Criminal Law

Brokers Still Leaving Wirehouses

Posted on October 27, 2010
Over the last two years our practice has seen a marked increase in brokers who are leaving wirehouses. We have always represented advisers who are changing firms, but with the mergers of Merrill Lynch and Smith Barney into their former competitors, there has been a significant increase in these matters...

Another Award Against a Firm For Reneging Compensation

Posted on October 21, 2010
Maybe the investment banks will learn that you cannot unilaterally decide not to pay their employees? Another FINRA arbitration panel has just awarded an investment banker, who alleged Barclays used the collapse of former employer Lehman Brothers to seek to renege on a compensation agreement, over $700,000 in compensation...

Merrill Brokers Win $1.167 ML Arb Award For Retained Comp

Posted on October 17, 2010
For those who believe that the wirehouses would not deny compensation to an employee simply to save money, this article from Registered Rep provides some telling information. According to the article, Merrill Lynch's employee policies provide that a broker who resigns for "Good Reason" is entitled to have his deferred compensation benefits vest at the time of his resignation...

FINRA Proposes to Drop Industry Arbitrator Requirement

Posted on September 29, 2010
FINRA announced on Tuesday that it is going to propose a rule change which will permit investors in all cases filed with the agency to choose to have their claim decided by a panel of three public arbitrators. Currently, arbitration panels at FINRA are comprised of two public arbitrators and one arbitrator that has some connection to the financial industry...

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FINRA Wants More Details When Someone Gets Canned

Posted on September 28, 2010
FINRA's Regulatory Notice 10-39 is getting quite a bit of attention. FINRA is going to require Broker-Dealers to put more detail on termination notices in the future. The reason for the attention is that once again, we are going to have public disclosure of unsubstantiated allegations against brokers...

Judge Orders Law Firms to Assign Minorities and Women to Case

Posted on September 27, 2010
I have the utmost respect for Judge Baer, but this is a bit bizarre. According to Law.com, the Judge has ordered two plaintiff's class action law firms to "make every effort" to assign women and minority lawyers to the class action case. The rationale is that there are thousands of class members, male and female, from diverse backgrounds...

Appellate Court Reinstates SEC vs. Cuban

Posted on September 22, 2010
The Fifth Circuit Court of Appeals reversed the District Court ruling which dismissed the SEC's complaint against Mark Cuban. We previously addressed the merits, or rather the apparent lack of merit, to the SEC's claims here.However, the appellate court found that there were facts that were in dispute, an that the case should not have been dismissed...

Court Affirms Arb Award Against Madoff Feeder Fund

Posted on August 30, 2010
We have always been of the opinion that Madoff feeder funds have potential exposure to investor claims for not disclosing or monitoring the feeder funds investments with Madoff. That exposure is heightened in some instances, where the feeder fund simply turned over the funds to Madoff, took a piece of the management fees, and did little else...

State of NJ Settles Securities Fraud Charges

Posted on August 19, 2010
Well, here is something I have never seen. The State of New Jersey has settled securities fraud charges brought against it by the SEC. But there is a reason why I have never seen it; it has never happened before. According to the NJ Star Ledger, the State was accused of securities fraud for failing to tell bond investors it was underfunding its pension funds...

SEC Looking Into Insider Trading in BP Shares

Posted on August 02, 2010
Reuters is reporting that the SEC is investigatingwhether people may have illegally profited from trading on nonpublic information at BP Plc (BP.L) (BP.N) in the weeks and months following the disastrous Gulf of Mexico oil spill.  More>>>

SEC To Distribute $106 Million in HealthSouth Fraud

Posted on July 27, 2010
The Securities and Exchange Commission today announced a Fair Fund distribution of more than $106 million to investors harmed in a financial fraud at HealthSouth Corporation.The Fair Fund for HealthSouth Corporation fraud victims resulted from an SEC enforcement action in March 2003 after which HealthSouth paid $100 million to settle SEC charges that it falsely inflated earnings to meet Wall Street expectations...

Advisors Win $2 Million Award Against NRP

Posted on July 27, 2010
Two financial advisors won $2 million in arbitration from a retirement-plan advisory firm they left Merrill Lynch to join in 2008, only to be let go the following year.According to this article in FA Magazine, National Retirement Partners sought to have the Indianapolis advisors, Wade Walker and Jeffrey Bafs, return funds the company said they owed through a corporation NRP purchased to buy their practice...

Madoff Trustee Ready to Sue Investors

Posted on July 26, 2010
rving Picard, the court-appointed trustee overseeing the liquidation of Bernard Madoff's investment firm, is preparing to file new lawsuits to recover funds from investors who were also duped by the Ponzi scheme, the Wall Street Journal said. More...

