Corporate & Securities Law

Exchange-Traded Products (ETPs) may be Hazardous to an Investor?s Financial Health

Posted on May 20, 2020
On May 15, 2020, the Financial Industry Regulatory Authority (FINRA) issued a Regulatory Notice (?Oil-Linked Exchange-Traded Products?), which highlighted the fact that Exchange-Traded Products (ETPs), which provide different types of exposure to the oil market through several product structures, might not be understood by investors or investment professionals and that the performance of such products […] The post Exchange-Traded Products (ETPs) may be Hazardous to an Investor?s Financial Health appeared first on Investor Protection.

FINRA Accelerates Investor Protection Initiatives for Senior Investors

Posted on May 05, 2020
On April 30, 2020, the Financial Industry Regulatory Authority (FINRA) issued an a report (?Protecting Senior Investors 2015-2020, An Update on the FINRA Securities Helpline for Seniors, Other FINRA Initiatives and Member Firm Practices?), which highlighted the fact that seniors, who ?make up an increasingly large share of the American population and hold higher levels […] The post FINRA Accelerates Investor Protection Initiatives for Senior Investors appeared first on Investor Protection.

FINRA Proposes Enhancements to Protect Senior Investors from Financial Harm

Posted on April 27, 2020
On April 16, 2020, the Financial Industry Regulatory Authority (FINRA) issued an alert which stated that ?there is no higher priority for FINRA than protecting senior investors from financial exploitation. Thus, every year we bring dozens of enforcement actions against brokers who harm senior investors, either through fraud schemes, conversion, churning of accounts, or otherwise...

HAVE YOU LOST MONEY IN ENERGY INVESTMENTS?

Posted on April 27, 2020
If you have suffered investment losses in oil and gas bonds and stocks or other energy investments, you may be able to recover compensation. For many years, brokers and investment advisors sold energy company bonds and other energy-related investments as safe, secure, and income generating investments for investors...

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Midstream Energy Master Limited Partnerships are Approaching ?Junk? Status

Posted on April 09, 2020
On April 3, 2020, in a research note to clients (?Navigating Credit Risks in the Midstream Sector?), Bank America ? Merrill Lynch noted that the rating agency Standard & Poors believes that ?over 40 producers? in the midstream energy sector ?will be rated in the CCC category? and that it ?sees potential for bankruptcies or […] The post Midstream Energy Master Limited Partnerships are Approaching ?Junk? Status appeared first on Investor Protection.

Are Energy Master Limited Partnerships (MLPs) Running on Empty?

Posted on April 03, 2020
On March 17, 2020, Fitch Ratings downgraded senior notes to ?A? from ?AAA? and preferred shares to ?BBB? from ?AA or ?A? of 10 midstream energy closed-end funds (CEFs) following severe declines in portfolio values that eroded the funds? asset coverage ratios...

What Will Wall Street do With the Junk Bonds in their Inventories?

Posted on March 27, 2020
As the Wall Street Journal noted this morning (?Investors, Fearing Defaults, Rush Out of Junk Bonds?), ?the specter of widespread corporate defaults in the coming months has caused a massive selloff in junk bonds around the world, as many debt-laden companies face the prospect of going weeks or months with virtually no revenue...

Oil & Gas Investments are Getting Crushed by Volatile Market Conditions

Posted on March 24, 2020
As the Wall Street Journal noted this morning (?The Oil Crash is Hitting this Investment Hard?), ?the plunge in crude-oil prices is sending shock waves through closed-end funds tracking the energy sector, highlighting how the market turmoil is hitting products popular with ordinary investors seeking to boost returns during the long bull market...

Have You Experienced Investment Losses?

Posted on March 23, 2020
In March of 2020, America has experienced the unprecedented pandemic known as the Coronavirus. The US stock market has declined by more than a 1/3 from its all-time high in February 2020. Some investors have watched their own portfolios decline by 30-50%...

Margin Accounts May be Inherently Unsuitable in Volatile Market Conditions

Posted on March 20, 2020
As volatile market conditions continue and seem to be accelerating on a daily basis, questions are being increasingly raised regarding the risks posed to investors and the relationship of margin to those risks. Generally speaking, investors who sign a margin agreement can borrow up to 50% of the purchase price of marginable investments (the exact […] The post Margin Accounts May be Inherently Unsuitable in Volatile Market Conditions appeared first on Investor Protection.

Securities America: Is a Settlement In The Works?

Posted on March 29, 2011
A deal may in the works between Securities America and investors who lost hundreds of millions of dollars from soured private-placement deals in Medical Capital Holdings and Provident Royalties. The story was first reported by Investment News on March 28...

Southwest Securities Faces FINRA Fine

Posted on March 25, 2011
The Financial Industry Regulatory Authority (FINRA) has ordered Southwest Securities to pay $500,000 to resolve claims involving violations of Municipal Securities Rulemaking Board rules and using paid consultants to solicit business. As reported March 13 by Investment News, the unit of SWS Group ?paid five people, including three former officials of Texas municipal bond issuers, to [...

Securities America Receives Legal Blow In Med Cap, Provident Royalties Case

Posted on March 21, 2011
Late last Friday, Securities America received news that a federal judge would not be approving the broker/dealer?s request for a $21 million class action settlement. The case involves soured private-placement deals in Medical Capital Holdings and Provident Royalties...

Securities America CFO On Class Action Case

Posted on March 19, 2011
Securities America CFO Kelly Windorski testified today that the broker/dealer could potentially go under if a settlement in a $21 million class action lawsuit is not reached. Judge W. Royal Furgeson Jr. is expected to make his ruling later tonight, according to a March 18 article by Investment News...

