securities arbitration

Published on: February 17, 2012

Securities Arbitration May Be Better Path for UBS Lehman Brothers Investors

Investment attorneys continue to seek investors who suffered significant losses in Lehman Brothers 100 Percent Principal Protection Notes and who wish to pursue securities arbitration claims in order to recover losses. Lehman Brothers 100 Percent Principal Protection Notes, also known as Principal Protected Notes, were issued by UBS Financial Services and have resulted in significant losses for many investors.

Securities Arbitration May be a Better Path for UBS Lehman Brothers 100% Principal Protected Notes Investors

Many claims have been filed on behalf of Lehman note holders in the Lehman bankruptcy proceedings, but there are many more investors who must take action if they wish to recover these losses. Though many investors hope to recover losses through the class action that has been filed, individual securities arbitration claims may prove to return a larger percentage of losses to investors. Based on the Third Amended Joint Chapter 11 Plan of Lehman Brothers, it appears that investors will only receive about 21 cents on the dollar through the class action lawsuit. Therefore, investors should attempt to recover losses by any means available to them, including securities arbitration. Furthermore, investors should act immediately due to potential statutes of limitations.

Customers of UBS Financial Services who suffered losses as a result of their investments in Lehman Brothers 100 Percent Principal Protection Notes are encouraged to contact a stock fraud lawyer immediately for more information about filing a securities arbitration claim with the Financial Industry Regulatory Authority’s Office of Dispute Resolution. One way to do this is to look for an attorney who is experienced at representing clients with these kinds of claims. You will want someone who knows the history of rulings relative to these claims, as well as someone who understands how to recover as much money as possible for his or her clients.

Published on: February 16, 2012

Did You Purchase Lyon Capital CLO with Banc of America? You May Have a Securities Arbitration Claim

by InvestorLawyers

Investment attorneys are seeking Banc of America Securities customers who purchased Lyon Capital Management VII Collateralized Loan Obligations. Banc of America sold Lyon Capital to its institutional and high-net-worth customers. The CLOs were issued in July 2007. However, at this time, the value of investment, which was created by pooling loans together, was already declining. Lyon Capital’s value quickly declined and, eventually, was liquidated. The poor performance of Lyon Capital indicates that Banc of America either knew, or should have known, the existing market conditions made the deal a bad one. Investment attorneys are also questioning the valuation procedures that were used in pricing the loans.

Purchasers of Lyon Capital CLO with Banc of America Securities May Have Securities Arbitration Claim

A Financial Industry Regulatory Authority Arbitration Panel last week awarded $1.38 million to a Lyon Capital CLO investor. The award includes attorney’s fees, hearing session fees, interest and the entirety of the claimant’s investment losses. Allegations heard by the panel stated that Lyon Capital was worthless at the time of purchase. Only one month after closing the allegedly worthless deal, the disclosures about potential losses in similar loan pools was changed by Banc of America. August 2007’s prospectus stated that, because of the declining market values of loans, it was likely that “on the closing date [the value of the portfolio] will be substantially less than the principal amount.” The claimant further alleged that the investment was sold as a low-risk investment and Lyon Capital CLO was, in actuality, artificially inflated at the time of closing.

In light of the conduct of Banc of America in the sales of Lyon Capital and the recent related FINRA award, investment attorneys believe there may be other Lyon Capital investors who can seek to recover losses through securities arbitration. To find out more about your legal rights and options, contact an investment attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

Published on: February 15, 2012

Charles Schwab Charged with Violating FINRA Rules in Customer Agreements

by InvestorLawyers

On February 1, 2012, the Financial Industry Regulatory Authority (FINRA) announced that it had filed a complaint against Charles Schwab & Company. FINRA charged the firm with violating FINRA rules when it required the waiving of rights of customers to bring class actions against the firm. It is the belief of many investment attorneys, investors and others in the securities industry that investors should retain the right to file class actions against the firm in the event that broker misconduct occurs.

Charles Schwab Charged with Violating FINRA Rules in Customer Agreements

According to the complaint issued by FINRA, Charles Schwab is charged with amending its customer agreement in October 2011 to include a provision that required customers to waive their rights that allowed them to bring or participate in class actions against the firm. The amended agreements were sent to nearly 7 million customers.

Furthermore, the agreement included a provision that required customers to agree that, in arbitration proceedings, arbitrators would not be able to consolidate the claims of multiple parties. According to FINRA, both provisions are in violation of FINRA rules of language or conditions that may be placed in customer agreements by firms.

