Corporate & Securities Law

MetLife Securities, Affiliates Fined $1.2M; Investigation Of Broker Misconduct Continues

Posted on November 20, 2009
MetLife Securities and three affiliates - New England Securities Corp., Walnut Street Securities, and Tower Square Securities - are facing a fine of $1.2 million by the Financial Industry Regulatory Authority (FINRA) for failing to properly monitor and review their brokers? email correspondence with the public...

Stifel, Nicolaus & Co., AXA Advisors Broker Kenneth Neely Charged In Ponzi Scam

Posted on November 19, 2009
Former Stifel, Nicolaus & Co. and AXA Advisors broker Kenneth Neely pleaded guilty on Nov. 4 to fraud charges connected to operating a Ponzi scheme in which clients from two brokerages - Stifel, Nicolaus & Co. and AXA Advisors - were lured into investing money in Neely?s St...

FINRA To Expand BrokerCheck, Permanently Disclose Disciplinary Actions Against Former Brokers

Posted on November 18, 2009
The Financial Industry Regulatory Authority (FINRA) has won approval from the Securities and Exchange Commission (SEC) to expand its BrokerCheck Service and make the disciplinary records of brokers permanently available online to the public.  Previously, a broker?s record generally became unavailable two years after he or she left the securities industry...

Medical Capital: Investigations Continue To Recover Investors? Losses

Posted on November 13, 2009
Various independent broker-dealers that sold Medical Capital securities to investors are the subject of ongoing investigations, as well as class-action lawsuits and arbitration claims filed with the Financial Industry Regulatory Authority (FINRA). The cases themselves focus on the sales practices and due diligence of the broker/dealers that marketed and sold private securities known as Medical [...

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Apology to J.P. Turner for Inaccurate Postings

Posted on November 09, 2009
Tom Hargett and Mark Maddox both mistakenly mentioned J.P. Turner in recent blog postings concerning Medical Capital Holdings.  We have learned that these posts were inaccurate, and we apologize to J.P. Turner and retract the statements made about the firm.

SEC Charges Endeavor, Advanced Planning Securities, Others In Real Estate Investment Scam

Posted on November 07, 2009
Federal regulators are suing Charles C. Slowey, Jr. and the companies he controls -   Endeavor Partners, LLC and Endeavor Capital Management Group, LLC - along with Advanced Planning Securities (APS), Oldham Harris and brokers Edward Puttick, Gregory Oldham and Glenn Harris for allegedly swindling retirees and senior citizens out of nearly $12 million...

Bear Stearns Criminal Trial Nears Conclusion

Posted on November 07, 2009
Ralph Cioffi and Matthew Tannin, the two former Bear Stearns executives who are on trial for allegedly lying to investors about the fiscal health of two hedge funds, will soon find out their fates. On Nov. 9, the month-long trial comes to a close, and a jury will begin deliberations on the charges of securities [...

FINRA Claims Increase

Posted on November 03, 2009
Individual arbitration claims filed with the Financial Industry Regulatory Authority (FINRA) totaled 5,545 through Sept. 30 - up 60% from the same period last year. Linda Fienberg, who serves as president of dispute resolution for FINRA, told Barron?s last month that she expects to see 7,500 cases filed by the end of the year...

LPL To Pay $1.3M To Victims Of Ponzi Scheme

Posted on November 02, 2009
LPL Financial Corp. (LPL) will pay nearly $1.3 million in restitution to Montana investors plus a fine of $150,000 to the State of Montana under a settlement reached with the Montana Commissioner of Securities and Insurance. The restitution and fine are tied to alleged illegal activity on the part of a former LPL registered representative, Donald [...

Medical Capital Holdings: Investors File Claims Over Med Cap Notes

Posted on October 28, 2009
Medical Capital Holdings is mired in legal issues these days, facing arbitration claims and a recently filed class action lawsuit over sales of Medical Capital Notes. In July, the Securities and Exchange Commission (SEC) entered the picture, as well, announcing fraud charges against Medical Capital Holdings and related Medical Capital entities...

Medical Capital Fraud: Lawsuits Against Broker/Dealers Begin

Posted on October 27, 2009
Arbitration claims involving Medical Capital Holdings are expected to escalate in the coming months, as investors take certain broker/dealers to task over allegations of misrepresentation and omission of material facts in connection to sales of Medical Capital Notes...

