Brian Smiley was quoted in a recent Bloomberg Businessweek article discussing Registered Investment Adviser’s. In theory, RIAs are legally bound to put their clients’ interests first, but in practice, they offer few protections for investors.
A Selective Overview of Provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act
Reasons for the Act Inspired by the financial meltdown of 2007-2010 Home market collapsed: total home equity in US dropped from $13 trillion in 2006 to $8.8 trillion by mid-2008, foreclosures Over 100 mortgage lenders went bankrupt in 2007-08 Money market funds experience mass withdrawals ($144.5 billion in a week, compared to $7.1 prior week) […]
FINRA Issues Warning About Structured Products, High Yield Bonds, and Floating-Rate Funds
The paltry returns from many traditional income investments like government bonds and CDs and the volatility of stocks have inspired brokers to push investments that promise high yields, but often carry hidden dangers. According to a recent release from the Financial Industry Regulatory Authority (FINRA), these kind of investments include high-yield bonds, floating-rate loan funds […]
State of Georgia Investigating Sales of Reverse Convertible Notes
It has been reported that the Secretary of State of Georgia, who regulates stockbrokers, is investigating whether securities laws were violated by the sale of reverse convertible notes to Georgia investors. According to a July 21, 2011 report in Bloomberg, the Secretary has issued subpoenas to UBS AG, Morgan Stanley, and Ameriprise Financial Inc. in order […]
U.S. Supreme Court Decision Gives Arbitration a Big Boost
In AT&T Mobility LLC v. Concepcion (April 27, 2011), the U.S. Supreme Court handed a big win to corporations that want to avoid facing class actions for consumer fraud. In a five to four decision, the Court reversed a Ninth Circuit ruling that invalidated a provision in AT&T’s cell phone contracts which required customers to […]
Fraudulent Stock Tips and The Japanese Disaster
It takes a cold, cold heart to exploit a natural disaster as a hook to defraud stock market investors. But according to a recent FINRA Alert, that is exactly what is happening in the wake of the Japanese earthquake, tsunami, and nuclear meltdown. FINRA reports that “con-artists” are engaging in “pump-and-dump” schemes to inflate the […]
David Lerner & Associates, Inc. Apple REITs Investigation
Investors in Apple REIT Ten sold by David Lerner & Associates, Inc. (“DLA) have reason to consider their legal options. FINRA recently filed a complaint against DLA, the underwriter of Apple REIT Ten which invests in extended stay hotels. FINRA alleges that DLA sold this investment to elderly and unsophisticated clients despite having failed to […]
The Three Most Common Wall Street Defenses
There are between 3,000 and 9,000 arbitration claims filed with FINRA against brokerage firms every year. The most frequently filed complaints allege that a broker breached his/her fiduciary duty, made misrepresentations, or sold investments that were not suitable for the client’s needs or investment objectives. For every case that actually gets filed in arbitration there […]
Initial Impressions: What Do Financial Planning Designations Mean?
If there is one thing that is not in short supply in the financial planning profession it’s initials. Professional designations in the financial planning business include CFPs, CFAs, ChFCs, RIAs, RRs, and CSAs to list only a few. To make things even more confusing, many people carry multiple designations. While no professional designation guarantees wisdom […]
Investors Warned About Stock-Based Loan Programs
FINRA has issued an Investor Alert to warn investors about stock-based loan programs. Brokers, financial planners, insurance agents and other advisors are pitching these programs as a way for clients to tap into the value of their stock holdings without having to sell their shares. The idea is that the broker will arrange for the […]
