FINRA

Published on: October 13, 2016

FINRA Fines Investors Capital Over Unit Investment Trust Sales

The Financial Industry Regulatory Authority (FINRA) recently fined Investors Capital Corporation $250,000 over the sale of unit investment trusts (UITs). Investors Capital did not admit or deny the allegations leading to the fine, but also agreed to pay $841,500 in restitution to customers, bringing its total payment to over $1 million.

FINRA alleged that certain Investors Capital brokers recommended that customers engage in unsuitable short-term transactions in UITs, and also alleged that the firm failed to apply sales charge discounts that should have been available to some customers. FINRA further alleged that Investors Capital Corporation lacked adequate systems and procedures to supervise the sales of UITs, leading to the violations. Short-term trading in UITs may be uneconomical in many cases due to relatively high up-front sales charges, and UITs are typically recommended only as long-term investments.

Investors Capital’s alleged violations occurred between 2010 and 2015.

Published on: October 6, 2016

FINRA Fines Investors Capital for Alleged Unsuitable UIT Sales

by InvestorLawyers

Investors Capital will pay $1.1 million in fines and restitution over the sale of unit investment trusts (UITs) to resolve an investigation by the Financial Industry Regulatory Authority Inc. (FINRA). FINRA alleges that certain Investors Capital brokers recommended unsuitable short-term trading of UITs and other complex financial products known as steepener notes in accounts of 74 clients, according to the settlement.

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Investors Capital also allegedly failed to apply sales charge discounts to certain customers’ purchases of UITs, and inadequately supervised its representatives, according to FINRA’s allegations. To resolve the FINRA case, Investors Capital agreed to pay $250,000 in fines and $842,000 in restitution. The firm has already reportedly paid close to $224,500 in restitution to clients.

Published on: June 10, 2015

Former Cadaret, Grant & Co. Broker Douglas William Findlay Suspended Over REIT Sales

by InvestorLawyers

Douglas William Finlay, Jr., a stockbroker formerly associated with Cadaret, Grant & Co., has entered into a Letter of Acceptance Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA) to settle a case in which FINRA alleged that Finlay over-concentrated a customer’s assets in an unsuitable illiquid real estate investment trust (REIT).

In the AWC, in which Finlay neither admitted nor denied the FINRA charges, FINRA found that Finlay failed to adequately disclose information to the customer about the REIT and also allegedly falsified a firm document that misrepresented the customer’s net worth and income.

As a result of the charges, Finlay’s license was suspended for 18 months. FINRA also fined Finlay $15,000 and ordered him to pay disgorgement of $6,639. The case is FINRA Disciplinary Proceeding No. 2013035576601

Published on: June 19, 2014

FINRA Bars Wade James Lawrence from Financial Industry

by InvestorLawyers

Recently, Wade James Lawrence was barred from the financial industry by the Financial Industry Regulatory Authority (FINRA). Investors’ rights lawyers are exploring accusations made against Lawrence regarding misappropriation of funds during his time as a broker. According to the FINRA report, Lawrence failed to respond to these allegations, and in doing so forfeited his opportunity to remain a practicing broker.

FINRA Bars Wade James Lawrence from Financial Industry

Lawrence’s most recent history as a broker was with Southwest Securities, where he was registered from August 2011 through December 2013. Prior to that, he worked for Oppenheimer & Co. from June 2008 through July 2011, and Merrill Lynch from April 2003 through June 2008. During his time at both Southwest Securities and Oppenheimer & Co., there were several complaints issued against Lawrence by customers who claimed to have received unsuitable recommendations. One client even alleged that Lawrence borrowed $850,000 and failed to return the funds. This alleged borrowing occurred while Lawrence was with Oppenheimer & Co. and the FINRA report states that he intended to “…pay for the losses. I [Lawrence] then voluntary resigned and left the appropriate funds in my personal account to be used to cover the losses.” Despite this response, Lawrence failed to appear for testimony with FINRA regarding this, or any of the other complaints, which included additional allegations of misappropriated funds and failure to provide appropriate investment recommendations.

If you suffered significant losses as a result of doing business with Wade James Lawrence or believe that another stockbroker or financial advisor led you to inappropriately use investment funds, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact a securities fraud attorney at the Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

Published on: June 10, 2014

David Zeng, Most Recently of Merrill Lynch, is Barred from Financial Industry

by InvestorLawyers

David Zeng was recently barred from working within the securities industry after he failed to respond to inquiries concerning over a dozen customer complaints about his investment activities. These complaints alleged misrepresenting an investment, unauthorized stock trading, unsuitable investment advice and fraud.

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Prior to starting with Merrill Lynch in 2009, Zeng worked for UBS Financial Services and before that for Morgan Stanley.

If you suffered significant losses as a result of doing business with David Zeng or received an unsuitable recommendation in any of the mentioned investment categories from another stockbroker or financial advisor, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact a stock fraud lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

Published on: May 2, 2014

Equi-Vest, Accumulator Variable Annuity Investors Could Recover Losses

by InvestorLawyers

Securities arbitration attorneys are currently investigating claims on behalf of investors who suffered significant losses in AXA Equitable Life Insurance Company Equi-Vest or Accumulator variable annuity contracts — specifically those invested in the managed funds, AXA Tactical Manager Strategy or ATM-managed funds.

