Posts Tagged ‘financial loss’
Annabel McClellan, the wife of Arnold McClellan, who was formerly the head of Deloitte Tax LP’s Mergers and Acquisitions, has settled a lawsuit
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alleging that she provided confidential information regarding mergers to family members. If the judge accepts Annabel’s $1M settlement, the Securities and Exchange Commission (SEC) has agreed to drop comparable charges against her husband.
According to the Commission, Annabel gave confidential insider information to her sister, Miranda Sanders, and Miranda’s husband James, on at least seven occasions. The Sanders used the information to make trades that earned them millions of dollars. The SEC claims that James Sanders, who is the proprietor of a financial firm, not only used the tips for his own advantage but also to the benefit of his partners and customers, who also made millions. The SEC further alleges that James took positions with companies in the U.S. that Annabel told him were targeted for acquisition. According to Annabel, her husband was unaware that she was providing confidential information to her sister and brother-in-law.
By settling the lawsuit, Annabel is neither admitting nor denying the charges against her. However, she has pled guilty to lying to the SEC during their investigation of the insider trading scam.
Annabel and Arnold McClellan were first charged by the SEC in 2010 after investigations were conducted simultaneously by the SEC, the Department of Justice (DOJ), the Federal Bureau of Investigation (FBI), and the Financial Services Authority (FSA).
Insider trading is breach of fiduciary duty on the part of a financial officer.
As such, it negatively affects the stock market in various ways. Most obviously, it hurts investor confidence. When a company’s confidential information is used for the benefit of a few, it may also harm the company, ultimately causing financial loss. When insider trader occurs, who is held responsible for this breach of trust? All of the parties involved. That includes the individual who passes the tip along and the person who receives it, as well as anyone who trades based upon illegally obtained insider information.
Are you are aware of an insider trading situation that has been detrimental to your financial welfare? If you feel that you are, contact a securities litigation attorney immediately. For a free consultation, contact security lawyer Dan Carlson of Carlson Law in San Diego today.
Tags: breach of fiduciary duty, Dan Carlson, financial loss, insider trading, Lawsuit, scam, SEC, Securities Fraud Attorney San Diego, Securities Litigation, Security Lawyer
Posted in Securities Law | Comments (0)
In October 2011, a former Agent for Hartford and Nationwide Life Insurance companies pled guilty to charges of theft and received a 10-year prison sentence. By Matthew J. Ryan’s own admission, he exploited weaknesses in the insurance companies’ practices and procedures in order to steal from the variable annuity contracts Hartford and Nationwide issued to his clients.
Ryan created fake companies and bogus “transfer forms” which he had his clients sign. The bogus forms gave Ryan the ability to divert funds from his customers’ variable annuities and, ultimately, into his own accounts. Hartford and Nationwide honored thousands of Ryan’s transfer requests, despite the fact that the fraudulent documents were obviously illegitimate. The fraudulent documentation was not detected until 2010. By that time, however, the former
agent had diverted an excess of $3M over a period of five years.
Two additional insurance companies have settled claims made by Ryan’s fixed variable annuity customers. Currently, combined suits of more than $3M against Nationwide and Hartford are pending.
Are you a former client of Mathew J. Ryan? Do you believe that your variable annuity contract assets have been or are being illegally diverted or invested unsuitably? If the answer to any of
these questions is yes, contact investment fraud lawyer Daniel Carlson at Carlson Law in San Diego for a free consultation. As an experienced investment recovery attorney, Mr. Carlson may be able to help you recoup all or part of financial loss.
Tags: Annuity (US financial products), Business, Contract, financial loss, Financial services, fraud, Insurance, investment fraud lawyer, investment recovery attorney, Life annuity, Matthew J. Ryan, San Diego, variable annuities, variable annuity, variable annuity contracts
Posted in Broker Fraud, Fiduciary Duty Breach, Investment Fraud, Securities Arbitration, Securities Fraud, Securities Litigation, Stock Loss | Comments (0)
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According to the October 11 issue of Investment News, the Securities and Exchange Commission (SEC) has filed a complaint against the Financial Industry Regulatory Authority (FINRA), alleging that requested staff meeting minutes were altered by a FINRA director before they were delivered to the SEC in August 2008. The alterations, according to the SEC, rendered the meeting notes incorrect and incomplete.
Although FINRA currently serves as a self-regulatory organization (SRO) for stockbrokers, it has recently aspired to assuming that role for financial advisors, too. Given the SEC’s complaint, however, those aspirations are in jeopardy.
Ironically, it was FINRA, not the SEC, that first brought the problem of the tampered documents to light. After reporting the problem to the SEC, FINRA appointed a new director in its Kansas office where the tampering occurred. The SRO has also updated its protocols for the handling of documents and instituted extensive ethics training for its employees.
