All brokers and broker-dealers have an obligation to ensure that their investment or investment strategy recommendation is suitable for the customer. All sales efforts must be reasonable and appropriate for the investor based upon the investor’s risk tolerance, investment objectives, age, financial circumstances, other investment holdings, experience, and other facts…
On March 19, 2013, a former employee of Fidelity Investments filed suit in the U.S. District Court in Boston, Massachusetts against her former employer alleging self-dealing with respect to the management of the FMR LLC Profit Sharing Plan, Fidelity’s 401(k) plan. In September, twenty-six additional current and former Fidelity employees…
This article continues my in depth look into how unsuspecting investors are sold speculative private placements. While investors were told that Fisker Auto’s prospects were fantastic, nothing could have been further from the truth. In February 2012, the DOE loan had been frozen after $192 million had been given to…
La caída en los precios de los bonos de Puerto Rico ha causado pérdidas financieras sustanciales a los inversionistas en activos que les fueron vendidos como como bonos seguros y garantizados. Según el New York Times, la raíz de los problemas de Puerto rico es el hecho de que 3.7…
In August, I wrote an article about how the brokerage firm Advanced Equities, Inc. (Advanced Equities) and First Allied Securities, Inc. (First Allied) sold nearly $1 billion in private placement offerings linked to clean technologies (clean-tech) to investors that have since become nearly worthless. Some of those investors have now…
The Financial Industry Regulatory Authority (FINRA) recently sanctioned Capstone Asset Planning Company (CAPCO) alleging that from 2010 through 2012, CAPCO distributed communications to the public concerning the Capstone Fund that failed to accurately reflect the change in the fund’s performance. In addition, FINRA alleged that the Capstone Fund’s website contained…
The Financial Industry Regulatory Authority (FINRA) barred broker Jerry McGlothlin from associating with any member firm for engaging in outside business activities, engaging in private securities transactions, providing false responses on annual compliance questionnaires, and failing to respond to FINRA requests for information. Between May 2003, and October 2012, McGlothlin…
Between March 16, 2009, and September 21, 2012, FINRA alleged that Sunset Financial Services, Inc., (Sunset) failed to establish and maintain a supervisory system regarding the sale of leveraged or inverse exchange-traded funds, otherwise known as nontraditional ETFs, that was reasonably designed to comply with NASD Conduct Rule 3010. Sunset…
On October 1, 2013, the Securities and Exchange Commission announced that it had awarded over $14 million to an unnamed whistleblower who voluntarily came forward with information that led to a successful enforcement action and the recovery of a substantial amount of investor funds. In the official order setting forth…
FINRA has barred broker Daniel P. Deighan (Deighan) for seven months and fined him $27,500 over allegations that he recommended private placements to customers that were not suitable given the customers’ net worth, annual income, and the concentration of the private placements in their accounts. Private placements are securities that…