FINRA Claims, Lawsuits Target Securities America

Posted on October 23, 2009
Securities America, a subsidiary of Ameriprise Financial, is becoming the target of more investor claims filed with the Financial Industry Regulatory Authority (FINRA) over allegations it falsely misrepresented private placement offerings associated with Medical Capital Holdings - the same company that the Securities and Exchange Commission (SEC) has charged in a $2 billion Ponzi scheme...

Medical Capital Investors File Claims With FINRA

Posted on October 23, 2009
Medical Capital Holdings, based in Tustin, California, is a medical receivables financing company that purchases accounts receivable from healthcare providers at a discount and then collects the debts owed on the accounts. Since 2003, the company has raised more than $2 billion from investors via offerings of notes issued by five Special Purpose Corporations (SPCs)...

Yield Plus Losses Result In Charles Schwab Lawsuit

Posted on October 20, 2009
Yield Plus and the words, Charles Schwab lawsuit, are becoming one and the same these days. Hundreds of investors have filed arbitration claims with the Financial Industry Regulatory Authority (FINRA) over charges the San Francisco brokerage made false and misleading statements about the Yield Plus Funds and the extent to which investments were made in [...

TSG Real Estate Losing Favor With Investors?

Posted on October 17, 2009
Founded in 2001 by Wayne ?Rob? Hannah III, TSG Real Estate LLC of Chicago has built a reputation for itself by taking on creative business ventures. Hannah, TSG?s president and CEO, is a former bond trader who later ventured into commercial real estate...

Schwab YieldPlus Funds Hit With SEC Warning

Posted on October 15, 2009
A warning from the Securities and Exchange Commission (SEC) in the form of a Wells Notice could have a direct impact on how Charles Schwab addresses current and future lawsuits and arbitration claims by investors who suffered losses in the  Schwab YieldPlus Funds...

Congress Considers Fiduciary Duty Standard for All Financial Advisers

Posted on October 09, 2009
Taking much-needed steps to strengthen investor protections, the House Financial Services Committee has begun the first of several congressional hearings on reforming the securities industry. Initial discussions concern the Investor Protection Act of 2009, with the focus on hedge fund registrations, the creation of an agency to oversee the insurance industry and a law to [...

Piper Jaffray: A Closer Look

Posted on October 09, 2009
Last year, the Montana State Auditor?s Office took a rather unusual approach to educate investors about the dangers of investment fraud. It teamed up with the AARP to produce Fraud Under the Big Sky, an hour-long documentary highlighting two major cases of securities fraud in Montana, including one that involved stockbroker Thomas J...

Medical Capital Recovery: Lawsuits Target Securities America, QA3 Financial, Other Brokerages

Posted on October 08, 2009
The list of brokerage firms facing arbitration claims from investors who suffered losses from investments in The basis of the lawsuits against concerns breach of fiduciary duty, with claimants alleging that brokerages like Based in Tustin, California, Medical Capital purchases accounts receivables of medical providers and then packages them as private investments...

Broker/Dealers That Sold Securities In Provident Asset Management, Medical Capital Holdings Under Fire

Posted on October 06, 2009
Independent broker/dealers and their financial advisers who sold investors private securities tied to Provident Asset Management LLC and Medical Capital Holdings - each of which faces securities fraud charges by the Securities and Exchange Commission (SEC) - could soon find themselves in the hot seat, as well, in the form of investor lawsuits and arbitration [...

Did Securities America Advisers Ignore Warnings About Medical Capital Note Sales?

Posted on October 06, 2009
A recently filed lawsuit claims advisers with Securities America chose to ignore obvious red flags in an effort to sell hundreds of millions of dollars? worth of securities notes in Medical Capital Holdings, a California medical receivables company that now faces securities fraud charges from the Securities and Exchange Commission (SEC)...

Next Financial Group: Do You Have A Claim?

Posted on October 06, 2009
Next Financial Group is finding the year of 2009 to be an ongoing hotbed of controversy, with the independent broker/dealer mired in investor complaints and regulatory problems. In July, the Houston-based firm was fined $1 million by the Financial Industry Regulatory Authority (FINRA) for supervisory failures that led to churning of customers? accounts and excessive [...

FINRA Fines New Jersey Broker Kapil Shashikant Shah

Posted on October 05, 2009
Kapil Shashikant Shah (CRD #4409290) was fined $10,000 by the Financial Industry Regulatory Authority (FINRA) in September and suspended from association with any FINRA member in any capacity for 20 business days. Without admitting or denying the allegations, Shah consented to FINRA?s sanctions (FINRA Case No...

