Investor Protection http://www.investorprotection.com Thu, 02 Nov 2017 14:49:14 +0000 en-US hourly 1 https://wordpress.org/?v=4.8.3 Tom Buck Update http://www.investorprotection.com/blog/2017/11/02/tom-buck-update-3/ Thu, 02 Nov 2017 14:49:14 +0000 http://www.investorprotection.com/?p=3515 Former heavy-hitter stockbroker Buck charged with fraud, the IBJ has the latest on these charges. Click this link: https://www.ibj.com/articles/66070-former-heavy-hitter-stockbroker-buck-charged-with-fraud

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Former heavy-hitter stockbroker Buck charged with fraud, the IBJ has the latest on these charges. Click this link: https://www.ibj.com/articles/66070-former-heavy-hitter-stockbroker-buck-charged-with-fraud

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FINRA Orders Wells Fargo to Pay $3.4 Million of Restitution to Customers for Unsuitable Recommendations of Volatility-Linked Exchange-Traded Products (ETPs) and Related Supervisory Failures http://www.investorprotection.com/blog/2017/10/17/finra-orders-wells-fargo-pay-3-4-million-restitution-customers-unsuitable-recommendations-volatility-linked-exchange-traded-products-etps-related-supervisory-failures/ Tue, 17 Oct 2017 14:48:54 +0000 http://www.investorprotection.com/?p=3512 On October 16, 2017, the Financial Industry Regulatory Authority, Inc. (“FINRA”) announced that it had ordered Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC to pay more than $3.4 million in restitution to affected customers for unsuitable recommendations of volatility-linked exchange-traded products (ETPs) and related supervisory failures. FINRA found that between […]

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On October 16, 2017, the Financial Industry Regulatory Authority, Inc. (“FINRA”) announced that it had ordered Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC to pay more than $3.4 million in restitution to affected customers for unsuitable recommendations of volatility-linked exchange-traded products (ETPs) and related supervisory failures.

FINRA found that between July 1, 2010, and May 1, 2012, certain Wells Fargo registered representatives recommended volatility-linked ETPs without fully understanding their risks and features.

As noted by FINRA, “[v]olatility-linked ETPs are complex products that could be misunderstood and improperly sold by registered representatives. Certain Wells Fargo representatives mistakenly believed that the products could be used as a long-term hedge on their customers’ equity positions in the event of a market downturn. In fact, volatility-linked ETPs are generally short-term trading products that degrade significantly over time and should not be used as part of a long-term buy-and-hold investment strategy.”

In view of the “unique features and risks of volatility-linked ETPs,” FINRA has also issued Regulatory Notice 17-32 “to remind firms of their sales practice obligations relating to these products” which cautions and reminds firms who solicit the sale of volatility ETPs to “be well aware of the unique risks that they pose” including the risk that “many volatility-linked ETPs are highly likely to lose value over time” which may render them “unsuitable for certain retail investors, particularly those who plan to use them as traditional buy-and-hold investments.”

FINRA also “found that Wells Fargo failed to implement a reasonable system to supervise solicited sales of these products during the relevant time period.”

If you are an individual or institutional investor who has any concerns about your investments with Wells Fargo or volatility-linked exchange-traded products (ETPs) purchased through any other brokerage firm, please contact us for a no-cost and no-obligation evaluation of your specific facts and circumstances. You may have a viable claim for recovery of your investment losses by filing an individual securities arbitration claim with the Financial Industry Regulatory Authority (FINRA).

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Massachusetts Securities Regulator Targets SII Investments with Enforcement Action http://www.investorprotection.com/blog/2017/09/25/massachusetts-securities-regulator-targets-sii-investments-enforcement-action/ Mon, 25 Sep 2017 17:46:43 +0000 http://www.investorprotection.com/?p=3503 On September 20, 2017, the Enforcement Section of the Massachusetts Securities Division filed a massive complaint against SII Investments, Inc. The complaint alleges that from 2011 to 2017, SII Investments engaged in “dishonest and unethical conduct and failed to supervise its agents by allowing systemic inflation of its clients liquid net worth while maintaining contradictory […]

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On September 20, 2017, the Enforcement Section of the Massachusetts Securities Division filed a massive complaint against SII Investments, Inc.

The complaint alleges that from 2011 to 2017, SII Investments engaged in “dishonest and unethical conduct and failed to supervise its agents by allowing systemic inflation of its clients liquid net worth while maintaining contradictory and unclear rules related to the purchase of non-traded real estate investment trusts (REITS).”

Non-Traded REITS are companies which own and manage income producing properties or are involved in real estate financing and are often investments that are entirely illiquid. As a result of the complicated characteristics of REIT investments, they have become a “widely used and widely misunderstood investment vehicle” that “typically pay high sales commissions and offer fees that range from 15 to 18 percent.”

