Posts tagged ‘securities regulation’
Ongoing Investigation into Sala-Multi Series Fund and Foresee Strategies Insurance Fund
The White Law Group continues to investigate potential FINRA arbitration claims against the broker-dealers that may have improperly sold Sala-Multi Series Fund and Foresee Strategies Insurance Funds.
The hedge funds, Foresee Strategies Insurance Fund, were issued by Sun Life Financial as variable annuity subaccounts to Sala-Multi Series Fund and than sold to investor by various broker-dealers such as SagePoint Financial Inc, Geneos Wealth Management Inc, Lincoln Financial Network, National Planning Corp, and FSC Securities Corp.
Foresee Strategies Insurance Fund suffered devastating losses and was shut down in 2010. According to Investment News, “FINRA is investigating half a dozen independent broker-dealers that sold variable annuities with subaccounts invested in hedge funds that resulted in $18 million in client losses during the credit crisis.”
In addition, Sun Life Financial, according to their own web site is in the processes of selling their U.S. annuity business to Delaware Life holdings. Sun Life Financial president, Dean A. Connor stated that “This transaction represents a transformational change for Sun Life. It significantly advances our strategy of reducing Sun Life’s risk profile and earnings volatility, focuses our U.S. operations on our areas of greatest strength and opportunity, and crystallizes future earnings and capital releases that will further support our growth and shareholder value creation. “
Upon information and belief many investors were unaware of risks or mislead by the broker-dealer that sold them the annuity investment. However, investors may be able to recovery their losses through FINRA arbitration against their broker-dealer or financial advisor.
Arbitration claims against broker- dealers often involve unsuitability, misrepresentation, and omission of facts. Broker-dealers and financial advisors have a fiduciary duty to make investment recommendations that are suitable for potential clients based on such factors as age, risk tolerance, and financial need.
Broker-dealers and financial advisors are legally obligated do disclose all the risks of the investment, and perform a reasonable investigation of the investment prior to making recommendations.
If you invested in the Sala-Multi Series Fund or Foresee Strategies Insurance Funds Financial would like to speak to a securities attorney about your litigation options, please call our 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.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.
Connecticut Investment Firm, Wadsworth Investment Co., Faces State Scrutiny
Wadsworth Investment Co. reportedly has been told by the Connecticut state Department of Banking that it has “…90 days to make changes in its operation or risk losing its broker-dealer registration.” The report from the local news outlet myrecordjournal.com, further indicates that a Feb.7th ruling ordered Wadsworth to replace its president, William F. Wadsworth Sr., and additionally revoked his registration as a broker-dealer agent and investor adviser agent. The White Law Group is currently investigating the impact the issues at Wadsworth may have had on investors. If investors have suffered losses they may be able to pursue recovery of their losses through the Financial Industry Regulatory Authority (FINRA) dispute resolution claims process.
The February 7th ruling reportedly stated “that Wadsworth Investment Co. Inc. failed to maintain books and records, particularly e-mail records…” and “fail[ed] to make required books and records, particularly corporate records, available to the Commissioner.” William F. Wadsworth Sr. was said to have violated anti-fraud securities provisions “by omitting material information…” to clients and “willfully engag[ing] in dishonest or unethical practices by using signature guarantees in a manner that was inconsistent with industry standards, including guaranteeing the signature of a deceased individual…”
William F. Wadsworth Sr. purportedly disagrees strongly with the actions of the state regulators and is said to have admitted to only minor administrative issues at the firm. The action of the Connecticut securities regulators seems to indicate that they believe there have been serious issues at Wadsworth Investment Co. The Department of banking fined Wadsworth Investment Co. $250,000 and Mr. Wadsworth Sr. individually $200,000.
If you suffered investment losses as a result of investing with Wadsworth Investment Co. and/or Mr. William F. Wadsworth Sr. and would like to speak to a securities attorney about your potential to recover investment losses through a claim with the Financial Industry Regulatory Authority (FINRA) please call our 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.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.
BankAtlantic Bancorp Charged with Misleading Investors in 2007
According to a recent release from the Securities and Exchange Commission (SEC), they have “charged the holding company for one of Florida’s largest banks and its top executive with misleading investors about growing problems in one of its significant loan portfolios early in the financial crisis.” The SEC has alleged that BankAtlantic Bancorp and CEO Alan Levan “made misleading statements in public filings and earnings calls in order to hide the deteriorating state of a large portion of the bank’s commercial residential real estate land acquisition and development portfolio in 2007.” Further allegations include fraudulent accounting when seeking to “minimize BankAtlantic’s losses on their books.” The alleged fraud and misleading statements made by BankAtlatic Bancorp may have resulted in unnecessary damage to some investors.