Securities America Sued For Alleged Negligence Tied To Medical Capital Holdings

Posted on October 05, 2009
Securities America, a subsidiary of Ameriprise Financial, has been sued by Ilene Grossbard of Sarasota, Florida, over allegations that the Omaha-based brokerage failed to warn her and other investors about what she says was a multibillion-dollar Ponzi scheme involving sales of notes in Medical Capital Holdings...

SEC Charges Aura Financial With Excessive Churning

Posted on July 10, 2009
Birmingham-based investment firm Aura Financial Services and six of its employees face lawsuits by the U.S. Securities and Exchange Commission (SEC) and the Alabama Securities Commission (ASC) on charges of ?rampant churning? of customer accounts,  supervisory failures and other securities violations...

Investors Try To Recover Losses Tied To David Steckler, Enterprise Trust

Posted on July 09, 2009
In 2007, a Dec. 24 article in Barron?s magazine lauded David Steckler, an institutional money manager with LPL Financial Services, for his investing strategies to hone in on supposedly solid-performing stocks. Less than six months after the publication of that article, however, Steckler, who joined LPL in 1989, would be fired from the company...

Investor Inquiries Grow Over LPL financial advisor, Raymond Londo

Posted on July 09, 2009
Long before Bernie Madoff made news, there was financial advisor Raymond Londo. In March 2008, Ray Londo was fired from Linsco Private Ledger (now known as LPL Financial, or LPL for short) for failing to follow company policies on lending or borrowing funds from clients...

Improved Public Disclosures About Bad Brokers Needed

Posted on July 08, 2009
Securities fraud. Stockbroker misconduct. Unsuitable investments. Churning. Unauthorized transactions. Investment scams. Did you ever wonder what happens to bad brokers or financial advisors who are charged by regulators of committing these acts against individual and institutional investors? If your guess is they find a new career outside the securities industry, think again...

Securitization: A Market Long Overdue For Reform

Posted on July 07, 2009
For too long, the idea of ?anything goes? on Wall Street was the norm, as investment banks concocted and sold individual and institutional investors exotic baskets of untested and speculative financial instruments like subprime mortgage securities, credit default swaps and collateral debt obligations (CDOs)...

A More Investor-Friendly FINRA Arbitration Process

Posted on July 06, 2009
Tumultuous upheaval in the financial markets has led to a rash of arbitration claims from retail and institutional investors on charges their financial advisors and brokerages misrepresented the risk levels of certain investment products. Some of the central players in these claims: Morgan Keegan & Company and Charles Schwab...

Texas, Ohio Pension Funds Lead Investor Lawsuit Against Bank of America

Posted on July 05, 2009
A group of public Ohio and Texas pension funds will lead a securities class-action lawsuit on behalf of investors against Bank of America (BofA) and the acquisition of brokerage firm Merrill Lynch. On June 30, Judge Denny Chin of the U.S. District Court for the Southern District of New York granted lead plaintiff status to the [...

Investor Wins FINRA Award In Schwab YieldPlus Claim

Posted on July 02, 2009
On June 26, 2009, a Washington, D.C., arbitration panel of the Financial Industry Regulatory Authority (FINRA) ruled in favor of investor David Cutler and his claim (FINRA No. 09-00300) against Charles Schwab & Company and its Schwab YieldPlus Fund...

SEC Says Prime Capital Services Misled Seniors About Variable Annuities

Posted on July 02, 2009
New York-based Prime Capital Services (PCS) and several of its brokers - Eric J. Brown, Matthew J. Collins, Kevin J. Walsh and Mark W. Wells - face enforcement action by the Securities and Exchange Commission (SEC) for allegedly luring senior citizens and retirees to buy unsuitable variable annuities...

FINRA Finds Morgan Keegan Liable

Posted on June 30, 2009
A Birmingham arbitration panel (FINRA Case Number 08-00926) ruled against Morgan Keegan & Company in a claim involving the RMK Select High Income-C Bond Fund.  In March 2008, investors Richard and Carolyn Bland filed their claim with the Financial Industry Regulatory Authority (FINRA), charging Morgan Keegan of failing to disclose certain risks about the Select High [...

Crime & Punishment: Madoff Gets 150 Years

Posted on June 30, 2009
Shattered dreams and broken spirits were, in part, vindicated today when a federal judge formally sentenced disgraced financier Bernie Madoff to 150 years in federal prison. Before Judge Denny Chin of U.S. District Court in New York imposed the sentence, several victims, including former friends of Madoff??s, told their stories of how the money manager?s $65 [...

