Investment Fraud Lawyer Blog

The securities industry in New York City has lost 22,000 jobs since January 2008, and will lose another 10,000 by the end of next year, according to a report by New York City’s Comptroller Thomas P. DiNapoli. If his predictions are correct, Wall Street will have lost 17% of its jobs. Wall Street has shed 4,100 jobs since April. Bonuses and other compensation are declining as well. (See “Wall Street Shrinkage,” by Andrew Grossman, Wall Street Journal).

Continue reading "Wall Street: Under Siege and Contracting" »

Jobs at Wall Street banks are being eliminated at an increasingly rapid pace and this bodes ill for many employed in the financial services sector.

Bloomberg’s recent article “UBS Bankers Face Dwindling Options for Jobs” underscores this situation. Those pushed out at UBS will doubtless find few opportunities on Wall Street. The bigger story, however, is that what is happening at UBS is just a small part of the overall “brain drain” occurring all across Wall Street these days, as the larger global banks are cutting jobs at the fastest rate since 2008.

Continue reading "Job Cuts at UBS - A Microcosm of What's Happening on Wall Street" »

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 jobs crisis is starting to hit Wall Street banks and brokerage firms, according to a series of Wall Street Journal articles (“Wall Street Wielding the Ax,” by Aaron Lucchetti and Liz Rappaport; “Credit Suisse Set to Ax 600 Jobs,” by Katharina Bart; and “Here’s Why Wall Street Is Cutting Jobs”). A regulatory crackdown on high-risk proprietary trading is reportedly to blame. As the Wall Street Journal put it, “[a] longtime secret sauce on Wall Street – derivatives trading – is drying up.” In addition, less trading by retail and hedge fund clients means less fees and commissions are coming in.

Continue reading "Securities Industry Employment Disputes on the Increase as Wall Street Cuts Jobs" »

Simply stated, senior investors (in fact, all investors) should be very leery of high-risk structured products. Author John Wasik, in conjunction with Demos and The Nation Institute, has published a white paper entitled “How Safe Are Your Savings? How Complex Derivative Products Imperil Seniors’ Retirement Security.” The paper’s focus is on structured products and how they are mis-marketed to seniors, the group most in need of safe and secure income. The paper is reportedly the result of more than a year of research involving interviews with investors, state securities regulators, investors’ attorneys and officials with the Securities and Exchange Commission (SEC).

Continue reading "Study: Structured Products Pose Huge Risks to Investors' Portfolios" »

Securities regulators are expanding their investigation Wall Street’s sales of reverse convertibles, according to Jean Eaglesham’s Wall Street Journal article entitled, “Complex Bond Faces Regulators’ Scrutiny. Earlier this week the Financial Industry Regulatory Authority (FINRA) announced it was conducting “sweeps” of certain firms to gather information about their advertising for these structured products.

Continue reading "Regulators Widen Probe of Reverse Convertibles - SEC Also Jumps into the Fray" »

If you are an investor who lost money in the financial crisis, your stockbroker or investment advisor may owe you money. There are a variety of legal claims that can be brought for investment malpractice, ranging from fraud and misrepresentation to making unsuitable investment recommendations. But there are also legal deadlines for bringing such claims, and time may be running out if you have not yet discussed your options with a lawyer who handles investor rights claims.

Continue reading "Victims of Investment Malpractice or Other Financial Misconduct During the Recent Financial Crisis May Be on the Verge of Losing Legal Rights" »

The new whistleblower program that pays big cash rewards for tips about investment fraud has already resulted in a large number of high quality tips to the SEC, according to a news story this week on CNBC. According to the report, the SEC expects to receive 30,000 tips this year—just one year after the program was created under the Dodd-Frank financial reform act. SEC Enforcement Director is quoted as saying “we’re gonna get information hopefully sooner on in the life cycle of a fraudulent scheme, so there’s less investor loss, less harm.” In addition to helping the feds detect fraud in the securities industry, however, the program promises to pay big financial rewards to the whistleblowers whom report it.

Continue reading "Wall Street Whistleblower Program Already Paying Off" »

The U.K. bank Barclays PLC was handed a $12.2 million fine and will be required to pay up to $96 million to customers who were improperly sold two stock-and-bond funds, according to an article in the Wall Street Journal by Margot Patrick. The settlement arose out of an investigation by the U.K.’s Financial Services Authority. It was the biggest fine yet for a retail matter and according to the FSA reflects the “serious failings” in the way products were marketed and determined to be suitable for investors by Barclays.

Continue reading "Barclays Hit with $108 Million Charge" »

Banks sold more than $6 billion of reverse convertible notes last year, promising income investors returns of up to 64 percent in this historically low interest rate environment; however, reverse convertibles lost money, on average, according to a recent InvestmentNews articles entitled “Hot new asset class has ‘failed on all counts.’” In fact, reverse convertibles contain an often-hidden trap door called a put option, which can end up costing unsuspecting investors dearly.

According to Bloomberg, 1,481 reverse convertibles sold in the U.S. last year lost an average of 1 percent, compared with the Standard & Poor's 500 stock index that returned 8 percent, and corporate bonds that gained 11.1 percent, during the same period.

Continue reading "Reverse Convertibles and Similar Structured Products are "Unsafe at any Speed"" »

Wall Street may face a wave of lawsuits under an expanded version of the Martin Act, New York’s securities anti-fraud statute, if the newly elected Governor of New York has his way, according to a Wall Street Journal Deal Journal blog entitled, “And the Next Mortal Threat to Wall Street Is…”.

Continue reading "Proposed Changes to New York Law Would Make Wall Street More Accountable" »

Given the disdain that surveys show most people have for Wall Street, it may not be all that surprising to see some Wall Street insiders jumping on the bandwagon. In her New York Times Dealbook article, “Cracks Emerge in Wall St.’s Unity,” Heidi N. Moore says that the unity of top Wall Street executives appears to be cracking.

Continue reading "Despite Some Cracks in the Armor, Most of Wall Street Continues Business as Usual with No Regrets" »

The financial crisis and recent bear market have caused many investors to become more concerned about safety of principal. The investment industry has taken advantage of that concern by creating so-called “principal protected” notes and pushing them hard on retirees and others in need of safe, steady income.

Continue reading "Bank of America Principal Protected Notes May Create More Problems for Wall Street Firms" »

Some judges are starting to question lenient settlement deals proffered by Wall Street firms and their arguably captive regulator, the SEC, according to an August 19, 2010 article in the Wall Street Journal by David Weidner called “In Search Of Justice for Wall (Street).” Two U.S. District Court Judges, Jed S. Rakoff and Ellen Segal Huvelle, have rejected settlements on the ground that the penalties were too small to be fair to the investing public. Another federal judge, Emmet G. Sullivan, threatened to reject but ultimately accepted a settlement proposed by the SEC and Barclays PLC. Judge Sullivan reportedly had earlier called it a "sweetheart deal."

Continue reading "Judges Begin to Question "Sweetheart" Securities Regulatory Settlements" »

The Financial Industry Regulatory Authority (FINRA) is investigating possible sales practice violations (e.g., misrepresentations and omissions) by Morgan Stanley, Barclays, and Credit Suisse in pitching collateralized debt obligation securities (CDOs) to institutional investors, according to a July 23, 2010 Reuters article by Steve Eder and Leslie Gevirtz, “FINRA probes M Stanley, Barclays, Credit Suisse.”

Continue reading "FINRA Investigates CDO Sales Practice Abuses by Morgan Stanley, Barclays and Credit Suisse" »