Corporate & Securities Law

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)...

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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...

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