Posts belonging to Category Disciplinary Actions

FINRA’s BrokerCheck Full Of Holes


FINRA’s system for revealing red flags about brokers may not disclose all the information that it is supposed to, according to a Wall Street Journal article by Jean Eaglesham and Rob Barry (March 7, 2014).  A report by FINRA’s BrokerCheck should include information about felony charges and convictions, personal bankruptcy petitions filed within 10 years, […]

Alternative Investments Begin to Haunt LPL Financial


LPL Financial, the country’s largest independent broker-dealer, is encountering serious problems involving its sales of alternative investments. LPL is also (not coincidentally) one of the country’s largest sellers of alternative investment products. In 2011, LPL sold $758,435,677 of variable annuities (which are considered by most industry observers as being alternative investments) and $110,643,148 of other […]

Massachusetts’ Action Reveals the Dangers of Crowdfunding Investments


Massachusetts has filed fraud charges against two out-of-state companies, Prodigy Oil and Gas LLC and Synergy Oil LLC, in connection with their sale of unregistered securities to Massachusetts investors. Prodigy raised at least $464,000 from one Massachusetts investor and Synergy raised $35,000 from two investors, according to Commonwealth Secretary William Gavin’s complaint.

Have Securities Regulators Become Too Chummy With Wall Street?


Susan Antilla’s recent Bloomberg column summarizes the securities regulatory enforcement activity in 2011 as a series of breaks, favors and waivers doled out by the regulators to big Wall Street banks. To be sure, the regulators often lower the boom on the small players, but Wall Street is another matter. (“Wall Street’s Big Swingers Get […]

FINRA Fines For False Advertising Quadruple


The Financial Industry Regulatory Authority (FINRA) reported that fines for false advertising have more than quadrupled from $4.75 million in 2010 to $21.1 million in 2011. FINRA found that a big part of that problem involved inaccurate or fraudulent internal communications. Firms were misleading their own brokers by telling them that structured products and other […]

Investment Regulators Often Fail to Collect Monetary Sanctions


“That’s the easiest $250,000 you’ll never see,” quipped the judge who had just granted a motion for summary judgment in a recent case. Collectibility of judgments is something that private attorneys usually consider in deciding whether to expend resources to pursue a case. The attorneys who work for the U.S. Securities and Exchange Commission and […]

Is FINRA Just a Trade Association for the Securities Industry?


The Financial Industry Regulatory Authority (FINRA) is lobbying Congress to become the regulator of 12,000 investment advisors and their firms, but critics say that should not happen. These critics claim that FINRA has done a poor job of protecting investors from unlawful sales practices by its member brokerage firms, according to an InvestmentNews article entitled […]

The Real Truth Regarding Some of Wall Street’s Subprime Shenanigans Begins to Emerge


J.P. Morgan Securities LLC has agreed to pay $153.6 million to settle SEC charges that it misled investors in a complex “built to fail” mortgage securities transaction just as the housing market was starting to plummet.

Annuity Products Used to Scam Senior Citizens


The securities regulator for Illinois has revoked the licenses of two investment adviser representatives, who are supposed to be fiduciaries, for recommending that elderly clients partially liquidate variable annuities in order to purchase equity index annuities, so that the reps could receive hundreds of thousands of dollars in commissions, according to Darla Mercado’s InvestmentNews article […]

Taxpayers Lost Billions in the Recent Financial Crisis – “Where are the Criminal Prosecutions?”


Gretchen Morgenson and Louise Storey have investigated the question so many people have ? why no prosecutions have been undertaken in the wake of the financial disaster ? and published their findings in a revealing ten page New York Times article entitled, “In Financial Crisis, No Prosecutions of Top Figures.”