What are non-traditional exchange-traded funds (ETFs) and non-traded real estate investment trusts (REITs)? Why are independent broker dealers selling these complex products without proper supervision? FINRA wants to know and just slammed LPL Financial for doing such a thing. This week, FINRA censured and fined LPL $10 million for broad…
An increasing issue in investment fraud cases is the liability of commercial banks for aiding and abetting fraud by an investment advisory firm that engages in fraud and then goes defunct. Such firms typically house their investment clients’ accounts with an independent broker dealer clearing firm that clears or processes…
On March, 30, 2015, H. Beck Inc. (“H. Beck”) submitted a Letter of Acceptance Waiver, and Consent (“AWC”) to settle allegations of sales practice violations by the Financial Industry Regulatory Authority (“FINRA”). FINRA alleged that: 1) H. Beck failed to establish a reasonable supervisory system and written supervisory procedures to…
Merrill Lynch was fined almost $20 million by the Financial Conduct Authority (FCA) in London for incorrectly reporting more than 35 million transactions from 2007 to 2014. Merrill Lynch didn’t report, at all, another 120,000 transactions. It’s the largest fine ever levied by the FCA for reporting failures. While this…
In another chapter of the continuing legal troubles facing UBS, AG and UBS Financial Services of Puerto Rico, Inc. (collectively “UBS”) for its marketing and sale of closed-end bond funds composed of Puerto Rican municipal debt (the “Puerto Rico Bond Funds”), two former UBS registered representatives, Jorge and Teresa Bravo…
In what has become a hot issue this Spring, the Labor Department yesterday proposed a new set of standards for brokers who offer advice in connection with 401(k)’s and other retirement accounts. Currently, brokers are required only to recommend products that are “suitable” for investors, which permits the sale of…
I noted in my March 20 post that the Chair of the SEC had just come out in favor of a rule requiring brokers to act in their clients best interests. While investors wait for the SEC to move forward on the issue, the New York City Comptroller, Scott Stringer,…
There has been a spate of litigation in recent years over whether broker dealers can contract out of FINRA arbitration and litigate in court instead. Goldman, Sachs & Co. v. Golden Empire Schools Financing Authority, 764 F.3d 210 (2d Cir. 2014) is a recent example in the Second Circuit. Since…
On March 30, 2015, the Financial Industry Regulatory Authority (“FINRA”) barred broker Anthony “Tony” Warren Thompson (“Thompson”) and expelled his firm, TNP Securities LLC (“TNP Securities”), for making material misrepresentations and omissions in connection with the sale of private placement securities in violation of various FINRA Rules and securities laws.…
Reuters reported that Mary Jo White, Chair of the U.S. Securities and Exchange Commission, came out in favor of creating of new rules to harmonize standards of care between investment advisers and brokers. Currently, investment advisers must act in a client’s best interest, while brokers may continue to sell products…