But for the SEC, these measures aren’t enough. The commission has ordered that FINRA hire an independent consultant to review the SRO’s training and in-house procedures, and to make recommendations for improvement. The goal? Ensuring that in future the SEC consistently receives reliable and accurate paperwork from FINRA.
Within 30 days of receiving the consultant’s findings and recommendations, FINRA’s board must either implement the suggestions for improvement or protest them. Alternatives to any recommendations that FINRA finds impractical or cumbersome must then be determined and agreed upon by both the board and the consulting agent.
In settling the charges made against it by the SEC, FINRA is neither denying nor admitting them. As an SRO that ensures the compliance of brokers with SEC regulations, however, FINRA recognizes that its own employees must comply with any and all requests made by the SEC.
At Carlson Law, our securities fraud attorneys represent those who have suffered financial loss due to stockbroker misconduct. To learn more about issues in finance today that may affect your wellbeing, check out other blogs at Carlson Law.
Tags: brokers, Finance, Financial Industry Regulatory Authority, financial loss, FINRA, Kansas, SEC, securities fraud attorneys, Self-regulatory organization, SRO, stockbroker, US Securities and Exchange Commission
Posted in Securities Law, Uncategorized | Comments (0)
Ambac Financial Group Inc., as well as several of its banking underwriters and insurers, has agreed to pay a total of $33M in order to settle claims of investment fraud. According to investors who experienced significant financial loss, the parties involved hid risks from investors about the mortgage debt it guaranteed.
The primary claimants in the case are the Arkansas Teachers Retirement System, the Public Employees’ Retirement System of Mississippi and the Public School Teachers’ Pension and Retirement Fund of Chicago. These claimants allege securities fraud in regard to Ambac bonds and stocks purchased from October 25, 2006 to April 22, 2008.
According to the suit, Ambac gave out misleading information regarding the safety of the bonds it insured in order to inflate the value of the securities. Claimants further allege that Ambac, which insured instruments related to high-risk mortgages, hid its involvement in the subprime loan disaster, an involvement that became clear when the housing market collapsed in 2008. According to the suit, Ambac falsely claimed that it insured the “safest” transactions, when in reality it guaranteed billions of high-risk residential mortgage debt and collateralized debt obligations that were high risk in pursuit of big profit.
Once a federal court has approved the settlement proposal, Ambac will pay claimants 2.5M. Citigroup, Goldman Sachs, Merrill Lynch, HSBC Holding and Wachovia (now a part of Wells Fargo) will pay a combined total of $5.9 million. The four insurance companies involved will pay a total of $24.5M.
If you believe that you’ve been a victim of securities fraud, contact an investment recovery lawyer. Like the claimants in the Ambac case, you could recoup some or all of your financial loss through securities arbitration or litigation. Contact Carlson Law today at 619-544-9300 for a free consultation.
Tags: Ambac Financial Group, Citigroup, financial loss, free consultation, Goldman Sachs, Insurance, Investment Fraud, investment recovery lawyer, Merrill Lynch, Plaintiff, Securities Arbitration, Securities Fraud, Securities Fraud Attorney San Diego, Wells Fargo
Posted in Fiduciary Duty Breach, Investment Fraud, Negligent Misrepresentation, Securities Fraud, Securities Law, Securities Litigation | Comments (0)
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High net-worth investors will enjoy lower fees—that is, if the Securities and Exchange Commission’s (SEC’s) proposed changes to performance based fees proceed as planned.
The SEC intends to increase the dollar thresholds investors must meet before financial professional can charge them performance based fees. Currently, the thresholds are determined under two provisos of Rule 205-3 of the Investment Advisers Act: (1) brokers must have a reasonable belief that the client has a net worth of more than $1.5M, or (2) they must manage a minimum of $750,000 worth of investments for the client.
According to investment recovery lawyer Daniel Carlson of Carlson Law Firm, APC the current Act contains inherent risks for the average investor because it could encourage brokers to take big risks in order to make bigger fees: “If a high-risk investment fails, brokers don’t experience the financial consequences personally, but investors, particularly retirees, can end up losing everything.”
The SEC says it will issue an order revising the test for allowing performance fees to (1) a reasonable belief that the investor has $2 million in net worth or (2) $1 million of assets under management. In addition, the SEC order will exclude an investors primary residence from consideration in the 2 million dollars net worth evaluation, add a method for factoring inflation into the dollar amount tests.
If you are a high net-worth investor and have been exposed to unsuitable risk, you may have a claim for recovery of your losses. Contact Carlson Law at 619-544-9300 for a free consultation.
