Can JPMorgan Be Forced To Pay MF Global Customers' Claims?

December 21, 2011

The reports are that JP Morgan suspected some MFGlobal funds it received were customer deposits.
…”But JPMorgan was not satisfied. The bank once again contacted Mr. Corzine, this time requesting a guarantee in writing.”…..[DealBook article 12/21/11]
JP Morgan asked several times for a letter because they suspected, that MF Global was sending customer money. If a MF Global customer files a civil theft lawsuit (in Florida a win gets double the theft) or a FINRA arbitration claim....JP Morgan may have to payout.

It gets worse...maybe fraud or RICO.........two actors, with knowledge, acting to advance a criminal enterprise....conspiracy (punitive damages)...RICO (more than one MF Global customer's money was removed from segregated funds)?

Take a look at possession of stolen property statutes. (Best place? Look online for jury instructions on possession of stolen property). lawyers can argue that JP Morgan suspected that the funds were from segregated customer accounts. JP Morgan can be a target for a FINRA claim, civil theft suit ( remember the NYT article about a single mother in Fort Lauderdale) or a class action by customers with deposited funds at MF Global.


November 24, 2011

A Lifetime of work and sacrifice is, in finance, distilled to a ledger entry. If you maintain an account with a South Florida securities dealer, a stockbroker or investment counselor, it matters who you trust: so know how to decide whom you can trust. Ask your stocker broker/ financial advisor questions: are you with a firm or are you working alone? Are your accounts supervised by a compliance program? Whose program? Does he/she have an active compliance program or is it done by his/her firm? Is there outside compliance? If I file a claim for stockbroker fraud and win at a FINRA hearing who pays? Historically when yields are low (look at a treasury bill yield) and the pressure is on stockbrokers to produce income and profits, they take risks.

Risk for higher yields is like speeding: most speeders crash or get caught, it is only time that separates the speeders from the convicted. If you live in South Florida and have your investments with a stockbroker who is “solo” then ask the questions. If your stockbroker has placed your assets in high risk securities it is very important that you protect yourself by doing the following:
1. Make sure your risk profile, risk tolerance, is clearly spelled out in the documents you signed when your account was opened. If it has been more than five years or you are transitioning from productive years to harvest years make sure your broker’s paper work clearly states your risk tolerance.
2. READ YOUR STATEMENT every month: if you don’t then you can’t complain, silence can be construed to be consent if an investment in your account tanks and you didn’t object in a timely manner. Before you move on to Amazon or Google re-read the Securities Act of 1933….handily reproduced for your review below….it is very relevant to YOUR purchases and trades in securities. By doing this you will be secure in knowing that your money is better invested, productive and safer.

Securities Act of 1933
Often referred to as the "truth in securities" law, the Securities Act of 1933 has two basic objectives:
• requires that investors receive financial and other significant information concerning securities being offered for public sale; and
• prohibits deceit, misrepresentations, and other fraud in the sale of securities.

Have you been suspecting that your financial advisor doesn’t have the right information for your benefit? Or that he or she may have misrepresented a product they sold you?

Some financial advisors know what they are selling you, but may not always give you complete or full disclosure about the product you purchased. Other financial advisors do not have the information you need because they fail to ask the right questions to get you the answers you are looking for.

No matter whom you purchase securities from in Aventura, Boca Raton, Fort Lauderdale or Weston. The financial advisor and or the agency owe you a duty to explain and inform you of what you purchase. If you buy a car, you expect it runs, if you buy a refrigerator you expect it cools. Why not expect the answers for questions about your investment?

Your money future is important to you and should be to whomever you invest it with. If you suspect a fraudulent transaction or misrepresented product, do not hesitate to call a securities attorney that can help you find answers you may need to start your claim. Remember this “to error is human but to defraud is criminal.” Call my office if you have any concerns about your investment choice.


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.

Check-lists for evaluating your Stock Broker

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.

Goldman and JP Morgan cut deals with the SEC

July 5, 2011

Is beauty truth, or truth beauty or does it matter to JP Morgan? The SEC began legal action against JPMorgan Securities for not disclosing material facts to investors about a CDO vehicle. Sounds familiar? It should because recently Goldman Sachs was taken to the woodshed over the same issue. Not to worry, the woodshed won’t hurt too much as the money is small.
JPMorgan settled with a $156.3 million dollar check, Goldman Sachs settled for $550 million dollars. Whasss up? It’s all about failing to inform investors that a hedge fund was created and they were short. Oooopps.
No executives were tagged on this one and the penalty was corporate, so no real pain, and no changes. The street goes on and on and on.
The only refutation came from commentators who didn’t like the disparity….between $550 million and $156 million. Bloomberg spoke on this saying JP Morgan was given favored treatment, others pointed out, correctly, the differences in the case(s).
The SEC said nothing and went back to what it does so well…..doing very little.

More Securities Law Fraud from Countrywide Financial…. in trouble again?

February 13, 2011

Last year, executive Angelo R. Mozillo of Countrywide Financial Corp. was fined by the Securities and Exchange Commission in one of many suits involving allegations that Countrywide borrowers and investors. The securities law fraud allegedly concerns the risks of lending. The fine mislead or misrepresented was in the amount of $22.5 million dollars, the largest ever imposed on an individual for a case involving misrepresentations to shareholders. The securities fraud laws extend not only for stock broker fraud but for other frauds committed on investors, many of whom are here in Fort Lauderdale, Aventura, Miami and Boca Raton.

Countrywide was recently accused of predatory lending and has settled to pay a $6.5 million dollars in California courts. The State of California as one of the top 10 states in the foreclosure crisis will create a fund with $5.2 million dollars of the money for the relief of troubled homeowners. The fund created for the homeowners will be used to educate them and assist other agencies statewide in prosecuting mortgage fraud. The remaining amount will pay for the costs of the investigation and attorneys fees. Hopefully this lesson will curve the lenders ideas of predatory lending and get some other lenders to see the most needed reconsideration or modification of many of the loans they created that contribute to the foreclosure crisis in many states.

If you believe your investment advisor, financial advisor or stock broker has committed a fraud contact a South Florida securities fraud lawyer or law firm. Attorneys in South Florida who practice in the field of stock broker fraud and stock broker misdeeds are very capable and will be pleased to give you the time for a consultation about any stock broker fraud that may have been committed on you.

Fiduciary Duty: What does it mean?

November 9, 2010

A fiduciary duty imposes a very high level of responsibility. A fiduciary must act in the best interest of the person to whom they owe that duty. Think of a parent: good parenting requires that one always protect and act in the best interest of the child. Think of a doctor: she/he must act always in the best interest of the patient. Think of the stockbroker? They have a duty to always act in the best interest of the client. If they fail to act in the best interest of the client; or they compromise their judgment to balance other interests…. they have crossed the line. The line between malfeasance and acting as a fiduciary is often easy to see. It is also often missed. If you believe that a financial advisor or stockbroker has acted against your interests in presenting and executing a financial transaction with your money then you have a claim of breach of fiduciary duty. These claims are arbitrated in the securities industry, they rarely go to court. If you believe you have been the victim contact your South Florida securities fraud attorney and ask for a consultation.