Morgan Keegan Losses Keep Growing In FINRA Rulings

Posted on June 30, 2009
More investors are scoring legal victories in their claims against Morgan Keegan & Company and a group of proprietary mutual funds. As reported June 7, 2009, by The Birmingham News, 16 of investors? 20 wins came in the past 25 arbitration hearings with the Financial Industry Regulatory Authority (FINRA)...

FINRA Hands Win To Investor In Case Against Stifel Nicolaus

Posted on June 29, 2009
On March 23, 2009, a St. Louis, Missouri, FINRA arbitration panel awarded investor Philip Rein $220,944 plus interest on his claims of fraud, breach of fiduciary duty and negligence against Stifel, Nicolaus & Company.  According to award documents (FINRA # 07-01495), the claimant alleged that St...

Schwab YieldPlus Fund Arbitration Award Issued

Posted on June 29, 2009
Charles Schwab & Company has been hit with yet another arbitration award connected to its Schwab YieldPlus Fund. On May 29, 2009, a FINRA arbitration panel in Minneapolis, Minnesota, awarded more than $14,500 plus interest to Gary Wilhelm on claims of negligence and misrepresentation on the part of the San Francisco-based investor firm and the [...

Wachovia Securities Fined $1.4 Million By FINRA

Posted on June 27, 2009
The Financial Industry Regulatory Authority (FINRA) announced on June 25 that it had fined Wachovia Securities, LLC of St. Louis $1.4 million for the firm?s failure to deliver prospectuses and product descriptions to customers who purchased various investment products from July 2003 through December 2004...

Former Fla. Regions Bank President Wins Arbitration Claim Against Morgan Keegan

Posted on June 27, 2009
Two brothers, Edward and Roderick King, were awarded almost $700,000 by a Birmingham arbitration panel of the Financial Industry Regulatory Authority (FINRA) for their claims involving a group of collapsed Regions Morgan Keegan mutual funds. One of the brothers, Edward, had once been a local president in Florida for Regions Bank...

Target-Date Mutual Funds Under Scrutiny

Posted on June 25, 2009
The concept behind target-date mutual funds is simple: Investors place their money in a fund that is managed around the holder?s intended retirement age. Over the years, target-date funds grew increasingly popular as a safe, conservative investment choice, becoming a staple in many 401K plans...

PIABA Files Petition With SEC To Remove Industry Arbitrator Requirement

Posted on June 24, 2009
A group for attorneys representing individual and institutional investors in securities arbitration disputes has formally petitioned the Securities and Exchange Commission (SEC) to remove a requirement that allows representatives from the securities industry to serve as arbitrators on Financial Industry Regulatory Association (FINRA) panels...

Aura Financial Services Charged By SEC With Securities Violations

Posted on June 22, 2009
On June 21, 2009, the Securities and Exchange (SEC) and the Alabama Securities Commission filed fraud charges against Birmingham brokerage firm Aura Financial Services for rampant churning of customer accounts, widespread supervisory failures and other securities violations...

SEC Files Fraud Charges Against Former Brookstreet Securities Brokers

Posted on June 22, 2009
The June 2007 meltdown of Brookstreet Securities may finally produce some justice for more than 750 clients who were left with questions and massive financial losses because of bad bets placed by the Irvine, California-based brokerage on risky collateral mortgage obligations (CMOs)...

More Investors Prevail In Cases Over Toxic RMK Funds

Posted on June 08, 2009
The arbitration scorecard keeps getting bigger for investors and their arbitration cases against Memphis-based Morgan Keegan & Co. At the heart of the legal disputes: Seven mutual bond funds that aggrieved investors say Morgan Keegan and fund managers led them to believe were invested in conservative preferred stocks and corporate bonds...

Schwab YieldPlus Funds: An Invitation To Investment Disaster

Posted on May 22, 2009
Facing hundreds of arbitration claims and class-action lawsuits over huge losses in two ultra-short bond funds known as the Schwab YieldPlus Fund (SWYPX) and the Schwab YieldPlus Select Fund (SWYSX), Charles Schwab & Co. may want to rethink its ?Talk to Chuck? advertising slogan...

Credit Default Swaps Create Worldwide Tsunami Of Trouble

Posted on May 22, 2009
Credit default swaps (CDS) may be described as insurance-like contracts designed to hedge against default on loans or bonds, but they are far from ordinary insurance. Created in the early 1990s by JPMorgan Chase & Co., credit default swaps belong in a derivatives class all by themselves...

