Investment Fraud Lawyer Blog

So many investors have lost money in investments mis-marketed under assurances the investment was “principal-protected,” or “capital guaranteed,” that the Financial Industry Regulatory Authority (FINRA) has found it necessary to issue a notice (Notice to Member 09-73) reminding brokerage firms of their sales practice duties when recommending investments such as so-called Principal Protected Notes. These securities are structured products that are typically comprised of a zero-coupon linked to the performance of some other asset. That asset might be, for example, a derivative product based on a stock index or a basket of securities as obscure as the Brazilian Real-U.S. Dollar exchange rate and the price of copper.

Continue reading " Regulators Express Concerns about "Principal-Protected" and "Capital Guaranteed" Investments " »

It’s not just the SEC that is feeling the sting of public criticism for lax enforcement. The U.S. Department of Justice, responsible for prosecuting federal crimes (including financial crimes), filed markedly fewer cases during the years leading up to one of the worst economic meltdowns in U.S. history, according to a recent USA Today article by Brad Heath (“Crisis loomed as fraud cases fell,” Dec. 16, 2009). An examination of Justice Department records by USA Today revealed that the drop in enforcement actions involved everything from stock-trading schemes and corporate wrongdoing to fraud aimed at individual consumers.

Continue reading " The Lack of Government Enforcement Actions Facilitated the Recent Epidemic of Investment Fraud " »

There have been various developments over the past several weeks which investors may consider relevant in allocating their resources or evaluating alternatives that are available to them. Some of the more significant developments include, but are not limited to, the following:

• The Dow Jones Industrial Average opened the week at 10,329 and, on Monday, the market rose 85 points.

• On Tuesday, the Dow Jones Industrial Average jumped 51 points.

• On Wednesday, the Dow Jones Industrial Average drifted up 2 points.

• On Thursday, the Dow Jones Industrial Average increased 54 points and closed the week at 10,520.

• On Friday, the markets were closed for Christmas.

Continue reading " Page Perry's Market Monitor - December 25, 2009 " »

Investors’ problems with private investments and Reg D offerings appear to be growing at an alarming pace. According to a recent InvestmentNews article by Sara Hansard (“Finra to get tough on Red D offerings,” Dec. 13, 2009), FINRA says it is “getting tough” and plans to file regulatory actions against brokerage firms involved in selling private-placement offerings next year. “We have a number of investigations under way involving allegations of wrongdoing arising from the sales of these Regulation D private placements,” James Shorris, executive vice president and executive director of enforcement at FINRA, was quoted as saying in the article.

Continue reading " Wrongdoing in Reg D Offerings and Other Private Investments Becomes a Growing Concern " »

There have been various developments over the past several weeks which investors may consider relevant in allocating their resources or evaluating alternatives that are available to them. Some of the more significant developments include, but are not limited to, the following:

• The Dow Jones Industrial Average opened the week at 10,471 and, on Monday, the market rose 30 points.

• On Tuesday, the Dow Jones Industrial Average fell 49 points.

• On Wednesday, the Dow Jones Industrial Average sunk 11 points.

• On Thursday, the Dow Jones Industrial Average dropped 133 points.

• On Friday, the Dow Jones Industrial Average rose 21 points and closed the week at 10,329.

Continue reading " Page Perry's Market Monitor - December 18, 2009 " »

The SEC has begun to probe Bank of America’s failure to disclose increasing losses at Merrill Lynch prior to its acquisition. This development was reported just two months before the SEC ‘s scheduled trial against Bank of America for its failure to disclose controversial bonuses paid to Merrill employees.

Continue reading " SEC Expands Investigation of Merrill Lynch/Bank of America Transaction " »

A Financial Industry Regulatory Authority (FINRA) arbitrator awarded damages to Mr. Weigel as a result of losses sustained in the Schwab YieldPlus Fund. The panel awarded the Mr. Weigel $19,400 in a claim submitted under FINRA’s special “simplified” procedure for claims of $25,000 or less (exclusive of interest and costs). Mr. Weigel’s actual trading loss in Schwab YieldPlus Fund was $22,279 while his net out of pocket loss was $15,359. In a simplified claim, a single arbitrator decides the case based on the paper submissions of the parties without an in-person hearing.

Continue reading " The Beat Goes On - Schwab Loses Another Schwab YieldPlus Case " »

Time is running out for Schwab YieldPlus investors to opt out of the class action. A properly completed Request for Exclusion must be received by the class action administrator no later than December 28, 2009. With the holidays, the time to do that is running very short.

