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 […]
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 […]
If You Want More Fraud, Try Cutting The SEC’S Budget
The SEC’s budget is the topic of hot debate, with SEC Chair Mary Schapiro begging Congress not to make further cuts to the agency that is charged with policing our securities laws. It is distressing to contemplate that this is even up for discussion at a time when investors are still climbing out of the […]
An Outline of the FINRA Arbitration Process For Customer-Broker Disputes
I. General A. Nearly all brokerage firms require retail clients to sign an agreement to have all disputes between them decided in arbitration rather than court. B. About 25 years ago, in Shearson/Am. Express, Inc. v. McMahon, 402 U.S. 220 (1987), the U.S. Supreme Court upheld the validity of arbitration clauses which require clients to […]
Reverse Convertible Notes
Reverse convertible notes are short-term bonds peddled to investors by Wall Street firms. Throughout their term, they pay comparatively high interest rates, but whether they pay back the investor’s principal is the big question. The reason for that question is because a reverse convertible’s principal repayment is linked to the performance of a specific stock […]
Lehman Brothers Principal Protected Notes
Anyone who was sold one of these notes learned the hard way: in broker-speak the terms “principal protected” and even “100% principal protected” does not really mean your principal is protected. After Lehman Brothers filed for bankruptcy on September 15, 2008, holders of the notes learned that they are just unsecured creditors of the insolvent […]
Private Placement Securities
Smiley Bishop & Porter LLP is investigating the fraudulent or unsuitable sales of private placement securities to brokerage firm clients. Click here for a detailed examination of private placements. The lack of transparency in the private placement market has allowed it to become a fertile breeding ground for fraud that has generated regulatory investigations and […]
Nothing to Sneeze At: US Supreme Court Rules In Favor of Investors in Matrixx Securities Fraud Case
Unanimous decisions by the U.S. Supreme Court are rare. Even rarer are those upholding class action claims under the federal securities laws. Because of this, there is reason to be pleased with yesterday’s opinion, Matrixx Initiatives, Inc. v. Siracusano (No. 09-1156) (Mar. 22, 2011). In the case, the Court ruled that the plaintiffs stated a […]
UBS, Bank of America, Citigroup—Investigated for Manipulation of LIBOR
Recent reports reveal that UBS, Bank of America (BOA), and Citigroup are under investigation by the SEC and U.S. Department of Justice for allegedly manipulating the London Interbank Offered Rate, known as LIBOR. LIBOR is the most widely used benchmark for short-term interest rates. Manipulation of Libor is hugely consequential since it is a benchmark […]
Securities America/Medical Capital and Provident Royalties
Smiley Bishop & Porter LLP is investigating Securities America’s Medical Capital, Inc. promissory notes and Provident Royalties preferred stock. Clients have brought claims against the firm alleging that it failed to adequately investigate these products, that the investments were unsuitable, and that the firm did not disclose the products’ risks, which were substantial. The Securities […]
