Colling, Gilbert, Wright & Carter Securites Fraud
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Thursday, September 30, 2010
Alabama Securities Regulator Mistakenly Released Confidential Information about Morgan Keegan Clients
The Wall Street Journal reported on Wednesday that the Alabama Securities Regulator mistakenly released confidential information about Morgan Keegan clients in response to a request for publicly available exhibits to a regulatory complaint filed by the Alabama Securities Commission. The commission had been investigation Morgan Keegan over customer losses experienced in the company's RMK Bond funds and filed a regulatory action in July regarding same. However, when a Birmingham securities attorney was unable to access the exhibits online, he requested a certified copy from the commission. A disk was provided that included the client information. The disk has since been returned and there has been no report of any misuse of the information to date.
Labels: broker misconduct
posted by
William B. Young Jr. Esq.
at
12:57 PM
FINRA Proposes to Permanently Give Investors the Option of All-Public Arbitration Panels
According to a recent article in Investment News, the Financial Industry Regulatory Authority (FINRA) plans to ask the Securities and Exchange Commission (SEC) for approval to appoint all public arbitrator panels for non-broker claims. This is a move that has been long sought by plaintiff securities lawyers and one that most observers believe will help level the playing field in securities arbitration.
The full FINRA press release appears below:
WASHINGTON — The Financial Industry Regulatory Authority (FINRA) will file a rule proposal next month that would allow all investors filing arbitration claims the option of having an all-public panel, greatly increasing investor choice in the FINRA arbitration program. The rule proposal, which will be filed for approval with the Securities and Exchange Commission (SEC), would expand to all investor claims a two-year-old FINRA pilot program that gives investors filing an arbitration claim against certain firms the option of choosing an all-public panel.
"Giving each individual investor the option of an all-public panel will enhance confidence in and increase the perception of fairness in the FINRA arbitration process," said Richard Ketchum, FINRA Chairman and Chief Executive Officer. "All investors will have greater freedom in choosing arbitration panels, and any investor will have the power to have his or her case heard by a panel with no industry participants."
If approved by the SEC, the rule would give investors the option of choosing an arbitration panel that has two public arbitrators and one non-public arbitrator, as is now the case, or choosing to have their case heard by an all-public panel. The current pilot program involves 14 firms that agreed voluntarily to a set number of investor cases that did not involve individual brokers. The proposed rule would apply to all investor disputes against any firm and any individual broker. It would not apply to arbitration disputes involving only industry parties.
Since the Public Arbitrator Pilot Program began in October 2008, slightly more than 60 percent of investors eligible to participate have opted in, resulting in almost 560 cases to date. Investors opting into the pilot, given the power to eliminate all non-public arbitrators, still chose to have one non-public arbitrator on their panel about 50 percent of the time. The pilot program was originally set to conclude after two years. However, the participating firms agreed recently to extend the pilot program for an additional year while the rule making process goes forward.
FINRA, the Financial Industry Regulatory Authority, is the largest non-governmental regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business – from registering and educating all industry participants to examining securities firms, writing and enforcing rules and the federal securities laws, informing and educating the investing public, providing trade reporting and other industry utilities, and administering the largest dispute resolution forum for investors and registered firms. Currently, there are roughly 6,200 FINRA arbitrators – 2,700 are non-public and 3,500 public. For more information, please visit www.finra.org.
The attorneys at Colling Gilbert Wright & Carter have a practice devoted exclusively to filing and litigating FINRA arbitration claims on behalf of investors. If you suspect you have lost money in your investment account due to negligence or fraud on the part of your investment advisor, please contact our office for a case evaluation. Thank you.
The full FINRA press release appears below:
WASHINGTON — The Financial Industry Regulatory Authority (FINRA) will file a rule proposal next month that would allow all investors filing arbitration claims the option of having an all-public panel, greatly increasing investor choice in the FINRA arbitration program. The rule proposal, which will be filed for approval with the Securities and Exchange Commission (SEC), would expand to all investor claims a two-year-old FINRA pilot program that gives investors filing an arbitration claim against certain firms the option of choosing an all-public panel.
"Giving each individual investor the option of an all-public panel will enhance confidence in and increase the perception of fairness in the FINRA arbitration process," said Richard Ketchum, FINRA Chairman and Chief Executive Officer. "All investors will have greater freedom in choosing arbitration panels, and any investor will have the power to have his or her case heard by a panel with no industry participants."