Continue reading " Less Than 15 Days are Left for Schwab YieldPlus Investors to Preserve their Rights " »

If you were sold Main Street Natural Gas Bonds that were guaranteed by Lehman Brothers, you are likely to have a compelling claim to recover any losses that you sustained when Lehman Brothers went bankrupt. These bonds were sold to income oriented investors as relatively safe investments. However, the brokerage firms that sold them, in many cases, did not do their homework. If they had, they would have realized that these bonds were totally inappropriate for almost any investor.

Continue reading " Investor Alert: Main Street Natural Gas Bonds Backed by Lehman Brothers " »

There have been various developments over the past several weeks which investors may consider relevant in allocating their resources or evaluating alternatives that are available to them. Some of the more significant developments include, but are not limited to, the following:

• The Dow Jones Industrial Average opened the week at 10,389 and, on Monday, the market rose 1 point.

• On Tuesday, the Dow Jones Industrial Average fell 104 points.

• On Wednesday, the Dow Jones Industrial Average rebounded up 51 points.

• On Thursday, the Dow Jones Industrial Average jumped 69 points.

• On Friday, the Dow Jones Industrial Average rose 66 points and closed the week at 10,472.

Continue reading " Page Perry's Market Monitor - December 11, 2009 " »

Private investments (Reg D offerings) are exposing investors to significant risks and regulators are fighting to get the situation under control. In a recent article in Investment News, Saras Hansard reported that state securities regulators are making progress toward their goal of regaining authority to regulate these private offerings. Congress preempted that authority by enacting the National Securities Market Improvement Act of 1996. However, state securities regulators have complained that the NSMIA increases the potential for fraudulent private placement offerings. Observers have criticized that decision, believing that state securities regulators are in the best position to deal with private placement offerings.

Continue reading " The Dangers of Private Investments (Reg D Offerings) Grow " »

A Columbia, South Carolina-based Financial Industry Regulatory Authority (FINRA) arbitration panel awarded damages to a South Carolina resident as a result of losses sustained in Lehman Brothers Holdings Inc. principal-protected notes sold to her by UBS. The panel awarded Patricia Flanagan $150,000 in compensatory damages, plus an additional $35,000 designated as costs, plus interest. Ms. Flanagan had requested compensatory damages in the amount of $300,000.00, plus interest, costs, expenses, attorney’s fees, expert witness fees, FINRA fees, and punitive damages. The Panel assessed $6,075.00 of the hearing session fees to Claimant and the same amount to be paid by UBS. No attorney’s fees, expert witness fees or punitive damages were awarded.

Continue reading " Investors in Lehman Principal-Protected Notes Have an Opportunity to Recoup Their Losses " »

There have been various developments over the past several weeks which investors may consider relevant in allocating their resources or evaluating alternatives that are available to them. Some of the more significant developments include, but are not limited to, the following:

• The Dow Jones Industrial Average opened the week at 10,310 and, on Monday, the market jumped 35 points.

• On Tuesday, the Dow Jones Industrial Average surged 127 points.

• On Wednesday, the Dow Jones Industrial Average dropped 19 points.

• On Thursday, the Dow Jones Industrial Average tumbled 87 points.

• On Friday, the Dow Jones Industrial Average rose 23 points and closed the week at 10,389.

Continue reading " Page Perry's Market Monitor - December 3, 2009 " »

Huge recruiting bonuses for brokers may bode ill for customers. Large brokerage firms like Merrill Lynch and Morgan Stanley Smith Barney are offering some of the highest recruitment bonuses ever offered – up to 330% of their previous year's fees and commissions – to entice reps who rank among the top fifth of their firms' producers to come to work for them, reported Bruce Kelly in his November 15 InvestmentNews article, “Warring wirehouses add fuel to hiring fire.”

Continue reading " Wall Street Recruiting Packages Put Customers At Risk " »

Investors and their accountants should scrutinize investment portfolios to see whether they contain Main Street Natural Gas Bonds that were guaranteed by Lehman Brothers Holdings, Inc. These bonds were not only guaranteed by Lehman Brothers, they were issued to finance the cost of acquiring a thirty-year supply of natural gas from Lehman Brothers Commodities Services Inc., a wholly-owned subsidiary of Lehman Brothers, as the designated Gas Supplier. Thus, the viability of these Lehman-backed bonds was directly dependent upon the viability of Lehman Brothers. In September 2008, Lehman Brothers filed for bankruptcy, and Lehman-guaranteed Main Street Natural Gas Bonds plummeted in value, but there were numerous red flags and storm warnings well before then.

Continue reading " Investors Sue to Recover Losses on Main Street Natural Gas Bonds " »