Published on: February 13, 2012

Broker Misconduct: Illegal Transfer of Funds Through Email Hacks

by InvestorLawyers

On January 27, 2012, the Financial Industry Regulatory Authority (FINRA) issued an Investor Alert warning investors of fraudsters compromising investor email accounts to send trading instructions as a way to commit fraud. According to FINRA, fraudsters will use the email account to gain access to information that they can then use to request wire transfers to overseas accounts. Because this form of fraud can be committed by stock brokers and traders, stock broker fraud attorneys are encouraging defrauded investors to come forward with potential claims.

Broker Misconduct: Illegal Transfer of Funds Through Email Hacks

In some cases, firms failed to verify the instructions via telephone but released the funds anyway. This violation in procedure may entitle defrauded investors to a recovery of losses through securities arbitration. According to the SEC, four brokerage firms have been charged for allowing traders to trade in the U.S. securities market, despite the fact that they were unregistered. In the same case, Igors Nagaicevs, a trader, was charged with making $874,896 through unauthorized purchases and sales. He also broke into accounts 159 times from 2009 to August 2010. According to the SEC, he cost investors possibly over $2 million.

“Nagaicevs engaged in a brazen and systematic securities fraud, repeatedly raiding brokerage accounts and causing massive damages to innocent investors,” says the director of the SEC’s San Francisco regional office, Marc J. Fagel.

Published on: February 9, 2012

Watch List Issued by FINRA

by InvestorLawyers

On January 31, 2012, the Financial Industry Regulatory Authority (FINRA) posted a letter on its website outlining its 2012 priorities for regulation and examination. According to the letter, “FINRA is informing its examination priorities against the economic environment that investors have faced since 2008, as these circumstances have steadily contributed to conditions that foster an increased risk of aggressive yield chasing, inappropriate sales practices, unsuitable product offerings, and misappropriation and fraud.” The letter goes on to state FINRA’s concerns that investors “may be inadvertently taking risks they do not understand or that are inadequately disclosed.”

This is a concern that is shared by investment attorneys as they are faced with client after client that have suffered significant losses as a result of insufficient disclosure or lack of understanding.

Top products on FINRA’s watch list for suitability problems include non-traded real estate investment trusts (REITs), residential and commercial mortgage-backed securities, municipal securities, variable annuities, structured products, exchange-traded funds using synthetic derivatives and significant leverage, life settlements and private placements.

Published on: February 8, 2012

After Securities Arbitration, Merrill Lynch Must Pay $1.4 Million to Investor

by InvestorLawyers

Bobby Hayes, a Nevada retiree and wealthy investor, has been awarded $1.4 million in damages in securities arbitration against Merrill Lynch. According to Hayes’ allegations, Bank of America Corp.’s Merrill Lynch sold him collateralized debt obligations which were worthless at the time he purchased them.

After Securities Arbitration, Merrill Lynch Must Pay $1.4 Million to Investor Over CDO Loss

The case was filed in 2011, and Hayes’ allegations included consumer fraud and breach of contract, among other misdeeds. The collateralized debt obligations, or CDOs, were purchased in 2008 from former Bank of America Securities LLC, which is now part of Merrill Lynch. The Financial Industry Regulatory Authority’s (FINRA) ruling, dated for January 31, 2012, was in favor of the claimant.

CDOs are securities that are backed by underlying pools of loans or bonds. While these investments are inherently risky, they are relatively common among qualified investors.” However, Hayes was unaware of the fact that at the time of purchase, the securities were already under water. The loans backing the securities were purchased by Merrill between November 2006 and June 2007. According to Hayes’ allegations, while in the company’s inventory, the securities lost a significant amount of their value. Regardless, Merrill sold the loans to investors like Hayes for the purchase price rather than what they were worth.

Published on: February 2, 2012

Citigroup’s Misconduct Comes to Light After Documents are Unsealed and Judge Refuses Request to Overturn FINRA Decision

by InvestorLawyers

Documents from the Financial Industry Regulatory Authority (FINRA) proceedings of Citigroup vs. Gerald D. Hosier, Jerry Murdock Jr. and Brush Creek Capital have been unsealed. The $54.4 million award granted in this case was the largest ever given to individuals in securities arbitration proceedings. A decision was made this month on Citigroup’s request to overturn FINRA’s decision.

Citigroup’s Misconduct Comes to Light After Documents are Unsealed and Judge Refuses Request to Overturn FINRA Decision

The details of the FINRA proceedings, which were confidential, have been unsealed following Citigroup’s request that the award be tossed out by a United States district court. The documents viewed by FINRA arbitrators show, according to the New York Times, that Citigroup rated the investments of the claimants at a 5 rating for risk on a scale of 1 to 5, with 5 being the highest risk rating. Investors went on to lose 80 percent of their investments, which is no surprise considering the risk rating.

