Investment Fraud Lawyer Blog

Morgan Keegan has been aggressively fighting an array of regulatory actions and investor claims. As a result of these "hardball" defense tactics, Morgan Keegan's legal costs have doubled and are consuming a significant chunk of the firm's revenue as a result of investigations by securities regulators and legal actions by aggrieved investors, according to an Feb. 25 article in InvestmentNews by Bruce Kelly.

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A Memphis, Tennessee Chancery court has vacated an award in favor of an investor that was issued by a FINRA arbitration panel in a Morgan Keegan bond fund case. Vacatur of an arbitration award is highly unusual, and should not occur without proof of some corruption in the process, such as evident partiality of an arbitrator. The reason given by the Tennessee court was that two of the arbitrators were “biased” because they had previously ruled against Morgan Keegan in another Morgan Keegan bond fund case.

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The Commonwealth of Massachusetts Securities Division recently filed a Complaint (“Complaint”) that makes some startling allegations about Securities America’s actions in selling Medical Capital Notes. The collapse of the Medical Capital investments has left investors nationwide in the hole to the tune of about $1 billion.

Continue reading "Securities America Faces a New Wave of Medical Capital Problems" »

Investors have been moving out of money-market funds into short-term bond funds, and while short-term bond funds are considered to be relatively safe, beware, says Tom Lauricella in his recent article in the Wall Street Journal, “Short-Term Bonds May Disappoint Investors This Year.”

Continue reading "Some Short Term Bond Funds Carry Big Risks" »

A Financial Industry Regulatory Authority (FINRA) arbitrator awarded damages to Mr. Weigel as a result of losses sustained in the Schwab YieldPlus Fund. The panel awarded the Mr. Weigel $19,400 in a claim submitted under FINRA’s special “simplified” procedure for claims of $25,000 or less (exclusive of interest and costs). Mr. Weigel’s actual trading loss in Schwab YieldPlus Fund was $22,279 while his net out of pocket loss was $15,359. In a simplified claim, a single arbitrator decides the case based on the paper submissions of the parties without an in-person hearing.

Continue reading "The Beat Goes On - Schwab Loses Another Schwab YieldPlus Case" »

Time is running out for Schwab YieldPlus investors to opt out of the class action. A properly completed Request for Exclusion must be received by the class action administrator no later than December 28, 2009. With the holidays, the time to do that is running very short.

Continue reading "Less Than 15 Days are Left for Schwab YieldPlus Investors to Preserve their Rights" »

A Columbia, South Carolina-based Financial Industry Regulatory Authority (FINRA) arbitration panel awarded damages to a South Carolina resident as a result of losses sustained in Lehman Brothers Holdings Inc. principal-protected notes sold to her by UBS. The panel awarded Patricia Flanagan $150,000 in compensatory damages, plus an additional $35,000 designated as costs, plus interest. Ms. Flanagan had requested compensatory damages in the amount of $300,000.00, plus interest, costs, expenses, attorney’s fees, expert witness fees, FINRA fees, and punitive damages. The Panel assessed $6,075.00 of the hearing session fees to Claimant and the same amount to be paid by UBS. No attorney’s fees, expert witness fees or punitive damages were awarded.

Continue reading "Investors in Lehman Principal-Protected Notes Have an Opportunity to Recoup Their Losses" »

A federal court recently certified a class action against Charles Schwab & Company, Inc. brought on behalf of investors in the Schwab YieldPlus Fund. The certification means that the lawsuit can proceed as a class action; no settlement has been reached. Most importantly for YieldPlus investors with significant losses, the deadline to be excluded from this class action is December 28, 2009.

Continue reading "Only 40 Days Left for Schwab YieldPlus Investors to Preserve their Rights" »

Private investments (also known as private placements or Reg D offerings) have been the subject of a growing number of fraud charges by the U.S. Securities and Exchange Commission and some states. Such deals, including oil and gas ventures and real estate partnerships, have historically been capitalized by sales to individual investors through independent broker-dealers. Promoters of these investments depend upon this channel to raise money and the broker dealers reap rich commissions on the private placements with loads up to 30%.

Continue reading "Reg D Offerings and Other Private Investments Expose Investors to Huge Risks" »

A federal court recently certified a class action against Charles Schwab & Company, Inc. brought on behalf of investors in the Schwab YieldPlus Fund. The certification means that the lawsuit can proceed as a class action; no settlement has been reached. Most importantly for YieldPlus investors with significant losses, the deadline to be excluded from this class action is December 28, 2009. Otherwise, YieldPlus investors who happen to be class members (i.e., who purchased the YieldPlus Fund within certain dates) are automatically included and will be bound by any settlement that may be reached.

Continue reading "Time is Running Out on Schwab YieldPlus Investors who Want to Opt Out of the Class Action " »

Investors in Charles Schwab’s YieldPlus Fund need to be aware of their options in light of the recent certification of a class action brought by YieldPlus investors against Schwab. Most importantly, YieldPlus investors who are class members need to request exclusion from the class if they wish to maintain individual claims against Charles Schwab (even if those claims are already filed). Requests for exclusion must be properly filed and received by the claims administrator no later than Monday, December 28, 2009.