If approved by the SEC, the rule would give investors the option of choosing an arbitration panel that has two public arbitrators and one non-public arbitrator, as is now the case, or choosing to have their case heard by an all-public panel. The current pilot program involves 14 firms that agreed voluntarily to a set number of investor cases that did not involve individual brokers. The proposed rule would apply to all investor disputes against any firm and any individual broker. It would not apply to arbitration disputes involving only industry parties.
Since the Public Arbitrator Pilot Program began in October 2008, slightly more than 60 percent of investors eligible to participate have opted in, resulting in almost 560 cases to date. Investors opting into the pilot, given the power to eliminate all non-public arbitrators, still chose to have one non-public arbitrator on their panel about 50 percent of the time. The pilot program was originally set to conclude after two years. However, the participating firms agreed recently to extend the pilot program for an additional year while the rule making process goes forward.
FINRA, the Financial Industry Regulatory Authority, is the largest non-governmental regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business – from registering and educating all industry participants to examining securities firms, writing and enforcing rules and the federal securities laws, informing and educating the investing public, providing trade reporting and other industry utilities, and administering the largest dispute resolution forum for investors and registered firms. Currently, there are roughly 6,200 FINRA arbitrators – 2,700 are non-public and 3,500 public. For more information, please visit www.finra.org.
The attorneys at Colling Gilbert Wright & Carter have a practice devoted exclusively to filing and litigating FINRA arbitration claims on behalf of investors. If you suspect you have lost money in your investment account due to negligence or fraud on the part of your investment advisor, please contact our office for a case evaluation. Thank you.
posted by
William B. Young Jr. Esq.
at
12:38 PM
Tuesday, September 28, 2010
Lehman Art Sale Fetches over $12 Million
A Sotheby's auction of the Lehman Brothers art collection, held last week, set new sales records for 17 artists and raised just over $12 million dollars.
The proceeds of the auction will go toward repaying the more than $600 billion owed to the creditors of Lehman Brothers, which declared bankruptcy on September 15, 2008 and helped set off a global meltdown of the financial system.
Although the sale was considered a success by art critics, the proceeds are not likely to make much of an impact on the over $2 billion in investor losses related to Lehman Brothers backed structured notes (PPNs) and other products sold to retail investors. The firms selling Lehman Brothers notes include brokerage giants UBS, Charles Schwab and Merrill Lynch.
If you lost money in a Lehman Brothers backed investment, please contact our office for a case review. Thank you.
The proceeds of the auction will go toward repaying the more than $600 billion owed to the creditors of Lehman Brothers, which declared bankruptcy on September 15, 2008 and helped set off a global meltdown of the financial system.
Although the sale was considered a success by art critics, the proceeds are not likely to make much of an impact on the over $2 billion in investor losses related to Lehman Brothers backed structured notes (PPNs) and other products sold to retail investors. The firms selling Lehman Brothers notes include brokerage giants UBS, Charles Schwab and Merrill Lynch.
If you lost money in a Lehman Brothers backed investment, please contact our office for a case review. Thank you.
Labels: broker misconduct
posted by
William B. Young Jr. Esq.
at
11:38 AM
Thursday, September 23, 2010
Timing of Goldman Sachs Suit Questioned
The Securities and Exchange Commission (SEC) has come under suspicion due to the timing of the fraud lawsuit which some observers say was done to move attention away from criticism the SEC's enforcement unit failed to detect a $7 billion Ponzi scheme allegedly perpetrated by money manager R. Allen Stanford. The enforcement unit also took considerable heat for not detecting the Bernard Madoff scheme before it collapsed costing investors billions in losses.
The SEC has denied any political motivation in the fraud suit and denied further comment.
If you have lost money due to an alleged ponzie scheme or other fraudulent activity by your money manager or stock broker, please contact our offices for a case evaluation. Thank you.
The SEC has denied any political motivation in the fraud suit and denied further comment.
If you have lost money due to an alleged ponzie scheme or other fraudulent activity by your money manager or stock broker, please contact our offices for a case evaluation. Thank you.
posted by
William B. Young Jr. Esq.
at
6:16 AM
Wednesday, September 22, 2010
Bond Markets Getting Riskier (Again)
The old adage (and I'm paraphrasing) those who don't learn from their mistakes are destined to repeat them could be playing out in the bond markets. After the credit crisis and global market meltdown brought about by huge bets on subprime mortgage paper and structured finance nearly took down the global financial markets, investors are once again testing the high yield or junk bond markets seeking higher returns. According to a front page article in the September 20, 2010 issue of The Wall Street Journal, prices on high-yield paper hit the highest level since 2007, nearly doubling the yields found during the worst of the credit crisis.
