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Friday, July 23, 2010

FINRA Extends Public Arbitrator Pilot Program

The Financial Industry Regulatory Authority (FINRA) has agreed to extend a pilot program that gives claimants the option of an arbitration panel without an industry-affiliated arbitrator.

In FINRA administered securities arbitration, the number of arbitrators chosen is based on the amount of damages claimed. Most arbitration cases are heard by a three-arbitrator panel. Of those three members, one is typically affiliated with the securities industry, while two others, including the Chairman are classified as public arbitrators.

Investors and attorney's representing them have felt the industry arbitrator may bring a built-in bias in favor of their industry to the proceeding. By giving investors the option of a panel comprised of three public arbitrators...at least the potential for or perception of industry bias is somewhat eliminated.

Finra didn't formally announce the extension but it was mentioned on the SRO's website www.finra.org.

Fourteen firms are participating in the program and have agreed, collectively, to have over 400 cases heard in 2010 and again in 2011. The participating firms include UBS Financial Services Inc., Citigroup Global Markets, Inc. and and Wells Fargo Advisors.

If you believe you have lost money due to broker negligence or fraud and would like to discuss your options for recovery, including FINRA arbitration, please contact our offices.

posted by William B. Young Jr. Esq. at 6:34 AM

Wednesday, July 21, 2010

Golman Sachs Reports Profits Down 82 Percent

Yesterday Goldman Sachs reported a 82% decline in profits due in part to a sharp decline in revenue and a bad bet on volatility of the securities markets as well as the $550 million dollar settlement reached last week with the Securities and Exchange Commission over allegations of securities fraud.

The earnings report came as a bit of a surprise to Wall Street observers who saw the Wall Sreet giant post its worst results since the fourth quarter of 2008. The equity trading desk saw a 62% decline in revenues and the fixed-income/currency and commodities-related trading did not fair much better reporting a revenue decline of 35%.

Overall, confidence in one of Wall Street's most stable firms appears to be eroding as is the stock price. The SEC settlement, which was inked yesterday, cast a dark shadow over the firm that had managed to steer clear of the type of scandal that rocked many of the Streets most prestigious firm, bringing down several, including Bear Stearns (now JP Morgan Chase)and Lehman Brothers Holdings, forcing others to merge such as Merrill Lynch and Wachovia Securities (now Wells Fargo Securities).

Investors are still picking up the pieces from the broken portfolios due to the dramatic declines and failures in the financial service sector. If you have lost money investing in financial services related securities, please contact our office to discuss your options for recovery. Thank you.

Labels: broker misconduct

posted by William B. Young Jr. Esq. at 7:46 AM

Monday, July 19, 2010

Goldman Sachs Agrees to $550 Million Dollar Settlement in SEC Securities Fraud Case

Last thursday, Wall Street giant Goldman Sachs agreed with the Securities and Exchange Commission to pay $550 million to settle a fraud case. The regulators alleged that the firm misled investors into buying financial products that the firm knew were risky and unsuitable. The settlement is the largest the SEC has ever negotiated. Despite the size of the settlement, some observers believe this is simply a slap on the wrist and busines as usual will continue at Goldman Sachs and the other major Wall Street brokerage firms.

The SEC press release appears in its entirety below:

Goldman Sachs to Pay Record $550 Million to Settle SEC Charges Related to Subprime Mortgage CDO
Firm Acknowledges CDO Marketing Materials Were Incomplete and Should Have Revealed Paulson's Role

FOR IMMEDIATE RELEASE
2010-123

“This settlement is a stark lesson to Wall Street firms that no product is too complex, and no investor too sophisticated, to avoid a heavy price if a firm violates the fundamental principles of honest treatment and fair dealing.”

Robert Khuzami
Director
SEC Enforcement

Washington, D.C., July 15, 2010 — The Securities and Exchange Commission today announced that Goldman, Sachs & Co. will pay $550 million and reform its business practices to settle SEC charges that Goldman misled investors in a subprime mortgage product just as the U.S. housing market was starting to collapse.

In agreeing to the SEC's largest-ever penalty paid by a Wall Street firm, Goldman also acknowledged that its marketing materials for the subprime product contained incomplete information.

The attorneys at Colling Gilbert Wright and Carter assist investors who have been the victims of securities negligence and fraud. If you believe you have lost money due to broker negligence of fraud, please contact our offices for a free case evaluation. Thank you.

posted by William B. Young Jr. Esq. at 12:54 PM

Friday, July 2, 2010

Federal Court Refuses to Overturn Arbitration Award Against Morgan Keegan

A federal court judge in the Central District of California upheld a $1.45 million Financial Industry Regulatory Authority (FINRA) arbitration award issued to former NBA star Horace Grant against Memphis, Tennessee based Morgan Keegan. The Judge rejected all of Morgan Keegan’s arguments for vacating the award and referred to some of their arguments as “disingenuous” in his Order upholding the award.

This is yet another blow to the beleaguered brokerage firm that has been swamped with investor suits over the marketing and management of the Regions Morgan Keegan income funds. The firm is was also issued a "Wells" notice by the Securities & Exchange Commission in July, 2009, informing the firm the SEC was investigating the sale and management of the RMK funds.

The Horace Grant case is but one of hundreds of arbitration cases filed by investors who lost money in the Regions Morgan Keegan income funds. The attorneys at Colling Gilbert Wright & Carter are currently litigating numerous cases involving the RMK funds. If you lost money in either the two open end or four closed-end income funds, please contact our office for a case evaluation. Thank you.

Labels: broker misconduct

posted by William B. Young Jr. Esq. at 6:13 AM

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