Investment Fraud Lawyer Blog

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 10,173 and, on Monday rose 24 points.

• On Tuesday, the Dow Jones Industrial Average fell 3 points.

• On Wednesday, the Dow Jones Industrial Average jumped 42 points.

• On Thursday, the Dow Jones Industrial Average plunged 116 points.

• On Friday, the Dow Jones Industrial Average fell 53 points and closed the week at 10,067.

Continue reading " Page Perry's Market Monitor - January 29, 2010 " »

The Massachusetts Securities Division recently filed a complaint against Securities America related to its private offerings of Medical Capital Notes. The collapse of the Medical Capital investments has left investors nationwide in the hole to the tune of about $1 billion.

Continue reading " Evidence Against Securities America Mounts in Medical Capital Cases " »

According to Don Schreibner Jr., they have. See his Jan. 3, 2010 InvestmentNews article, “It’s time to sell municipal bonds.” Mr. Schreibner is president and chief executive of WBI Investments, a money management firm.

Continue reading " Have Municipal Bonds Become High Risk Investments? " »

Former Credit Suisse broker Eric Butler, who was convicted of fraud by a New York federal court jury in August, was sentenced last week to five years in federal prison. Along with former Credit Suisse colleague Julian Tzolov, Butler was accused of making misrepresentations in the sale of auction rate securities, claiming that they were backed by federally-insured student loans when in fact they were backed by high-risk collateralized debt obligations, or CDOs. Prosecutors alleged that Butler and Tzolov had switched their clients to the CDO-backed securities because they paid higher commissions.

Continue reading " Broker Sentenced for Fraud in Selling Auction Rate Securities Issued by CDO's " »

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 markets were closed on Monday for Martin Luther King Day.

• On Tuesday, the Dow Jones Industrial Average opened at 10,610 and soared 116 points.

• On Wednesday, the Dow Jones Industrial Average dropped 122 points.

• On Thursday, the Dow Jones Industrial Average fell 213 points.

• On Friday, the Dow Jones Industrial Average plunged 216 points and closed the week at 10,173.

Continue reading " Page Perry's Market Monitor - January 22, 2010 " »

The SEC has adopted its much-anticipated final rule relating to custody by investment advisers. The final rule omits the "pop quiz," or surprise audit proposal, contained in the proposed rule for advisers who have custody solely by virtue of having the ability to deduct advisory fees. The Commission stated in the adopting release that it received more than 1,300 comment letters on the proposal, most of them relating to the pop quiz proposal.

Continue reading " SEC Adopts New Custody Rules For Investment Advisers " »

An Illinois-based pension fund has brought a shareholder’s derivative action seeking to recover billions of dollars in executive compensation paid by Goldman Sachs. This could be the first of many such suits, reported James Armstrong of Law360, “Goldman Pay Suit Could Signal New Wave of Litigation,” Jan. 8, 2010.

Continue reading " Institutional Investors Are Fed Up With Wall Street Pay Excesses Too " »

The President of the North American Securities Administrators Association, in testimony before the Financial Crisis Inquiry Commission last week, continued to blast the SEC and FINRA for dropping the ball. Denise Voigt Crawford said there is an "oversight gap" resulting from Congress stripping away substantial state regulatory oversight of brokers and advisors when it enacted the National Securities Markets Improvements Act in 1996. She urged Congress to return to the states all of the authority taken away by that law. If Congress acted on her request, the states would once-again have concurrent authority with the SEC over large investment advisers, like Bernie Madoff. She also urged Congress to return to the states power to oversee private placement offerings.

Continue reading " State Securities Commissioners Need More Authority to Fight Investment Fraud " »

The Wall Street Journal reported on January 15th that the major US banks are set to pay their employees record bonuses of approximately $145 billion for 2009. This staggering amount represents an 18% increase over bankers’ 2008 salaries. Wall Street tries to justify these huge bonuses by pointing out that there was an increase in bank revenues. The Journal projects that the top 38 banks and hedge funds generated about $449.6 billion in revenue for 2009, a 25% jump since 2007. Of course, Wall Street wouldn’t be earning any profits or revenues if not for government bailouts and capital injections. The Obama administration has paid attention to these record payouts and President Obama announced his proposal for a bank tax.

Continue reading " Does the Proposed Bank Tax Adequately Compensate Taxpayers for the Risks? " »

Two months ago we reported that Citigroup Global Markets, Inc. had asked a New York court to dismiss a $72 million lawsuit filed against it by KV Pharmaceutical Co. Last week it was announced that Citi had agreed to settle with KV.

Continue reading " Citi Settles $72 Million Lawsuit Involving Auction Rate Securities " »

How short their memories. Wall Street firms on the brink of failure until rescued by a controversial taxpayer bailout continue to show their unabashed greed by claiming entitlement to massive amounts of money earned on funds "invested" by American taxpayers. Without those bailouts, most, if not all the Wall Street firms would be bankrupt or teetering on failure. Nevertheless, undeterred by the rising anger on Main Street and the populist backlash in Washington D.C., and flush with record revenues of $449.6 billion, Wall Street firms are on track to pay over $145 billion in bonuses for 2009, according to the Wall Street Journal.

