Corporate & Securities Law

SEC's $550 Million Settlement With Goldman Sachs Is A Slap On The Wrist

Posted on July 21, 2010
The Securities and Exchange Commission announced that Goldman, Sachs & Co. will pay $550 million and reform its business practices to settle SEC charges that Goldman misled investors in a subprime mortgage product. In settlement papers submitted to the court,...

SNSFE Ready To Assist Broker-Dealers Negotiate Up-Front Money Deals With Their Clearing Firms

Posted on July 19, 2010
According to a recent article in InvestmentNews, capital-strapped broker-dealers are demanding loans from clearing firms as a sign-on condition. Clearing firms, facing declining revenue and increased competition, have something new to worry about: more and more broker-dealers are seeking loans...

SEC Proposes New Measures To Help Investors Understand The Risks Of Target Date Funds

Posted on July 15, 2010
The Securities and Exchange Commission has voted unanimously to propose rule amendments to help clarify the meaning of a date in a target date fund's name and enhance the information provided to investors in these funds as they invest for...

A Duty Not Satisfied: When Risk Tolerance Neither Is Asked Nor Answered

Posted on July 13, 2010
We recently arbitrated a claim to recover investment losses for a retiree against an investment advisory firm that describes itself as different and better. Though certainly different, we found that the firm fell (and continues to fall) far short even...

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SNSFE Continues Its Investigation Of Principal-Protected Notes Following Disclosure Of SEC Inquiries

Posted on July 09, 2010
SNSFE is continuing its investigation of principal-protected notes following a report that the U.S. Securities and Exchange Commission is asking financial firms for information on how they market those principal-protected notes. The SEC wants to know if investors in principal-protected...

Inability To Pay Arbitration Award No Longer A Defense To FINRA Membership Suspension Proceedings

Posted on July 02, 2010
Effective July 2nd, 2010, firms and associated persons will be unable to rely on an inability-to-pay defense in expedited actions for failure to comply with arbitration awards involving customers if the FINRA Rule 9554 notice initiating the action is sent...

New, Contentious Report Has Good Advice For Advisers In Transition And Planning Their Succession

Posted on June 18, 2010
A new report by Mark Hurley entitled, "Creating, Measuring and Unlocking Enterprise Value in a Wealth Manager," has raised eyebrows because it concludes that all but 7% of the nation's 20,000 wealth management firms won't extract significant value from their...

Lack Of Disclosure Custom And Practice Is No Defense For Securities America Regarding Its Sale Of Medical Capital Notes, Massachusetts Regulator Argues

Posted on June 18, 2010
In a highly unusual legal maneuver in its battle with Massachusetts securities regulators, Securities America is requesting that other broker-dealers that sold the private-placement investments of Medical Capital Holdings be issued subpoenas. The move is designed, according to InvestmentNews, to...

Jury Finds Wells Fargo Breached Its Fiduciary Duty To Not-For-Profit Agencies And Awards Nearly $30 Million

Posted on June 17, 2010
A jury has found Wells Fargo Breached its fiduciary duties in a securities lending case. On June 4th, The Minnesota Star Tribune reported a Minnesota state court jury has awarded four non-for-profit agencies nearly $30 million in a lawsuit alleging...

FINRA Outlines Regulatory Priorities To Protect Investors

Posted on June 10, 2010
Recently, Richard Ketchum, The Chairman and CEO of FINRA (the Financial Industry Regulatory Authority), discussed how FINRA seeks to protect investors from fraud and other wrongdoing. Let's discuss two of the principal areas that he covered: the enhancement of FINRA's...

FINRA Outlines Regulatory Priorities To Protect Investors

Posted on June 10, 2010
Recently, Richard Ketchum, The Chairman and CEO of FINRA (the Financial Industry Regulatory Authority), discussed how FINRA seeks to protect investors from fraud and other wrongdoing. Let's discuss two of the principal areas that he covered: the enhancement of FINRA's...

Securities Regulator Reminds Financial Services Firms Of Their Obligations With Respect To Private Placement Recommendations

Posted on June 07, 2010
Citing "significant problems in several recent examinations and investigatgions", FINRA (the Financial Industry Regulatory Authority) has issued Regulatory Notice 10-22 to warn firms of their obligations in what has become a $609 billion market for private placement securities...

Securities Regulator Reminds Financial Services Firms Of Their Obligations With Respect To Private Placement Recommendations

Posted on June 07, 2010
Citing "significant problems in several recent examinations and investigatgions", FINRA (the Financial Industry Regulatory Authority) has issued Regulatory Notice 10-22 to warn firms of their obligations in what has become a $609 billion market for private placement securities...

SNSFE Investigates Unlisted REITs In View Of Unsuitability And Misrepresentation Concerns

Posted on June 03, 2010
SNSFE attorneys continue to investigate nontraded REITs. Regulators are examining brokers who sold unlisted REITs which have raised $59 billion since 2000. Attorneys are seeing a large concentration of elderly clients' portfolios jammed into nontraded REITs...

CDO Probe Widens To Include Several More Firms, Including Morgan Stanley, J.P. Morgan Chase, Citigroup, Deutsche Bank And UBS

Posted on May 27, 2010
According to the Wall Street Journal, federal prosecutors, working with securities regulators, are conducting a preliminary criminal probe into whether several major Wall Street banks misled investors about their roles in mortgage-bond deals, according to a person familiar with the...

