Investment Fraud Lawyer Blog

Brokerage firms’ advertising portrays brokers as trusted members of the family, writes Tara Siegel Bernard in her New York Times article, “Trusted Adviser or Stock Pusher? Finance Bill May Not Settle It.” Anyone who has tried to hold a broker to a fiduciary standard of conduct, however, hears a very different response: “We are mere order takers. You never should have trusted us.”

Continue reading "Is Your Financial Adviser Acting in Your Best Interest?" »

Private placement offerings (also known as Reg D offerings), such as Medical Capital Holdings Inc. and Provident Royalties LLC, have devastated unsuspecting investors. Such offerings, as well as the unscrupulous broker-dealers who pushed them, have wound up in the crosshairs of state securities regulators. See “Cracking Down on ‘Private Placement’ Investments,” March 27, 2010, Wall Street Journal, by Jane J. Kim.

Continue reading "The Hammer is Coming Down on Private Placement (Reg D) Offering Scams" »

According to a recent Bloomberg National Poll, more than 50% of Americans despise Wall Street and favor punishment of the bankers who caused the worst financial crisis since the Great Depression. The majority of poll participants -- 56 percent -- say big financial companies are more interested in enriching themselves at the expense of ordinary people.

Continue reading "It's Official - Most Americans Despise Wall Street" »

Public school teachers have filed a class action lawsuit against The Variable Annuity Life Insurance Co., known as VALIC, according to a recent article in InvestmentNews by Darla Mercado. The teachers are suing on behalf of all individuals who bought a VALIC deferred annuity after Jan. 1, 1974, in order to fund a qualified retirement plan.

Continue reading "Teachers Sue to Recover Variable Annuity Losses" »

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" »

InvestmentNews reported on October 25 that Ameriprise Financial Services reached a settlement with Massachusetts over accusations of deceptive sales practices. The $200,000 settlement centers on the Ameriprise’s failure to supervise their financial representatives, allowing them to charge fees for financial plans that were never delivered to clients. In addition, the reps failed to disclose the fees behind the plans to clients.

Continue reading "Ameriprise Settles Deceptive Sales Practices Charges" »

In her recent article in the Wall Street Journal, Eleanor Laise reports that sales of Leveraged and Inverse Exchange Traded Funds (ETFs) have exploded to $32.8 billion as of June 2009, almost tripling the $11 billion held at the start of 2008. The number of such ETFs has increased to 119, an increase of 86%, over the same period. “The explosive growth in this area over the past year reflects an aggressive sales effort,” said William F. Galvin, Secretary of the Commonwealth of Massachusetts. These products are unsuitable for and should not have been sold to most investors.

Continue reading "Regulators Investigate Sales of Leveraged and Inverse ETFs" »

The Securities Industry and Financial Markets Association, an important Wall Street lobbying group, has decided to support the Obama administration’s proposal to hold brokers to the same standard as a fiduciary when they provide investment advice, according to a recent report in The Wall Street Journal. While investors who sue their brokers have long argued, with considerable success, that a fiduciary duty arises whenever there is a relationship of trust and confidence between broker and investor, that determination is presently made on a case by case basis under laws that vary from state to state. A federal standard, which is more likely to pass now that it has been endorsed by the industry, would make it easier for investors to prevail in claims against brokers.

Continue reading "Wall Street Trade Association Supports Fiduciary Standard" »

Ameriprise Financial Services has agreed to pay over $17 million to settle Securities and Exchange Commission charges that it sold investments without disclosing that it was being paid by the investment company to sell the investment, according to a July 11 article by the Associated Press published in the New York Times. Between 2000 and 2004, Ameriprise sold millions of dollars of real estate investment trusts (REITs) in exchange for which it received approximately $30.8 million of compensation that it did not disclose to the purchasers of such REITs, according to the SEC. The receipt of undisclosed compensation constituted a clear conflict of interest and violated applicable securities laws.

Continue reading "Ameriprise Pays $17 Million to Resolve Conflicts of Interest Claims" »

On May 13, 2009, the U.S. Securities and Exchange Commission (“SEC”) approved a rule change that requires brokers to disclose alleged sales practice violations made by a customer against a securities broker in the body of a civil lawsuit or arbitration claim, even if that broker is not named as a defendant or respondent. The SEC received a total of 1,654 comment letters on the proposed rule change. Approximately 1,451 of the letters were “form letters” from financial advisors and insurance agents (who sell insurance products such as variable annuities) opposing the change.

Continue reading "Regulators Require Financial Firms to Provide More Public Disclosure Regarding Customer Complaints" »

Ameriprise Financial Services, formerly known as American Express Financial Advisers, has been cited and fined by regulators extensively in recent months for so-called "selling-away violations." Selling-away occurs when a financial adviser sells a client an investment product that has not been vetted and approved by the brokerage firm. Because they have not been subjected to a rigorous investigation, these products often turn out to be highly risky and sometimes outright scams like ponzi schemes. Regulators have fined Ameriprise for failing to properly supervise the activity of sales persons who have sold the unapproved products. The firm also faces significant exposure to defrauded investors as a result of these situations.

Continue reading "Unapproved Investments Cause Ameriprise Big Problems" »

According to an October 17, 2007 article in the Wall Street Journal, several states, including New Hampshire and Alabama, are investigating allegations that large numbers of Ameriprise customers are paying hundreds of dollars for financial plans that they never received.  Instead, advisors are allegedly forging customer names to make it appear that investors received these expensive plans.

According to the article, Ameriprise spokesman Benjamin Pratt minimized the alleged problem by describing these as “isolated incidents.”  But are they really so isolated?

Page Perry's experience suggests otherwise.  In March 2007, Page Perry filed an arbitration against Ameriprise Financial Services, Inc. for failure to deliver written financial plans paid for by the client.  The client's financial advisor, operating out of Ameriprise's Chattanooga, Tennessee branch office, also forged the client's signature to a number of documents to make it appear as though the client had agreed to pay for the financial plan and had in fact received it.  This arbitration is still pending.

Recent history also suggests that these problems are not isolated incidents.  Consider, for example, that this past July, a federal judge in New York approved a $100 million class action settlement by investors who alleged that American Express Financial Advisors’ (Ameriprise’s predecessor company) financial plans were generic and were designed as a way to steer clients into proprietary American Express insurance and investment products.  According to the class action complaint, the firm imposed sales quotas on its advisors to sell financial plans and proprietary products.  Page Perry’s experience suggests that firm-wide quotas lead to firm-wide compliance and suitability problems for customers who are often unsophisticated and looking for an advisor to trust.

In addition, even though not mentioned in the Wall Street Journal article, Ameriprise agreed in October 2007 to pay $225,000 in penalties to Georgia Secretary of State’s office to settle consumer complaints stemming from a fraud and forgery case.  As part of the settlement, Ameriprise also agreed to a two-year reporting and monitoring period.  According to a recent article in the Atlanta Journal-Constitution, the settlement followed an investigation launched by the Georgia Secretary of State’s office in which investigators found that the company failed to discover forgeries of customer signatures on financial documents.

According to the Wall Street Journal article, the Alabama Securities Commissioner Joseph Borg “believes more than 200 Ameriprise plans weren’t delivered to customers in Alabama.”  He also stated that Ameriprise was cooperating with his investigation and has “already made a bunch of refunds” to customers who did not receive a plan.  Also, Page Perry’s investigation efforts have uncovered information suggesting that customers in North Carolina may be victims of forgery in connection with the sale of these financial plans. 

Page Perry, LLC represents investors across the nation seeking to recover losses from financial professionals and their firms for engaging in unlawful conduct.