According to a May 5, 2011 Investment News article, Wells Fargo took as many as 153 days to deliver prospectuses to more than 900,000 clients who purchased mutual funds in 2009. (Securities law requires that prospectuses be delivered to purchasers within three days of the buy.) For dragging their feet, the company has been fined $1M by the Financial Industry Regulatory Authority (FINRA).
Wells Fargo also allegedly failed to take action to remedy the situation after learning that up to 9 percent of its customers had not received prospectuses within the requisite three days.
FINRA enforcement chief Brad Bennett stressed the importance of prospectuses to customers, as they contain important data regarding a fund’s costs, plans, performance history and risks. By failing to deliver prospectuses in a timely manner, said Bennett, Well Fargo deprived its customers of key information.
According to the article, Wells Fargo further broke FINRA rules by failing to report client complaints. Neither did the company disclose all arbitration claims that involved its representatives within the required 30 days.
Were you one of Wells Fargo’s more than 900,000 unlucky customers? If you suffered financial loss as a result of the company’s misconduct, contact an investment recovery attorney at Carlson Law.
Tags: financial loss, FINRA, investment recovery attorney, mutual fund, mutual funds, prospectus, Securities Fraud Attorney San Diego, securities lawsuit, Wells Fargo
Posted in Fiduciary Duty Breach, Negligent Misrepresentation, Securities Arbitration, Securities Law, Stock Loss | Comments (2)
Mutual Funds 101
Mutual funds are sold by companies that pool money (capital) from many investors. This capital is then invested in bonds, stocks and/or other securities. Investors in the fund all have shares, and these shares represent a part of the fund’s holdings.
If you’re interested in making an investment, a mutual fund may or may not be the right choice for you. Like all investments, they come with many different levels of risk. They aren’t insured or guaranteed by financial institutions or government agencies, even those sold by banks. However, because mutual funds are often a mix of various bonds and/or stocks, the risk is some mutual funds is “spread out” or diversified. That said, some mutual funds are not diversified, and it is important to understand that a mutual fund investment can be very high risk, or very low risk, depending upon the holdings and the goals of the fund. Each fund must be looked at individually to determine if it is appropriate for the investor, in the same manner as any individual stock or other investment.
Mutual funds are managed by professional fund managers. These managers invest the money investors contribute into individual stocks, bonds and other securities. And because mutual funds buy and sell securities in large amounts at one time, they usually incur fewer fees, thus operating in a cost-efficient manner. However, it is very important to carefully examine prior to purchase all of the fees and costs associated with the fund you are purchasing as they can vary greatly and take a significant bite out of your return.
If you feel your financial advisor placed you in inappropriate mutual fund investments and/or failed to disclose the fees and costs associated with investment or that the underlying holdings of the fund were beyond your tolerance for risk, you may have a case. Call Carlson Law at 858-544-9300 for a free consultation.
Tags: bonds, Broker Fraud, capital, disclosure, diversification, Fiduciary Duty Breach, financial, financial loss, FINRA, Fraud Attorney, Investment, investment attorney, investment loss, Investor, investors, losses, mutual fund, mutual funds, Negligent Misrepresentation, San Diego, securities, Securities Fraud Attorney San Diego, securities lawsuit, Stock Loss, stocks, unsuitability, Unsuitable
Posted in Broker Fraud, Fiduciary Duty Breach, Investment Fraud, Negligent Misrepresentation, Securities Arbitration, Securities Fraud, Securities Law, Securities Litigation, Stock Fraud, Stock Loss | Comments (0)
Making financial investments with money from a loan on your home is generally a poor, high risk activity. And it’s a particularly poor idea when the investment is a private placement that’s speculative and unable to be liquidated easily or traded publically. Brokerage houses that encourage clients to take out extra mortgages or home equity loans in order to buy risky investments in limited partnership and private placements are often held liable for their customers’ financial loss.
