From Investment Fraud Blawg, Securities Fraud Blawg, and Stockbroker Fraud Blawg:
On August 4, 2009, the Wall Street Journal reported that Fidelity Investments had joined other broker-dealers in warning its customers about the risks of investing in Leveraged ETFs (see other blawg posts on this topic here and here). The article, written by Daisy Maxey, states that Fidelity’s website warned investors that “Leveraged products are complex, carry substantial risks and are intended for short-term trading,” and that “[m]ost reset daily and …

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:
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 …