Posts belonging to Category Regulatory Developments

Regulators Focus on Complex Alternatives


The Financial Industry Regulatory Authority (FINRA), as well as the SEC and state regulators, have announced that they are concerned about broker/adviser sales practices involving alternative investments including variable annuities and equity-indexed annuities. They have the distribution of these complex products on their radar screens.  On January 11, 2013, FINRA sent a letter to its […]

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 […]

The Games That Mutual Funds Play


OppenheimerFunds  Inc. has agreed to pay more than $35,000,000 to settle SEC charges that it  made misleading statements about two of its mutual funds during the credit crisis.  The payments include a penalty of $24,000,000, disgorgement of $9,879,706, and prejudgment interest of $1,487,190. According to the SEC, Oppenheimer used total return swaps (a type of […]

Illinois Settles SEC Fraud Charges


The SEC has charged the State of Illinois with securities fraud for misleading municipal bond investors between 2005 and early 2009.  According to the SEC, Illinois failed to disclose the impact of structural underfunding of its pension system in connection with the offer and sale of more than $2.2 billion worth of municipal bonds.  The […]

Broker Barred for Ripping Off Pro Athletes


The Financial Industry Regulatory Authority (FINRA) has barred broker Jeffrey Rubin of Lighthouse Point, Florida, from the securities industry for unsuitable recommendations to NFL players to invest in the securities of a now-bankrupt Alabama casino. The NFL players lost millions in the illiquid, high-risk investment. According to FINRA, Rubin made the recommendation to at least […]

Financial Services Whistleblower Cases – A New Twist


Financial service industry whistleblower claims have become a hot item. Ironically, it is even reported that a crowd funding website is being used by an individual who hopes to raise money from people interested in investing in a portfolio of financial whistleblower claims.  Of course, crowd funding is one of the newest and most controversial […]

DOJ’s New Strategy for Dealing with White Collar Fraud


Is the federal government really getting tougher on white-collar crime? Faced with criticism for not holding big banks and their senior executives accountable for their behavior leading up to the financial crisis, the U.S. Department of Justice (“DOJ”), which prosecutes federal crime cases, is developing a new model for dealing with alleged financial crimes perpetrated […]

Financial Advisers – What Are They Hiding?


Financial advisers continue to object to a recent rule that grants securities regulators more access to potentially relevant documents under the adviser’s control. The Securities and Exchange Commission has approved a rule change proposed by the Financial Industry Regulatory Authority (FINRA) that significantly increases FINRA’s ability to discover a member firm’s documents.  FINRA is now […]

Bond Warning Issued by FINRA


The Financial Industry Regulatory Authority (FINRA) has finally joined the crowd in warning investors about the risks of bonds and bond funds in the current environment. If FINRA is worried about bonds, the end may be near. FINRA may be late in warning investors about bond and bond fund risks say financial advisers, but investors […]

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 […]