The misconduct that is alleged in the enforcement complaint is predicated on the allegation that SII Investments increased the purported liquid net worth of its clients in order to get around the Massachusetts regulation – and SII’s own internal policies and procedures – which limit the amount of a client’s investment to no more than 10% of a client’s liquid net worth in any one sponsor’s REIT with a maximum of no more than 20% of liquid net worth allowed across all such REIT products.

A copy of the complaint filed by Massachusetts against SII Investments can be found here SII-Administrative-Complaint-E-2016-0128.

SII Investments, Inc. is an independent broker-dealer which has an extensive history of prior regulatory actions and customer-initiated arbitration proceedings having been filed against it.

If you are an individual or institutional investor who has any concerns about your investments with SII Investments, please contact us for a no-cost and no-obligation evaluation of your specific facts and circumstances. You may have a viable claim for recovery of your investment losses by filing an individual securities arbitration claim with the Financial Industry Regulatory Authority (FINRA).

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FBI Investigating Former Boston Morgan Stanley Broker James Polese http://www.investorprotection.com/blog/2017/08/10/fbi-investigating-former-boston-morgan-stanley-broker-james-polese/ Thu, 10 Aug 2017 15:04:22 +0000 http://www.investorprotection.com/?p=3492 According to AdvisorHub, the Federal Bureau of Investigation has interviewed at least one client of James Polese, a Boston-area broker who Morgan Stanley fired for allegedly misappropriating client assets. Morgan Stanley recently fired Polese and fellow broker Cornelius “Cory” Peterson on June 26 for “allegations of conduct involving misappropriation of client assets,” according to their […]

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According to AdvisorHub, the Federal Bureau of Investigation has interviewed at least one client of James Polese, a Boston-area broker who Morgan Stanley fired for allegedly misappropriating client assets. Morgan Stanley recently fired Polese and fellow broker Cornelius “Cory” Peterson on June 26 for “allegations of conduct involving misappropriation of client assets,” according to their BrokerCheck records. Morgan Stanley has allegedly made one client whole for assets allegedly misappropriated by Polese.

Our firm is investigating potential investor claims against James Polese and Morgan Stanley relating to broker misconduct. If you are an individual or institutional investor who has any concerns about your investments with Morgan Stanley and/or its brokers like James Polese or Cory Peterson, please contact us for a no-cost and no-obligation evaluation of your specific facts and circumstances. You may have a viable claim for recovery of your investment losses by filing a securities arbitration case with the Financial Industry Regulatory Authority (FINRA).

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Lafayette, IN based Bison Financial Group Forced Out By Wells Fargo http://www.investorprotection.com/blog/2017/06/15/lafayette-in-based-bison-financial-group-forced-out-by-wells-fargo/ Thu, 15 Jun 2017 19:49:28 +0000 http://www.investorprotection.com/?p=3456 A large group of stockbrokers previously with Wells Fargo were “permitted to resign” because of annuity sales practices, according to some of their Brokercheck reports. According to Ameriprise, approximately 15 of the Bison Financial Group’s 21 brokers have joined it in the past few weeks, all leaving Wells Fargo. The publicly available Brokercheck reports for […]

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A large group of stockbrokers previously with Wells Fargo were “permitted to resign” because of annuity sales practices, according to some of their Brokercheck reports.

According to Ameriprise, approximately 15 of the Bison Financial Group’s 21 brokers have joined it in the past few weeks, all leaving Wells Fargo. The publicly available Brokercheck reports for CEO David C. Vorbeck, President F. Stephen Dunnuck and Lafayette Market Director Stephen R. Wien were all recently amended to state they were each “permitted to resign” by Wells Fargo due to “termination of licensee agreement of certain annuity processes.”

The attached Advisorhub.com article: https://advisorhub.com/wells-fargo-confirms-expulsion-big-indie-team-annuity-violations/ suggests that these 3 brokers at Bison Financial Group were forced out by Wells Fargo due to improperly generating commissions through the switching or churning of certain investment products called annuities. This article further claims that an insider tipped off Wells Fargo about this problem in September of 2016.