Massachusetts Regulator Probes State Street Bond Fund

Posted on April 30, 2009
State Street Corp., the Boston-based financial services firm that has made more than $4oo million in settlements and other payments for problems related to its fixed-income funds, is once again in hot water. This time, Massachusetts Secretary of State William Galvin is investigating whether State Street intentionally misled pension funds and other institutional investors about [...

Oppenheimer Funds Sued By Oregon 529 College Savings Plan

Posted on April 14, 2009
Oppenheimer Funds, one of the bigger players of 529 college savings plans with $4 billion under management, has been sued by the state of Oregon for gambling on exotic derivatives in the Oregon 529 College Savings Network. Oppenheimer?s ill-fated bets eventually resulted in $36 million in losses...

Morgan Keegan?s Bond Derivative Deals Backfire For Many Municipalities

Posted on April 09, 2009
When the small town of Lewisburg, Tennessee, needed help paying the interest on a bond for new sewers, officials thought investment firm Morgan Keegan had the answers. Little did they know that the advice and the poorly conceived municipal bond derivative deal Morgan Keegan came up with eventually would mean millions of dollars in unanticipated [...

Oppenheimer Funds The Subject Of Five State Probe For 529 Plan Losses

Posted on April 08, 2009
A year of financial losses and investor lawsuits is about to go from bad to worse for Oppenheimer Funds. In February 2009, the company received an ?F? from a Morningstar analyst for its failure to explain investing strategy changes regarding several of its bond funds...

FASB Approves Mark to Market Rule Changes

Posted on April 03, 2009
It?s official. The Financial Accounting Standards Board (FASB) has approved relaxing fair value, or mark to market, accounting rules, a move that gives banks leeway to assign a value to investments based on their own internal model of what the assets might sell for in the future rather than in current market conditions...

FINRA Eyes Nontraded REIT Sales Practices Of Broker Dealers

Posted on April 02, 2009
Nontraded real estate investment trusts (REITs) apparently are a subject of interest by the Financial Industry Regulatory Authority (FINRA). A March 30 article in the Wall Street Journal reported that the independent regulator of the securities industry is seeking information from a number of broker-dealers about their sales and promotion practices of the entities...

FAS 157 Amendments Lack Substance, Alter Integrity Of Financial Reports

Posted on April 01, 2009
Proposed revisions to the fair value accounting standard known as FAS 157 have garnered harsh criticism from those who say the changes are ambiguous and undefined, lack substance and will create further inconsistencies as banks assign value to some assets...

Morgan Stanley Must Pay $7.2 Million to Resolve FINRA Charges Of Early Retirement Scam

Posted on March 30, 2009
Dozens of retirees from Xerox Corp. and Eastman Kodak will soon share in a welcome pay-out after the Financial Industry Regulatory Authority (FINRA) ruled investment firm Morgan Stanley must pay $7.2 million to settle charges that two of its brokers wrongly persuaded 90 Rochester, New York, employees to take early retirement...

FINRA Panels Returning Awards For Losses In Morgan Keegan Bond Fund Investments

Posted on March 30, 2009
Stung by huge financial losses in several Regions Morgan Keegan (RMK) bond funds, investors finally are getting some welcome news. Earlier this month, three separate FINRA arbitration panels announced awards in favor of investors who lost money in RMK mutual funds...

Under Funded Pension Plans A Bone Of Contention For Companies, Employees and Retirees

Posted on March 25, 2009
Chaos in the world?s financial markets has wreaked havoc on corporate pension plans, with more people seeing their retirement savings slowly dwindle in value month after month. For retirees of bankrupt employers, the reality is especially grim. David Jeanes, 60, is one of those individuals...

JP Morgan To Buy New Corporate Jets, Faces Public Backlash

Posted on March 23, 2009
As the recipient of $25 billion in funds from the government?s Troubled Asset Relief Program (TARP), JPMorgan Chase should be focusing on how and when it will pay back taxpayers? money. Instead, ABC News reports that the bank plans to spend nearly $140 million on two new luxury Gulfstream jets and embark on a lavish [...

Foundations, Universities, Nonprofits Face Dwindling Endowments From Failed Investments

Posted on March 20, 2009
A downturn in the economy, coupled with bad investments in auction rate securities and other risky financial instruments has left many foundations, universities and nonprofits with record low endowments. A March 2009 study from the Commonfund Institute showed that endowments at colleges, universities and independent schools saw their worst performance ever at the end of [...

