Posts belonging to Category Regulatory Developments

CYNK Latest Wall Street Trap?


Cynk is a social network company that has no revenue, no assets, and no profits. Until last week, it was the hottest stock on Wall Street, according to a Business Insider report by Hunter Walker and Julia La Roche (July 14, 2014).  Its stock rose to $21 per share on July 10th, which gave the […]

Pension Advisers Fall Under Scrutiny


The problem of conflicts of interest for pension advisers attracted Congressional attention, according to a Wall Street Journal article by Dan Fitzpatrick  (June 9, 2014).  U.S. Representative George Miller (D., Calif.) has written a letter to the Labor Department that asks the Department to examine the conflicts of interest in the pension advising industry. The […]

Judge Who Refused To Roll Over Overruled By Second Circuit


The US Court of Appeals for the Second Circuit overruled a decision by Judge Jed Rakoff of the District Court in Manhattan, according to a New York Times article written by Ben Protess and Matthew Goldstein (June 4, 2014).   Judge Rakoff’s decision from 2011 rejected a settlement negotiated between the Securities and Exchange Commission (SEC) […]

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, […]

SEC Charges Former LPL Advisor With Fraud


On May 23, 2013, the SEC charged a former LPL Financial LLC advisor, Blake Richards, with fraud and misappropriating $2 million from at least six clients.  The SEC filed the civil complaint in the U.S. District Court for the Northern District of Georgia. According to an article by Bruce Kelly in Investment News, “when investors […]

More Risks Ahead for Muni Investors


Stockton, California, the most recent U.S. city to file for Chapter 9 bankruptcy protection, has presented serious issues about whether municipal bondholders will be forced to take a “haircut” while Stockton pensioners do not. With 300,000 residents, Stockton is the largest U.S. city in history to file bankruptcy.  Stockton has total outstanding debt of over […]

OppenheimerFunds Pays $35 Million to Settle Charges


OppenheimerFunds  Inc. has agreed to pay more than $35 million to settle SEC charges that it  made misleading statements about two of its mutual funds during the credit crisis in late 2008.  The payments include a penalty of $24 million, disgorgement of $9,879,706, and prejudgment interest of $1,487,190. According to the SEC, Oppenheimer used total […]

CDOs Haunt UBS


Swiss banking giant UBS AG is reported to be engaged in settlement discussions with the U.S. Securities and Exchange Commission regarding its structuring and underwriting of an allegedly fraudulent mortgage bond deal.  The SEC has alleged that UBS defrauded clients that invested over $748 million in notes linked to a CDO known as ACA ABS […]

Hedge Fund Scams Harm Investors


Anastasios “Tommy” Belesis, owner of John Thomas Financial, a brokerage firm, and George R. Jarkesy Jr., a hedge fund manager, worked together to defraud investors in the John Thomas Bridge and Opportunity Fund LP I and John Thomas Bridge and Opportunity Fund LP II, according to a recently filed SEC complaint.  The funds reportedly invested […]

Investment Policy Statements Are Important


A decided majority (61%) of financial advisers do not provide their clients with a written investment policy statements.  Such policy statements should, at a minimum, be based upon a number of suitability factors developed by the Financial Industry Regulatory Authority (FINRA). Those factors include, but are not limited to, the client’s age, other investments, financial […]