Equi-Vest, Accumulator Variable Annuity Investors Could Recover Losses

Reportedly, the New York State Department of Financial Services (“DFS”) launched an investigation in 2011 concerning alleged omissions on the part of AXA Equitable regarding its applications for approval to alter the Equi-Vest and Accumulator variable annuities. The change would substitute ATM-managed funds for previous managers. According to DFS’ allegations, AXA Equitable misled DFS regarding the change’s impact and failed to disclose the underperformance of the ATM funds under the previous managers. Allegedly, these actions resulted in a reduced return for investors, especially for those who paid fees to receive guaranteed minimum benefits and those who wanted to be more aggressive in their investment strategy. In order to settle the investigation, AXA Equitable agreed to pay $20 million on March 17, 2014.

Some AXA Equitable investors may have been misled about the variable annuity contract changes. In addition, certain characteristics of variable annuities, including high penalties for early withdrawal, long surrender periods and low rate of return, make these products unsuitable for many investors. Many brokers are motivated to make unsuitable recommendations because of the large commissions associated with variable annuities.

Published on: April 24, 2014

Customers Could Recover Losses for Unsuitable MetLife Variable Annuity Recommendations

by InvestorLawyers

Securities attorneys are currently investigating claims on behalf of the customers of Christopher B. Birli and Patrick W. Chapin, who suffered significant losses as a result of misrepresentations and unsuitable recommendations of variable annuities. Reportedly, Birli and Chapin received significant sales commissions for allegedly unsuitable recommendations to their customers.

Customers Could Recover Losses for Unsuitable MetLife Variable Annuity Recommendations

On March 27, a complaint was filed with the Financial Industry Regulatory Authority Office of Hearing Officers against Birli and Chapin regarding the State University of New York retirement program. According to the complaint, Birli and Chapin recommended their customers switch MetLife variable Annuities with new ones held outside the retirement plan in MetLife IRA accounts.

Allegedly, Birli and Chapin circumvented their firm’s general prohibition of direct annuities exchange by recommending to their customers that they surrender their annuities to purchase another product available within the retirement program, wait 90 days, and then sell the second product in order to purchase the MetLife IRA annuity.

Published on: April 22, 2014

ETF, ETN Investors Could Recover Losses

by InvestorLawyers

Lawyers are investigating claims on behalf of investors who suffered significant losses in exchange-traded notes (ETNs) and exchange-traded funds (ETFs) issued by Credit Suisse and other full-service brokerage firms.

ETF, ETN Investors Could Recover Losses

According to Bloomberg, the $45,000 loss suffered by Jeff Steckbeck in TVIX, a Credit Suisse Group AG note, has set off a probe by the Securities and Exchange Commission. Reportedly, ETNs became more popular with the TVIX in February 2012. That month, Credit Suisse stopped selling the ETN and rising demand caused the investment to veer up to 89 percent from the index. When Credit Suisse began issuing the notes again in March of that year, a FINRA warning cautioned investors that ETNs could trade at a price that was higher than their underlying index.

Bloomberg data indicates that the estimated initial value of the securities is typically 2 to 4 percent less than the price investors paid. Exchange-traded notes like TVIX mimic assets through the use of derivatives and their value is based on volatility shifts in the market. However, the ETN market is small beans compared to the ETF market, which has around $2.4 trillion in assets.

Published on: April 17, 2014

Morgan Stanley Customers Could Recover Losses for Unsuitable Puerto Rico Bond Sales

by InvestorLawyers

According to one claim that was recently filed, Morgan Stanley advisors recommended that one couple invest all their money into bonds issued by Puerto Rico Sales Tax Financing Corp., Puerto Rico Public Finance Corp. and Puerto Rico Electric Power Authority, when a low-risk, safe, fixed-income portfolio would have been more suitable for the couple. The claim is seeking to recover $200,000 in damages. According to stock fraud lawyers, Puerto Rico Bonds and bond funds were unsuitable for many investors given their age, investment objectives and risk tolerance.

Morgan Stanley Customers Could Recover Losses for Unsuitable Puerto Rico Bond Sales
Allegedly, Morgan Stanley did not adequately disclose the risk associated with the recommended investment strategy of concentrating all of their funds into these three investments. The firm also allegedly failed to adequately disclose the risks associated with low credit ratings and long-duration bonds. Allegedly, the couple was led to believe that the Puerto Rico Bonds were constitutionally guaranteed by the Commonwealth of Puerto Rico.

Some of the bonds and bond funds currently being investigated by securities fraud attorneys are:

Published on: April 16, 2014

Pennsylvania Regulators Investigate Non-traded REIT Sales

by InvestorLawyers

Investment fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses in non-traded real estate investment trusts, or non-traded REITs, in light of an investigation that is now underway by the Pennsylvania Department of Banking and Securities.

Pennsylvania Regulators Investigate Non-traded REIT Sales

Reportedly, Pennsylvania regulators are currently looking into non-traded REIT sales conducted by Securities America employees. Securities America is owned by broker-dealer Ladenburg Thalmann & Co. Inc., which also owns two more independent brokerage firms. Ladenburg stated in its annual report that Pennsylvania regulators wanted to be provided with data regarding non-traded REITs purchased by Pennsylvania residents since 2007.

Securities arbitration lawyers are currently unsure if the non-traded REIT sales investigation will extend to firms other than Securities America.