FINRA

Published on: August 1, 2013

100 Percent Principal Protected Note Investors Could Recover Losses

Investment fraud lawyers are currently investigating claims on behalf of customers of UBS Financial Services who were sold 100 Percent Principal Protected Notes. 100 Percent Principal Protected Notes were bonds or structured notes issued by Lehman Brothers Inc. Lehman Brothers declared bankruptcy in September of 2008, resulting in disastrous losses for many investors.

100 Percent Principal Protected Note Investors Could Recover Losses

Recently, a Financial Industry Regulatory Authority arbitration claim was filed on behalf of a Texas investor against UBS Financial Services. According to the Statement of Claim, UBS Financial Services allegedly sold the investor, who was a brokerage customer of the firm at the time, $300,000 of the 100 Percent Principal Protected Notes.

According to the claim’s allegations, UBS was aware of the deteriorating financial condition of Lehman Brothers, but concealed its views from brokerage customers who owned the notes. Furthermore, UBS customers were allegedly kept unaware that the Lehman Brothers notes could quite possibly default and become worthless. In addition, the claim alleges that the sales of Lehman notes were halted twice by UBS Financial Services because of concerns regarding credit risk, but UBS did not disclose these halts to thousands of its customers who were already invested in Lehman notes.

Published on: July 30, 2013

Investors Could Recover ATP Oil and Gas Note Losses

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of investors who suffered significant losses in ATP Oil and Gas 11.875 Percent Senior Second Lien Exchange Notes. The investigation is regarding whether customers received unsuitable recommendations of the ATP Notes from their full service brokerage firm or advisor.

Reportedly, a class action lawsuit was filed on May 24, 2013, on behalf of investors who acquired ATP Notes that can be traced to the company’s exchange of $1.6 billion in notes that occurred on December 16, 2010. According to the complaint, the company allegedly concealed two moratoriums while issuing the ATP Notes. These moratoriums were issued by the U.S. Department of Interior and regarded deep water drilling. Reportedly, the drilling devastated the revenues of the company, which filed for bankruptcy on August 17, 2012.

According to stock fraud lawyers, ATP Oil and Gas 11.875 Percent Senior Second Lien Exchange Notes were speculative investments that carried a very high risk. As a result, they were not suitable for investors with conservative portfolios, low risk tolerances or those seeking fixed income.

Published on: July 25, 2013

Wells Fargo Ordered to Pay Investor $2.8 Million

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of Wells Fargo Advisors LLC customers in light of a recent arbitration award regarding the firm’s alleged failure to detect theft and fraudulent transactions in a customer’s account. On July 3, 2013, a Financial Industry Regulatory Authority arbitration panel ordered Wells Fargo to pay an investor $2.8 million for the alleged failures.

Wells Fargo Ordered to Pay Investor $2.8 Million

The case was filed by a family limited partnership, College Health and Investment Ltd., in 2010. According to stock fraud lawyers, many wealthy families use family limited partnerships as an estate planning tool to minimize certain tax liabilities and preserve assets.

Reportedly, College Health filed a lawsuit in 2010 against Esther Spero. Spero allegedly forged the signatures of the family limited partnership’s employees who had authorization to transfer funds so that she could make transfers out of the accounts for her personal use. A $21 million judgement was entered in October, 2010, against Spero. Allegedly, Spero operated the scheme through multiple entities, including Wells Fargo.

Published on: July 23, 2013

Scottrade Fined for Alleged Failure to Supervise $8.4 Million in Sales of Unregistered Stock

by InvestorLawyers

Investment fraud lawyers are currently investigating claims on behalf of the customers of James W. Margulies and Scottrade Inc. in light of a recent Financial Industry Regulatory Authority decision. Reportedly, Scottrade has agreed to pay a fine of $100,000 to FINRA for failing to supervise Margulies, the former Industrial Enterprises of America Inc. chief financial officer, general counsel and board member.

