Investment Fraud Lawyer Blog

Matt Taibbi’s recent Rolling Stone article entitled “Is the SEC Covering Up Wall Street’s Crimes?” questions whether corruption plagues the U.S. Securities and Exchange Commission. In that article Taibbi meticulously contends that Wall Street banks and their law firms have, over and over again, shut down fraud investigations by influencing senior SEC officials, who later take lucrative jobs at the very banks that were the targets of the investigations or at the law firms representing those banks.

Continue reading " Is the Fox Guarding the (Investors') Chicken House? " »

The association of state securities regulators known as NASAA has released its top 10 investment traps. NASAA finds that scam artists are peddling various get-rich-quick schemes to take advantage of the economic uncertainty. According to NASAA, investments that investors should be particularly wary of include distressed real estate schemes, energy investments, gold and precious metal investments, promissory notes, and securitized life settlement contracts. Tactics used to peddle such investments often involve affinity fraud, bogus or exaggerated credentials, mirror trading, private placements, and securities and investment advice offered by unlicensed agents.

Continue reading " Securities Cops Issue Warnings about Current Investment Scams " »

Wall Street banks are targeting their mid-level, middle-age employees for termination in an effort to reduce costs in this down market, according to “Mid-Career Workers Squeezed Off of the Street.” Approximately 113,000 employees (nearly half of those aged 35 to 54) at U.S. investment banks and brokerages have been terminated since 2008, according to the article, citing a FINS.com analysis of data provided by the Bureau of Labor Statistics. By contrast, 62,000 employees (39% of those aged 20 to 34) have been terminated, while bankers aged 55 and over increased by 18%.

Continue reading " Are Wall Street's Job Cuts Tainted with Discriminatory Practices? " »

Investors are in a very bad mood, at least as bad as in early 2009 when their financial world seemed to be crumbling, according to Jason Zweig’s Wall Street Journal article entitled “Too Flustered to Trade: A Portrait of the Angry Investor.”

Continue reading " Recent Study Confirms that Retail Investors are Disgusted and Angry " »

UBS AG said it will lay off more than 5% of its employees, according to Neil Maclucas’s Wall Street Journal article entitled “UBS to Cut 3,500 Jobs.” Forty-five percent of the cuts will come from investment banking and thirty-five percent will come from the wealth-management and Swiss bank unit. The high proportion of cuts at the wealth-management and Swiss banks business reportedly surprised Rainer Skierka, an analyst at Bank Sarasin.

Continue reading " UBS Announces Massive Job Cuts " »

With the exchange traded fund market over-saturated, sellers are churning out scads of new theme products that target every conceivable interest group. Examples include the JETS Dow Jones Islamic Market International Index, Global X Fishing Industry Fund, Global X Farming ETF, Global X Fertilizer Fund, et cetera. Investors should be skeptical about such offerings and consider a number of risks that sellers typically do not explain, according to Penelope Wang’s CNNMoney article entitled “Don’t be lured in by niche ETFs.”

Continue reading " Niche Exchange Traded Funds (ETFs) Involve Unique Risks " »

If you think you know the full story about the unemployment problem, think again. The media has yet to really put the extent of the problem into perspective. To be fair, some of the blame must go to the methods of measurement and political distortions that cloud conventional logic. Where are our “job creators”? The preservation of the tax cuts was supposed to loosen the floodgates of new jobs. They have had 4 years to make it happen. So where are we now?

Continue reading " Unemployment Poses Major Threat to the Economy " »

Investors withdrew net $23.5 billion from U.S. equity mutual funds as of Aug. 10, the most since October 2008, following the Lehman Brothers bankruptcy, according to a recent InvestmentNews article entitled “Equity investors exiting -- and may not be back for years.”.

Continue reading " Have the Equity Markets Become Too Risky for Most Retail Investors? " »

Bank of America will cut 3,500 jobs this quarter and at least 10,000 this year, in addition to the 2,500 jobs cut earlier this year, according to an InvestmentNews article entitled “BofA to slash 10,000 jobs: Reports.” The jobs cuts are reportedly in addition to BofA’s Project New BAC, which is another cost-cutting program. In the bigger picture, the 50 largest global banks have cut 60,000 jobs as of August 5, 2011, the fastest rate since 2008, according to data compiled by Bloomberg.

