Articles Posted in Investor Education

On December 17, 2012, we posted a blog entitled Massachusetts sues LPL Financial Over Non-Traded REITs, which detailed the Massachusetts suit against LPL. The complaint alleged that LPL engaged in numerous violations of state blue sky laws, violations of prospectus requirements, and violations of LPL compliance practices in the sale of non-trade REITs. LPL now has…

On February 5, 2013, the Federal Trade Commission’s stance to crack down on tax relief companies took a major step forward. American Tax Relief LLC agreed to pay $15 million to settle claims that they operated a scheme that falsely advertised debt-relief services that they company never provided. The scheme took in more than $100 million by falsely claiming…

On February 4, 2013, the SEC filed suit against Richard K. Olive and Susan L. Olive in the Southern District of Florida in a charitable-gift-annuity scheme. The Olives allegedly drew $75 million from more than 400 investors in at least 30 states. In March of 2008 the Olives took over the inactive nonprofit, We The People, which…

On February 6, 2013, Royal Bank of Scotland (RBS) became the 3rd international bank to reach a settlement in the ongoing investigation of the widespread manipulation of LIBOR. LIBOR is the rate that serves as a standard interest rate for loans between banks and impacts more than $360 trillion in lending to businesses and consumers. Federal…

According to a recent article in InvestmentNews entitled, Back to square one, insurance issuers have started changing the terms to in-force variable annuity (VA) contracts. These changes are detrimental to policyholders because they take away some of the benefits which caused the policyholder to purchase the VA in the first place. For example, according to the…

On January 30, 2013, the SEC charged five former real-estate executives with defrauding investors in an investment scam. The investors were led to believe that they were funding the development of five-star destination resorts in Florida and Las Vegas when they were actually buying into a ponzi scheme. The SEC alleged in the complaint that Cay…

On January 29, 2013, the SEC charged Firas Hamdan, a day trader in Sugar Land, TX, with “defrauding investors in his supposed high-frequency trading program and providing them falsified brokerage records that drastically overstated assets and hid his massive trading losses.” “The SEC alleges that Firas Hamdan particularly targeted fellow members of the Houston-area Lebanese and…

Recently, we published a blog entitled Former Jefferies & Co. Executive Charged with Defrauding Investors. It detailed a former executive of Jefferies & Co. and his fraudulent investment scheme centered on selling mortgage-backed securities with falsely inflated prices and fictional sellers. This case illustrates that investors far too often are kept in the dark about the…

FINRA has proposed a new rule regarding its BrokerCheck system, which gives investors access to information about a financial advisor’s business and disciplinary history. The new rule would “require its broker-dealer members to include a prominent description of, and link to, BrokerCheck…on their websites, social-media pages and any comparable Internet presence.” Under this new proposed rule,…

Reverse convertible notes linked to Apple stock have been popular investment products in recent years because they appear to provide above-average yields and resemble corporate bonds. As noted in previous posts though, reverse convertible notes (RCNs) are complex derivative investments that are rarely suitable for retail investors. To the average investor, RCNs resemble short-term corporate…