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RBC Wealth Management (RBC) Pays Huge $3.5 Million Settlement http://www.investorprotection.com/blog/2017/06/11/rbc-wealth-management-rbc-pays-huge-3-5-million-settlement/ Sun, 11 Jun 2017 19:38:17 +0000 http://www.investorprotection.com/?p=3455 In April of 2017, RBC settled a case involving Indianapolis broker James Wilson for $3.5 Million. The investors alleged that Wilson and RBC had overtraded in many accounts and excessively sold their family various closed end funds that included Unit Investment Trusts (UITs). More details can be found in the story in the Indianapolis Business […]

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In April of 2017, RBC settled a case involving Indianapolis broker James Wilson for $3.5 Million. The investors alleged that Wilson and RBC had overtraded in many accounts and excessively sold their family various closed end funds that included Unit Investment Trusts (UITs). More details can be found in the story in the Indianapolis Business Journal at: https://www.ibj.com/articles/64159-brokerage-resolves-complaint-with-skinner-family-for-35m?utm_source=this-week-in-ibj&utm_medium=newsletter&utm_campaign=2017-06-10

On behalf of our clients, our firm is investigating various claims against RBC and its brokers, including James Wilson,  for the sale of closed end funds such as UITs, and other bad practices such as overtrading accounts. If you are an individual or institutional investor who has any concerns about your investments with RBC and/or its brokers like James Wilson, please contact us for a no-cost and no-obligation evaluation of your specific facts and circumstances. You may have a viable claim for recovery of your investment losses by filing a securities arbitration case with the Financial Industry Regulatory Authority (FINRA).

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ENERGY MASTER LIMITED PARTNERSHIPS (MLPs) http://www.investorprotection.com/blog/2017/05/30/energy-master-limited-partnerships-mlps/ Tue, 30 May 2017 15:33:55 +0000 http://www.investorprotection.com/?p=3453 Some investors lost considerable amounts of money by investing in Energy MLPs. Recommended by many financial advisors in 2014-2015, investors were misled to believe these investments carried far less risk than was true. A common misrepresentation was that some of these MLPs were like “fully leased toll roads” where investors simply sat back and collected […]

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Some investors lost considerable amounts of money by investing in Energy MLPs. Recommended by many financial advisors in 2014-2015, investors were misled to believe these investments carried far less risk than was true. A common misrepresentation was that some of these MLPs were like “fully leased toll roads” where investors simply sat back and collected the rents. Other investors had their portfolios unsuitably over-concentrated in Energy MLPs.

We are investigating many Energy MLPs for our clients. If you are an individual or institutional investor who has any concerns about your investments in the securities of Energy MLPs, please contact us for a no-cost and no-obligation evaluation of your specific facts and circumstances. You may have a viable claim for recovery of your investment losses by filing an individual securities arbitration claim with the Financial Industry Regulatory Authority (FINRA).

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SEC Charges Credit Suisse Securities (USA) and Former IA Representative Sanford Michael Katz with Breaches of Fiduciary Duty and other Securities Law Violations http://www.investorprotection.com/blog/2017/04/12/sec-charges-credit-suisse-securities-usa-and-former-ia-representative-sanford-michael-katz-with-breaches-of-fiduciary-duty-and-other-securities-law-violations/ Wed, 12 Apr 2017 11:59:53 +0000 http://www.investorprotection.com/?p=3447 On April 4, 2017, the U.S. Securities and Exchange Commission announced that Credit Suisse Securities (USA) LLC and one of its former investment adviser representatives, Sanford Michael Katz, agreed to pay almost $8 million to settle charges that they improperly invested clients in more expensive “Class A” shares of mutual funds rather than less expensive […]

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On April 4, 2017, the U.S. Securities and Exchange Commission announced that Credit Suisse Securities (USA) LLC and one of its former investment adviser representatives, Sanford Michael Katz, agreed to pay almost $8 million to settle charges that they improperly invested clients in more expensive “Class A” shares of mutual funds rather than less expensive “institutional” shares for which they were eligible.

The SEC’s orders found that Credit Suisse and Katz both breached their fiduciary duties, failed to adequately disclose the conflict of interest created by such investments as they enriched themselves at their clients’ expense, and with deficiencies in compliance policies and procedures.

Class A shares are generally more expensive than institutional shares of the same fund because they charge investors marketing and distribution expenses known as 12b-1 fees that are paid out of the assets of the mutual fund. In this case, the 12b-1 fees were paid by the mutual funds to Credit Suisse, which then shared a portion of those fees with Katz.

According to the SEC’s orders, between January 1, 2009 and January 21, 2014, Credit Suisse collected approximately $3.2 million in avoidable 12b-1 fees from clients in its Discretionary Managed Portfolio program, and approximately $2.5 million of that amount was generated from Katz’s advisory clients. Credit Suisse also failed to implement policies and procedures to prevent these fiduciary breaches.

Credit Suisse and Katz will collectively pay disgorgement of $3,224,483, prejudgment interest of $577,678, and penalties totaling $4.125 million. Credit Suisse and Katz also consented to censures and the entry of cease-and-desist orders from committing or causing further violations of these provisions.