This activity in the bond markets is a scary scenario and one that warrants attention. Investors lost billions of dollars on bond funds and structured notes that bet heavily on high-yield paper to ramp up returns. Often the funds were misrepresented as to their holdings leading to hundreds of FINRA arbitration claims filed on behalf of investors seeking compensation for their losses. Some of the funds that have been subject of those claims include the Morgan Keegan RMK bond funds, the Oppenheimer Funds Champion Income Fund, and the Wachavio/Evergreen short-term bond funds.
Also structured notes, such as the UBS Principal Protected, Partially Principal Protected and Rate Optimization notes have been the subject of allegations UBS brokers failed to disclose Lehman Brothers was in fact the underlying credit behind the notes and the principal was only good as long as Lehman Brothers viable. When Lehman Brothers filed for bankruptcy in September 2008, the investment in those notes was wiped out, much to the surprise and shock of many investors.
If you have lost money in a bond fund or structured note and believe the investment was not adequately disclosed as to holdings and risk, please contact our office for a case evaluation. Thank you.
This activity in the bond markets is a scary scenario and one that warrants attention. Investors lost billions of dollars on bond funds and structured notes that bet heavily on high-yield paper to ramp up returns. Often the funds were misrepresented as to their holdings leading to hundreds of FINRA arbitration claims filed on behalf of investors seeking compensation for their losses. Some of the funds that have been subject of those claims include the Morgan Keegan RMK bond funds, the Oppenheimer Funds Champion Income Fund, and the Wachavio/Evergreen short-term bond funds.
Also structured notes, such as the UBS Principal Protected, Partially Principal Protected and Rate Optimization notes have been the subject of allegations UBS brokers failed to disclose Lehman Brothers was in fact the underlying credit behind the notes and the principal was only good as long as Lehman Brothers viable. When Lehman Brothers filed for bankruptcy in September 2008, the investment in those notes was wiped out, much to the surprise and shock of many investors.
If you have lost money in a bond fund or structured note and believe the investment was not adequately disclosed as to holdings and risk, please contact our office for a case evaluation. Thank you.
posted by
William B. Young Jr. Esq.
at
11:33 AM
Friday, September 17, 2010
Money Funds Taking on Risk Again
According to a Wall Street Journal article (Sept 16, 2010), some money-market funds are once again venturing into riskier investments, a strategy that led to massive investor withdrawals and the collapse of one fund during the recent credit crisis. The Reserve Primary Fund "broke the buck" due to a large exposure to Lehman Brothers debt which became worthless when the company filed for bankruptcy protection on September 15, 2008.
In the wake of the near-collapse of the financial system, the Securities & Exchange Commission enacted new rules limiting the types of investments money funds could hold. Those rules include a requirement the funds hold at least 30% of their assets in securities with maturities of seven days or less and to post their holdings each month online. The goal of the 30% requirement was to ensure the funds could convert securities to cash to meet investor redemption requests on short notice.
However, an unintended result of the new rules was issuers are now turning to longer-term financing thus reducing the available short-term instruments available for money-fund investment. In response, the funds are turning to repurchase agreements (REPOS) to make up for the shortfall and to get better yield. REPOS are often backed by government securities but more and more the funds are purchasing REPOS backed by corporate debt and stock. Obviously these are more risky securities then government-backed investments.
These revelations have spooked some institutional investors and many remain unconvinced the new rules have made the money-fund market any safer.
In the wake of the near-collapse of the financial system, the Securities & Exchange Commission enacted new rules limiting the types of investments money funds could hold. Those rules include a requirement the funds hold at least 30% of their assets in securities with maturities of seven days or less and to post their holdings each month online. The goal of the 30% requirement was to ensure the funds could convert securities to cash to meet investor redemption requests on short notice.
However, an unintended result of the new rules was issuers are now turning to longer-term financing thus reducing the available short-term instruments available for money-fund investment. In response, the funds are turning to repurchase agreements (REPOS) to make up for the shortfall and to get better yield. REPOS are often backed by government securities but more and more the funds are purchasing REPOS backed by corporate debt and stock. Obviously these are more risky securities then government-backed investments.
These revelations have spooked some institutional investors and many remain unconvinced the new rules have made the money-fund market any safer.
posted by
William B. Young Jr. Esq.
at
8:19 AM
FINRA Escapes SEC Scrutiny
The Financial Industry Regulatory Authority (FINRA) enjoys what is know as the Securities & Exchange Commissions (SEC) "black box" status. That means the SEC has provided FINRA a means by which the self-regulatory organization's (SRO) records are kept private.