Morgan Keegan Loses In Indiana FINRA Arbitration Award

Posted on March 19, 2009
In a page out of David and Goliath, a church secretary from Whitestown, Indiana, emerged victorious in her FINRA arbitration claim that investment firm Morgan Keegan failed to disclose the risks of a certain bond fund that was heavily invested toxic collateralized debt obligations (CDOs) and other asset-backed securities...

FINRA Rules Against Regions Financial Corp.?s Morgan Keegan In Latest Arbitration Claim

Posted on March 13, 2009
Yet another investor has found justice over losses caused by the collapse in value of several Morgan Keegan bond funds that owned securities backed by risky subprime mortgages. On March 12, the Financial Industry Regulatory Authority (FINRA) ruled in favor of Alabama investor Philip Willingham, awarding him $187,000...

UBS Problems Spur Management Upheaval

Posted on March 11, 2009
The subprime mess and allegations of tax evasion schemes are just some of the issues responsible for tarnishing the reputation of UBS AG. For months now, a string of crises has fueled speculation about the fiscal health of the Swiss-based investment firm...

Madoff Will Plead Guilty To Nation?s Biggest Ponzi Scheme

Posted on March 11, 2009
Ira Sorkin, the lawyer for disgraced money manager Bernard ?Bernie? Madoff, says his client will plead guilty to 11 criminal charges on March 12. His punishment: a potential prison term of 150 years. On Dec. 11, Madoff, a former Nasdaq chairman, was arrested by federal authorities and accused of running a $50 billion Ponzi scheme in [...

CEO Vikram Pandit Defends Citigroup In Employee Memo

Posted on March 10, 2009
Citigroup CEO Vikram Pandit contends the bank whose stock fell below $1 last week is poised for a rebirth. As reported in a March 9 article in the Wall Street Journal, Pandit told colleagues that despite Citi?s ongoing financial issues and market perception, the bank?s capital strength and earnings power ultimately would enable the company [...

Former Merrill Lynch Chiefs Invested And Lost With Madoff

Posted on March 08, 2009
Former high-profile executives with Merrill Lynch, including two CEOs, invested in hedge funds that lost huge amounts of money to disgraced money manager Bernard Madoff and his $50 billion Ponzi scheme. According to a March 5 report from Reuters, one-time chief executive officers Daniel Tully and David Komansky, along with former investment-banking chief Barry Friedberg, [...

Stephen Walsh, Paul Greenwood Lived Large On Investors? Money

Posted on February 27, 2009

Stung By Toxic Holdings, Florida Investment Pool Languishes

Posted on February 25, 2009
Strangled by the tentacles of toxic subprime mortgages and structured investment vehicles (SIVs), the Florida Local Government Investment Pool (LGIP) is finding itself unable to pull in deposits from once-burned, twice-shy municipalities.  Florida?s LGIP is used much like a money-market fund by nearly 1,000 school districts, counties and cities in the state Florida...

Missouri Secretary of State Calls Stifel?s ARS Plan Inadequate

Posted on February 21, 2009
Missouri Secretary of State Robin Carnahan had harsh words for the brokerage firm Stifel, Nicolaus & Company and its plan to give investors holding auction-rate securities only $25,000, or 10%, or their frozen savings.  On Feb. 11, Carnahan told Stifel it needed to immediately come up with an alternative solution that will buy back all frozen [...

Texas Money Manager R. Allen Stanford Charged In Massive Fraud Scheme

Posted on February 19, 2009
First there was Bernie Madoff, now Texas financier Robert Allen Stanford is making a name for himself by running an alleged $8 billion fraud scheme. On Feb. 17, the Securities and Exchange Commission (SEC) filed a civil lawsuit against Stanford and three of his companies on charges of orchestrating a fraudulent, multibillion-dollar investment scam that [...

STMicroelectronics Wins $406 Million ARS Lawsuit Against Credit Suisse

Posted on February 17, 2009
Another chapter has been written in the saga on auction-rate securities - and this time it?s a win for institutional investors.  On Feb. 13, the Financial Industry Regulatory Authority (FINRA) ordered the Credit Suisse Group to pay STMicroelectronics NV more than $406 million to settle claims that the brokerage misled the semiconductor maker into buying [...

New Law Would Broaden Florida?s Ability To Pursue Securities Fraud

Posted on February 17, 2009
Investors may get a welcome shot in the arm if Florida?s attorney general and several state lawmakers have anything to say about it. On Feb. 11, Attorney General Bill McCollum joined Senator Garrett Richter and Representative Tom Grady to unveil a legislative proposal designed to strengthen Florida laws protecting securities investors...

