against certain securities broker-dealers resulting from the risky or unsuitable recommendation of securities. Investment trusts, labor unions, pension funds, local municipalities, school boards and charitable…
Washington, D.C. – The Financial Industry Regulatory Authority (FINRA) announced today that it has imposed a $250,000 fine against J.P. Turner & Company, LLC of Atlanta, GA, for failing to have an adequate supervisory system designed to ensure that its registered representatives charged customers fair and reasonable commissions on stock trades. As part of the…
LPL Financial was sued last week in Phoenix for its role in an affinity fraud case involving members of a local church and an ex-broker who allegedly stole $5 million from at least 40 victims. The lawsuit alleges that the broker, James Buchanan, was able to steal $382,376 from an elderly married couple because LPL…
PHILADELPHIA – PA Nicholas J. Guiliano of the Guiliano Law Group, P.C., in Philadelphia, Pennsylvania announced today he is actively investigating and pursuing fraud claims against certain securities broker-dealers resulting from the risky or unsuitable recommendation of the securities of certain financial institutions. Tens of Billions Lost in Securities Investment Trusts, Labor Unions, Pension Funds,…
The Securities and Exchange Commission today charged a former broker in South Florida, Gary J. Gross, who allegedly defrauded senior citizens and other customers through a variety of abusive sales practices, garnering him more than $700,000 in commissions and fees while causing more than $2.7 million in investor losses. SEC Chairman Christopher Cox announced the…
Despite intense pressure from regulators to tighten recruiting standards for brokers with marks on their records, these bad apples are still being hired by new firms, recent cases illustrate. The problem is compounded by an industry practice that condones silence from broker-dealers when a registered representative leaves under a cloud, attorneys and regulators said. It’s…
In a case allegedly involving stolen stock, Wachovia Securities LLC was hammered in a recent arbitration loss and ordered to pay clients $5.3 million in damages. An award of that size is a huge win for investors, attorneys said. The case, which was decided July 30, centered on allegations that Wachovia of St. Louis “accepted…
In a superficial effort to avoid Congress enacting the Arbitration Fairness Act, in response to the perceived corruption of the arbitration process by FINRA, a “self”-regulatory organization consisting of the same brokerage firms that are the defendants or respondents in these cases, announced that it will launch a two-year pilot program later this fall. The pilot program…
Saying stockbrokers should be barred from hiding their mistakes, Attorney General Douglas F. Gansler lauded a federal appeals court for allowing state regulators to intervene in malpractice settlements in an attempt to make sure the action stays on the broker’s national record. But the outcome was decried by an attorney for the former broker who…
Last August, Wall Street firm Morgan Stanley and one of its senior traders agreed to pay $6.1 million in fines and restitution to settle allegations that the investment bank overcharged brokerage customers on 2,800 purchases of $59 million of bonds. Dana de Windt, a Crucial Inside Source Regulators investigating the case had a crucial inside…
General Description of Auction Rate Securities Auction rate securities were first offered for sale in U.S. financial markets in the early 1980s. As of the end of 2005, there were approximately $263 billion of auction rate securities outstanding. Many different types of issuers have issued auction rate securities for example, closed-end funds, corporations, municipal authorities…
Recent downgrades of municipal bond insurers and other short-term liquidity concerns have created extreme volatility in the market for municipal Auction Rate Securities. There also have been an unprecedented number of “failed auctions,” meaning that investors who chose to liquidate their positions through the auction process were not able to do so. This situation may…
Testimony of Tanya Solov Director, Illinois Securities Department Illinois Secretary of State On behalf of the North American Securities Administrators Association Before the United States Senate Committee on the Judiciary Constitution Subcommittee December 12, 2007 S. 1782, the Arbitration Fairness Act of 2007 December 12, 2007 Chairman Feingold, Ranking Member Brownback, and Members of the…
A critical part of the hiring process in the securities industry is the background investigation of prospective personnel. For instance, background investigations can help member firms determine whether a prospective employee is subject to a statutory disqualification or whether he or she may present a regulatory risk for the firm and customers. Firms Obligations It…
The Financial Industry Regulatory Authority has fined Oppenheimer & Co. Inc. $1 million to settle charges it produced “flawed, incomplete and untimely data” in breakpoint self-assessment. FINRA claimed that New York boutique firm Oppenheimer submitted fund breakpoint data to FINRA that the firm knew to be inaccurate, in addition to other supervisory deficiencies, in 2003….
NYSE HEARING BOARD DECISION 07-143 September 7, 2007 Citigroup Global Markets Inc. Violated NYSE Rule 401(a) by failing to ensure delivery of prospectuses in connection with sales of registered securities in violation of Section 5(b)(2) of Securities Act of 1933 and to deliver trade confirmations to certain customers; violated NYSE Rule 1100(b) by failing to…
NEW YORK STOCK EXCHANGE LLC NYSE HEARING BOARD DECISION 07-129 September 7, 2007 BANC OF AMERICA SECURITIES LLC MEMBER ORGANIZATION Violated NYSE Rule 401(a) by failing to ensure delivery of prospectuses in connection with sales of registered securities in violation of Section 5(b)(2) of Securities Act of 1933; violated NYSE Rule 1100(b) by failing to…
NEW YORK STOCK EXCHANGE LLC NYSE HEARING BOARD DECISION 07-116 September 7, 2007 WACHOVIA CAPITAL MARKETS LLC MEMBER ORGANIZATION Violated NYSE Rule 1100(b) by failing to deliver product descriptions to customers that purchased Exchanged Traded Funds; violated NYSE Rule 342 by failing to provide for, establish, and maintain appropriate procedures of supervision and control, including…
Allianz will provide restitution to seniors and implement more stringent suitability processes. Minnesota Attorney General Lori Swanson announced today the settlement of a lawsuit she brought in January against Allianz Life Insurance Company of North America for selling deferred annuities to Minnesota senior citizens without first determining whether the annuities were suitable investments for the…
Mutual Service Corp. of West Palm Beach Fla., and five of its principals are the subjects of a complaint by Financial Industry Regulatory Authority concerning allegedly shoddy and inaccurate books and records over sales of variable annuities, including tax-free exchanges, known as 1035 exchanges. MSC, with about 1,200 affiliated registered representatives and 800 branches, was…
Pruco Securities, LLC (CRD #5685, Newark, New Jersey) and Prudential Investment Management Services LLC (CRD #18353, Newark, New Jersey) submitted a Letter of Acceptance, Waiver and Consent in which they were censured, fined $525,000, jointly and severally, and required to conduct an audit and prepare written findings regarding their compliance with NASD rules relating to…
NEWARK, NJ – Citigroup Global Markets Inc. has been ordered to cease and desist from violations of the New Jersey Uniform Securities Law, and to pay the state $5 million in civil monetary penalties under the terms of a consent order announced today by Attorney General Anne Milgram, Consumer Affairs Acting Director Stephen B. Nolan…
Morgan Stanley agreed Wednesday to pay nearly $8 million to settle federal fraud charges stemming from its reported failure to get retail stock investors the best prices possible on more than a million over-the-counter transactions. The Settlement Over roughly three years, the Securities and Exchange Commission said Wednesday in announcing the settlement, “Morgan Stanley’s automated…
The Securities and Exchange Commission (SEC) has approved the NASD Codes of Arbitration Procedure for Customer and Industry Disputes (hereinafter referred to as the Customer and Industry Codes, respectively, or new Codes). Customer and Industry Codes The Customer and Industry Codes reorganize the dispute resolution rules into separate procedural codes, simplify the language of the…