FINRA Orders Schwab to Pay $18,000,000 for Marketing YeildPlus Bond Fund

February 6, 2011

Recently the arbitration process at FINRA resolved a dispute alleging misdeeds by Schwab in the marketing of its YieldPlus short-term bond fund. Some investors in South Florida who had their brokerage account in Fort Lauderdale and Palm Beach wire houses were included in the Fair Fund award.
The allegations are that Schwab make inaccurate statements or omissions of material information about the fund. The Securities and Exchange Commission (SEC) was the moving party (plaintiff) in the FINRA arbitration which resolved in 2011. Many retirees in Boca Raton and Aventura had made investments in the fund and would be included in the recovery. If your investment advisor or South Florida Stock Broker had you money invested in this vehicle (The Schwab YieldPlus Bond Fund) contact a South Florida Securities Fraud attorney and ask about your possible recovery in the Fair Fund award. Some of South Florida’s most prominent and respected Securities Fraud and Stock Broker Fraud lawyers were either involved in the action in assisting the SEC or had their client’s included in the recovery. The findings by FINRA were that between Sept 2006 and Feb 2008 Schwab sold of $13.75 billion dollars in shares in the YieldPlus Fund to customers. If you had an account in a South Florida securities dealer (over 98% of Schwab customers invested in ultra short-term bond funds, 40% of whom were under forty years of age) contact a securities fraud lawyer and ask about the FINRA arbitration award.

FINRA arbitrations posted on the internet

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.


November 17, 2010

Most people think, or should think to ask the question, why do you need a stock broker fraud attorney to resolve claim? In fact you don't. Over 60% of the claims that are resolved through arbitration ultimately are won by the claimant. So why do you need a stockbroker fraud lawyer? The question becomes an especially financially painful one when you realize that the lawyer will be paid from the proceeds of your award. So why should you share your money with the lawyer? The answer is you don’t have to share, you shouldn’t have to share, and your recovery will most likely be greater: dollar for dollar. There are several ways to understand the question: first one is probably you will need some help in the arbitration proceeding, but they are relatively simple and you can do it without a lawyer. Another reason is that you will often get a larger recovery with a skilled litigator than you will without one. It may be true that most claimants have valid claims, but the extent that you can get a significant portion of your losses back depends on the method and content of presentation. A poorly prepared presentation can result in a less than complete recovery. A well grounded and complete presentation can get you a larger award. In a practical sense the portion of the recovery which goes to pay the lawyer may be insignificant compared to the greater amount you can recover by using a skilled and seasoned stockbroker fraud attorney. Remember reading in the paper that someone got a million dollars for a broken arm? Most people get $500. Why the difference? Ask the person who won the million dollar judgment and they’ll tell you it was the lawyer’s skill that won the award. Sharing a portion of the million leaves the litigant with more than $500.00 doesn’t it? Call a lawyer for a consultation; it will not be a waste of your time.


October 31, 2010

FINRA arbitration panels have historically been three person panels of screened, qualified licensed arbitrators. Drawn from diverse backgrounds in the securities industry, law and business, arbitrators are approved, licensed and listed as available. When a dispute is submitted to FINRA for resolution, the parties select the three-person panel from a list of approved FINRA arbitrators. Arbitrators are licensed either as "Public" or "Non-Public". A distinction with a major difference: go to FINRA's website for an explanation. A pilot program run by FINRA concluded recently found that investors, by a 60% factor, selected all "Public" arbitrators. The result prompted FINRA to propose a rule change allowing all "Public" arbitrator panels. Over 500 cases have been arbitrated under this pilot program. The purpose of the study is to determine the public perception of the fairness of panels. The two year study will conclude next year and may result in changes in panel members. The proposed rule allows the selection of an all "Public" arbitrator panel. The proposed rule change requires SEC approval, which is expected. The problem was created by FINRA (formerly NASD) by the designation of arbitrators as either a 'public' or 'industry' arbitrator. The ill-chosen designations suggest that the arbitrators are inclined to side with a private individual or side with the industry. This is not the case, but it is the perception: that is the reason for the rule change. If FINRA had it's socks on correctly they would drop the designations and just list arbitrators and their backgrounds and let the complainaint and respondent select.


October 26, 2010

This may disturb you, but it's just grist for the mill here. When you charge a broker with fraud or self-dealing or communications failures some brokers can go into their office computers and change statements. Brokers have been caught doing this, they have been fired, some face criminal charges… Prison food doesn't compare to steak dinners paid for with your money. Here's a message: keep your statements! Go to Office Depot buy yourself a plastic tub or cardboard box and throw them in, not out with the trash. Why? If I'm in arbitration with you on my side and I show the arbitrators a monthly paper statement which has a transaction……then I show the arbitrator what the broker submitted in response to a subpoena. If they don't jive: the glove don't fit. Major fireworks, major trauma, the arbitrators tell the brokerage house to write you a check. It's a sure win for the claimant in arbitration when the broker changed computer records. It happens, sadly. So here's the message: keep those paper records.


October 23, 2010

What is NASD? It is now FINRA. It's mandate is to regulate most contact and transactions between securities industry "regulated individuals" and consumers. The securities industry is largely regulated by this non-governmental agency which exists to produce guidelines and standards and to enforce securities laws regulating ‘regulated individuals’… People who work as stockbrokers and financial advisors. It's most important function, for you and I, is that it is the place we can go to resolve a dispute with a regulated person: a stockbroker, a financial advisor, a wire house, a financial professional who is in the business of providing financial services and selling financial products to individuals and non individual clients (trusts, companies, corporations, charitable institutions, legal entities that basically don’t breath or eat): Think stockbroker. If you have a complaint about your stockbroker you go to FINRA. They provide you with a forum in which to resolve claims: arbitration. Arbitration is held at their offices, before a panel of three arbitrators. The process of arbitration for dispute resolution is generally regarded as better than the courtroom and all the formal court proceedings and procedures which make dispute resolution so complex. The process of arbitration works well for those who are prepared and organized and on the right side of the issue. Not every loss is compensable and not every loss is incurred by malfeasance or misfeasance (bad acts). But those that are, that is losses that are the result of some improper act by a “regulated” person can be brought to arbitration. Arbitration is not mediation. Mediation is happy talk and a suggested solution. Arbitration is different. In arbitration the decision is enforceable and final and therefore resolves conflicts.