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Wells Fargo Advisors Financial Network, LLC and Wells Fargo Clearing Services, LLC have been ordered by the Financial Industry Regulatory Authority (FINRA) to pay over $3.4 million as restitution to customers relating to “unsuitable recommendations of volatility-linked exchange traded products (ETPs) and related supervisory failures.” It was discovered by FINRA that Wells Fargo’s registered representatives,…

Morgan Stanley Smith Barney, LLC was fined by the Financial Industry Regulatory Authority (FINRA) for “failing to supervise its representatives’ short-term trades of unit investment trusts (UITs).”  Approximately 3,000 of Morgan Stanley Smith Barney’s customers were affected. The firm was required by FINRA to pay approximately $3.5 million in fines and $9.78 million in restitution…

It was announced this week by the Financial Industry Regulatory Authority (FINRA) that J.P. Morgan Securities, LLC has been fined $1.25 million “for failing to conduct timely or adequate background checks on approximately 8,600, or 95 percent, of its non-registered associated persons from January 2009 through May 2017.” As outlined by Susan Schroeder, Executive Vice-President…

The Securities Arbitration Commentator (SAC) recently took notice of a new investor education project that was spearheaded by our own Jason Doss.  Mr. Doss is a recent past president of the Public Investors Arbitration Bar Association, or PIABA, and the current president of the PIABA Foundation.  PIABA is an association of attorneys from around the country who…

A South Carolina grand jury has indicted a Greenville broker named Claus Foerster for defrauding his clients out of $2.8 million.  According to news reports, the indictments states that Foerster persuaded clients to invest in a fictitious company called SG Investment Management.  According to the Associated Press, Foerster provided his clients with bogus earnings statements…

Following up on our previous blog post, broker dealers that sold UDF non-traded REITs to investors include, but are not limited to, IMS Securities Inc., Berthel Fisher & Co. Financial Services Inc., Centaurus Financial Inc., and VSR Financial Services, Inc. These firms have a history of regulatory violations and customer complaints: The Financial Industry Regulatory…

Following up on our previous blog post, United Development Funding IV was organized on May 28, 2008.  UDF IV shares began trading on the NASDAQ under the symbol “UDF” on June 4, 2014.  Prior to June 4, 2012, UDF IV was a public non-traded REIT. An investment in a public non-traded REIT is essentially an…

Shares of United Development Funding IV collapsed 55% to $3.20 per share on Thursday, February 18, before trading was halted.  UDF IV is a publicly traded REIT.  The collapse occurred after the FBI raided the company’s offices in Texas.  A prominent hedge fund manager had previously accused UDF IV of essentially operating as billion dollar…

F-Squared Investments, Inc., a SEC registered investment adviser firm, filed a Chapter 11 bankruptcy petition in July 2015 after paying $35 million and admitting wrongdoing to settle SEC charges that it falsified its advertised track record of investment performance, giving investors the false impression that its performance results were significantly better than they really were.…

On March 15, 2013, the SEC announced that S.A.C. Capital Advisors affiliate hedge fund advisory firm, CR Intrinsic Investors, has agreed to pay more than $600 million to settle SEC charges that it participated in an insider trading scheme involving a clinical trial for an Alzheimer’s drug being jointly developed by two pharmaceutical companies. This settlement is…