Continue reading " Bank of America May Cut More Than 10,000 Jobs This Year " »

Lehman Brothers is filing arbitration claims to recover recruitment and retention bonuses paid to brokers based on the premise that they are loans that have to be repaid if the broker’s employment was terminated for any reason. So far, Lehman has been successful as arbitration panels have awarded Lehman clawbacks of $2.2 million against one former broker and $800,000 against another, according to Joseph Checkler’s and Suzanne Barlyn’s Wall Street Journal article entitled “Lehman Pursues Former Brokers' Bonuses.“

Continue reading " Lehman Sues Brokers to Recoup Bonuses - Confirms that Consummate Corporate Arrogance Knows No Bounds " »

More than a year after it was created by the Dodd-Frank financial reform act, the U.S. Securities and Exchange Commission (SEC) opened its Office of the Whistleblower on August 12, 2011. According to a statement released by SEC Director of Enforcement Robert Khuzami, “early and quick law enforcement action is the key to preventing securities fraud and avoiding investor losses, and the whistleblower program gives us the tools to help achieve that goal.” Investor rights attorney Craig T. Jones of Page Perry LLC in Atlanta agrees: “This program will catch fraud sooner because it gives Wall Street insiders a significant cash incentive to be the first to come forward with information about abusive practices. Not only will whistleblowers and their attorneys profit from doing the right thing, but the investing public as a whole will benefit.”

Continue reading " New SEC Whistleblower Office Opens " »

The National Credit Union Administration (“NCUA”), acting as liquidating agent for failed corporate credit unions, has filed suit in a federal court in Los Angeles against Goldman Sachs. The complaint involves the sale of $1.2 billion of mortgage-backed securities that were "destined to perform poorly."

Continue reading " Credit Unions Sue Goldman Sachs for Misrepresenting Mortgage-Backed Securities " »

Just as a low tide near the seashore can reveal shipwrecks, a falling stock market often reveals misconduct by investment advisers. This is particularly true with respect to an investment adviser’s duty to recommend only investments to a customer that are suitable in light of the customer’s investment objectives, status in life and risk tolerance. Unfortunately many investors only learn that their advisers have violated this duty when adverse market conditions develop.

Continue reading " Market Turmoil Expected to Precipitate an Avalanche of Suitability Claims " »

The current free fall in the stock market is likely to activated the ticking time bombs that are hidden away in some investors’ portfolios. These time bombs are embedded in a type of structured product called Reverse Convertible Notes or Reverse Exchangeable Notes. The problem has to do with the way these products are structured.

Continue reading " Reverse Convertible Securities More Likely to Become Toxic as Market Swoons " »

The dramatic swings in the financial markets are sure to cause many retail investors in exchange traded funds (ETF’s) to question whether their investment advisors were prudent in recommending the investments to customers and whether such advisors satisfied the obligation to provide customers with full disclosure of the risks of ETFs.

Continue reading " As Markets Fall, ETF Investors Get Hammered " »

When the markets go haywire, the financial scam artists come out of the woodwork. According to attorney Pratt H. Davis of the securities and arbitration law firm Page Perry, LLC, “with the recent extreme market volatility, investors looking for security can be increasingly easy targets for financial scam artists.” According to Mr. Davis, “in times of financial distress investors can be lured by scam artists promoting ‘safe’ or ‘risk free’ investments that offer increased returns despite the current market conditions.”

Continue reading " Are You the Victim of a Financial Scam? " »

Fears of a double-dip recession, the expiring money-printing program called “Quantitative Easing II,” the specter of government spending cuts, and a widely anticipated downgrade of U.S. government debt have sent equity markets into a major downward spiral that culminated in a 513 point drop in the Dow on Thursday, August 4, 2011, the largest single point drop since 2008, the year Bear Stearns and Lehman Brothers failed, the credit markets froze, and U.S. political leaders seemed genuinely frightened.

Continue reading " Investors Seek Safe Havens as the Markets Tumble " »

The recent political and economic instability reminds us that while there are some “black swan” risks that are out of an investor’s control, portfolios can and should be managed based on an investor’s risk tolerance. See Paul Sullivan’s recent New York Times article entitled “Managing an Investment Portfolio for Risks, Not Only Returns.”

Continue reading " Investors Should Focus on Risk Tolerance during Turbulent Times " »

On Friday, August 5, 2011, Standard & Poors, one of the three major credit rating agencies, downgraded U.S. Treasury obligations for the first time ever. The new grade is AA+, one notch below the highest AAA rating. The other two major ratings agencies, Moody’s and Fitch, have not announced a downgrade of U.S. debt at this time. Upon the announcement, investors heavily sold Treasuries, which dropped sharply sending yields higher.

Continue reading " S & P Downgrades U.S. Debt - Investors Remain Nervous " »

On July 27, 2011, the Staff of the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations published a report entitled “Staff Summary Report on Issues Identified in Examinations of Certain Structured Securities Products Sold to Retail Investors.” This report was based on the Staff’s review of eleven broker dealers that sell various structured securities: three large firms affiliated with bank holding companies that are issuers structured securities, on wholesale seller of structured securities issued by third parties, and seven smaller retail firms that also sell structured securities issued by third parties.

Continue reading " SEC Report Reveals Serious Abuses in the Sale of Structured Securities " »