FINANCIAL ACCOUNTABILITY

Posted On: October 26, 2011

With the new age and in these stressed economic times “accountability” seems to be the word of the day, week or even year. In recent news, the Attorney General imposed a fine on a Baltimore man and his practices in selling investments, as he was not licensed to practice as a financial advisor. In other news it was ruled by a New York court that FINRA, an important regulator of Wall Street for more than 70 years, does not have the right to take its members to court to enforce its disciplinary actions.

So what does the Financial Industry Regulatory Authority, formerly the National Association of Securities Dealers, do when a broker fails in his or her duties to protect your investment, in this stressful economic time? The FINRA has been under pressure to impose greater accountability on its licensed brokers and brokerage firms so that risk evaluations are explained to investors thoroughly. So who do we turn to for the accountability of financial loss? Who can answer the hard questions of; Where did my money go and why? Does the financial industry have stability; is it worth the risk at all?

Many people have the same questions, no matter where you live New York, Florida, or California they seek answers from any avenue available, but many times the answers are hard to find. An attorney that practicing in the field of Financial Securities can find the answers to these questions you have and investigate or even recover for you from the “accountable” party, the broker or broker house who created your loss.

Timeshares re sellers may do time.

Posted On: October 24, 2011

Just last week in the Sun Sentinel, Miami, I read that in a company named Mega Media, employees were being charged by the U.S. Attorney with criminal charges of wire fraud. The company was in practice of re-sales of timeshares. Some of the allegations are that the employee’s of this company were claiming they had buyers lined up to purchase timeshare units that were for sale and in fact, did not.

The sellers of timeshares were told the closing dates had changed multiple times; the tactics according to the U.S. Attorney was to delay processes so that the sellers could not claim refunds of the monies they paid for the sales services. These Federal charges are serious and if each person involved is convicted they may be facing up to five years of prison time and fines of up to $25,000.00 each.

The Federal Trade Commission has also filed suit against the company with the implications that the company was fraudulently operating in the procedure of timeshare sales. In this economy no one can afford to be defrauded, yet we have brokers who commit securities fraud and lose investors’ assets every day. Miami Beach, Fort Lauderdale and Palm Beach are prime locations for vacationers and many use the timeshares as a great investment, but you need to watch your investment and know who you are dealing with. Broker misconduct and mortgage backed securities are one of the many ways you can get scammed into thinking you own something and later find out you have lost it all.

Check-lists for evaluating your Stock Broker

Posted On: October 22, 2011

Step one is to go to the FINRA website and go to the broker check search for that individual. The broker check will tell you if that stockbroker or financial planner has a complaint history for bad conduct. The second thing to do is what we all consider our gut check. That's simple enough. However if you want checklist here are some things to concern yourself with. Unsuitable investments, risk tolerance, appropriate and realistic financial goals, proper presentation of facts, or the omission of facts. If your stockbroker seems to understand your investment horizon and your risk tolerance then go on to an interview of current clients. My personal opinion is that if you're not in a nationally registered and well-known stock brokerage house you are in the wrong office. Because the majors like Smith Barney, Merrill Lynch, UBS are so well organized and monitored by their compliance departments that you can take that as a good indicator that the financial advisor, stockbroker, is being monitored. Another important indicator is a number of years they been in practice and if they are a solo practitioner or in a group. Groups are better than solos because of redundancy, backup, oversight and depth of staff.

THE “MILKING EFFECT”

Posted On: October 21, 2011

Many American’s are struggling to keep their homes; in Hollywood, Pembroke Pines and Fort Lauderdale, others have lost jobs and can’t find work. Are people going to be able to spend less if they have nothing to spend? Are the banks ready to lend to jobless people, as they increase fees for withdrawals and various banking transactions? I was taught at an early age that 1+1=2 but 0+0 equals nothing because there is no value in zero.

Now that the Mortgage Industry has somewhat stabilized, so we are led to believe, our financial industry should build-up, right? Are the spending dollars available? Or is it just a dream we wish to pursue in some distant future? As we look into the financial and securities industry we see fraud and mismanagement everywhere. The number of homes across the country that received initial default notices, (which is the first step in the foreclosure process), according to the foreclosure listing firm RealtyTrac, jumped 33 percent in August from July. This average includes cities such as; Hollywood, Margate, Pompano Beach and Coral Springs. Is there any way fix the mistake? Banks, mortgage companies or investment brokers made and to find out if they falsified documents that caused the holes in our economy.

