Corporate & Securities Law

Capital Financial Tries To Combine Investor Claims In Provident Royalties Case

Posted on January 25, 2011
Apparently short on cash, broker/dealer Capital Financial Services is trying to combine 36 separate investor arbitration claims and lawsuits as part of a class action settlement. The claims are tied to private-placement sales totaling millions of dollars in Provident Royalties...

SEC Charges West End Investment Firms, Top Officers With Fraud

Posted on January 21, 2011
The Securities and Exchange Commission (SEC) has charged three New York investment firms - West End Financial Advisors LLC, West End Capital Management LLC, Sentinel Investment Management Corp. - and four senior officers - William Landberg, Kevin Kramer, Steven Gould and Janis Barsuk - of conning investors into believing their money was invested in stable, [...

Med Cap, Provident Legal Claims Take Toll On QA3 Financial

Posted on January 18, 2011
Private placement investments in Medical Capital Holdings and Provident Royalties have caused financial devastation for hundreds of investors after the deals later soured and the companies issuing the securities went belly up. Now, several independent broker/dealers that sold the products to investors are facing financial issues of their own...

Arbitration Claims Pile Up For Securities America

Posted on January 17, 2011
Broker/dealer Securities America is finding itself entrenched in arbitration claims filed by disgruntled investors over soured private-placement deals involving the now-bankrupt Medical Capital Holdings. As reported Jan. 9 by Investment News, the broker/dealer could face 150 or more arbitration claims over the next 12 to 18 months...

To access this complete feed in the blog feed reader login or register for free.

Investor Wins In UBS, Lehman Principal-Protected Notes Case

Posted on January 06, 2011
A $2.2 million arbitration award is the latest win for investors in cases involving UBS and Lehman Brothers Principal-Protected Notes. The award, which was announced in December by a three-person arbitration panel of the Financial Industry Regulatory Authority (FINRA), is the seventh consecutive win for investors with pending complaints against UBS over the Lehman Brothers [...

2010: A Bad Year For Broker/Dealers

Posted on January 03, 2011
Soured private-placement deals left dozens of broker/dealers in dire straits this past year, forcing many to close their doors entirely. As reported Jan. 2 by Investment News, the broker/dealer community has shrunk by 9% since 2005 to 4,619. Through November 2010, the number of broker/dealers registered with the Financial Industry Regulatory Authority (FINRA) was 101 [...

2010: A Year in Review

Posted on December 28, 2010
Medical Capital Holdings. Securities America. Behringer Harvard REIT I. Main Street Natural Gas Bonds. Tim Durham. Fannie Mae, Freddie Mac Preferred Shares. Goldman Sachs CDO Fraud. Lehman Structured Notes. These names were among the hot topics that dominated the investment headlines in 2010...

Former Wachovia Reps Preyed On Elderly, SEC Says

Posted on December 23, 2010
Ex-Wachovia Securities brokers William Harrison and Eddie Sawyers told clients they had a ?sure thing? for them to invest in - complete with 35% returns and no chance of losing their principal. Instead, investors ended up losing $8 million. In a federal fraud lawsuit filed last week, the Securities and Exchange Commission (SEC) says Harrison, 33, [...

Ex-Wachovia Brokers Accused Of Defrauding Elderly Clients

Posted on December 20, 2010
Two former Wachovia Securities brokers - William Harrison and Eddie Sawyers - are accused of misleading dozens of elderly clients into investing in what they called a sure thing. Instead, investors lost approximately $8 million, according to a lawsuit filed Dec...

Cornerstone, Other Non-Traded REITs Haunt Investors

Posted on December 20, 2010
Their names may be different - Cornerstone Core Property, Inland American, Inland Western and Behringer Harvard REIT I - but these non-traded real estate investment trusts (REITs) have produced similar financial woes for their investors. Non-traded REITs can be tricky investments...

Broker/Dealers Face Lawsuit Over Failed DBSI TIC

Posted on December 09, 2010
Sales of tenant-in-common exchanges (TICs) have come back to haunt a number of broker/dealers, as they face a lawsuit brought by the trustee of one of the biggest creators and distributors of TICs - DBSI Inc. DBSI, which defaulted on its payments to investors in 2008, has filed for Chapter 11 bankruptcy protection...

SEC Plans To Tighten Custody Rules Of Broker/Dealers

Posted on December 08, 2010
Fraud allegations and failed deals over private placements connected to issuers like Medical Capital Holdings have sullied the reputation of countless broker/dealers this year. Some have closed up shop entirely, while others, like Securities America, are the subject of arbitration claims and lawsuits by investors...

JPMorgan Chase Being Sued Over Madoff Fraud

Posted on December 03, 2010
JP Morgan Chase, the main banker for the now-jailed Bernie Madoff, is being sued for $6.4 billion by the trustee charged with liquidating the former financier?s business. According to a statement made earlier this week by trustee Irving H. Picard, the lawsuit is based on claims that JP Morgan aided and abetted Madoff?s fraud...

Next Financial Hit With $400K Fine By FINRA

Posted on December 03, 2010
For the third time in three years, Next Financial Group has been fined by the Financial Industry Regulatory Authority (FINRA). The latest is a $400,000 fine, plus $102,000 in restitution to clients. According to FINRA?s Broker Check Web site, the action is attributed to Next Financial failing to ?have a reasonable system for reviewing the transactions [...

Joey Wade Dean Faces Allegations Over Structured Notes

Posted on December 01, 2010
Former Morgan Stanley broker Joey Wade Dean is facing regulatory action from the Financial Industry Regulatory Authority (FINRA) in connection to sales of unlisted structured notes. The action, taken by FINRA on Sept. 10 and outlined on the regulator?s Broker Check Web site, alleges that Dean made significant misrepresentations and omissions regarding the products, as well [...

