Articles Posted in Investor Education

On March 21, 2013, heiress of the Knott’s Berry Farm theme park, Maureen Sloan, filed a FINRA arbitration claim against LPL Financial and her former broker, Alberto Neira. The claim alleged that Neira stole $4.5 million from her through a fraudulent auto-financing scheme, called Silver Oak Leasing, and she lost an additional $4 million in unsuitable trading…

On March 19, 2013, FINRA filed with the SEC a proposed rule change amending FINRA Rule 8313 (Release of Disciplinary Complaints, Decisions and Other Information) that seeks to make more information about disciplinary proceedings available to the public. FINRA specifically is seeking to make pending regulatory complaints “much” more visible to the public. FINRA disciplinary information currently…

On March 22, 2013, the SEC charged Anastasios “Tommy” Belesis, owner of independent broker-dealer John Thomas Financial, and George R. Jarkesy Jr., a Houston-based hedge fund manager, with defrauding investors. The SEC alleged that, as part of the scheme, Belesis and Jarkesy launched two hedge funds that raised a total of $30 million from investors. Then,…

On March 19, 2013, the SEC charged Craig Berkman, a former Oregon gubernatorial candidate, with defrauding investors by promising them access to pre-IPO shares of Facebook and other social-media companies. The SEC alleged that Berkman touted to investors that he had special access to scarce sources of pre-IPO stock in Facebook, LinkedIn, Groupon, and Zynga. Then, instead of purchasing…

On March 18, 2013, Goldman Sachs Group Inc. suffered a defeat as the U.S. Supreme Court let stand a decision forcing it to defend against claims it misled investors about mortgage securities that lost value during the 2008 financial crisis. Without comment, the U.S. Supreme Court refused to consider Goldman’s appeal of a September 2012 decision. This…

On March 18, 2013, Citigroup announced it settled a class action lawsuit for $730 million. The class action lawsuit was on behalf of investors who said they were misled by the Citigroup’s disclosures. Investors purchased bank’s debt and preferred stock between 2006 and 2008 claimed there were misstatements and omissions in the disclosures. In the class…

On March 13, 2013, the Massachusetts Securities Division fined Deutsche Bank Securities (DBSI) $17.5 million for conflicts in marketing collateralized debt obligations (CDOs). The matter has since been settled in a consent order. According to the allegations, DBSI, underwrote approximately $32.2 billion of CDOs between 2004 and 2008. Furthermore, DBSI failed to disclose conflicts of interest arising from…

On March 15, 2013, the SEC charged a group of Canadian stock promoters, two San Diego attorneys, a Bahamas-based broker-dealer, and other participants in an international “pump-and-dump” scheme involving two publicly traded U.S. companies, Pacific Blue Energy Corporation and Tradeshow Marketing Company Ltd. According to the SEC’s complaint, Canadian stock promoters John Kirk, Benjamin Kirk, Dylan Boyle, James Hinton, and…

On March 14, 2013, in a speech that took place in Washington D.C., FINRA’s Chairman and Chief Executive Richard Ketchum continued to echo FINRA’s position for uniform regulatory harmonization for broker dealers and investment advisors. Mr. Ketchum stated his support for uniform regulations for brokers and investment advisors beyond only instituting a single uniform fiduciary standard.…

On March 12, 2013, industry researchers released an annual survey of FINRA’s sanctions. The results showed that many areas increased in 2011 from disciplinary actions to fines. For example, FINRA filed 1488 disciplinary actions in 2011, up from 1310 in 2010. Additionally, the number of individuals barred increased. In 2011 FINRA barred 329 individuals, while FINRA…