Florida Securities Fraud Attorney Blog

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

Wed, 21 Dec 2011 09:13:04 -0500

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.

New Rules for Expungement of Certain Broker Check Complaints

Tue, 20 Dec 2011 01:57:40 -0500

December 2011 may be a watershed date in the battle for fairness for stockbrokers. Constantly barraged by complaints, which are often no more than attempted extortion, the FINRA board may make some rule changes. It's a modest beginning; but it's a start. The proposal would amend the arbitration procedures adopting rules for expunction of consumer complaints for parties that are not named. You need to read that again: the new rules, and I'm quoting from a FINRA press release, better yet I'll just let you read it: “….new rules that would permit persons who are the "subject of" allegations of sales practice violations made in arbitration claims, but who are not named as parties to the arbitration, to seek expungement relief by initiating In re expungement proceedings. “ Albeit not a breakthrough….. it does represent the first of what should be many steps towards a level playing field in fairness for brokers who are the victim of consumer complaints that are little more than money-grabs. It needs to be done so that the true purpose of Broker Check, that is to apprise the public of financial advisors who are performing below standard, can be identified fairly without maligning the entire industry. More news will follow as we move forward toward Broker Check becoming a meaningful vehicle for the general public to become aware of broker malfeasance.

WHY ARE EXPUNGEMENT ORDERS BY ARBITRATORS IGNORED BY BROKER CHECK?

Mon, 19 Dec 2011 12:42:11 -0500

A customer complaint, once filed, is technically a public record. Public records are subject to state control and cannot be expunged without an order from U.S. federal court. If your arbitration award includes an order of expunction; contact a securities lawyer and use the federal court to get it off Broker Check. When your federal court action starts FINRA is noticed and the process begins. It takes anywhere from 3 to 6 months and 10-20 hours of attorney time to complete. Send me a copy of your arbitrator award and I can let you know exactly which of the four avenues available to you would get the complaint removed from broker check. 1) Rule 2080 can be used to get a complaint expunged from Broker Check, 2) a special type of FINRA arbitration can get it removed from Broker Check, 3) sometimes all it takes is a letter to FINRA, and….. 4) U.S. Federal Court order. Get your house in order, and don’t be afraid to speak out for yourself if you have been wronged by a frivolous or false complaint to FINRA.

Expunging CRD Information for Stock Brokers on Broker Check

Fri, 09 Dec 2011 13:37:19 -0500

FINRA Rule 2080 is the stock broker’s most effective route to having a customer complaint removed from Broker Check. You know this because complaints are sent to FINRA on the member’s U5 report or your own U4 and then appear on Broker Check. Unless FINRA voluntarily decides to remove the complaint (for reasons go to Rule 2080) the only way to get them off is to file an In Re Expungement action in Federal Court. For a free review of your case send a copy of the complaint and the arbitrator's ruling that recommends expunction. Call me first so I can expect your mail. Ralph Behr, 888 SE Third Ave., Suite 400, Fort Lauderdale, FL 33316 or call: 1-800-761-3446.

Removing Customer Complaints from Broker Check

Mon, 05 Dec 2011 09:54:27 -0500

Financial Advisors can have customer complaints removed from Broker Check. My office provides this service to Financial Advisors. The number of complaints removed dropped after 2004, (when the rules changed), but a Rule 2080 removal does get results: the process works and Broker Check removes the complaint. If you are a Financial Advisor and you want more information, or help, for a Rule 2080 Expungement action contact attorney Ralph Behr at 1-800-761-3446 or email me at ralph@ralphbehr.com or refer to my office website for more information. A 2080 Rule action is: OBTAINING AN ORDER OF EXPUNGEMENT OF CUSTOMER DISPUTE INFORMATION FROM THE CENTRAL REGISTRATION DEPOSITORY [CRD] SYSTEM.

WATCH YOUR MONEY

Thu, 24 Nov 2011 12:30:08 -0500

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.

TRIMMING THE HEDGES IS FOR THE YARD NOT YOUR INVESTMENTS

Tue, 22 Nov 2011 13:07:16 -0500

In today’s market, people in Boca Raton, Miami, Fort Lauderdale and other states alike, are very worried about hedge funds and the distortions they cause in the stock market. Some look like well-known pyramid schemes, some are players, some bring investment savvy and others are pure risk-takers. Why? Because when we hear a story about hedge funds it’s usually about some scam that was run by a hedge fund CEO that succeeded in swindling investors out of lots of money.