Continue reading " Wall Street Firms "Thumb Their Noses" at Taxpayers and Washington Politicians - Award Obscene Bonuses Anyway " »

The first public hearings by the Financial Crisis Inquiry Commission were notable for what did not happen. The well-prepared Wall Street bankers faced the cameras with apparent humility, parried Commission clunkers with their own platitudes, and left pretty much unperturbed. Those who expected the reprise of the 1930s Pecora hearings must have been disappointed. “Pecora’s revelations enraged the public and stampeded Congress into creating the SEC and separating commercial banks from investment banks,” according to Paul Wiseman in his USA Today column, “Depression-era star muckraker shapes Wall Street inquiry.” He added: “In public hearings, Pecora squared off against the elite financiers of the age, pointing at them with his cigar and coaxing them into what [Senate historian Donald] Ritchie calls ‘startling admissions of wrongdoing.”

Continue reading " The Reason Real Change is Needed - Wall Street Maintains a Business as Usual Stance as Public Hearing Begin on the Financial Crisis " »

Hiring a financial adviser is a very important decision for investors. On January 5th, the Atlanta Journal-Constitution ("AJC") published an article giving several suggestions about hiring a financial planner or financial adviser. The article recommends that the investor stay focused on the goals he or she has set out and to hire an adviser that can give proper advice relative to those plans.

Continue reading " A Few Basic Considerations in Hiring a Financial Adviser " »

Financial advisors’ unenthusiastic reception of recently-offered lower-cost variable annuities confirms what most observers took for granted – that variable annuity sales are driven primarily by commissions. See “Slimmer variable annuities attract thin following,” InvestmentNews, Jan. 10, 2010, by Darla Mercado.

Continue reading " Why Do They Sell Variable Annuities? - It's the Commissions Silly " »

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 year at 10,428 and, on Monday, the market soared 156 points.

• On Tuesday, the Dow Jones Industrial Average dropped 12 points.

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

• On Thursday, the Dow Jones Industrial Average rose 33 points.

• On Friday, the Dow Jones Industrial Average moved up 11 more points and closed the week at 10,618.

Continue reading " Page Perry's Market Monitor - January 8, 2010 " »

Independent financial advisers are gaining on Wall Street brokers in the competition to manage more than $5 trillion in Americans' savings, according to E. S. Browning in his recent Wall Street Journal article, “More Brokers Flee Big Firms, Taking Investors With Them.”

Continue reading " Yes, Wall Street can be Replaced - Independent Brokerage Firms and Investment Advisers are Gaining on Big Wall Street Firms " »

In an encouraging sign to those who despair about investors receiving full justice in a compulsory arbitration process financed by the brokerage industry, a California FINRA panel last month (December 2009) awarded compensatory damages of $319,798 to a 96-year old investor as well as treble damages of $959,394 under the California Elder Abuse Act.

Continue reading " FINRA Arbitration Panel Metes Out Harsh Punishment for Elder Fraud " »

"Signs and wonders" are pointing to a new bubble brewing in corporate debt and investors should be wary. According to a January 6 Bloomberg article by Bryan Keogh and Shannon D. Harrington (“Treasurers Embrace Pay-in-Kind Bonds as Ghost of Lehman Fading”), companies are (i) issuing bonds that pay interest in new debt rather than cash, (ii) using the proceeds to pay dividends to their owners rather than for operations or expansion, (iii) asking their lenders to change the terms of their existing debt agreements to permit this, and (iv) increasing the amounts of offerings if investors want more. Such risky offerings have not been seen since 2007, before Lehman Brothers declared bankruptcy and the credit markets froze.

Continue reading " Exotic New Junk Bonds are Fraught with Risk " »

An Atlanta-based Financial Industry Regulatory Authority (FINRA) arbitration panel has ordered SunTrust Robinson Humphrey, Inc. (SunTrust) to pay over $4.1 million in damages (including punitive damages, attorneys’ fees and costs) to a former registered representative based on a claim of wrongful termination and malicious defamation in annotating the claimant’s Form U-5 (a regulatory filing) to indicate that he had been “permitted to resign” for “failure to follow firm sales practice policy.” The claim arose out of the sale of Trapeza V, LLC Auction Rate Preferred Securities. The claimant was a 19-year veteran of SunTrust. The case is Lance R. Beck v. SunTrust Robinson Humphrey, Inc., FINRA Case No. 08-02482.

Continue reading " SunTrust Hit with $4.1 Million Damage Award for Terminating and Defaming a Broker who Sold Auction Rate Securities " »

The Wall Street Journal reports that “hundreds of businesses are fighting to recover billions of dollars tied up in frozen auction-rates securities, a year after Wall Street firms agreed to $60 billion in settlements over the collapsed market for the investments.” See “Firms Fight Banks Over Billions in Frozen Notes,” WSJ 1/2/10. While regulators stepped in to help individual investors after the auctions froze in February 2008, many corporate and institutional investors did not benefit from settlements between banks, broker-dealers and the SEC, FINRA and state attorneys general. According to Atlanta attorney Craig T. Jones, investors were left holding about $330 billion in illiquid securities when the auctions froze, so $60 billion in settlements is only a drop in the bucket.”

Continue reading " The Auction Rate Securities Debacle Continues - Corporate America Takes on Wall Street " »

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 10,520 and, on Monday, the market rose 27 points.

• On Tuesday, the Dow Jones Industrial Average dropped 2 points.

• On Wednesday, the Dow Jones Industrial Average gained 3 points.

• On Thursday, the Dow Jones Industrial Average fell 120 points and closed the year at 10,428.

• On Friday, the markets were closed for New Years Day.

Continue reading " Page Perry's Market Monitor - January 1, 2010 " »