The investments in question were municipal arbitrage portfolios, or ASTA/MAT. They were sold by Citigroup Global Markets through MAT Finance LLC. Internal emails show that the investments began their decline in value in early 2008, following which Sally Krawcheck requested the risk rating of the MAT. Despite the fact that documents showed a risk rating of 5, she was told the risk rating was “3-5.” In addition, Citigroup did not disclose the investments’ 5 rating to investors. Furthermore, according to The Times, the portfolio manager was instructed not to discuss information the internal guidelines — which differed from the investors’ prospectus — in a conference call that involved the brokers of clients that had sustained losses.

Published on: January 30, 2012

Investment Attorneys Seeking Defrauded Investors Following Two Securities Arbitration Cases Against Merrill Lynch

by InvestorLawyers

Investment attorneys are investigating potential claims on behalf of investors against Merrill Lynch and the Phil Scott Team. Over the last seven months, the Financial Industry Regulatory Authority has awarded defrauded investors, in two separate securities arbitration proceedings, around $2 million. The $2 million awarded includes compensatory damages, attorney’s fees, forum fees, costs and interest. The first case, decided in June 2011, resulted in an award to claimants of around $880,000. The second case, decided in January 2012, resulted in an award to claimants of about $1.2 million.

Investment Attorneys Seeking Defrauded Investors Following Two Securities Arbitration Cases Against Merrill Lynch

According to claimant allegations, Phil Scott (a/k/a Walter Schlaepfer) recommended they place their assets in portfolios which were invested in 100 percent equities, an unsuitable recommendation. The portfolios recommended were the Merrill Lynch Phil Scott Team Portfolios. In addition, one claimant had pledged nearly two-thirds of the portfolio to three different Merrill Lynch loans, increasing the risks associated with the portfolio and leading to a forced liquidation of securities as a result of the declining market value on the account.

Two claimants, Douglas and Kristin Mirabelli, claimed Scott’s broker misconduct included breach of fiduciary duty and misrepresentation. The Mirabellis’ case, decided this month, was the case in which $1.2 million was awarded by the FINRA Arbitration Panel. According to one of the Mirabellis’ attorneys, Scott should have diversified the claimants’ money rather than placing it into the Merrill Lynch Phil Scott Team Income Portfolios.

Published on: January 27, 2012

FINRA Awards Claimants More Than $9 Million

by InvestorLawyers

Securities Arbitration recently concluded in a private placement suit between CapWest and 30 claimants. The initial filing with the Financial Industry Regulatory Authority (FINRA) took place in December 2009 and was amended in February 2010 and June 2010. Claimants asserted breach of contract, breach of fiduciary duty, negligence and failure to treat claimants in an equitable and just manner. The allegations of the claimants arose in connection with their investments in Medical Capital Corporation, DBSI, Inc. and Provident Royalties LLC.

FINRA Awards Claimants More Than $9 Million

Including the investments issued by the three companies, tens of millions of dollars in private placements were sold by CapWest. CapWest’s closing in September 2011 was prompted by these private placements. The onset of the “Great Recession” marked the point at which the private placement securities became toxic and many investors holding them suffered substantial losses, they argue.

The claimants have demanded the following amounts in compensatory damages, respective to each company, plus interest, costs and attorney’s fees: $6,055,763, $7,465,763 and $8,300,763. A comment on the decision stated that, “On September 23, 2011, the Panel conducted a hearing to consider Claimants’ motion for sanctions and to preclude. Respondent did not appear. The Panel determined that an attempt was made by the conference operator to contact Mr. H Thomas Fehn, counsel for Respondent, that Mr. Fehn had been notified by FINRA of the date and time of the hearing, and that the operator was unable to reach Mr. Fehn at the phone number provided.” The Securities Arbitration Panel ultimately found CapWest liable and ordered it to pay $7,925,763.00 in compensatory damages, $1,188,863 in attorneys’ fees, and $5,840 in costs. In addition, CapWest was ordered to pay 8 percent per annum interest on the sums awarded.

Published on: January 26, 2012

CPI Corp. Shareholders May Have Valid Securities Arbitration Claim

by InvestorLawyers

A class action suit alleging violations of federal securities laws by CPI Corp. has been commenced in the United States District Court for the Eastern District of Missouri. The class action is on behalf of CPI common stock purchasers from April 20, 2010 to December 21, 2011. As a result of this action, investment attorneys are seeking investors of CPI that have potential claims against the company. Through wholly-owned subsidiaries, CPI is a holding company that sells and manufactures professional portrait photography of individuals, families and young children.

CPI Corp. Shareholders may have a Valid Securities Arbitration Claim

According to the complaint, CPI is charged with violating federal securities laws and issuing materially false and misleading statements. These statements were regarding CPI’s business and financial results. According to plaintiffs’ allegations, CPI concealed the following facts:

The company’s business growing initiatives were not working as represented.