Posts tagged ‘Boca Raton’
FINRA Know Your Customer Rule
Financial Advisors have a fiduciary duty to research investments and to make sure that every investment they recommend is suitable for the client. This obligation is typically called the “Know Your Customer” Rule. Generally, in order to determine whether an investment is suitable, a stockbroker must know the clients age, net worth, investment objectives, investment experience, and tolerance for risk.
FINRA recently announced that the SEC approved its proposal to adopt rules governing know-your-customer and suitability obligations for the consolidated FINRA rulebook. The new rules are based in part on and replace provisions in the NASD and NYSE rules. For more information on the proposal to adopt rules governing the “Know Your Customer” Rule, visit:
http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p122778.pdf
The consolidated FINRA Rules regarding suitability go into effect October 7, 2011.
If you have questions regarding whether your financial advisor breached its fiduciary duty in recommending an investment to you, the securities attorneys of The White Law Group may be able to help. For a free consultation, call the firm’s Chicago office at 312-238-9650.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.
FINRA Investigates Long Island brokerage firm David Lerner & Associates
According to the New York Post, in May 2010, FINRA accused Long Island brokerage firm David Lerner Associates and its head trader, William Mason, of charging customers “excessive” markups on normally safe municipal bonds and high-grade mortgage-backed securities.
According to the FINRA complaint, David Lerner & Associates between 2005 and 2007 charged brokerage customers, many of whom were individual investors, markups of up to 5.78 percent on more than 1,500 muni-bond transactions and up to 12.81 percent on more than 1,800 high-grade mortgage securities.
By jacking up the price it charged customers to buy those securities, David Lerner & Associates was able to collect a higher commission.
But because bond prices and yields move inversely of each other, the higher prices that David Lerner & Associates charged resulted in its customers being paid a lower yield by the bond issuers.
In one example outlined in the complaint, David Lerner & Associates is said to have bought in May 2006 250 muni bonds tied to New York City’s Municipal Water Finance Authority at a price of $97.625 each.
The day after buying them, David Lerner & Associates unloaded the bonds to three customers at a price of $101.875 — a premium of 4.35 percent and resulting in a yield of 4.268 percent.
Other broker-dealers were selling the same bonds for between $99.916 and $100 each, resulting in yields of 4.5 percent and higher, according to the complaint.
FINRA is seeking from the Syosset-based firm a fine, disgorgement of ill-gotten gains and full restitution to customers.
This isn’t David Lerner & Associates’ first time in FINRA’s crosshairs.
In 2005, the watchdog fined David Lerner & Associates $115,000 for misleading radio spots, including some advertising “returns of 10 percent and more,” and other misleading communications with investors.
In 2006, David Lerner & Associates was fined $400,000 for problems relating to sales of complex insurance vehicles known as variable annuities (variable annuities are traditionally one of the highest commission products sold by a financial advisor).
If you have questions about investments you made with David Lerner & Associates, the securities attorneys of The White Law Group may be able to help. For a free consultation, call the firm’s Chicago office at 312-238-9650.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.
Municipal Arbitrage Fund Securities Investigation
The White Law Group is investigating potential claims on behalf of investors who invested in the following municipal arbitrage funds:
1861 Capital Management
Citigroup’s Mat and ASTA Funds
Aravali Fund
Blue River Asset Management
GEM Capital
Havell Capital Enhanced Municipal Income Fund
Rockwater Hedge Fund, LLC
Stone and Youngberg Municipal Advantage Fund
TW Tax Advantaged Fund
The municipal bond arbitrage strategy employed by these funds were risky and exposed investors to significant losses.
The 1861 Capital Funds, for example, imploded in February 2008, causing catastrophic losses to investors.
It appears that these municipal bond arbitrage funds were marketed to clients as a fixed income product offering slightly higher returns than a municipal bond. Investors reasonably believed that these funds were conservative.
Various brokerage firms, including UBS, sold these products to many of their high net worth client and retired investors.
If you have questions about investments you made in these municipal arbitrage funds, The White Law Group may be able to help. For a free consultation, please call the firm’s Chicago office at 312-238-9650.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.
Former Smith Barney Financial Advisor Sanjeev Jayant Kumar Shah Pleads Guilty To Securities Fraud
A former Smith Barney financial adviser in New York has plead guilty to attempting to defraud a client of more than $3 million.
According to Reuters, Federal prosecutors have said that Sanjeev Jayant Kumar Shah admitted to sending false documents in March 2009 that authorized Smith Barney to transfer $3.25 million from a client’s account to an offshore bank.
Shah allegedly told the client that the transfer was made to purchase bonds. He then said a computer error at Smith Barney prevented the bonds from appearing on the client’s online account statement, said the office of U.S. Attorney Preet Bharara in New York.
Shah, 35, spent three and a half years at Smith Barney, a unit of Citigroup Inc, according to filings with the Financial Industry Regulatory Authority. He has not been registered with FINRA since April 2009.
Shah pleaded guilty to one count of securities fraud, carrying a maximum penalty of 20 years in prison plus a fine, and three counts of wire fraud, each carrying a maximum penalty of 30 years in prison plus a fine.
Shah entered his plea before U.S. Magistrate Judge Theodore H. Katz in Manhattan federal court.
In November 2010, FINRA announced that Shah was named in a FINRA complaint alleging that he made unauthorized foreign currency trades in a client’s account, resulting in margin calls being generated for the account and, without funds to meet the calls, certain of the customer’s accounts were frozen and one customer was unable to wire funds out of the account. The complaint also alleges that Shah made unauthorized transfers from another client satisfy, in part, the fund request the first client made and to satisfy the margin calls for the account. Additionally, FINRA also alleges that Shah, in order to carry out the unauthorized wire transfers, forged a signature and falsified Letters of Authorization (LOA) directing the transfer of funds.
If you have questions about investments you made with Shah or Smith Barney, The White Law Group may be able to help. For a free consultation, call the firm’s Chicago office at 312-238-9650.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.
Local Florida Counsel For FINRA Arbitrations
The White Law Group often serves as local counsel throughout Florida for out-of-state attorneys in FINRA securities arbitration matters. Florida Bar Rules require that an attorney be licensed in the state of Florida to participate in a Florida arbitration or that the attorney partner with a local attorney.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions.
If you want to retain a firm to assist you in a FINRA arbitration that knows the FINRA rules and local arbitrators , The White Law Group is the choice for you.
To discuss your local counsel matter, please contact the firm at 312-238-9650.