Fair Finance?s Tim Durham Arrested, Indicted

Posted on March 17, 2011
Disgraced businessman Tim Durham has been arrested on charges of defrauding at least 5,000 Indiana and Ohio investors out of hundreds of millions of dollars. Durham, who is co-owner of Fair Financial, is accused of running a $200 million Ponzi scheme...

SEC May File Charges Against Former Fannie Mae CEO

Posted on March 15, 2011
The Securities and Exchange Commission (SEC) may pursue civil charges against Daniel Mudd, former CEO of Fannie Mae, over allegations that the mortgage giant failed to tell investors about the extent of its exposure to risky loans. On March 14, Mudd, who is now CEO of Fortress Investment Group, received a Wells Notice from the SEC...

Over-Concentration: A Growing Concern For Investors

Posted on March 09, 2011
Over-concentration is the opposite of diversification. An over-concentrated portfolio means too much of your money is tied up in one security or asset class, such as a single stock, bond, mutual fund, or other investment vehicle. Over-concentration happens if you buy or sell too many shares of a stock in one company...

Securities America: Arbitration Claims vs. Class Actions

Posted on March 07, 2011
Private-placement deals pushed by Securities America in Medical Capital Holdings and Provident Royalties have left investors stranded on a financial limb. Now, they have a new worry - and that is whether to resolve their complaints through arbitration or roll their claims into two existing class-action lawsuits again Securities America...

Fannie Mae, Freddie Mac Preferred Stock Losses

Posted on March 01, 2011
Fannie Mae. Freddie Mac. Over the past 70 years, they?ve guaranteed some 90% of all new home mortgages in the United States. Today, Fannie and Freddie are under conservatorship - a move that?s costing taxpayers more than $150 billion. And no one is more bitter than the thousands of investors who purchased preferred shares in Fannie [...

Behringer Harvard, Other Non-Traded REITs Focus of Complaints

Posted on February 24, 2011
The following is an online post by an obviously unhappy investor who put his money in a non-traded real estate investment trust known as Behringer Harvard. ?I’ve been burned by Behringer Harvard. I sent my request for distribution in on Feb. 10 of 2009...

Non-Traded REITs: Brokers Love Them, Investors Not So Much

Posted on February 23, 2011
Non-traded real estate investments trusts (REITs) like Behringer Harvard REIT and Inland Western are a big hit with independent broker/dealers and financial advisors for their high commissions - sometimes up to 15%. Meanwhile, investors who buy non-traded REITs often find themselves in the dark, unaware of how the products actually work and the potential risks [...

Private-Placement Lawsuits: Securities America Update

Posted on February 21, 2011
Embattled broker/dealer Securities America was handed a legal victory today when a federal judge decided to combine private-placement claims involving Medical Capital Holdings and Provident Royalties with two class actions. As reported Feb. 18 by Investment News, Judge W...

National Securities Faces Reg Action Tied to Provident Royalties

Posted on February 18, 2011
Sales of private placements in Provident Royalties has gotten yet another broker/dealer in hot water. This time, it?s National Securities Corp., with the broker/dealer facing disciplinary action by the Financial Industry Regulatory Authority (FINRA) over sales of private placements gone bad...

Workman To Pay $700K To Resolve Med Cap/Provident Royalties Claims

Posted on February 15, 2011
Workman Securities, a big seller of private placements in Medical Capital Holdings and Provident Royalties, has reached an agreement with the Financial Industry Regulatory Authority (FINRA) to settle issues over the deals. The broker/dealer will pay $700,000 for partial restitution to more than a dozen clients with legal claims against Workman for sales of the [...

All-Public Arb Panel To Impact Broker/Dealer Disputes

Posted on February 07, 2011
Arbitration claims connected to Medical Capital Holdings and Provident Royalties and other risky deals - including those involving non-traded REITs - could grow much bigger in number following a recent regulatory decision by the Securities and Exchange Commission (SEC)...

QA3 Financial To Close This Week?

Posted on February 07, 2011
It?s been a tumultuous year for independent broker/dealers, with many closing their doors over private-placement deals gone bad, rising legal costs, and capital violations. Now, it appears QA3 Financial Corp. has become the latest B-D to bite the dust...

FINRA Cracks Down On Deals Involving Private Placements

Posted on February 04, 2011
Private-placements deals in Medical Capital Holdings and Provident Royalties have become a bone of contention for the Financial Industry Regulatory Authority (FINRA), which plans to focus new attention on the broker/dealers responsible for selling the opaque and illiquid private investments to investors...

Magnetar Hedge Fund Update

Posted on February 01, 2011
Documents from the Financial Crisis Inquiry Commission (FCIC) shed new light into the hedge fund Magnetar and its role in helping Wall Street create at least $40 billion worth of collateralized debt obligations and then betting against many of those same CDOs to fail...

UBS AG Yield Optimization Notes: What You Need to Know

Posted on January 30, 2011
Maddox, Hargett & Caruso currently is investigating complaints tied to UBS structured investments and the way in which the products were marketed and sold to investors. Specifically, numerous complaints allege that these products, which include the UBS AG Yield Optimization Notes with Contingent Protection linked to the common stock of Lehman Brothers Holdings, were sold by [...

Merrill Lynch Settles SEC Fraud Charges

Posted on January 26, 2011
On Jan. 25, the Securities and Exchange Commission (SEC) charged Merrill Lynch with civil securities fraud for ?misusing customer order information? to place proprietary trades and for charging customers undisclosed trading fees. Without admitting or denying the charges, Merrill has agreed to pay a $10 million fine and consent to a cease-and-desist order...

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