It has always been our position that a stockbroker owes his or her customer both a suitability obligation under FINRA rules and (at least in our home state of Ohio) the broad duties of a fiduciary under state law. Thus, we’ve consistently asserted in securities arbitrations that any investment-related recommendation must be in the customer’s …
The Financial Industry Regulatory Authority (FINRA) has just launched a pilot program specifically designed for large arbitration cases involving claims of $10 million or more, though it can be used in any case, regardless of size. The program enables parties to customize the administrative process and allows them to bypass certain FINRA arbitration rules. In …
We get our fair share of calls from individuals whose parents were swindled or manipulated by financial advisors, but usually, by the time the kids get involved a lot of damage already has occurred. The children have stepped in due to some crisis: their parent has died or gone into managed care or is suffering …
There is a growing wave of recent lawsuits and investigations involving Residential Mortgage-Backed Securities (“RMBS”). It’s not too late for you to recover your losses in these investments, but your window is beginning to close. For those who don’t know, an RMBS is a type of asset-backed security that consists of large numbers of residential debt …
We’re a little behind on our posts lately due to a serious family illness. That’s why we only just saw the May 1 notice from the Financial Industry Regulatory Authority (FINRA) that it recently assessed Citigroup; Morgan Stanley; UBS; and Wells Fargo Advisors a total of more than $9 million in sanctions and restitution for …
We’re currently representing a charitable foundation that pays JP Morgan Chase Bank a percentage of assets under management to serve as its discretionary portfolio manager. By “discretionary,” we mean that JP Morgan gets to decide what will be bought and sold, without needing prior approval for each transaction. Despite having a fiduciary duty to avoid …
We have a new Variable Universal Life (VUL) insurance case in the office, and it comes at a time when lots of people seem to be searching for information about variable insurance products and variable annuities. This case involves New York Life, as did our last case, but there are plenty of other carriers who …
If you’re a holder of VelocityShares 2x Long VIX Short Term Exchange Traded Notes (“TVIX”), managed by Credit Suisse Group AG, you’re all too aware that TVIX recently plunged off a cliff. But you may not have understood exactly what you owned, how it was supposed to work, or how risky it could be. The …
In law, the term “expungement” refers to a court-ordered process in which the legal record of an arrest or a criminal conviction is “sealed” or erased in the eyes of the law. For most purposes, someone checking the criminal records will find no evidence of the expunged crime. But the concept of expungement isn’t solely …
We recently told you about the insurance agent who was convicted and sentenced to jail for selling an illiquid Allianz equity indexed annuity to an 83-year old woman who showed signs of dementia. The focus of this story has been on the agent’s criminal conviction, but agents get such huge commissions for selling these products …
Affinity: a natural attraction, liking, or feeling of kinship. Affinity fraud: a fancy name for ripping off fellow members of one’s own club, association, or religious, racial, ethnic, or social community. Several days ago, a former Mormon bishop was indicted by a federal grand jury in Connecticut. He allegedly ran a Ponzi scheme in which …
We’ve told you in a prior post about BrokerCheck, FINRA’s portal to background information concerning brokerage firms and their registered representatives. FINRA provides information on brokers who are currently registered with FINRA or who have been registered within the last 10 years. A free summary report is delivered immediately online and provides: A listing of the broker’s …
By now, the NYT op-ed resignation letter of Greg Smith, a former Goldman Sachs employee, has made the rounds on Twitter and the Blogosphere. In an act of professional suicide, Smith has scathingly indicted Goldman for its rancid ethics, declaring that “the environment now is as toxic and destructive as I have ever seen it,” …
Everyone is reprinting a new story from Reuters about a Stanford Law School/Cornerstone Research study which reports that in 2011, securities fraud settlements in federal courts plummeted to their lowest level in a decade. Various experts are offering their two cents as to why that might be the case. But for individuals whose losses were …
Cliches become cliches in large part because they resonate with truth. Here’s one of the best known cliches in all of investing. “If it sounds too good to be true, it probably is.” Most investors know that an investment’s return usually is commensurate with its risk. As a general proposition, higher return is accompanied by …
