Posts belonging to Category Investor Rights

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, […]

Financial Crimes – How Should We Deal With Them?


Has the government gone too far in ignoring financial criminal conduct? Is the United States operating under an unspoken policy to refrain from prosecuting large financial institutions even if they believe criminal laws were violated? Are the regulators afraid that doing so might damage the economy? Those questions were raised in a recent Wall Street […]

It is Important for Investors to Know about their Broker’s Recruitment Compensation Package


The Financial Industry Regulatory Authority is considering a rule change that would require firms to disclose brokers’ recruitment compensation packages to transferring customers. Brokers who are recruited to change firms often receive financial incentives that may subtly encorage them to engage in unlawful sales practices, such as churning and unsuitable sales, in order to generate […]

Wells Fargo Fined for Selling Unsuitable Investments to Municipalities and Non-Profits


Wells Fargo agreed to pay more than $6.5 million to settle SEC charges that it sold commercial paper backed by mortgage securities and collateralized-debt obligations to municipalities, nonprofit institutions and other customers without first understanding the substantial risks of those securities. The securities were unsuitable because the investors had a low risk tolerance. Three of […]

Are the Traditional Safe Haven Investments Still Safe?


In the wake of the financial crisis, investors have flocked to so-called safe haven investments like U.S. treasuries and debt of Germany and the United Kingdom. The price for that safety is too high, however, according to some experts. Those experts claim that the debt of those safe havens has been bid up into bubbles […]

New Rule May Make it Easier for Small Investors to Recover Investment Losses


Effective July 23, 2012, the Financial Industry Regulatory Authority (FINRA) rule relating to Simplified Arbitration, Rule 12800, will apply to arbitrations involving $50,000 or less, exclusive of interest and expenses. The previous cap was $25,000. This change should make it easier for investors to recover who have suffered relatively smaller losses as the result of […]

Stockton Bankruptcy Rattles Municipal Markets


In the national news and on the minds of municipal bondholders across the country is the bankruptcy of Stockton, CA. On June 28 the town of Stockton, CA, filed for Chapter 9 bankruptcy protection. This is not the first town to file for bankruptcy with outstanding bonds however its aggressive attitude toward bondholders has those […]

Wall Street’s ‘Suitability’ Duties to Customers are Updated


A new Financial Industry Regulatory Authority (FINRA) rule (Rule 2111) significantly broadens stockbroker duties owed to customers. The rule, which took effect July 9, 2012, is expected to weaken or eliminate certain arguments brokerage firms use to try to deflect liability (“New FINRA rule seen as weakening brokerage defenses,” by Suzanne Barlyn, Reuters).

JPMorgan Proprietary Funds Torch Investors


JPMorgan financial advisers say that they were encouraged to push the firm’s proprietary products despite the availability of less expensive, better performing alternatives, and that the firm exaggerated the returns of at least one crucial offering (See “Former Brokers Say JPMorgan Favored Selling Banks’ Own Funds Over Others,” by Susanne Craig and Jessica Silver-Greenberg).

Arbitrators Claim That FINRA ‘Blacklisted’ Them for Awarding Large Damages to Investors


Bloomberg reports that the Financial Industry Regulatory Authority (FINRA) summarily removed from its roster three arbitrators who served together on a case in which the investor was awarded more than $500,000 and has refused to even discuss the matter with the arbitrators, despite the absence of any impropriety. (“Wall Street’s Captive Arbitrators Strike Again,” by […]