While hedge funds trade long some markets and short others, frequently, they can be marginalized and margin murdered when larger forces move. Think about sovereign funds, Greece, Oil pipelines and oil traders. No hedge fund is large enough to put market risk aside and get major returns. With the current securities and stock market ups and downs, bond fears and interest jumps, every investment and every trade matters. The Securities and Exchange Commission may feel the same way, as they voted unanimously in November 2011 to approve final guidelines for the supervising of hedge funds. With this decision and regulatory oversight and involvement will come many questions of hedge funds and investor funds. The costs of more oversight and compliance will work and prove their worth.

Banks in Miami - Dade, Broward and Palm Beach are increasing holding and transactions fees and some are leveraging their own funds in speculative risks through hedge funds. Before you jump and change investment groups, always investigate the stockbroker’s group or the firm environment. Consult a South Florida securities attorney and determine if the risk you are taking in your account is your only exposure. .

FINANCIAL ACCOUNTABILITY

Wed, 26 Oct 2011 13:20:00 -0500

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.

Timeshares re sellers may do time.

Mon, 24 Oct 2011 11:57:38 -0500

Just last week in the Sun Sentinel, Miami, I read that in a company named Mega Media, employees were being charged by the U.S. Attorney with criminal charges of wire fraud. The company was in practice of re-sales of timeshares. Some of the allegations are that the employee’s of this company were claiming they had buyers lined up to purchase timeshare units that were for sale and in fact, did not.

The sellers of timeshares were told the closing dates had changed multiple times; the tactics according to the U.S. Attorney was to delay processes so that the sellers could not claim refunds of the monies they paid for the sales services. These Federal charges are serious and if each person involved is convicted they may be facing up to five years of prison time and fines of up to $25,000.00 each.

The Federal Trade Commission has also filed suit against the company with the implications that the company was fraudulently operating in the procedure of timeshare sales. In this economy no one can afford to be defrauded, yet we have brokers who commit securities fraud and lose investors’ assets every day. Miami Beach, Fort Lauderdale and Palm Beach are prime locations for vacationers and many use the timeshares as a great investment, but you need to watch your investment and know who you are dealing with. Broker misconduct and mortgage backed securities are one of the many ways you can get scammed into thinking you own something and later find out you have lost it all.

Check-lists for evaluating your Stock Broker

Sat, 22 Oct 2011 16:05:05 -0500

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.

THE “MILKING EFFECT”

Fri, 21 Oct 2011 11:10:55 -0500

Many American’s are struggling to keep their homes; in Hollywood, Pembroke Pines and Fort Lauderdale, others have lost jobs and can’t find work. Are people going to be able to spend less if they have nothing to spend? Are the banks ready to lend to jobless people, as they increase fees for withdrawals and various banking transactions? I was taught at an early age that 1+1=2 but 0+0 equals nothing because there is no value in zero.

Now that the Mortgage Industry has somewhat stabilized, so we are led to believe, our financial industry should build-up, right? Are the spending dollars available? Or is it just a dream we wish to pursue in some distant future? As we look into the financial and securities industry we see fraud and mismanagement everywhere. The number of homes across the country that received initial default notices, (which is the first step in the foreclosure process), according to the foreclosure listing firm RealtyTrac, jumped 33 percent in August from July. This average includes cities such as; Hollywood, Margate, Pompano Beach and Coral Springs. Is there any way fix the mistake? Banks, mortgage companies or investment brokers made and to find out if they falsified documents that caused the holes in our economy.

So the “milking effect” has begun…we have less to spend, and yet we are milking from the working, the productive, and the wealthy. Our economic “leaders” expect to replace revenue by “milking”, for what others no longer contribute into our economy. For most people this makes no sense. There are people with no jobs, or struggling to live in homes of their own. People in general need to be employed and productive, in order to earn an income and contribute, not incur more debt and fees making the already bad economy, worst. How are we are going to grow our economy if we use every bit of “parked” wealth and “parked” money to mend it? Can we continue to exhaust our investments to this cycle of loss? Who protects the investments? Is there any hope for the Financial Investors and Securities? “No use crying over spilled milk.” But with these hard times, also come people who exploit investors and commit fraud using investment firms. We can only try to do the best with what we have and hope for growth of the economy in our time.

Will FINRA or the SEC help me if I've been the victim of broker fraud?

Thu, 20 Oct 2011 11:04:25 -0500

No.
The securities industry, through its lobbying efforts, has succeeded in creating a wall between broker misconduct and recovery by federal agency action: the SEC and FINRA will not and administratively cannot help you recover from a claim of fraud by your stockbroker. The result is that the federal agencies charged with regulating the securities industry does not and will not recover losses by investors in 99% of the claims. If you complain to the SEC, and the complaint has merit, it will open an investigation. The ultimate result of an SEC investigation may be an enforcement proceeding or fine imposed on the financial advisor or the brokerage house. The SEC will not recover losses for individuals, it will only impose fines, with a few exceptions that for your purposes means the agencies might as well not exist if you claim broker fraud, most claims of broker mis-conduct such as placing your money into investments that are not proper for your investment goals, excessive risk, and most of the abuses we find brokers committing on their clients.

