Criminal Law

Changes at the SEC. Benefit to Advisers?

Posted on August 06, 2009
When President Obama appointed FINRA chief Mary Schapiro as the new Chairman of the Securities and Exchange Commission, the nation was promised an overhaul of the agency and of securities regulation in general. Given the turmoil created by the financial meltdown and the Bernard Madoff mess, we are seeing those changes happen very quickly...

Citi's Krawcheck to Head BofA's Wealth Management Group.

Posted on August 06, 2009
Former top Citigroup executive Sallie Krawcheck is joining Bank of America Corp. as head of its global wealth and investment management group, according to a statement from the Charlotte, N.C.-based company. She replaces Brian Moynihan, who was named to a new position as the head of consumer banking...

Financial Advisers Change Their Business Approach

Posted on August 06, 2009
There are some interesting, but not surprising, survey results at InvesmentNews.com. A recent industry survey of financial advisers reflects a clear change in the way they do business.InvestmentNews.com's summary of the survey is at its website, in an article titled "Downturn has changed the way most advisers do business, survey indicates"...

An attorney was was suspended for

Posted on August 06, 2009
An attorney was was suspended for 18 months, stayed, placed on two years of probation with a 45-day actual suspension and was ordered to take the MPRE within one year after it was found that not only did he fail to disclose that he was an attorney during jury selection, once he was selected for the jury he posted comments about the trial on his blog during the trial, including identification of the judge, and the criminal defendant (by his first name only)...

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UBS Retail Product's Executive Takes Leave

Posted on August 05, 2009
Michael Weisberg, the head of products and services for UBS AG's U.S. and Canadian wealth management businesses, has taken an indefinite leave of absence, according to an article in todays electronic version of Investment News.According to the site, Weisberg's departure was announced internally this week, as rumors swirled that the firm's U...

Morgan Keegan Appeals Arbitration Decisions

Posted on August 05, 2009
Morgan Keegan, a regional brokerage owned by Birmingham-based Regions Financial Corp. (RF), has faced a flood of claims by investors who were hit by sizable losses in 2007 and 2008 in seven funds that made bets in debt and other mortgage-related holdings...

Bank of America Fined $33 Million In Fines For Merrill Disclosure

Posted on August 04, 2009
Bank of America agreed to pay $33 million on Monday to settle federal charges that it hid from investors plans to pay billions of dollars in bonuses to employees of Merrill Lynch.The SEC accused the firm of misleading shareholders when the bank asked them to approve the deal, which was ultimately concluded under intense federal pressure as Merrill Lynch teetered on the verge of collapse...

Investor's Guide to Securities Industry Disputes

Posted on August 03, 2009
The Pace Law School Investor Rights Clinic, has just published the Investor?s Guide to Securities Industry Disputes: How to Prevent and Resolve Disputes with Your Broker.  The Guide, authored by Professor Jill Gross, the Director of the school's Investor Rights Clinic, and Clinic Staff Attorney Alice Oshins, is designed to help individual investors with modest investment accounts...

Rise in Broker Employment Disputes Noted

Posted on August 03, 2009
As FINRA announces the significant increase in arbitration filings this year over last, many have assumed that the increase is caused by customers filing complaints against their brokers. That may not be the case.Our law firm is seeing a marked increase in complaints by brokers over the termination of their employment at some of the major investment banks...

New Plan to Register Investment Advisers

Posted on August 03, 2009
The Obama Administration is proposing legislation that will remove the exemptions from registration enjoyed by managers of private investment partnerships and hedge funds. The legislation will require the registration of virtually all investment advisors who operate from the United States, or who provide services to United States citizens, and who manage over $25 million in assets...

Court Dismisses SEC vs Mark Cuban Suit

Posted on July 20, 2009
On Friday, the federal district court judge in Texas granted Mark Cuban's motion to dismiss the insider trading charges against him. I have been blogging about the case since it's inception (the posts and analysis are available here).I am still digesting the opinion, which actually rejects a number of Mr...

Marc Dreier Sentenced To 20 Years in Prison

Posted on July 14, 2009
In case you forgot about him,Marc Dreier has been sentenced to 20 years fordefrauding clients and investors of over $400 million. Law Blog - WSJ

The SEC's "Feel Good" Committee

Posted on July 09, 2009
The SEC's new "investor Advisory Committee" is getting ready to become a functioning entity. The committee was created to advise the SEC on matters of concern to investors, and to provide the Commission with investor perspective on regulatory issues. My view on the Committee is in this month's On Wall Street Magazine, in an article titled "The SEC's 'Feel Good' Committee"...

Email Storage and the Attorney Client Privilege

Posted on June 30, 2009
Work place computers, privacy and the attorney client privilege are starting to create a legal stir, which can have an impact on the brokerage community.FINRA rules and SEC regulations require brokerage firms to store and preserve all incoming and outgoing emails...

Finally, a Rational Analysis of "Mandatory" Arbitration

Posted on June 30, 2009
While his brethren at the claimant's bar shout for the end of mandatory arbitration in securities disputes, Seth Lipner, a well known and respected customer attorney,former PIABA President, and law professor, has entered the "mandatory" arbitration fray, and hit the nail on the head in his column at Forbes...

