In a highly unusual legal maneuver, the trustee overseeing the receivership of private placements that went bust last year is suing 49 broker-dealers seeking to claw back $285 million in claims, including commissions, from the firms.

On June 21, the liquidating trustee, Milo H. Segner Jr., filed the lawsuit in federal bankruptcy court in Dallas against the broker-dealers, alleging they "failed miserably in upholding their fiduciary obligations" when selling the series of Provident Royalties LLC private placements.

The Securities and Exchange Commission las...

Read Full Article

Many investment advisors are brokerage firm rejects.

They may have been disciplined or subject to numerous complaints while at a brokerage firm, but then reinvent themselves as investment advisors.

The only problem is that once they have been unregistered for two years, FINRA, subject to certain recent exceptions, does not provide any information regarding these individuals, and the SEC's Investment Advisor database provides no information regarding individuals registered with investment advisory firms.

However, as of yesterday, that has all changed.<...

Read Full Article

 Banks do not want to be in the banking business. It is too risky. Banks, through their broker-dealer affiliates, would rather earn fees and commissions from the sale of investment products to consumers, where all the risk is passed along to the customer.

Customers owning Certificates of Deposit, money market accounts, or even interest bearing checking accounts with material balances, will get a call from an individual associated with their "bank," a financial consultant, who wants to show you how you can get higher returns on your money.

Customers se...

Read Full Article

In May, Marilyn Hazell won a $400,000 Finra arbitration claim against Peak Securities Corp., claiming breach of contract, breach of fiduciary duty, negligence and fraud stemming from the purchase of notes offered by Medical Provider Funding Corp. VI.

Those notes are at the center of a Securities and Exchange Commission fraud complaint issued last summer. The SEC charged Medical Capital Holdings Inc., the parent company of the issuer, with fraud in the sale of $77 million in notes. Dozens of independent broker-dealers sold the notes.

A scan of the Finra database of a...

Read Full Article

The latest cycle of investment fraud cases, unlike the tech-wreck cases of 2000 and 2001, has hit mostly otherwise conservative investors seeking safety and income.

This is the latest fall out resulting from Wall Street’s manufacturing and sale of synthetic investment products, CDOs, structured products, proprietary closed end funds, and multi-billion dollar underwritings of the preferred securities of troubled financial institutions.

However, most investor...

Read Full Article