If you are an individual or institutional investor who has any concerns about your investments with Credit Suisse Securities (USA) LLC, please contact us for a no-cost and no-obligation evaluation of your specific facts and circumstances. You may have a viable claim for recovery of your investment losses by filing an individual securities arbitration claim with the Financial Industry Regulatory Authority (FINRA).

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GIANT GRAY, INC. and BRS LABS http://www.investorprotection.com/blog/2017/04/06/giant-gray-inc-and-brs-labs/ http://www.investorprotection.com/blog/2017/04/06/giant-gray-inc-and-brs-labs/#comments Thu, 06 Apr 2017 18:24:54 +0000 http://www.investorprotection.com/?p=3445 We are investigating investor concerns about various investments made in the securities of Giant Gray, Inc. f/k/a Behavioral Recognition Systems, Inc. (BRS Labs). Specifically, we are investigating cases where financial advisors and brokerage firms improperly recommended their investors purchase securities in these companies that included promissory notes, warrants, and common stock. If you had a […]

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We are investigating investor concerns about various investments made in the securities of Giant Gray, Inc. f/k/a Behavioral Recognition Systems, Inc. (BRS Labs). Specifically, we are investigating cases where financial advisors and brokerage firms improperly recommended their investors purchase securities in these companies that included promissory notes, warrants, and common stock. If you had a financial advisor or broker recommend the purchase of any of these securities to you, please contact our office as soon as possible.

If you are an individual or institutional investor who has any concerns about your investments in the securities of Giant Gray, Inc. f/k/a Behavioral Recognition Systems, Inc. (BRS Labs), please contact us for a no-cost and no-obligation evaluation of your specific facts and circumstances. You may have a viable claim for recovery of your investment losses by filing an individual securities arbitration claim with the Financial Industry Regulatory Authority (FINRA).

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Unsuspecting Investors May Owe Taxes on Their Individual Retirement Accounts (IRAs) http://www.investorprotection.com/blog/2017/03/14/unsuspecting-investors-may-owe-taxes-on-their-individual-retirement-accounts-iras/ Tue, 14 Mar 2017 15:40:17 +0000 http://www.investorprotection.com/?p=3442 As described in a recent article in The Wall Street Journal (“Are Taxes Lurking in Your Tax-Free Retirement Account”), many Americans are now receiving notices informing them that they owe additional taxes on their traditional individual retirement accounts (IRAs). Although investors have been led to believe that their retirement accounts were normally tax-free, it is […]

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As described in a recent article in The Wall Street Journal (“Are Taxes Lurking in Your Tax-Free Retirement Account”), many Americans are now receiving notices informing them that they owe additional taxes on their traditional individual retirement accounts (IRAs).

Although investors have been led to believe that their retirement accounts were normally tax-free, it is entirely possible to owe annual tax on a tax-deferred traditional IRA or tax-free Roth IRA, even allowed investments.

“Taxpayers should beware that as IRAs grow in size, so does the potential for taxes on these accounts if they have investments in alternative assets such as hedge funds, private-equity funds, limited partnerships, operating businesses and real estate.”

The reason why there are taxes on an apparently tax-free account is that these accounts must pay income tax on the “Unrelated Business Taxable Income,” or UBTI, which can often arise when an IRA invests in operating businesses that pass profits and losses directly to the owners, such as partnerships, master limited partnerships and limited-liability companies.

As more IRA owners look to invest in alternative assets for accounts large and small, here’s what the WSJ advises investors to know – and document – before they invest their funds:

Ask before you invest. The time to find out about UBTI is up front. In general, a risk exists for investments that report results to the Internal Revenue Service on a Schedule K as many publicly traded partnerships do – especially when units are sold.

Understand the tax bite. Because UBTI is taxed at trust rates, the top rate of 39.6% kicks in quickly—at $12,500 of income in 2017. However, each IRA gets a UBTI exemption of $1,000. So if a saver has three traditional IRAs and a Roth IRA, he gets four exemptions. If there is tax, be sure it is paid with IRA assets. If the account owner pays with outside funds, the entire IRA could become taxable.

Find out who files. Tax on UBTI doesn’t go on the IRA owner’s individual return. Instead, the IRA must apply for its own taxpayer ID number, file a Form 990-T with the IRS, and pay the tax. There may also be state income tax implications, such as additional taxes owed, and required filings for each state in which the investment entity conducts its operations.

If you are an individual or institutional investor who has any concerns about your retirement account investments, please contact us for a no-cost and no-obligation evaluation of your specific facts and circumstances. You may have a viable claim for recovery of your investment losses by filing an individual securities arbitration claim with the Financial Industry Regulatory Authority (FINRA).

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