A uniform fiduciary duty for broker-dealers and advisers has been a prevalent topic since 2010 when the Dodd-Frank Financial Reform Act was signed into law. Despite the SEC’s initial efforts to study whether a uniform fiduciary duty was appropriate, the subsequent process of implementing the uniform fiduciary duty stalled over the last couple of years…
DetailsRecently, 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…
DetailsOn 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…
DetailsReverse 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…
DetailsFINRA 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…
DetailsOn January 21, 2013, the President nominated former U.S. Attorney Mary Jo White as head of the Securities and Exchange Commission (SEC). Her nomination signals that the SEC will be tougher on Wall Street. White has a strong track record as a prosecutor from taking on the terrorists behind the bombing of the World Trade…
DetailsSTMicroelectronics NV (STMicro), Europe’s largest computer chip maker, has sued Credit Suisse for “allegedly placing $450 million of its cash into auction-rate securities (ARS) without authorization.” STMicro believes that more than $2 billion of its money was invested in these ARS, without authorization. The complaint alleges that STMicro thought its cash was being invested in…
DetailsOn January 28, 2013, the SEC charged Jesse Litvak, a former executive of Jefferies & Co. a New York based broker-dealer, with defrauding investors in a mortgage-backed securities (MBS) investment scheme. According to the SEC’s complaint, Litvak allegedly purchased MBS investments from some customers of Jefferies & Co. and subsequently sold the investments to other…
DetailsOn January 15, 2013, The Harvard Law School Forum on Corporate Governance and Financial Regulation released their study on the 2012 Trends in Securities Class Actions. A few interesting facts were revealed. One fact found was that federal securities class actions continue to stay around the average, even with the credit crisis “all but ended.”…
DetailsAtlanta’s Leo Wells, head of Wells Real Estate Funds, will not be “register[ing] any new investment products” for the time being. Leo Wells is one of the most well-known, outspoken, issuers of non-traded REITs. Thus, his timely “pause” from the industry is noteworthy. Leo Wells cites the lack of regulatory clarity, marketplace clarity, and uniform…
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