Goldman Agrees to Pay $550 Million to Settle SEC Charges

Posted on July 16, 2010
The Securities and Exchange Commission today 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 just as the U.S. housing market was starting to collapse...

MA Securities Regulators Leaks SSNs of Advisers

Posted on July 12, 2010
According to Investmentnews.com advisers in Massachusetts were stunned after receiving a letter from the Massachusetts Securities Division, announcing that the regulator had accidentally leaked personal information on some 139,000 advisers registered in the Bay State...

B. of A. says it made deals that hid debt

Posted on July 12, 2010
Bank of America Corp. has told federal regulators that it made six trades from 2007 to early 2009 that led to it hiding billions of dollars of debt, according to a media report Saturday. More at MarketWatch

Federal Employees Paid 40% More Than Private Employees

Posted on July 11, 2010
Inflated Federal Pay: How Americans Are Overtaxed to Overpay the Civil Service. From the Heritage Foundation...

Open Letter to Fans from Cavaliers Majority Owner Dan Gilbert

Posted on July 09, 2010
I am not a basketball fan, and barely knew who Lebron James was before all of the hoopla this month, but the letter from the Cavaliers' Owner to the Cleveland fans is priceless. He is a bit upset over James leaving the team. Just a bit. But maybe he will take "the curse" with him...

Arbitration Panel Orders Goldman Sachs to Pay $20.58 million

Posted on June 29, 2010
Goldman Sachs has been ordered to pay $20.58 million to creditors of a failed hedge fund to settle claims that the bank helped the fund perpetrate a Ponzi scheme. More>>>

No Fund for States to Oversee Advisers?

Posted on June 21, 2010
If the legislation that is currently moving through Congress passes, state regulators will take responsibility for the oversight of all investment advisers who manage less than $100 million dollars, a change from the current benchmark of $30 million dollars...

Attracting Investors - Movie Industry

Posted on June 21, 2010
Many filmmakers begin their careers by persuading private investors to back them. Indeed, unless you are a star like Kevin Costner or Barbra Streisand, it is rare for a major studio to fi¬nance a beginning filmmaker. Banks will not lend money without substantial collateral...

Proposed Rules For Breaking Erroneous Trades

Posted on June 21, 2010
The Securities and Exchange Commission announced that the national securities exchanges and the Financial Industry Regulatory Authority (FINRA) are filing proposed rules to clarify the process for breaking erroneous trades. The rules would make it clearer when, and at what prices, trades would be broken...

Exodus of brokers still a threat for wirehouses

Posted on May 28, 2010
Exodus of brokers still a threat for wirehouses: Report - Investment News

Sell Everything, You Won't Recognize America By The End Of The Year

Posted on May 23, 2010
Dow Theorist Richard Russell says the end is near.---THE DOW JONES AVERAGES WITH AN EXPLANATION OF THE DOW THEORY (THE BARRON'S AVERAGES)

Senate Passes Financial Reform Bill

Posted on May 21, 2010
The Senate passed its version of a financial regulatory bill Thursday evening. Now the process of reconciling the House version with the Senate version begins, but it looks like we will soon see the most sweeping overhaul of our nation's financial regulatory systems since the 1930s...

Who You Calling a Tea Bagger?

Posted on May 05, 2010
Apparently President Obama is quoted in a book referring to the supporters of the Tea Party Movement as "tea baggers" and the right is having an absolute fit, claiming the term is disgusting and inappropriate. The feigned outrage is simply amazing.Please...

FINRA Proposes Expanding Arbitrator Lists

Posted on May 05, 2010
FINRA announced today that it will increase the number of arbitrators on each of the selection lists by 2 - bringing each list to 10 potential arbitrators. While the change will increase the number of selections for the parties, the number of strikes for each list will remain at 4, increasing the chances that the parties will have an arbitrator that they do not want...

Goldman's Defense to SEC Fraud Case

Posted on April 25, 2010
The WSJ has copies of Goldman's Wells Submission and its Wells Supplement on line. While the Wells Submission is not Goldman's answer to the complaint, it does offer insight into Goldman's defense of the SEC's claims. (See my article on Wells Notices at SECLaw...

The Problem with Litigation is Losing - Pitt on Goldman

Posted on April 21, 2010
Former SEC Chairman and corporate litigator Harvey Pitt puts forth his views on the SEC's complaint against Goldman Sachs. He raises some interesting questions, revolving more around the impact of an SEC loss in the matter, rather than a win. More>>>

Impact of SEC CDO Fraud Case Against Goldman

Posted on April 18, 2010
An analysis of the impact on investor claims of the SEC CDO fraud complaint against Goldman Sachs. More>>>

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