From Investment Fraud Blawg, Securities Fraud Blawg, and Stockbroker Fraud Blawg:
On July 30, 2009, New York Attorney General Andrew Cuomo issued a report entitled “No Rhyme or Reason: The ‘Heads I Win, Tails You Lose’ Bank Bonus Culture.”
In the report, Mr. Cuomo discusses the compensation programs instituted by banks and brokerage firms while the economy was heading for, and in the midst of, crisis. The findings are truly astonishing are summed up well as “When the banks did well, their …

From Investment Fraud Blawg, Securities Fraud Blawg, and Stockbroker Fraud Blawg:
Earlier this week, The Wall Street Journal reported that while the four major Wall Street brokerage firms experienced an outflow of $8 billion of assets in 2008, Registered Investment Advisers brought in more than $108 billion in new assets during the same period. This activity likely reflects a shift in investor preference from transaction-based broker relationships to fiduciary relationships.
Investors generally choose to have their financial affairs handled by someone they …

From Securities Arbitration Blawg:
According to the Financial Industry Regulatory Authority (FINRA), securities arbitration claims are on the rise in 2009. In fact, according to FINRA’s June Summary Arbitration Statistics, the self-regulatory organization anticipates that 56% more cases will be filed during the year, as compared to 2008 and that during the first six months of 2009, 82% more cases had been filed as during the same period in the previous year. During this same period, FINRA reports that fewer cases …

From Consumer Fraud Blawg:
Two recent news items should come as welcome news to consumers. Regulatory and private action has led to the suspension of consumer credit collection arbitration by two groups who administer arbitration claims across the country. Given the anti-consumer nature of arbitration, these actions should help level the playing field for consumers in debt-related disputes.
National Arbitration Forum to stop administering consumer debt arbitration claims
In another pro-consumer effort, Minnesota Attorney General Lori Swanson recently reached a settlement with the …

From the Securities Fraud Blawg
On July 21, 2009, the Securities and Exchange Commission (SEC) charged Morgan Keegan & Company. In its Complaint, the SEC seeks an injunction for violation of the federal securities laws, as well as equitable relief for Morgan Keegan investors. Included in this equitable relief is a request for a court order requiring Morgan Keegan to repurchase illiquid ARS from its customers. More about the SEC’s case, including a link to the Commission’s Litigation Release and Complaint …

From the Securities Fraud Blawg
In a much anticipated move, the Securities and Exchange Commission (SEC) made permanent a rule that it hopes will curb abusive “naked” short selling practices in the securities markets.
Short selling is the practice of selling a security that a person does not own. In essence, the person (the “short seller”) “borrows” the security from their broker (or another third party) and sells it to a buyer. This strategy is implemented where the short seller anticipates that …

From the Stockbroker Fraud Blawg
This morning, U.S. District Court Judge Denny Chin sentenced Bernard Madoff to the maximum sentence of 150 years of prison for his role in a “historic” multi-billion dollar fraud.
Judge Chin stated “Here the message must be sent that Mr. Madoff’s crimes were extraordinarily evil and that this kind of manipulation of the system is not just a bloodless crime that takes place on paper, but one instead that takes a staggering toll.”
Mr. Madoff’s “error of judgment” …

From the Stockbroker Fraud Blawg
On June 11, 2009, the Securities and Exchange Commission filed two fraud actions against different financial/investment advisers.
Morgan European Holdings ApS, et al.
On June 11, the SEC obtained an emergency court order and asset freeze to shut down a fraudulent prime bank scheme. The action was filed in the United States District Court for the Middle District of Flordia against Morgan European Holdings ApS, a/k/a Money Talks, Inc. ApS, John Morgan, Marian Morgan, Bowman Marketing Group, Inc., …

From the Stockbroker Fraud Blawg
The New York Times published an informative article by Tara Siegel Bernard on December 16, 2008 that discusses a lot of the basics of mutual funds.
This is a great article for anyone who is unfamiliar with mutual funds, but who has or is considering incorporating mutual funds into their investment portfolio.
Too often, investors are misled as to key features of the investments they are sold. Having a fundamental understanding of how different investments work serves two …

From the Investment Fraud Blawg
I stumbled across an article written by Paul Sullivan that The New York Times published on January 26, 2009 that contained some useful information about estate planning.
Although the article is five months old, its content is no less important today than at the time the article was published. Unfortunately, too many people overlook the benefits of prudent (and often simple) estate planning. Many people feel that since issues tend to come up after they have died, …