Scottrade Fined for Failure to Supervise 8.4 Million in Sales of Unregistered Stock

Reportedly, Margulies was allowed to improperly sell unregistered stock to investors between February 2005 and October 2007. Securities arbitration lawyers say he reportedly sold $8.4 million worth of unregistered stock. According to FINRA, “Scottrade failed to conduct an independent inquiry to determine whether the shares deposited were freely tradable.”

According to investment fraud lawyers, Margulies was convicted in 2011 of stealing more than $20 million from investors and looting over $90 million in illegally-issued securities by the Manhattan district attorney. He reportedly used more than $7 million of that money for luxury items such as jewelry for his wife, a vacation club membership, expensive homes and travel on a private jet.

Published on: July 18, 2013

UBS Allegedly Made Unsuitable Recommendation of Lehman Structured Products

by InvestorLawyers

Investment fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses as a result of the unsuitable recommendation of Lehman structured products. Recently, a securities arbitration claim was filed on behalf of a couple who did business with UBS Financial Services Inc. The FINRA arbitration was filed against UBS Financial Services and alleges the improper and unsuitable sale of Lehman structured products.

UBS Allegedly Made Unsuitable Recommendation of Lehman Structured Products

According to the Statement of Claim, the couple was nearing retirement and, therefore, wanted to preserve and protect their savings. Allegedly, they were presented with a written financial plan by UBS Financial Services that recommended an allocation of 52 percent equities and 46 percent fixed income for their “moderate” objectives and risk tolerance.

However, securities arbitration lawyers say the claim alleges that UBS disregarded the recommended allocation and concentrated the couple’s accounts in structured products and notes and equities for the “fixed income” portion. These investments allegedly included Lehman structured products, which UBS was aware carried significant default risk.

Published on: July 10, 2013

UPS Employees with Leveraged, Concentrated Positions Could Recover Losses

by InvestorLawyers

Investment fraud lawyers are currently investigating claims on behalf of UPS employees who suffered significant losses as a result of their concentrated position in UPS stock. A recent securities arbitration claim was filed with the Financial Industry Regulatory Authority’s Office of Dispute Resolution on behalf of one investor against Wells Fargo Advisors, seeking damages of $4,000,000.

The claim alleges that the claimant, a 40-year employee of UPS, acquired more than 234,000 shares of UPS stock through the company’s Employee Stock Purchase Plan and Manager’s Incentive Program. A Hypothecation Loan was allegedly opened to facilitate the purchase of the stock, which was used as collateral for the loan. Reportedly, the investor reached a Note and Security Agreement with Wells Fargo when he moved his hypo loan to the firm.

Allegedly, Wells Fargo did not recommend a risk management strategy, such as a protective put and/or collar in order to protect the investor’s leveraged, concentrated position. Meanwhile, Wells Fargo used the UPS stock as collateral for loans to the investor. When UPS’ stock suffered a significant decline that dropped its value well below the loan-to-value ratio, the collateral call on the loan could have been prevented by a protective put option or collar. However, Wells Fargo allegedly facilitated borrowing against the investor’s concentrated stock position, while it was unprotected by a risk management strategy, in an effort to make money.

Published on: June 25, 2013

Customers of Wendy J. Worchester, TNP Securities Could Recover Losses

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of the customers of Wendy J. Worchester and TNP Securities LLC. According to a recent article in InvestmentNews, Tony Thompson’s non-traded REIT, or real estate investment trust, was suspended by the Financial Industry Regulatory Authority for five months because of a failure to conduct independent and adequate due diligence.

Worchester was the co-chief compliance officer of TNP Securities LLC, a broker-dealer under Thompson’s control. Worchester and TNP Securities were suspended from working with a FINRA affiliated broker-dealer and Worchester was fined $15,000. According to FINRA, Worchester’s failure in due diligence was regarding three TNP Securities-sponsored private placement offerings.

According to stock fraud lawyers, TNP suffered almost $25.8 million in losses in 2009, resulting in negative $13.6 million net equity while launching the TNP Strategic Retail Trust Inc., a REIT. Allegedly, both of the note programs and two of the private placements offered by Thompson used new investor money to pay old investors. Both note programs are now in default.