Congressional Stock Trading Oddities -Time for Blind Trusts?

Posted on June 29, 2009
The controversy over Senator Durbin's stock transactions has put the spotlight back on stock market transactions by our elected officials. While Senator Durbin appears to have bought and sold stocks after the public announcement of the information he allegedly received, other odd trades are beginning to surface...

Madoff Sentencing Today

Posted on June 29, 2009
Facing 150 years in prison, Madoff will be sentenced today by US District Judge Denny Chin. The sentencing comes on the heels of an announcement on Friday that all of Madoff's property had been seized as part of an effort to obtain compensation for his victims...

Bernard Madoff is sentenced to 150 years in prison

Posted on June 29, 2009
Bernard Madoff was sentenced to 150 years in prison Monday. Judge Chin issued the maximum sentence that was permissible under the sentencing rules for the fraud.

Accountant Pleads Guilty in UBS Tax Fraud Case

Posted on June 26, 2009
The UBS tax fraud case is expanding. An accountant who hid money with UBS pleaded guilty to filing a false tax return. According to press reports, prosecutors based their charges on UBS records that they obtained as part of a defferred compensation agreement...

Stock Loan Fraud Bites Firms

Posted on June 19, 2009
The investigation into stock loan practices and the trials that arose from that investigation did not gain much press, but the impact on the business practices surrounding stock loan programs are being felt. On Wednesday, FINRA announced fines, and suspensions against Raymond James and RBC for their alleged participation in the process...

FINRA's Ketchum Acknowledges Lack of Confidence, Calls for More Regulation

Posted on June 19, 2009
He references the erosion of investor confidence after the market collapse and the arrest of Madoff, causing some to wonder, "given his status as a respected veteran of the securities industry, many investors were left to wonder if he was truly an outlier, or emblematic of how the industry operates...

Time For Government Mandated Arbitration to Go

Posted on June 18, 2009
The government's financial reform plan has been released, and is available online at the link. This might be the start of the end of arbitration agreements in brokerage accounts, as the report recommends that the SEC "study" the issue. The underlying argument is that pre-dispute arbitration agreements are not fair to the individual, because his is giving up his right to go to court of any dispute he might have, and he is giving it up before the dispute arises...

Administration Plans Fiduciary Standard for Brokers

Posted on June 17, 2009
And it begins. A market crash, a major ponzi scheme, and new regulations. The Obama administration announced today that it will propose to establish a fiduciary duty for broker-dealers offering investment advice and harmonize the regulation of investment advisors and broker-dealers...

The "Controversy" Around Senator Durbin

Posted on June 16, 2009
Running with headlines like Durbin cashed out during big stock collapse newspapers and bloggers are claiming that Senator Dubin traded on inside information when he sold $115,000 worth of stock in late September, 2008.Durbin didn't sell $115,000 in stock on the 19th, he sold $43,000 of unidentified mutual fund shares, and bought $43,000 in Berkshire Hataway...

Supremes to Decide If Arbitration Agreement Includes Class Actions

Posted on June 16, 2009
I shudder at the thought of a class action in arbitration, and really cannot imagine who would push for such an outcome, but at least one party to an arbitration is doing so.In Stolt-Nielsen S.A., et al. v. AnimalFeeds International Corp. the US Supreme Court is going to rule on the plaintiff's request that a class action go to arbitration...

PIABA Petitions SEC To Remove Industry Arbitrator Requirement

Posted on June 16, 2009
PIABA, the bar association dedicated to suing brokers and brokerage firms, has filed a petition with the SEC to remove the requirement of having an arbitrator that is affiliated with the securities industry from panels involving customer disputes.The requirement of an industry arbitrator has been part of FINRA arbitrations since the forum has existed, and has its genesis in worthwhile goals...

Beware of Enforcement Agencies

Posted on June 05, 2009
A group of former government lawyers turned white-collar defense lawyers gathered in Washington, D.C., this week to discuss the current enforcement environment as well as changes across federal agencies in response to the financial crisis. While one lawyer likened the pro-enforcement era to "a walk in the woods with a very hungry grizzly bear" and another warned it was "2002 on steroids," the bottom line was: Be afraid, Corporate America...

Does the NASAA Really Oppose "Take it or Leave it" Arbitration Clauses?

Posted on June 03, 2009
Intellectual honesty is important; particularly when it comes to government officials and regulators. Which is why I simply shake my head at the comments made by the North American Securities Administrators Association (the "NASAA") regarding pre-dispute arbitration agreements...

Who Says Employees Can't Win in Arbitration - $4.1Billion Award

Posted on June 03, 2009
Making arguments by anecdotes is not the way to present a convincing argument, and one winner (or loser) does not prove that a dispute resolution process is fair (or unfair). But in the midst of all of the misleading and inaccurate comments being made about arbitration and how it is stacked against the little guy, I couldn't help but chuckle at this award...

Morgan Stanley Smith Barney

Posted on June 01, 2009
The joint venture between Morgan Stanley and Smith Barney closed today, creating a massive brokerage firm with over 18,000 financial advisors and 1,000 branch offices.According to press reports, the joint venture will handle each firm's retail operations, which each firm's institutional business will remain separate, although institutional will execute is orders through the joint venture...

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