Jefferson County, Alabama: One Year Later And No Progress On Sewer Crisis

Posted on February 12, 2009
Mired in debt and still facing the nation?s largest municipal bankruptcy, Jefferson County, Alabama, has made little headway to solving its sewer debt crisis. At the center of controversy are members of the Jefferson County Commission, whom many say have let personal issues take a front seat to finding a solution for the ongoing sewer [...

Ruth Madoff Withdrew $15.5 Million Right Before Husband?s Fraud Arrest

Posted on February 11, 2009
Only hours before money swindler Bernie Madoff was arrested on securities fraud charges, his wife pulled $15 million out of a brokerage account. According to a complaint filed Feb. 11 by Massachusetts Secretary of State William Galvin, Ruth Madoff withdrew $5...

Madoff Recovery Questions Answered

Posted on January 16, 2009
Madoff Recovery Questions Answered How big is the Bernard Madoff scandal? The Madoff fraud is being called the largest financial fraud in U.S. history. Following Bernard (Bernie) Madoff?s arrest on Dec. 11, authorities estimate that the scale of the alleged scam could be as much as $50 billion, with 4,000 or more investors suffering extraordinary financial [...

Wisconsin School Districts Charge Stifel, RBC With Fraud Over CDO Debacle

Posted on January 16, 2009
The story began in 2006, when five Wisconsin school districts - Kenosha Unified School District, Kimberly Area School District, School District of Waukesha, West Allis-West Milwaukee School District and Whitefish Bay School District - went looking for investment advice to shore up its teachers? retirement plans...

Indiana Money Manager Marcus Schrenker Called A ?Mini-Madoff?

Posted on January 16, 2009
Marcus Schrenker?s past finally caught up with him. The Indiana financial manager was arrested by authorities on Jan. 13 after staging his own plane crash to escape financial ruin. U.S. marshals located Schrenker late Tuesday night at a campsite in Quincy, Florida...

Trustee, SIPC Report $830 Million In Liquid Assets From Madoff?s Firm

Posted on January 05, 2009
The plot concerning hedge fund manager Bernie Madoff continues to thicken. And this time the news may benefit the growing number of investors trying to recover some of the $50 billion that the disgraced 70-year-old and former Nasdaq stock market chairman scammed from them as part of a massive Ponzi scheme...

Lawmakers To Examine Bernie Madoff Swindle On Jan. 5

Posted on January 01, 2009
One of the first tasks greeting lawmakers in the new year will be to examine Bernard (Bernie) Madoff’s alleged $50 billion Ponzi scheme and why the Securities and Exchange Commission (SEC) appeared to be asleep at the wheel before detecting the fraud...

SEC Imposes Dec. 31 Deadline For Madoff To Disclose Assets

Posted on December 28, 2008
The disgraced New York hedge fund manager responsible for bilking investors out of some $50 billion in the world?s biggest Ponzi scheme has until New Year?s Eve to provide a detailed list of his investments, assets and financial holdings to the Securities and Exchange Commission (SEC)...

Madoff Feeder Funds Become Target Of Investor Lawsuits

Posted on December 22, 2008
The enormity of the Bernie Madoff scandal and the massive losses hitting investors was underscored this past weekend when the Federal Bureau of Investigation (FBI) announced that the $50 billion Ponzi scheme and other frauds would take priority over counter-terrorism cases...

Bernie Madoff: A Modern-Day P.T. Barnum

Posted on December 17, 2008
The plot continues to thicken in the saga of Bernard (Bernie) L. Madoff. Earlier today, authorities placed the mastermind behind a $50 billion hedge fund Ponzi scheme under house arrest. Now, instead of late-night Manhattan parties, the once-revered Wall Street legend will be subjected to electronic monitoring and 7 p...

Bernie Madoff?s House Of Lies

Posted on December 15, 2008
From humble beginnings as a lifeguard to a storied investment leader on Wall Street, Bernard (Bernie) L. Madoff has seen and done it all. Or, so he thought. Following Madoff?s arrest by federal agents last week for running a giant Ponzi scheme and losing at least $50 billion of his clients? money, the next stop [...

Goldman Sachs Profiting From Financial Problems Of Some States

Posted on December 10, 2008
Public officials of financially strapped states like California, Florida, Nevada, Ohio, Wisconsin and Michigan are outraged at New York-based securities firm Goldman Sachs for advising some of its biggest institutional clients to bet against state municipal bonds by purchasing credit default swaps...

