Criminal Law

Citi to Sell Smith Barney?

Posted on September 16, 2009
The Street is reporting that Citi CEO Vikram Pandit said the company will eventually sell its remaining stake in the Smith Barney joint venture entered into this summer with Morgan Stanley. More>>>

NASAA Pushes to Abolish Mandatory Arbitration

Posted on September 16, 2009
I really am not picking on them, but one more part of today's NASAA story. The organization of state securities regulators have also raised the "mandatory arbitration is not fair" refrain again. The NASAA incoming president, Denise Voight Crawford is pushing to end mandatory arbitration in the securities industry...

NASAA Power Grab With a Punch

Posted on September 16, 2009
As referenced earlier today the NASAA is pushing hard to regain its power and authority over the financial industry, and isn't being shy about it. We wrote eabout their push to increase the ceiling for state registered investment advisers from $25 million to $100 million, which will put financial regulation back at least a decade...

SEC Announces Distribution of Gabelli Fund Disgorgement

Posted on September 14, 2009
The Distribution Plan provides for distribution of the disgorgement, prejudgmentinterest, and penalties totaling $16 million paid by Gabelli Funds LLC plus anyaccumulated interest, less any federal, state or local taxes on the interest.The Distribution Plan provides that the calculation of amounts to be distributedto investors will be based on records of Gabelli Funds LLC and records obtainedfrom

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Stifel to sell 1.2 million shares in offering

Posted on September 09, 2009
Stifel Financial Corp. said Wednesday it plans to launch a public offering of 1.2 million shares of common stock. According to a regulatory filing, the company plans to use the proceeds from the offering for general corporate purposes. The company will have 29...

NYAG Seeks to Question BofA Lawyers on Merger

Posted on September 09, 2009
In a move that has the potential to impact the attorney-client privilege, New York Attorney General Andrew Cuomo asked Bank of America Corp. to allow his office to question the institution's lawyers in its ongoing probe into last year's merger with Merrill Lynch...

Fuld on Lehman's Anniversary

Posted on September 09, 2009
The demise of Lehman Brothers is coming up on an anniversary, and Reuters spoke to the man who led Lehman at the time - Richard Fuld. Most will recall that Fuld was blamed for the downfall of Lehman, and was then humiliated before a Congressional panel last October...

SEC Charges Biotech Company With Fraudulently Hyping Stem Cell Breakthrough

Posted on September 09, 2009
The SEC has filed charges CellCyte Genetics Corporation its former CEO, and its former Chief Scientific Officer for falsely telling investors that the company's cutting-edge stem cell technology had been proven successful and was headed for human trials...

SEC Files Another Ponzi Scheme Complaint

Posted on September 08, 2009
Ponzi schemes have become a popular topic at the SEC these days. Hardly a week goes by without the Commission announcing charges against someone for running a Ponzi scheme.While it is well known that bull markets will disguise losses, bad investments and even frauds, it is interesting to note that most of these schemes have been operating for years, at least according to the SEC's allegations...

What Next? Performance Fees for SEC Staffers?

Posted on September 08, 2009
Sen. Charles Schumer intends to propose legislation that would allow the SEC to keep any fines it levies against wrongdoers and to pocket the $1.5 billion in transaction and other fees it is expected to collect for the fiscal year that begins Oct 1, 2009...

SEC Asset Freeze in $32 Million Scheme

Posted on September 08, 2009
The SEC announced fraud charges and obtained an order freezing assets of the defendants of an alleged investment scheme that the Commission alleges defrauded investors of $32 million dollars. According to the press release, the SEC alleges that Sidney S...

Report Will Criticize SEC Over Madoff Failures

Posted on August 31, 2009
The Inspector General of the Securities and Exchange Commission is expected to deliver a stinging report today on the agency?s failure to prevent or detect Bernard Madoff?s $65 billion Ponzi scheme. More>>>

USDJ Rakoff Rejects SEC-BofA Settlement.

Posted on August 26, 2009
Judge Rakoff wants the explanation behind why a Bank of America proxy statement last November misled investors about bonuses for employees at Merrill Lynch, which was about to be acquired by the bank. On Tuesday, he stated another desire: to get the SEC to better explain why had agreed to a settlement without pressing the bank?s executives harder...

Lehman Principal Protected Note Arbitrations

Posted on August 26, 2009
Spurred by an enforcement proceeding by the State of New Hampshire and a class action complaint filed against Lehman Brothers executives, retail investors are retaining attorneys to attempt to recover their investment losses in Lehman Brothers. This article from SECLaw...

Obama to Nominate Bernanke For Second Term

Posted on August 25, 2009
President Obama on Tuesday will nominate Ben S. Bernanke to a second term as chairman of the Federal Reserve, administration officials said. More>>>

SEC and BofA Try to Convince Judge to Approve Settlement

Posted on August 24, 2009
Bank of America Corp (BAC.N) and the top U.S. securities regulator sought to persuade a judge to approve their $33 million settlement of a civil lawsuit over the lack of disclosure of billions of dollars of bonuses at Merrill Lynch & Co. The SEC says that BofA misled shareholders by not telling them that it was going to pay Merrill employeees $3...

