From Investment Fraud Blawg, Securities Fraud Blawg, and Stockbroker Fraud Blawg:
Only weeks after Edward D. Jones, Ameriprise, Linsco Private Ledger (LPL) and UBS announced that they were restricting the sale of leveraged ETFs (see here), two more broker-dealers have decided to take action related to their sales of these risky, and often misunderstood investments.
As reported by the Wall Street Journal, Morgan Stanley Smith Barney announced that it is reviewing its sales procedures related to leveraged ETFs. In addition, Charles Schwab …

From Investment Fraud Blawg, Securities Fraud Blawg, and Stockbroker Fraud Blawg:
According to an article on InvestmentNews, Massachusetts securities regulators have subpoenaed four brokerage firms for information related to their sales practices of leveraged ETFs. The subpoenas come only a few weeks after Edward D. Jones, Ameriprise, Linsco Private Ledger (LPL) and UBS restricted the sale of the products or stopped selling leveraged ETFs altogether. This also comes approximately three weeks after FINRA advised firms that leveraged ETFs “typically are unsuitable …

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 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
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
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, …

From the Securities Arbitration Blawg
In a recent article published on Law.com, Sarah S. Gold and Richard L. Spinogatti conduct a thorough analysis of the issues in In re Merck & Co. Secs. Deriv. & ERISA Litig.., a Third Circuit Court of Appeals case. The Supreme Court granted certiorari in In re Merck to resolve when an investor is on inquiry notice of a potential fraud claim for purposes of determining when the statute of limitaions begins to run..
The authors note …

From the Stockbroker Fraud Blawg
It seems that each day there is another story about allegations that an investment adviser has stolen money from their clients. Yesterday, the SEC filed a complaint alleging that a New York investment adviser had bilked his clients, many of whom were terminally ill or mentally impaired, out of $6 million.
Where do you turn? The New York Times published an interesting article on June 5, 2009, discussing this issue. The Financial Industry Regulatory Authority has a …

From the Investment Fraud Blawg
According to the Wall Street Journal, the U.S. government has determined that the Social Security system will run out of money sooner than expected.
The government’s estimate is that the Medicare fund will be exhausted in 2017 and the Social Security trust fund will be insolvent in 2037. The article quotes recently appointed HHS Secretary Kathleen Sebelius as stating “It’s a wake-up call for anyone concerned about Medicare and the health of our economy.” Politics aside, this …