Margin Call Madness Underway

Posted on November 24, 2008
When stock markets plunged to their lowest level in four years in October, it quickly became news that margin calls were a key culprit to the problem. In the weeks since, the volume of margin calls has steadily increased, exacerbating issues for investors and adding turmoil to an already battered financial environment...

The Dark Side Of Margin Calls

Posted on November 24, 2008
The downturn in the economy is shedding new light on two dreaded and unwanted words no investor wants to hear: margin calls. Recent margin calls - in which shares of stock are bought using borrowed money - have created a margin blowout lately, sounding the alarm for CEOs and fund managers at companies from Chesapeake [...

What About Elm Street?

Posted on November 21, 2008
Over the past several months, both with the election and the credit crisis, much has been written and spoken about Wall Street vs. Main Street. But what has been largely overlooked is how the current financial crisis is affecting the individual, small investors on Elm Street...

Liquidated Commonfund Creates Severe Financial Dilemmas for Colleges

Posted on October 15, 2008
With the abrupt liquidation of the widely held short-term investment fund managed by Connecticut-based Commonfund, more than 1,000 colleges across the country suddenly confront serious financial problems. With Wachovia Corp. as trustee, the $9.3 billion Commonfund for Short Term Investments Fund basically provided colleges with a “checking account” out of which they could pay for [...

PIMCO High Income Fund Loses Over Half Its Value

Posted on October 15, 2008
The PIMCO High Income Fund (NYSE:PHK) has lost 55% of it value in one very turbulent month.  On September 10 this Fund closed at $11.49.  By October 10 its value had plummeted to $5.07.   According to its disclosures, the PIMCO High Income Fund operates as a closed-end management investment company...

$700 Billion Bailout Mistake

Posted on September 24, 2008
Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke are on the Hill trying to sell their $700 billion bailout to lawmakers. Yesterday Secretary Paulson and Chairman Bernanke testified before Congress that the bailout must be passed quickly and cleanly in order to prevent further economic crisis...

John Hancock Bond Fund Losses

Posted on September 09, 2008
The John Hancock High Yield Bond Fund has made the list. Just not the list its fund managers would like. On September 8, 2008, the Wall Street Journal listed its Leaders and Laggards. The Hancock Fund ranks near the top in the worst-performing bond fund category...

Morgan Keegan Bond Funds Top List

Posted on September 09, 2008
Once again three Morgan Keegan Bond Funds top the list of Wall Street’s worst-performing bond funds.  The RMK Select Intermediate Bond Fund, High Income Fund and Short Term Bond Fund share this distinction for yet another time. These funds have lost 84...

Did Morgan Keegan Target Seniors and Small Investors?

Posted on August 11, 2008
Regulators in five states are investigating whether Morgan Keegan, a Memphis-based brokerage firm, failed to disclose the risks associated with seven of its mutual funds.  These funds were loaded with debt positions that some have labeled “toxic...

Merrill Lynch Accused of Deceptive Marketing of Auction-Rate Securities

Posted on August 01, 2008
Massachusetts Secretary of State William Galvin is coming down on Merrill Lynch, one of the largest securities firms in the U.S., for not disclosing to its investors the volatility of the auction-rate market. Galvin claims that Merrill sold auction-rate securities to investors, even though it was aware that the market was collapsing...

Arbitration Fairness?

Posted on July 30, 2008
Imagine, after the market collapsed you were forced to sell your auction-rate securities at a significant discount, even though you were advised beforehand that these securities were as safe as money-market funds. Then, at your arbitration hearing, one of the three panel members charged with deciding your case is an employee of another firm that also sold auction-rate securities...

UBS Charged In Auction-Rate Wrongdoing

Posted on July 25, 2008
UBS AG is facing charges for promoting auction-rate securities as conservative, money-market funds at a time when the auction-rate market was plummeting. New York Attorney General Andrew Cuomo alleges that UBS is responsible for repurchasing $25 billion in auction-rate securities from its investors rather than the mere $3...

Wachovia Raided by Regulators

Posted on July 23, 2008
A team of investigators inspected Wachovia Corp.?s securities division Thursday as part of an ongoing investigation into the company?s sales of auction-rate securities. Regulators from more than five states searched the St. Louis headquarters to uncover information about sales practices, internal evaluations of the auction-rate securities market and marketing strategies...