Investment Fraud Lawyer Blog

Many investors, both individuals and corporations, were misled by their brokers and harmed during the credit crisis. For various reasons, however, many such investors have not yet taken action to recover their losses. Some have delayed taking action in order to see whether the misconduct warranted legal action while others just put it off until a later time. Investors need to appreciate that time is running out on their claims, and they should act now or forever hold their peace.

Continue reading "Time Is Running Out On Credit Crisis Legal Claims" »

Two subsidiaries of SunTrust Banks, SunTrust Robinson-Humphrey and SunTrust Investment Services have agreed to pay a combined total of $5 million to settle FINRA charges that they misled clients about the liquidity risks of auction rate securities, according to an article in the Atlanta Journal by J. Scott Trubey entitled “Regulator fines two units of SunTrust.”

Continue reading "SunTrust Settles Auction Rate Securities Case with Regulators" »

Best-selling “Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led To Economic Armegeddon,” by Gretchen Morgenson and Joshua Rosner, “calls out greedy guys behind mortgage mess,” according to a USA Today book review by Kathryn Caravan. See also “Home Truths,” by James Freeman of the Wall Street Journal. Both reviews provide examples of how the book peels back layer after layer of a bad onion to reveal how a nice-sounding idea (home ownership for all) turned into a house of cards that was doomed to collapse, after being propped up by private greed and public corruption.

Continue reading "The Subprime Mortgage Mess: How the American Dream Turned into a Nightmare" »

Defense-minded institutions that have long remained on the sidelines when defrauded have finally woken up and are jumping on the plaintiff-recovery bandwagon as they seek to protect themselves against a variety of wrongdoing, according to Vanessa O’Connell’s Wall Street Journal article entitled “Company Lawyers Sniff Out Revenue.” These actions include waves of claims against Wall Street financial institutions for fraud in the sale of mortgage backed securities, CDOs and related exotic investments.

Continue reading "Institutional Investors Are Filing Big Claims Against Financial Services Firms" »

A Virginia bankruptcy court is considering a proposed $14.3 million settlement to be paid by SunTrust Banks Inc. over its sale of auction rate securities to LandAmerica 1031 Exchange Service Inc. (“LES”), according to Hilary Russ’s Law360 article entitled “$14.3M Deal Ends LandAmerica, SunTrust ARS Dispute.”

Continue reading "SunTrust Offers $14.3 Million to Settle an Auction Rate Securities Case" »

A suit filed in federal court in Atlanta by a former SunTrust Bank employee and 401(k) plan participant alleges that SunTrust violated federal retirement plan laws by selecting its own high-fee, poorly performing mutual funds for its 401(k) plan. See J. Scott Trubey’s article in the Atlanta Journal Constitution entitled “SunTrust faces suit over operation of 401(k).” The violations enriched SunTrust but cost plan participants more than $100 million dollars, according to the complaint.

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Expecting licensed professionals who provide investment advice to act in their clients’ best interests “should be a basic tenet of the business,” but brokerage firms and their brokers don’t want that fiduciary yoke, says Karen Blumenthal in her InvestmentNews article, “When Your Adviser Can’t Be Trusted.” Moreover, they don’t want the public to know that they don’t want to be held to a fiduciary standard. So, while brokerage firms profess to be trusted advisers or like a member of a client’s family in their advertising, their lobbyists are working hard to persuade the SEC to weaken the “devil in the details” definition of the term “fiduciary” for purposes of governing brokers’ relationships with customers.

Continue reading "Are Brokerage Firms Really the Trusted Financial Advisers that Their Advertisements Claim that They Are?" »

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" »

Bank of America has agreed to pay $2.6 billion to settle charges that Countrywide (which BofA acquired) made material misrepresentations about home loans it sold to Fannie Mae and Freddie Mac, according to articles in the New York Times by Gretchen Morgenson (“$2.6 Billion to Cover Bad Loans: It’s a Start”) and Bloomberg.com by Steve Dickson (“BofA Resolves Fannie, Freddie Loan Putback Dispute”).

Continue reading "Are Wall Street Banks Concealing Their True Exposure to Mortgage Securities Problems" »

While many investors who lost money when the auction rate securities market collapsed in 2008 have now been made whole by regulatory settlements and redemptions, others have not been as fortunate and are still holding on to illiquid securities. Because regulatory settlements focused on the worst offenders in the industry, not all firms that sold auction rate securities were included in the settlements. Furthermore, most of the regulatory settlements have only benefited smaller investors leaving many corporate, institutional and other investors to fend for themselves. According to Craig T. Jones of Page Perry LLC in Atlanta whose firm has represented many large investors in auction rate securities cases, “we are continuing to file arbitration claims for investors nearly 3 years after the market failure. A lot of investors have patiently waited to be made whole, and now that the statutes of limitations are starting to run out, they are realizing that they must take action in order to protect themselves legally.”

Continue reading "Large Investors Who Have Sustained Losses on Auction Rate Securities Investments Need to Take Action" »

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" »

$130 billion of retail and institutional investor money is still being held in auction rate securities over two years after the $330 billion auction rate market failed and froze, according to Daisy Maxey in her Wall Street Journal article, “Still Frozen After All These Years.” But just as the Paul Simon song modulates from gloom into glee at the line, “But I would not be convicted by a jury of my peers…,” there may be a way out for ARS holders who are ineligible for the buy-backs some firms have agreed to as a result of their settlements with regulators.

Continue reading "Many Auction Rate Securities Investors Remain Left Out in the Cold" »

On July 30, 2010, Judge Michael D. Johnson of the Superior Court of Fulton County, Georgia, confirmed and upheld a December 2009 award issued by an Atlanta-based Financial Industry Regulatory Authority (FINRA) arbitration panel ordering 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.”

After the award was issued, SunTrust filed a motion to vacate (i.e., throw out) the award, which Judge Johnson denied at the same time that he confirmed the award.

Continue reading "Georgia Court Upholds $4.1 Million Damage Award Against SunTrust Robinson Humphrey for Terminating and Defaming a Broker who Sold Auction Rate Securities" »

White House executive “pay czar” Kenneth Feinberg has decided not to negotiate with 17 Wall Street firms to rescind $1.6 billion in payments to executive that Feinberg himself described as “ill advised” and payments that “[t]hey should not have made,” according to articles in the Atlanta Journal Constitution (“Bank execs get to l]keep $1.6 billion” by Daniel Wagner) and CNNMoney (“Banks paid big $ to execs during crisis” by David Ellis).

Continue reading "Wall Street Executives Get $1.6 Billion, Main Street America Picks Up the Tab" »

The Financial Industry Regulatory Authority (FINRA) has ordered SunTrust Investment Services, Inc. of Atlanta, GA (“SunTrust”), to pay $1.44 million in fines and restitution for misconduct arising out of unsuitable recommendations and churning the accounts of 17 mostly elderly customers, according to an article by J. Scott Tinsley in the Atlanta Journal Constitution (“SunTrust unit fined for improper trades”). $900,000 of that amount is a fine, which includes nearly $224,000 in disgorgement of commissions flowing from the unsuitable trades. The remaining $540,000 will serve as restitution to the customers who incurred losses.

Continue reading "SunTrust Burns Elderly Victims" »

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?" »

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" »

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" »

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 " »