Articles Posted in Industry Headlines

(December 4) The U.S. Attorney in Trenton and the Newark, New Jersey office of the FBI announced the criminal conviction of the leader of a multifaceted online stock manipulation scheme. Christopher Rad, 44, of Cedar Park Texas, was found guilty on six counts. He’ll be sentenced next year. Rad and others paid a network of…

(December 3) The Securities and Exchange Commission will be asked to approve an eight-month delay for the implementation of its massive Consolidate Audit Trail system. FINRA, along with the operators of the markets to be monitored by CAT (13 equity exchanges, 10 options markets, and more than 200 broker-dealers), will all ask to move the…

(December 3) Judith A. Wagner, the trustee who filed 161 controversial clawback complaints in the ongoing Vaughan Realtors Ponzi / bankruptcy case in Albuquerque, is fighting a legal tactic that would remove her. In February 2010 it was found that real estate executive Doug Vaughan had defrauded 600 victims out of $75M. He’s been sentenced…

(November 29) FINRA has formally proposed that broker-dealers and their employers reveal the terms of their compensation, which normally include bonuses and incentives. Industry reaction has, predictably, been loud and indignant. Regulators point out that Registered Investment Advisors are already under similar restrictions; that compensation and bonus structures for brokers can potentially lead to conflicts…

FOR IMMEDIATE RELEASE A federal law signed by President Obama earlier this year is almost certain to lead to new kinds of investment fraud. Banks Law Office issues this Investment Alert to urge individual and institutional investors to be aware of these changes, and to safeguard themselves against the risks they bring. The principle behind…

(November 26) The U.S. Supreme Court today issued an opinion in Nitro-Lift Technologies, L.L.C. v. Howard, firmly upholding the idea that if there’s a challenge to the validity of a contract which compels arbitration, an arbitrator must decide the validity of that contract (except in the special case where the arbitration clause itself is challenged).…

(November 14) A U.S. District Court Judge in Austin, Texas has ruled that the officers of a corporation may have their bonuses, stock options and stock profits “clawed back” (ordered repaid) when their corporation violated securities laws — even when those officers were not directly involved in the violation. The ruling is consistent with previous…

(November 23) What is apparently the largest insider-trading case in history has been filed by the Manhattan office of U.S. Attorney Preet Bahrara against a former portfolio manager for Steven A. Cohen’s well-known SAC Capital Advisors LP. The criminal complaint charges Mathew Martoma of trading on inside information of disappointing Alzheimer’s drug trials, and coming…

(October 23) The president of an insurance and re-insurance company based in Costa Rica has been found guilty of criminal mail fraud and money laundering charges in connection with an international fraud scheme worth half a billion dollars. Minor Vargas Calvo of Provident Capital Indemnity sold guarantee bonds to other companies that sold “life settlement”…

(October 23) The annual enforcement survey of the North American Securities Administrators Association (NASAA) released today shows an increase in state-level securities law enforcement. State securities regulators investigated roughly 6000 cases. About 10% were related to financial abuse of seniors. Unregistered sellers of unregistered securities amounted to the largest single category of investment fraud. NASAA…