Private Placements A Financial Disaster For Some Investors

Posted on November 29, 2010
Private placements - from Medical Capital to Provident Royalties - have made a name for themselves this year, producing massive financial losses for unsuspecting investors. Unsuspecting because, in many instances, investors were unaware of the untold risks associated with these largely unregulated investments...

UBS Sued By Bernie Madoff Trustee

Posted on November 25, 2010
The trustee charged with trying to recover money for investors who were swindled by disgraced financier Bernard Madoff is now suing UBS AG and related entities and individuals on allegations they enabled Madoff’s Ponzi scheme. As reported Nov. 25, 2010, by Investment News, the lawsuit - which alleges 23 counts of financial fraud and misconduct - [...

Structured Notes: What You Don?t Know Can Deplete Your Investment

Posted on November 19, 2010
Structured notes are booming, with sales reaching $45 billion just this year. Despite their growth, structured notes can be a risky venture for investors, especially as more and more brokerages push out structured products with the promise of equity returns and less risk...

Reverse Convertibles Cited In FINRA Fine

Posted on November 17, 2010
Reverse convertible notes were tied to a $500,000 fine levied by the Financial Industry Regulatory Authority (FINRA) against former Ferris, Baker Watts LLC, acquired by RBC Wealth Management. FINRA imposed the fine in October, citing inadequate supervision of sales of the notes to retail customers, as well as unsuitable sales of reverse convertibles to 57 accounts [...

Leveraged, Inverse ETF Sales Grow, Along With Risks

Posted on November 12, 2010
Sales of specialized exchange-traded funds (ETFs) are on the rise. And so is the risk, including liquidity concerns, hidden costs, and overall structure. Despite these issues, many investors have become enamored with ETFs - and, in particular, inverse and leveraged ETFs - on the advice of their broker...

Structured Products: Who?s Buying, Who?s Saying ?No?

Posted on November 11, 2010
The wealthiest U.S. investors are putting fewer dollars into structured financial products than the less affluent, according to a study by the Securities Industry and Financial Markets Association. As reported Nov. 11 by Investment News, U.S. investors bought more than a $42 billion of structured notes this year...

Securities America Expands Amid Medical Capital Lawsuits

Posted on November 02, 2010
Even though Securities America continues to wage legal battles stemming from sales of Medical Capital private placements, the company apparently is beefing up its network of independent representatives and advisers. As reported Nov. 1 by Investment News, Securities America acquired a branch of about 45 representatives and managers in control of $500 million in client assets [...

Survey Puts Morgan Stanley Smith Barney At Bottom

Posted on November 01, 2010
When it comes to financial adviser satisfaction, Morgan Stanley Smith Barney rates at the very bottom of six national broker/dealers, according to a J.D. Power and Associates Survey. Among independent broker/dealers, the survey says Commonwealth Financial Network came out on top, while MetLife Broker Dealer Group ranked the lowest...

Inland American REIT Resets Share Value

Posted on October 25, 2010
Inland American Real Estate Trust has reset the value of its common shares to $8.03. For investors, it isn?t good news; the price is down from the $10 that the shares sold for when the non-traded REIT was first launched in 2005. Inland announced the reset on Sept...

Non-Traded REITS: What?s An Investor To Do?

Posted on October 12, 2010
Non-traded real estate investment trusts (REITs) are big business. According to research from Blue Vault Partners LLC, non-traded REITs are on track to raise $7 billion in 2010, a 17% increase over 2009. For brokers and firms pushing non-traded REITs, that?s good news...

Securities America Gears Up For Legal Battle Over Medical Capital

Posted on October 05, 2010
Embattled broker/dealer Securities America is crying foul as it faces Massachusetts securities regulators over claims of misleading investors who bought $7.2 million in Medical Capital private placements. The legal showdown began in earnest last week, when Securities America appeared at an administrative hearing to answer allegations brought in early 2010 that the broker/dealer failed to [...

Financial Fraud Cases Against Broker/Dealers On The Rise

Posted on September 29, 2010
Financial fraud is growing, and more broker/dealers are at the center of the scams. According to data from the Securities and Exchange Commission (SEC), the number of cases brought by the regulator involving broker/dealers rose significantly last year...

Is Your Bond Fund Really Safe?

Posted on September 27, 2010
Investors? once-safe bond funds may not be so safe anymore. That?s because the research firms responsible for assessing the safety of bonds have changed their methodology as of Sept. 1. For many investors, the move means that the investment-grade bond fund they thought they were investing in could now have a credit risk similar to [...

FINRA Sides With Investor In Fidelity Case

Posted on September 24, 2010
Fidelity Brokerages Services LLC has been ordered to pay $110,000 to an elderly client whose account suffered major losses because it was repeatedly shuffled from agent to agent. According to an arbitration panel of the Financial Industry Regulatory Authority (FINRA), the claimant in the case, Viola McNeill, 79, had a $700,000 account in Fidelity?s Portfolio Advisory Services (PAS) fee-based management [...

Leveraged, Inverse ETFs Back In News

Posted on September 21, 2010
Concerns about the suitability of leveraged, inverse exchange-traded funds (ETFs) for individual investors may cause Morningstar to stop its 1-to-5 rating of the products. The company may remove the ETFs from broader fund categories altogether and instead place them in a separate group, according to a Sept...

Bloggers, promote your law blog by nominating your blog for inclusion in USLaw.com's Law Blog Directory and RSS Reader. Benefits described.