Madoff Losses May Be Covered Under Homeowner?s Policies

Posted on August 20, 2009
Madoff investors who believe they are without any remedy to recover their losses should look to their homeowner?s insurance to determine if they are covered by the Madoff fraud. Some homeowner?s policies contain a provision which covers the homeowner from loss of money, securities or properties that results from fraud, typically defined as an intentional act by someone other than the homeowner

AIG New CEO's $7 Million Salary

Posted on August 19, 2009
American International Group, the insurer that received billions of dollars in a U.S. bailout, said on Monday that it will pay newly-appointed Chief Executive Robert Benmosche an annual salary of $7 million.AIG says that the Obama Administration's Pay Czar approved the salary...

NY Sues Schwab Over ARS Sales

Posted on August 17, 2009
New York Attorney General Andrew Cuomo filed a lawsuit today against The Charles Schwab Corp., claiming the brokerage firm misled customers about the safety of auction rate securities ? and the firm is digging in for a fight.?The [attorney general?s] lawsuit casts blame for a bad situation in the wrong direction...

FINRA Admits Getting Tipped Regarding Stanford

Posted on August 17, 2009
FINRA acknowledged today that  it received a tip from an employee in 2003 that the company was running a Ponzi scheme?but did not follow up. The reason for the lack of follow up is, according to testimony that Dan Sibears of FINRA will present today, is supposedly because FINRA policy is to only follow up on complaints from customers, not employees...

SEC Proposes Alternative Uptick Rule - Extends Comment Period

Posted on August 17, 2009
The Securities and Exchange Commission today announced that it is seeking public comment on an alternative approach to short selling price test restrictions that may be more effective and easier to implement than previously proposed price test restrictions currently under consideration...

Bank Of American Drops Arbitration Agreements

Posted on August 14, 2009
The dispute over pre-dispute arbitration agreements between consumers and corporations continues, but the credit card issuers took a significant body blow last month when revelations were made about the National Arbitration Forum's involvement in the process...

Krawcheck Buys $1 Million of BofA Stock

Posted on August 14, 2009
A new executive officer buying stock in her company is not terribly unusual. It is often a sign of good faith, and an expression of confidence in her abilities to lead a team forward. What is somewhat unusual is when she buys a million dollars of the stock, which is exactly what Sallie Krawcheck, the new head of Bank of America's wealth management business did this week...

SEC Says It Will Not Re-File Against Mark Cuban

Posted on August 13, 2009
The SEC hold a federal judge yesterday that it will not be re-filing its complaint for insider trading against Mark Cuban. The complaint was dismissed earlier, and the SEC had 30 days to refile. While this is great news for Mr. Cuban, the party doesn't start until another 30 days passes and we find out if the SEC decides to appeal the dismissal...

Brokers Leaving Wirehouses, Going Independent

Posted on August 12, 2009
According to this article, in July, only 28% of the 990 wirehouse representatives who left their firms relocated to other wirehouses. The other 72% relocated to independent broker-dealers, regional and institutional firms has been on the rise. More>>>

Is Merrill Schizophrenic?

Posted on August 12, 2009
Less than a year ago Merrill Lynch was chasing its brokers out the door with a transition bonus that was so low it was insulting for anyone producing less than a million dollars a year. Readers will recall that many Merrill Lynch brokers were faced with the choice of remaining at Merrill and taking something less than one times trailing 12 to stay, or leaving Merrill and taking something more than two times trailing 12 to leave...

Rakoff Wants More Information on SEC-BofA Settlement

Posted on August 11, 2009
Southern District of New York Judge Jed S. Rakoff took strong exception Monday to a proposed settlement in which the Bank of America would pay a $33 million fine for not disclosing that Merrill Lynch was authorized to pay more than $5 billion in discretionary bonuses before the two entities merged in 2008...

The Final Days of Merrill Lynch

Posted on August 11, 2009
The Atlantic explores what happened behind the scenes in the final days of Merrill Lynch, when the Wal-Mart of banking took over the former Wall Street powerhouse. A great read.More>>>

FINRA Fines Credit Suisse For Settlement Violations

Posted on August 10, 2009
What happens when a major brokerage firm violates its settlement agreement with FINRA? Well, it pays another fine. No one is barred or suspended, the firm pays some more money to FINRA, and everyone is happy.Readers will recall the historic settlement reached in April 2003 with 10 major investment firms and every securities regulator over the research issue...

Madoff CFO To Plead Guilty To Criminal Charges

Posted on August 09, 2009
Frank DiPascali, self-proclaimed chief financial officer at Bernard Madoff?s investment advisory business, will be charged by the U.S. in connection with the multibillion-dollar Ponzi scheme. The announcement came Friday afternoon from the U.S. attorney?s office in Manhattan...

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