In 2009, the Ameritas Investment Corporation was fined $100,000 by the Financial Industry Regulatory Authority (FINRA) for not supervising one of its brokers whose deceptive financial recommendations to customers included home refinancing to purchase securities. The broker was fined $60,000 by FINRA, and her license was suspended for five years.
If your broker encouraged you to take out real estate loans in order to invest in any private securities, limited partnerships or other investments, you should seek the advice of a securities attorney. Contact Carlson Law for a free consultation.
Tags: Broker Fraud, Fiduciary Duty Breach, financial loss, Investment Fraud, investment loss, investment recovery, limited partnerships, Negligent Misrepresentation, private securities, San Diego, Securities Arbitration, Securities Attorney, Securities Fraud Attorney San Diego, securities lawsuit
Posted in Broker Fraud, Fiduciary Duty Breach, Investment Fraud, Negligent Misrepresentation, Securities Arbitration, Securities Fraud, Securities Law, Securities Litigation, Stock Fraud | Comments (1)
Recently, many investors have experienced significant financial loss in their securities accounts because of the inappropriate and improper trading of exchange traded funds (ETFs) by their stockbrokers.
A number of leveraged and inverse ETFs, including some funds by Direxion and Proshares, had risk associated that may not have been fully disclosed to some investors. Although these ETFs were built to seek out multiples of the exchange that they were created to track, many were also structured to reset daily. The result is radical disparities in their performance in the long term compared to the index that they were intended to follow.
Often, stockbrokers did not tell their clients about the extremely risky nature of holding these types of funds for any period of time, a risk that the Financial Industry Regulatory Agency (FINRA) clearly recognizes. In a June 2009 Regulatory Notice (09-31), FINRA underscored the high-risk character of these ETFs, asserting their unsuitability for many investors that intend to hold them for longer than one trading session, especially if the markets are volatile.
Have you incurred financial loss due to your broker’s advice on leveraged or inverse ETFs and/or the amount of time you were advised to hold those funds? Contact Carlson Law to discuss your potential claim with an experienced securities attorney today at 619-544-9300 or www.securities-fraud-attorney-san-diego.com
Tags: ETFs, financial loss, FINRA, high-risk securities, inverse ETF; Direxion, investment loss, investment recovery, leveraged ETF, Proshares, Securities Attorney, Securities Fraud, Securities Fraud Attorney San Diego
Posted in Broker Fraud, Fiduciary Duty Breach, Investment Fraud, Negligent Misrepresentation, Securities Arbitration, Securities Fraud, Securities Law, Securities Litigation, Stock Fraud, Stock Loss | Comments (1)
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Desert Capital REIT, a non-traded realty investment trust founded in 2004, was created to fund short-term, high-interest rate mortgage loans. During the real estate boom, brokerage houses sometimes committed broker fraud by marketing these “hard money” loans as safe investments. Because they could earn as much as 13.4 percent interest, the REIT appealed to investors. But safe? In fact, these types of investments are illiquid and can be among the riskiest real estate investments you can make.
When the real estate market plummeted, investors were stunned by the annihilation of the REIT’s market value. Losses were hefty. In 2007, Desert Capital lost $21M. In 2009, it lost $11M. And it the third quarter of 2010, it lost a staggering $26M. By the time that the company announced the likelihood of its imminent liquidation, investors were left with virtually worthless non-dividend-paying, illiquid investments they couldn’t trade on any exchange.
The Securities and Exchange Commission (SEC) is currently investigating Desert Capital and its relationship with CM Capital and CM Securities, brokerage firms that not only shared Desert Capital CEO Todd Parriott, but also marketed the REIT.
Do you hold investments in Desert Capital? Did you purcuase on the advice of CM Capital or CM Securities? If so, contact Carlson Law at 619-544-9300 for a free consultation. We may be able to help you recover your investment loss.
Tags: Broker Fraud, Desert Capital, investment loss, real estate investment, REIT
Posted in Broker Fraud, Fiduciary Duty Breach, Investment Fraud, Negligent Misrepresentation, Securities Arbitration, Securities Fraud, Securities Law, Securities Litigation | Comments (0)