So the “milking effect” has begun…we have less to spend, and yet we are milking from the working, the productive, and the wealthy. Our economic “leaders” expect to replace revenue by “milking”, for what others no longer contribute into our economy. For most people this makes no sense. There are people with no jobs, or struggling to live in homes of their own. People in general need to be employed and productive, in order to earn an income and contribute, not incur more debt and fees making the already bad economy, worst. How are we are going to grow our economy if we use every bit of “parked” wealth and “parked” money to mend it? Can we continue to exhaust our investments to this cycle of loss? Who protects the investments? Is there any hope for the Financial Investors and Securities? “No use crying over spilled milk.” But with these hard times, also come people who exploit investors and commit fraud using investment firms. We can only try to do the best with what we have and hope for growth of the economy in our time.

Will FINRA or the SEC help me if I've been the victim of broker fraud?

Posted On: October 20, 2011

No.
The securities industry, through its lobbying efforts, has succeeded in creating a wall between broker misconduct and recovery by federal agency action: the SEC and FINRA will not and administratively cannot help you recover from a claim of fraud by your stockbroker. The result is that the federal agencies charged with regulating the securities industry does not and will not recover losses by investors in 99% of the claims. If you complain to the SEC, and the complaint has merit, it will open an investigation. The ultimate result of an SEC investigation may be an enforcement proceeding or fine imposed on the financial advisor or the brokerage house. The SEC will not recover losses for individuals, it will only impose fines, with a few exceptions that for your purposes means the agencies might as well not exist if you claim broker fraud, most claims of broker mis-conduct such as placing your money into investments that are not proper for your investment goals, excessive risk, and most of the abuses we find brokers committing on their clients.

The SEC receives around 50,000 complaints every year. The SEC takes action on lesson 100 complaints every year. FINRA receives about 5000 complaints a year. And like the SEC takes action on only a few hundred. These actions may result in broker discipline or the filing of charges against the brokerage house. It will not resolve with a recovery for the losses of an individual investor. Recovering losses is not designated as a governmental function in the United States. Recovery of losses due to stockbroker fraud is done through the arbitration process or in some special cases permitted lawsuits in federal court.

Security fraud lawyers in South Florida, Boca Raton and Fort Lauderdale, will appear before the securities regulating agencies to press for losses incurred by their clients. If you open a trading account in any stockbroker firm and he subsequently believe you have a claim for broker fraud or misconduct: your only recourse is arbitration. Securities fraud lawyers deal primarily in representing victims of financial advisors.

Ameriprise Sued by It’s Own Financial Planners

Posted On: October 19, 2011

Ameriprise, the financial services giant, an organization which employs more certified financial planners than any other entity in United States, was sued by six people; including one current employee. The accusation in the suit suggests that Ameriprise has been overweighting its own expensive mutual funds, which have been performing below-market, into its own 401(k) plans. The financial services press has been billing this as a frustration for Ameriprise because its own mutual funds have been highlighted as poor performers which it is forcing on its own financial planners. One of the charts produced in the press, shows fees are 3 to 5 times higher than at other competing funds, such as Vanguard. If you feel that your stockbroker or financial planner has been infusing your investment portfolio with inappropriate investments contact a South Florida securities fraud attorney. Most security fraud lawyers in Fort Lauderdale, Boca Raton, West Palm Beach, and Miami, can, with a quick office visit, look at your monthly statements and give you a fair evaluation of which investments are appropriate for your risk tolerance. This type of review is especially important for those of us who are in our retirement years and rely on our investments for income to support our daily lives.

What duty does a Stockbroker owe to his/her Client?

Posted On: October 18, 2011

All stockbrokers are regulated by FINRA, which licenses and disciplines both stockbrokers and the brokerage firms that they work for. These federal securities laws and rules concern themselves with the suitability of security transactions for each individual customer. Stockbrokers must have a reasonable basis for any recommendation for the purchase or sale of any securities. The rules do not create any presumption that a transaction is appropriate, but each individual transaction must be suitable for the investor and their risk tolerance. The rules concerning transactions with customers, which regulate stockbrokers in South Florida, Fort Lauderdale, Miami, and West Palm Beach, require both transparency and justification for any recommendation or transaction. Your stockbroker, if he or she is in a nation franchise, or recognized traditional Wall Street brokerage house, is supervised both by the stock broker office manager and the compliance department. Regulations concerning transactions advised or performed at the request of investors are always subject to review. If you feel that you have been placed in an inappropriate high risk investment, contact a South Florida securities lawyer. FINRA has offices in South Florida, Boca Raton, where they undertake and conduct arbitrations. If you feel you have been victimized by stockbroker. If you believe that you are in a high risk and inappropriate investment due to stockbroker advice. If you feel you've been victimized by stockbroker fraud call a South Florida securities law firm and get a free consultation about your remedies available through arbitration.