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The threatened SEC enforcement action against The Charles Schwab Corp. relating to sales of its YieldPlus Fund increases the likelihood that Schwab will need to settle a class action and FINRA arbitrations involving the YieldPlus Fund, according to industry analysts, as reported by Bruce Kelly on October 18 in InvestmentNews. On October 14, Schwab disclosed that it had received a Wells notice from the staff of the U.S. Securities and Exchange Commission that the staff intends to recommend the filing of a civil enforcement action against Schwab Investments, Charles Schwab Investment Management, Charles Schwab & Co., Inc. and the president of the funds for possible violations of the securities laws with respect to the Schwab YieldPlus Fund and the Schwab Total Bond Market Fund.

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Investors in Charles Schwab’s YieldPlus Fund have important decisions to make. Recently, a California Federal court tentatively certified a class action brought by YieldPlus investors against Schwab. YieldPlus investors need to determine (i) whether they are members of one or more of the designated classes, (ii) if so, whether they wish to remain in the class action or pursue individual claims against Schwab, and (iii) what actions, if any, they need to take.

Continue reading "Investor Alert: Schwab YieldPlus Class Notice Issued" »

A Los Angeles based Financial Industry Regulatory Authority (FINRA) arbitration panel awarded damages to a California resident as a result of losses sustained in the Charles Schwab YieldPlus Fund. The panel awarded the Eliots $80,000, plus an additional $16,000 designated as expert witness fees, plus $300.00 as reimbursement for the non-refundable portion of the initial filing fee, and assessed the entire cost of the arbitration proceeding against Charles Schwab (SCHW).

Continue reading "The Beat Goes On - Hedge Fund Manager Wins Large Award in Schwab YieldPlus Case" »

The Receiver for Medical Capital Holdings Inc. issued his Second Report on September 7, 2009. According to the Report the estimate for the amount of money raised through the six offerings is $1.778 billion with $268 million in administrative fees taken and a staggering $1.079 billion still due investors. On July 16, the SEC charged Medical Capital Holdings Inc. with fraud related to the sale of $77 million of private securities in the form of notes.

Continue reading "Medical Capital Holdings Update: Receiver Estimates Over $1 Billion Due Investors" »

A Los Angeles based Financial Industry Regulatory Authority (FINRA) arbitration panel awarded market adjusted damages to a California resident as a result of losses sustained in the Charles Schwab YieldPlus Fund. The panel awarded Victor Chang 100 percent of his market-adjusted damages of $74,745.00, plus an additional $13,500.00 designated as expert witness fees, plus $225.00 as reimbursement for the non-refundable portion of the initial filing fee, and assessed the entire cost of the arbitration proceeding against Charles Schwab (SCHW).

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A Nevada based Financial Industry Regulatory Authority (FINRA) arbitration panel awarded damages to a Nevada couple as a result of losses sustained in the Charles Schwab YieldPlus Fund. The panel awarded the Raymond and Elsie Kelly 100 percent of their net out of pocket losses of $74,430.77 plus interest at the rate of 3.25% per annum from July 8, 2008 through August 26, 2009, plus an additional $25,650.00 designated as attorney’s fees, and assessed the entire cost of the arbitration proceeding against Charles Schwab (SCHW).

Continue reading "Investors Recover Damages Plus Attorneys Fees from Schwab in Schwab YieldPlus Case" »

A California federal court has issued an order allowing a Schwab YieldPlus Fund lawsuit filed against Charles Schwab to proceed as class action. The Fund is also the subject of numerous FINRA arbitrations as well as this class action. The order, filed on August 21, 2009, certified three classes, consisting of two federal classes of investors with claims under Sections 11 and 12 of the Federal Securities Act, and a single class of California investors with an unfair competition claim alleging that the fund changed its investment policies regarding asset concentration without a required shareholder vote.

Continue reading "Court Certifies Schwab YieldPlus Class Action but Leaves Many YieldPlus Investors "Out in the Cold"" »

According to a recent article in InvestmentNews, a former executive of Securities America feared a “panicked run on the bank” for clients who held securities issued by Medical Capital Holdings Inc. On July 16, the SEC charged Medical Capital Holdings Inc. with fraud related to the sale of $77 million of private securities.

Continue reading "How Much did Securities America Really Know about Problems at Medical Capital Holdings?" »

In her August 4th Wall Street Journal column called Compliance Watch, Suzanne Barlyn reports that Morgan Keegan is engaging in a rarely used hardball tactics in three arbitrations arising out of sales of its proprietary bond mutual funds in which arbitration panels have awards. So far, Morgan Keegan has moved to vacate awards issued in three cases involving more than $1 million in damages, attorneys’ fees and costs.

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