This is because SRO's like FINRA are considered to be "financial institutions" under the federal Freedom of Information Act (FOIA). As a result, SEC oversight reports and other records relating to FINRA don't have to be made public. The FOIA exempts from disclosure any "examination, operating or condition reports" of financial institutions.
When enacted, the FOIA was intended to protect banks in questionable financial shape from depositor runs by keeping oversight reports private, in addition to fostering cooperation with regulators, according to the Department of Justice, which interprets the FOIA statute for government agencies. A 1997 decision by a federal court found that Exemption 8 also applied to FINRA, then known as the National Association of Securities Dealers.
FINRA enjoys a status that, in the view of critics, is contrary to it's mission, that of regulating the financial services industry. They feel as a regulator, not a financial institution, FINRA records should be available for review. The more cynical observers have to wonder why documents are being kept from public scrutiny particularly in light of the rampant fraud that took place on Wall Street during 2007 and 2008.
Individual investors are contractually bound to take their claims for brokerage firm losses to FINRA arbitration. Given, this is most individual investors' only avenue of redress, one would think there should be more transparency, not less.
If you believe you have experienced investment losses due to stockbroker negligence or fraud, please contact our offices for a free case evaluation. Thank you.
This is because SRO's like FINRA are considered to be "financial institutions" under the federal Freedom of Information Act (FOIA). As a result, SEC oversight reports and other records relating to FINRA don't have to be made public. The FOIA exempts from disclosure any "examination, operating or condition reports" of financial institutions.
When enacted, the FOIA was intended to protect banks in questionable financial shape from depositor runs by keeping oversight reports private, in addition to fostering cooperation with regulators, according to the Department of Justice, which interprets the FOIA statute for government agencies. A 1997 decision by a federal court found that Exemption 8 also applied to FINRA, then known as the National Association of Securities Dealers.
FINRA enjoys a status that, in the view of critics, is contrary to it's mission, that of regulating the financial services industry. They feel as a regulator, not a financial institution, FINRA records should be available for review. The more cynical observers have to wonder why documents are being kept from public scrutiny particularly in light of the rampant fraud that took place on Wall Street during 2007 and 2008.
Individual investors are contractually bound to take their claims for brokerage firm losses to FINRA arbitration. Given, this is most individual investors' only avenue of redress, one would think there should be more transparency, not less.
If you believe you have experienced investment losses due to stockbroker negligence or fraud, please contact our offices for a free case evaluation. Thank you.
posted by
William B. Young Jr. Esq.
at
7:43 AM
Friday, September 3, 2010
Bernanke Says No Option but to Let Lehman Brothers Fail
Yesterday, Federal Reserve Chairman Ben Bernanke told the Financial Crisis Inquiry Commission there was nothing his department could do to keep the investment banking giant from failing. He told the commission charged with investigating the U.S. financial crisis he did everything possible. However he also said he regretted giving the impression the Fed might be able to save the firm and should have been more direct in that regard. Bernanke has been oft criticized for not doing more to the keep the 150 year old firm from going under and setting off a dramatic declines in the credit markets.
The failure of Lehman Brothers had a ripple effect on both Wall Street and main street. Many individual investors lost their life savings as a result of investing in Lehman bonds, preferred stock and other products backed by Lehman Brothers debt. Much of the debt was packaged in structured notes such as Principal Protected Notes (PPN), Return Optimization Notes and other innocuous sounding products. Many investors feel they were misled as to the true risk associated with these products and have file arbitration claims through the Financial Industry Regulatory Authority (FINRA).
The attorneys at Colling Gilbert Wright & Carter are currently investigating and litigating dozens of claims against firms including UBS, Wells Fargo, Charles Schwab and Merrill Lynch related to the sale of Lehman backed products. If you feel you have lost money in a Lehman Brother's related investment vehicle, please contact our office for a free case evaluation.
The failure of Lehman Brothers had a ripple effect on both Wall Street and main street. Many individual investors lost their life savings as a result of investing in Lehman bonds, preferred stock and other products backed by Lehman Brothers debt. Much of the debt was packaged in structured notes such as Principal Protected Notes (PPN), Return Optimization Notes and other innocuous sounding products. Many investors feel they were misled as to the true risk associated with these products and have file arbitration claims through the Financial Industry Regulatory Authority (FINRA).
The attorneys at Colling Gilbert Wright & Carter are currently investigating and litigating dozens of claims against firms including UBS, Wells Fargo, Charles Schwab and Merrill Lynch related to the sale of Lehman backed products. If you feel you have lost money in a Lehman Brother's related investment vehicle, please contact our office for a free case evaluation.
posted by
William B. Young Jr. Esq.
at
11:41 AM
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