It appears that BankAtlantic may have been consciously hiding information from investors and when “BankAtlantic finally acknowledged the problems in the third quarter of 2007 by announcing a large unexpected loss. The investing public did not expect a loss of that magnitude, and BankAtlantic’s share price immediately dropped 37 percent.” The SEC is seeking “financial penalties and permanent injunctive relief against BankAtlantic and Levan to enjoin them from future violations of the federal securities laws.” This may not comfort retail investors who suffered investment losses due to alleged fraud of BankAtlantic and Mr. Levan. However, investors may be able to seek recovery on their investment through an individual securities arbitration claim.
If you suffered investment losses as a result of Bank Atlantic Bancorp’s alleged failure to disclose a deteriorating portfolio in 2007 and would like to speak to a securities attorney about your potential to recover your investment through a securities arbitration claim please call our Chicago office at 312-238-9650.
The White Law Group, LLC is a securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.
Wells Fargo Fined $2 Million by FINRA for Sale of Unsuitable Reverse Convertibles
The Financial Industry Regulatory Authority (FINRA) has announced that it has levied a $2 million fine on Wells Fargo Investments, LLC. The fine is related to the sale of reverse convertible securities to more than 20 customers by a former registered representative, Mr. Alfred Chi Chen. The fine also resulted from a failure “to provide sales charge discounts on Unit Investment Trust (UIT) transactions to eligible customers. “
FINRA indicated that “As part of the settlement, the firm is required to pay restitution to customers who did not receive UIT sales charge discounts and to provide restitution to certain customers found to have unsuitable reverse convertible transactions.” Wells Fargo Investments, LLC has “neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.”
Reverse convertibles, according to FINRA, “are interest-bearing notes in which repayment of principal is tied to the performance of an underlying asset, such as a stock or basket of stocks.” Reverse convertibles can be considered a risky investment because “an investor risks sustaining a loss if the value of the underlying asset falls below a certain level at maturity or during the term of the reverse convertible.”
FINRA found in this case that Wells Fargo Investments’ former registered representative Mr. Alfred Chi Chen “recommended hundreds of unsuitable reverse convertible investments” and many of the investors “were elderly and/or had limited investment experience and low risk tolerance.” FINRA reported that of Chen’s 172 accounts, a staggering 142 of them had reverse convertible concentrations of over 50%. In the opinion of the securities regulators “The reverse convertible transactions exposed these customers to risk inconsistent with their investment profiles, and resulted in overly concentrated reverse convertible positions in their accounts.
FINRA also determined that “Wells Fargo failed to provide certain eligible customers with breakpoint and rollover and exchange discounts in their sales of UITs…” FINRA believes that this was the result of “insufficient systems and procedures to monitor for unsuitable reverse convertible sales and to ensure that UIT customers received discounts for which they were entitled.”
If you are concerned about an investment you made with Alfred Chi Chen while he was employed at Wells Fargo Investments, LLC and would like to speak to a securities attorney about your potential to recover investment losses through FINRA arbitration please call our 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.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.
Investors Encouraged to Research Financial Advisers and Choose Carefully
The USA Today recently ran a story in which they gave some tips on diligently selecting a financial advisor and encouraged investors to conduct research and ask questions prior to selecting one.
Their article notes that in today’s investment environment where Ponzi Schemes and other frauds are plentiful, there are simple things that investors can do to protect themselves and get sound advice. As Financial Industry Regulatory Authority (FINRA) investor education executive Gerri Walsh was quoted as saying, “The vast majority of investment professionals are hard-working individuals who look out for the interests of their clients and customers.” USA Today offers a few tips that can assist the investing public in ensuring they have found a reputable broker who is likely to look out for their best interest.
Here are a few of the most pertinent points made in the article (full text of the article can be found here: http://www.usatoday.com/money/perfi/retirement/story/2011-12-05/how-to-find-the-best-financial-advisor-for-you/51660088/1):
1. Avoid mistakes that are often made by people in the market for an advisor including, “Failure to check out the background of a financial professional,” “Relying on professional designations,” and “Buying investments you don’t understand.”
2. Be wary of tactics which are sometimes used by some of the less reputable elements of the investment business including: “affinity fraud” – where fraudsters attempt to gain trust by way of relating to investors’ race, religion, or other group, “reciprocity” – a tactic where investors are offered something small, like a lunch, with the hope that the investors will feel indebted and invest in the particular investment deal which may or may not be suitable, and also “scarcity” – where investors are encouraged to act fast in order to avoid missing out.
3. The article also encourages people to research advisors, ask a lot of questions about their credentials/investment strategies, and make sure to know your own investment goals. One way to check the credentials of an adviser is by using the finra.org Broker Check.
If you are concerned that you have been the victim of investment fraud or believe that your financial professional’s actions have otherwise resulted in damages and would like to speak to a securities attorney about your potential to recover investment losses please contact our 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.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.