The SEC receives around 50,000 complaints every year. The SEC takes action on lesson 100 complaints every year. FINRA receives about 5000 complaints a year. And like the SEC takes action on only a few hundred. These actions may result in broker discipline or the filing of charges against the brokerage house. It will not resolve with a recovery for the losses of an individual investor. Recovering losses is not designated as a governmental function in the United States. Recovery of losses due to stockbroker fraud is done through the arbitration process or in some special cases permitted lawsuits in federal court.

Security fraud lawyers in South Florida, Boca Raton and Fort Lauderdale, will appear before the securities regulating agencies to press for losses incurred by their clients. If you open a trading account in any stockbroker firm and he subsequently believe you have a claim for broker fraud or misconduct: your only recourse is arbitration. Securities fraud lawyers deal primarily in representing victims of financial advisors.

Ameriprise Sued by It’s Own Financial Planners

Wed, 19 Oct 2011 08:59:35 -0500

Ameriprise, the financial services giant, an organization which employs more certified financial planners than any other entity in United States, was sued by six people; including one current employee. The accusation in the suit suggests that Ameriprise has been overweighting its own expensive mutual funds, which have been performing below-market, into its own 401(k) plans. The financial services press has been billing this as a frustration for Ameriprise because its own mutual funds have been highlighted as poor performers which it is forcing on its own financial planners. One of the charts produced in the press, shows fees are 3 to 5 times higher than at other competing funds, such as Vanguard. If you feel that your stockbroker or financial planner has been infusing your investment portfolio with inappropriate investments contact a South Florida securities fraud attorney. Most security fraud lawyers in Fort Lauderdale, Boca Raton, West Palm Beach, and Miami, can, with a quick office visit, look at your monthly statements and give you a fair evaluation of which investments are appropriate for your risk tolerance. This type of review is especially important for those of us who are in our retirement years and rely on our investments for income to support our daily lives.

What duty does a Stockbroker owe to his/her Client?

Tue, 18 Oct 2011 11:24:34 -0500

All stockbrokers are regulated by FINRA, which licenses and disciplines both stockbrokers and the brokerage firms that they work for. These federal securities laws and rules concern themselves with the suitability of security transactions for each individual customer. Stockbrokers must have a reasonable basis for any recommendation for the purchase or sale of any securities. The rules do not create any presumption that a transaction is appropriate, but each individual transaction must be suitable for the investor and their risk tolerance. The rules concerning transactions with customers, which regulate stockbrokers in South Florida, Fort Lauderdale, Miami, and West Palm Beach, require both transparency and justification for any recommendation or transaction. Your stockbroker, if he or she is in a nation franchise, or recognized traditional Wall Street brokerage house, is supervised both by the stock broker office manager and the compliance department. Regulations concerning transactions advised or performed at the request of investors are always subject to review. If you feel that you have been placed in an inappropriate high risk investment, contact a South Florida securities lawyer. FINRA has offices in South Florida, Boca Raton, where they undertake and conduct arbitrations. If you feel you have been victimized by stockbroker. If you believe that you are in a high risk and inappropriate investment due to stockbroker advice. If you feel you've been victimized by stockbroker fraud call a South Florida securities law firm and get a free consultation about your remedies available through arbitration.

Penalty Bid Rule needs to be overhauled

Mon, 18 Jul 2011 16:58:07 -0500

It is illegal to fix the price or control the price of any security; that rule is one of the basics of a fair marketplace, and the function of government regulation, i.e. FINRA, is to make, or create, the perception that the market is fair to all bidders. With the vast amount of cash looking for a home the expected boom in underwriting and new issues is exploding, and market makers have sounded the call for FINRA to change the Penalty Bid Rule. Pitting market makers and issuers of new securities against savvy investors, this will be a bloody battle. Penalty bidding permits the underwriter to fix the bottom price on any new issue during initial distribution. Also known by its evil-twin name “pegging” it is permitted under SEC Rule 10b-7 but only for syndicate managers and underwriters of new issues. Fixing prices of securities is the antithesis of fair markets and the implausible arguments used by FINRA to support the Penalty Bid Rule are under attack. Keep tuned for more follow-up on this page. If your financial advisor has been pegging your account then you have the right to file a complaint. Contact a securities fraud lawyer in South Florida for more information about abuses and corrupt practices of financial advisors if you feel like you have been the victim of securities professional.