Articles Posted in Firm News

There’s a decided increase in the number of broker complaints that are being expunged from FINRA’s BrokerCheck records. In 2009 state regulators received 110 requests to have disclosure events (which include details of customer complaints, regulatory actions, settlements, bankruptcies, liens, criminal histories, changes of employment) removed from public view. In 2012 that number rose to…

A close analysis of recent SEC documents regarding the fiduciary standard indicates that the definition of that standard may be changing. While in theory a good idea, the proposed changes may have the effect of dramatically undermining investor protections. This is worth an investor’s attention. As it stands today, brokers (who are FINRA-licensed to sell…

(June 2) Rising costs of doing business, pressure on margins, and demographic changes are likely to benefit larger Registered Investment Advisor firms in the next few years, according to industry forecasts. The 19,000 RIA firms in the United States look to be increasingly dominated by perhaps 150 of the biggest firms, each of them with…

(December 29) The case of a Florida retiree cheated out of his life savings highlights the tragic depth of financial abuse of the elderly. Ninety-one-year-old Joe Forrest of Sarasota lost $246K to former broker Paul Arnold of Raymond James & Associates. Only the accidental intervention of a caring acquaintance led to an investigation and, ultimately,…

(December 28) Yesterday in its annual 10-K regulatory filing, Hewlett-Packard stated that the Justice Department has opened an investigation into the accounting practices that have led the company to an $8.8B write down associated with its acquisition of Autonomy Corp. and a significant drop in HP’s share price in the last few weeks. Autonomy, acquired…

(December 27) FINRA has fined five major U.S. banks $4.48M for their misconduct in underwriting municipal bonds. Between 2006 and 2010 the five banks (Citigroup, Goldman Sachs, JPMorgan, Merrill Lynch and Morgan Stanley) underwrote municipal and state bond offerings in California, made payments to the lobbying group California Public Service Association (Cal PSA) for their…

(December 26) The U.S. Court of Appeals for the Ninth Circuit has vacated a $203M ruling against Wells Fargo Bank related to overdraft fees. California consumers had sued the bank under the state’s Unfair Competition Laws, claiming that the bank’s practice of posting a day’s debit-card transactions in order from highest to lowest tended to…

(December 20) Hedge fund manager William Ackman today launched a detailed attack on the network marketing nutrition company Herbalife, characterizing it as a fraudulent pyramid scheme. During his presentation at the annual Sohn Conference, Ackman cited a 2002 FTC decision (“the organization is deemed a pyramid scheme if the participants obtain their monetary benefits primarily…

(December 19) In 2011 the proposed redefinition of a relatively obscure term in a relatively obscure piece of legislation by the Department of Labor’s Employee Benefits Security Administration (EBSA) caused such a “tremendous and passionate” outcry from the financial services industry that the Department withdrew the proposal in September 2011. The EBSA will re-introduce the…

(December 17) Two former Zeek Rewards affiliates are mounting the first plausible legal challenge to the receiver in the case, hoping to avoid the receiver’s Ponzi clawback action that would force them to pay back their profits. Former affiliates Trudy Gilmond and Kellie King have engaged Ira Sorkin, a notable former federal prosecutor in Manhattan…