Investment Fraud Lawyer Blog

Susan Antilla’s recent Bloomberg column summarizes the securities regulatory enforcement activity in 2011 as a series of breaks, favors and waivers doled out by the regulators to big Wall Street banks. To be sure, the regulators often lower the boom on the small players, but Wall Street is another matter. (“Wall Street’s Big Swingers Get the Biggest Breaks: Antilla,” Bloomberg).

Continue reading "Have Securities Regulators Become Too Chummy With Wall Street?" »

The Financial Industry Regulatory Authority (FINRA) reported that fines for false advertising have more than quadrupled from $4.75 million in 2010 to $21.1 million in 2011. FINRA found that a big part of that problem involved inaccurate or fraudulent internal communications. Firms were misleading their own brokers by telling them that structured products and other securities were not risky when, in fact, they were very risky. The brokers would then unintentionally mislead their customers by passing along the false information supplied by their firms. (“Finra enforcement actions, fines way up,” InvestmentNews).

In addition, fines more than doubled for suitability violations from $3.75 million in 2010 to $7.7 million in 2011. The number of enforcement actions also doubled. The suitability violations often involved structured products. FINRA is reportedly looking at whether firms are satisfying the two-prong requirement that (1) the firm and brokers perform proper due diligence to determine whether a product is suitable for investors in a general sense, and (2) whether it is a suitable recommendation for each particular purchaser.

Continue reading "FINRA Fines For False Advertising Quadruple" »

“That’s the easiest $250,000 you’ll never see,” quipped the judge who had just granted a motion for summary judgment in a recent case. Collectibility of judgments is something that private attorneys usually consider in deciding whether to expend resources to pursue a case. The attorneys who work for the U.S. Securities and Exchange Commission and the Commodities Futures Trading Commission often face the same collection issues, according to Jean Eaglesham’s Wall Street Journal article entitled, “Chasing Fraud, Then Cash.” As Ms. Eaglesham put it: “It is easier for regulators to get their man than it is to get their money.”

Continue reading "Investment Regulators Often Fail to Collect Monetary Sanctions" »

The Financial Industry Regulatory Authority (FINRA) is lobbying Congress to become the regulator of 12,000 investment advisors and their firms, but critics say that should not happen. These critics claim that FINRA has done a poor job of protecting investors from unlawful sales practices by its member brokerage firms, according to an InvestmentNews article entitled “Finra’s fines don’t match the crimes, critics say.”

Continue reading "Is FINRA Just a Trade Association for the Securities Industry?" »

J.P. Morgan Securities LLC has agreed to pay $153.6 million to settle SEC charges that it misled investors in a complex “built to fail” mortgage securities transaction just as the housing market was starting to plummet.

Continue reading "The Real Truth Regarding Some of Wall Street's Subprime Shenanigans Begins to Emerge" »

The securities regulator for Illinois has revoked the licenses of two investment adviser representatives, who are supposed to be fiduciaries, for recommending that elderly clients partially liquidate variable annuities in order to purchase equity index annuities, so that the reps could receive hundreds of thousands of dollars in commissions, according to Darla Mercado’s InvestmentNews article entitled “Illinois securities cops revoke licenses of reps for annuity sales.”

Continue reading "Annuity Products Used to Scam Senior Citizens" »

Gretchen Morgenson and Louise Storey have investigated the question so many people have – why no prosecutions have been undertaken in the wake of the financial disaster – and published their findings in a revealing ten page New York Times article entitled, “In Financial Crisis, No Prosecutions of Top Figures.”

Continue reading "Taxpayers Lost Billions in the Recent Financial Crisis - "Where are the Criminal Prosecutions?"" »

Sutherland Asbill & Brennan LLP recently completed a study of cases over a two-year period from October 2008 to September 2010 where the SEC or FINRA charged broker-dealers and individual representatives with violations, according to InvestmentNews.com. Sutherland concluded that, although “the odds are not in your favor” when regulators assert charges against broker-dealers and registered representatives, past results show it may be worthwhile to challenge the charges under certain circumstances.

Continue reading "Regulatory Actions - Is It Better to Fight or Concede?" »