SNSFE Investigates Oppenheimer Core Bond Fund Due To Impermissible Leverage And Exposure To Arbitrage Tactics

Posted on May 24, 2010
SNSFE attorneys have launched an investigation into Oppenheimer Core Bond fund. That fund lost 40% of its value during the period October 2008 through September 2009, despite the fact that the Index was down only about 5%. Oppenheimer used impermissible...

Court Ruling Strikes Down Exercise Of Self-Governance By Schwab YieldPlus Mutual Fund

Posted on May 20, 2010
Recently, a California federal district court judge granted a summary judgment motion filed by plaintiffs in class action litigation relating to the Schwab YieldPlus mutual fund. The decision is notable because it focuses on mutual fund governance - not the...

Court Ruling Strikes Down Exercise Of Self-Governance By Schwab YieldPlus Mutual Fund

Posted on May 20, 2010
Recently, a California federal district court judge granted a summary judgment motion filed by plaintiffs in class action litigation relating to the Schwab YieldPlus mutual fund. The decision is notable because it focuses on mutual fund governance - not the...

CDO Probe Widens To Include Several More Firms, Including Morgan Stanley, J.P. Morgan Chase, Citigroup, Deutsche Bank And UBS

Posted on May 18, 2010
According to the Wall Street Journal, federal prosecutors, working with securities regulators, are conducting a preliminary criminal probe into whether several major Wall Street banks misled investors about their roles in mortgage-bond deals, according to a person familiar with the...

Growing Number Of Advisers Breakaway To Join Existing Advisory Firm, Facilitating Transition And Succession Planning

Posted on May 17, 2010
More brokers are joining established RIAs according to an article in a recent InvestmentNews publication. A growing number of breakaway brokers are joining existing registered investment advisory firms, rather than setting up new ones. This information comes from Charles Schwab...

Garden Leave and Resignation Notice Provisions Can Wreck Havoc On Transitions To A New Firm

Posted on May 14, 2010
A lawsuit filed by Deutsche Bank Alex. Brown against a team of top-producing brokers who left the firm for Barclays Wealth Management has been settled. In an unusual twist in the case, the team was ordered by a New York...

CDO Investigations Broaden To 40 And Include Numerous Firms

Posted on May 06, 2010
Stories about CDOs, or collateralized debt obligations, are mounting. According to the New York Times, the SEC has a team of about 40 investigators focusing on CDO market practices, and regulators are examining a broad array of subprime mortgage-related issues...

CDO Investigations Broaden To 40 And Include Numerous Firms

Posted on May 06, 2010
Stories about CDOs, or collateralized debt obligations, are mounting. According to the New York Times, the SEC has a team of about 40 investigators focusing on CDO market practices, and regulators are examining a broad array of subprime mortgage-related issues...

SNSFE Investigates Private Placement Investments As FINRA Issues Regulatory Notice Warning Firms Of Their Duties To Investors

Posted on April 27, 2010
An increase in the number of investor complaints regarding private placements has led FINRA to publish guidance for firms about their obligations and best practices when selling those private placements. In Regulatory Notice 10-22 released on April 20, 2010, FINRA...

SNSFE Investigates Goldman Sachs And Paulson & Co. Following SEC's Allegations Of Fraud In Connection With Goldman's Structuring And Marketing Its Subprime Mortgage CDO Product

Posted on April 21, 2010
The SEC has charged Goldman Sachs and one of its vice presidents for defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter. The SEC...

SNSFE Investigates Goldman Sachs And Paulson & Co. Following SEC's Allegations Of Fraud In Connection With Goldman's Structuring And Marketing Its Subprime Mortgage CDO Product

Posted on April 21, 2010
The SEC has charged Goldman Sachs and one of its vice presidents for defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter. The SEC...

Securities Regulator Provides 10 Tips To Improve Financial Security

Posted on April 14, 2010
FINRA's Investor Education Foundation has released a national survey underscoring that many individuals are ill-prepared for their future. The national survey concludes that "far too many people tend to engage in financial behaviors that generate excessive expenses and fees", that...

Securities Regulator Provides 10 Tips To Improve Financial Security

Posted on April 14, 2010
FINRA's Investor Education Foundation has released a national survey underscoring that many individuals are ill-prepared for their future. The national survey concludes that "far too many people tend to engage in financial behaviors that generate excessive expenses and fees", that...

SEC Accuses Morgan Keegan And Others In Fraud Scheme Related To Overstating The Value Of Securities Backed By Subprime Mortgages

Posted on April 07, 2010
The SEC has charged Morgan Keegan and two employees with fraud related to subprime mortgages. The SEC has announced administrative proceedings against Memphis, Tennessee-based firms Morgan Keegan & Company and Morgan Asset Management as well as two employees accused of...

SEC Accuses Morgan Keegan And Others In Fraud Scheme Related To Overstating The Value Of Securities Backed By Subprime Mortgages

Posted on April 07, 2010
The SEC has charged Morgan Keegan and two employees with fraud related to subprime mortgages. The SEC has announced administrative proceedings against Memphis, Tennessee-based firms Morgan Keegan & Company and Morgan Asset Management as well as two employees accused of...

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