Published on: June 20, 2013

JP Morgan Policy Allegedly Conflicted with Best Interest of Customers

by InvestorLawyers

Investment fraud lawyers are currently investigating claims on behalf of customers of JP Morgan Securities LLC. At issue is whether the customers received recommendations that were unsuitable or not in their best interest because of a JP Morgan policy that conflicted with brokers’ responsibilities to their customers.

JP Morgan Policy Allegedly Conflicted with Best Interest of Customers

According to a securities arbitration claim filed by a former JP Morgan broker, the firm allegedly “had a policy to only recommend in-house product to customers, irrespective of whether that product was the best choice for customers to meet their investment objectives.” Furthermore, the firm continued to discourage the selling of outside products by allegedly making it difficult for brokers to collect commissions and fees for those products. In addition, the claim alleges that the firm’s continuing insistence on the sales of proprietary mutual funds created a perpetual conflict between the firm’s policies and a broker’s responsibility to his or her clients.

Financial Industry Regulatory Authority rules have established that firms have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance. The alleged practices of JP Morgan would have discouraged and/or made it difficult for brokers to act in the best interest of their clients.

Published on: June 18, 2013

Investors Could Recover Losses for Unsuitable Recommendation of Floating-rate Bank Loan Funds

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of investors who suffered significant losses as the result of an unsuitable recommendation of floating-rate bank loan funds. Earlier this month, the Financial Industry Regulatory Authority announced that it ordered Banc of America and Wells Fargo to pay a fine and restitution for the improper and unsuitable recommendation and sale of floating-rate bank loan funds.

Investors Could Recover Losses for Unsuitable Recommendation of Floating-rate Bank Loan Funds

Wells Fargo Advisors LLC was ordered to pay a $1.25 million fine and restitution of approximately $2 million for losses sustained by 239 customers. As Banc of America’s successor, Merrill Lynch, Pierce, Fenner & Smith was ordered to pay a $900,000 fine and restitution of approximately $1.1 million for losses sustained by 214 customers.

Floating-rate bank loan funds can be illiquid and carry significant risks because they invest in loans to entities with below-investment-grade ratings. According to FINRA’s findings, Banc of America and Wells Fargo made recommendations of concentrated purchases of these investments to customers for whom the recommendation was unsuitable. Stock fraud lawyers say that most investors with conservative risk tolerances or who want to conserve principal should not have received a recommendation to invest in a floating-rate bank loan fund.

Published on: June 4, 2013

Non-traded REITs: Five Firms to Pay $7 Million in Massachusetts Settlement

by InvestorLawyers

On May 22, 2013, secretary of the Commonwealth of Massachusetts William Galvin announced settlements with five major independent broker-dealers. According to the settlements, Ameriprise Financial Services Inc. will pay $2.6 million in restitution to investors and a $400,000 fine, Commonwealth Financial Network will pay restitution of $2.1 million and a fine of $300,000, Royal Alliance Associates Inc. will pay restitution of $59,000 and a fine of $25,000, Securities America Inc. will pay restitution of $778,000 and a fine of $150,000 and Lincoln Financial Advisors Corp. will pay restitution of $504,000 and a fine of $100,000. Securities fraud attorneys are currently investigating claims on behalf of investors who purchased Real Estate Investment Trusts (REITs) from these or any other independent broker-dealers.

Non-traded REITs: Five Firms to Pay $7 Million in Massachusetts Settlement

According to a statement made by Mr. Galvin, “Our investigation into the sales of REITs, triggered by investor complaints, showed a pattern of impropriety on the sales of these popular but risky investments on the part of independent brokerage firms where supervision has historically been difficult to monitor.”

According to stock fraud lawyers, this settlement follows the February decision in which LPL Financial LLC was required to pay restitution to investors of $2 million and fines totaling $500,000 regarding non-traded REIT sales.