UBS loss again in FINRA arbitration over “Principal Protect Notes” again…. (7th so far)

Posted On: January 22, 2011

In the latest of an increasing line of cases lost by UBS a FINRA arbitration panel awarded $2.2 million dollars for losses in funds known as “principal protected” securities. These investment vehicles were originally created by Lehman Brothers and are basically a combination of derivatives and fixed income or equities that are ‘supposed’ to provide fixed income and an upside of growth in equities. Sounds like the best of both worlds, as it turns out it is in the world of darkness, not light. Many low-risk investors (retirees mostly in Boca Raton and South Florida) sought these investments from their brokers here in Fort Lauderdale and Palm Beach. Now, again, FINRA awarded money against stock brokers who marketed these investments for preservation of capital with a good yield and equity growth potential. If you believe your investments contain these products contact a South Florida Securities Fraud lawyer for a review of your portfolio. The telltale signs are entries in your monthly statements indicating that you own Lehman Brother products listed as “LB 100% PPN”. For a list of other south Florida securities fraud lawyers in Fort Lauderdale and Palm Beach contact attorney Ralph Behr for a list of other lawyers also practicing in the field of securities fraud. Start with a list of lawyers practicing in this area and begin the process of finding one that is right for your needs.

Nicking Nuns a No-No…or as we already know, there are few stockbrokers in Heaven

Posted On: January 20, 2011

Sodom on the Hudson hit a new low when the SEC announced it settled charges that a broker in New York allegedly defrauded congregations of Nuns from The Bronx, New York. Sad but true…one less stockbroker gets to go to heaven. South Florida securities fraud lawyers have seen a lot here in Broward and Miami, but this deserves a trip to Church for redemption of our souls, not redemption of coupons. According to the SEC press release the Sisters of Charity (not the same as we have here in Fort Lauderdale) had one account for money for the care of the nuns assisted living facility. The account was allegedly churned by the broker who agreed to a settlement with the SEC. You don’t have to be a nun to be nun-to-poorly treated by your stockbroker. If you live in South Florida and have a brokerage account with a local Financial Advisor (for example Boca Raton, Miami, West Palm Beach) and you believe you have been placed in an inappropriate investment, or your broker has ignored your instructions or traded with your account without approval: contact a South Florida Securities fraud lawyer and ask for a consult. Most lawyers, who work in the field of stockbroker fraud here in Fort Lauderdale, will be pleased to spend the time to discuss and answer your questions. It’s nun-to-soon to ask a question about stockbroker fraud, so pick up your phone and ring us up!

FINRA arbitrations posted on the internet

Posted On: January 18, 2011

Since 1987 everyone who signs a customer agreement with a wire house or stock brokerage firm in the United States agrees to submit any broker disputes to arbitration. The United States Supreme Court as recently as 2008 effectively put the final nails into the coffin of federal court relief. Saying that unless the arbitrators were panel of "monkeys” ... you live and die by the arbitration panel’s decisions. Arbitration for claims of less than $25,000 is submitted in writing, and there are no hearings. A claim for over $25,000 will put you in front of a three person arbitration panel. The arbitration process is not a formal process and it does not invoke the federal rules of evidence. In selecting your arbitrators be very mindful of their backgrounds: if you select a retired judge you know it'll be by the book of federal evidence. If you agree to have an arbitrator who is a former stockbroker, well that's something we should discuss. If you feel you have been the victim of a stockbroker misdeeds, fraud or inappropriate investments, and you have suffered losses, contact a South Florida securities lawyer for a review of your claim. Most federal securities fraud lawyers in Fort Lauderdale and Boca Raton, Florida will sit and talk with you for no fee and review your claim. FINRA has a very extensive and excellent website which you should put on your browser. One of the buttons will need you to pages where the results of arbitration, awards and denials are posted: the you can check for names of people you deal with or know.

$118 Million in "I'm sorry" from Charles Schwab

Posted On: January 16, 2011

Charles Schwab agreed to pay the SEC $118 million to settle securities and fraud charges arising from its sale of its “YieldPlus” branded funds. The settlement requires a total payment of $118 million into a "fair fund": a pool of money which will be made available to reimburse investors who can prove that they were harmed due to being drawn into this investment vehicle. FINRA , quite proudly, issued a press release in which they said 17.5 million dollars of the money was the amount of fees Swab collected on the fund, plus a $500,000 fine. Charles Schwab, as we understand: between September 2006 and February 2008 sold over $13.75 billion in it’s “YieldPlus” fund to customers. This finding was that during the existence of the fund things changed in the underlying mortgage-backed securities market but Charles Schwab did not change its marketing information. Failure to properly advise their clients about the risks, which were known, constitutes the fraud for which Charles Schwab agreed to pay. During the life of the fund Charles Schwab never changed their selling material didn't take sufficient actions to have their brokers advise investors of the underlying changes in the risk of owning mortgage-backed securities. “YieldPlus” was marketed as a low risk investments which was characterized as such. Lesson to be learned: review your investments on an ongoing basis. How? Ask….what’s new in the bond market? What’s new in the municipals markets? How are my investments looking today as opposed to when we bought them? Take the time so you won’t see me professionally. Problems avoided are better than problems which can wreck your retirement..yes? yes! If, sadly, it is too late, then call me for a free consultation.

FINRA acts to stem High-Frequency trading abuses

Posted On: January 6, 2011

FINRA chairman Richard Ketchum has acted decisively to increase supervision of and enforcement because of recent complaints about Hedge funds activity in high-frequency trading venues. In a recent case FINRA censured and fined Trillium one million dollars and suspended eleven employees in connection with “illicit high-frequency” trading strategies. Calling these matters “troubling” FINRA has begun to act to reassure investors that inside traders cannot skim markets or drive markets improperly. The complaint arises from the widely perceived but much denied advantage afforded to high-frequency computer driven trades. Although South Florida has not had any cases in 2010 arising from Fort Lauderdale or Miami on this issue, South Florida stockbrokers are aware that the trading activity diminished investor perception of a level playing field for all investors.
FINRA accused Trillium of manipulating of stock and equity prices by creating and executing orders that were not true trades but had the effect of increased activity and volume liquidity which has the effect of accelerating price changes. The device will draw investors to securities because of exceptionally high trading volume. Fort Lauderdale and Boca Raton stockbrokers and their wire houses monitor markets for out-of-the ordinary trading volumes: once identified as active trading stocks many investors will be drawn into taking positions, either short or long, thus creating volume driven price changes. The high-frequency computer driven traders then skim small gains from volume driven stocks and by that device generate profits from their questionable devices. Many South Florida stockbroker fraud attorneys are aware and seeking clients to file FINRA complaints. If you believe a stock you are trading has seen unusual trading activity you should address those concerns with your Financial Advisor and possibly seek a consultation with a South Florida stockbroker fraud attorney.