Tags: 1940 Investment Advisers Act, accredited investor, Broker, broker fees, Dodd-Frank, Fee, financial loss, high-risk investment, Investing, Investment, investment recovery lawyer, Investor, Securities Fraud Attorney San Diego, U.S. Securities and Exchange Commission
Posted in Fiduciary Duty Breach, Securities Law, Uncategorized | Comments (0)
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According to a June 6, 2011 article by James Vicini for Reuters (“Halliburton securities fraud lawsuit reinstated”) the U.S. Supreme Court has reinstated a securities fraud class-action lawsuit filed against Halliburton in 2001 by pension and mutual fund investors on behalf of all buyers of Halliburton stock between June 1999 and December 2001.
Claimants in the case charge that Halliburton fraudulently overstated its engineering and construction revenues as well as the positive impact its merger with Dresser Industries would have on the company. At the same time, claimants allege, Halliburton misled investors regarding the company’s liabilities due to asbestos.
Because of these misrepresentations, claimants argue, Halliburton stock was artificially inflated and, when the company revealed the true state of its affairs, its stock fell dramatically, causing financial loss to investors.
The lawsuit had formerly been thrown out of court by a Texas federal judge who ruled that evidence of loss causation, a link between the claimants’ losses and the company’s actions, was insufficient. And an appeals court upheld that decision.
Their rulings created confusion among appeals courts regarding the necessity of claimants to prove loss causation early in the litigation process.
The Supreme Court disagreed with the judge and the appeals court, ruling that stock fraud plaintiffs do not have to prove loss causation simply in order to pursue a class-action lawsuit. That’s good news not only for claimants in the Erica P. John Fund v. Halliburton case, but also for injured investors throughout the nation who’ve had their suits quickly dismissed due to insufficient initial proof of loss causation.
Tags: Class action, class action securities fraud, financial loss, Halliburton, Lawsuit, loss causation, Reuters, Securities Fraud, Stock Fraud, Supreme Court of the United States
Posted in Fiduciary Duty Breach, Investment Fraud, Negligent Misrepresentation, Securities Fraud, Securities Law, Securities Litigation, Stock Loss | Comments (1)
Often, investment advisors, stockbrokers and brokerages who unsuitably push Reg. D Private Placements on investors claim that any financial losses investors subsequently experience occur despite their due diligence. However, these private investments pay high fees that can induce some financial professionals to look the other way, focusing on the fifteen percent fee rather than the best interests of their clients in recommending these high-risk investments without the required due diligence having been performed. With the smell of large commissions and enormous fees in the air, it’s probably easy for brokers to rationalize away all of the drawbacks, risks, and any lack of appropriate due diligence for private placement investments.
Luckily for investors the Financial Industry Regulatory Authority (FINRA) has decided to come down hard on the sales of Reg. D Private Placements. At a yearly meeting of the agency, FINRA CEO and Chair Richard Ketchum explained that in the future brokers who promote and sell private placements must “push and pull” for the necessary due diligence information in order to avoid liability and assure that they’re making sound investment recommendations for their clients. That means doing a lot more than reading basic investment documents and attending “canned” meetings if questions needed to be asked.
At Carlson Law we pursue brokerage firms and financial professionals who recommend inappropriate, high-risk private placements to clients. For elderly investors, conservative investors, and those with a net worth of less than $1 million or a yearly income of less than $200,000, private placements may be per se inappropriate investments. If you’ve suffered financial loss due to stockbroker malpractice, contact Carlson Law in San Diego today at 619-544-9300.
Tags: Brokerage firm, Due diligence, Finance, Financial Industry Regulatory Authority, financial loss, financial losses, FINRA, inappropriate investments, Investment, investment attorney, Investor, Private placement, private placements, Reg. D Private Placements, San Diego, stockbroker malpractice
Posted in Broker Fraud, Fiduciary Duty Breach, Investment Fraud, Negligent Misrepresentation, Securities Arbitration, Securities Fraud, Securities Law, Securities Litigation, Stock Fraud, Stock Loss | Comments (2)
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According to an article published by Reuters on June 2, 2011, Goldman Sachs has been subpoenaed by the Manhattan District Attorney’s Office for information regarding its role in events which precipitated the recent worldwide financial crisis. Earlier this year, the Wall Street Journal reported that the U.S. Department of Justice also plans to subpoena Goldman Sachs.
Both federal and New York prosecutors want more information about documents discovered through a U.S. Senate subcommittee probe regarding the part Wall Street played in the collapse of the housing market. According to the subcommittee report, as the market began to drop in late 2006 and 2007, Goldman Sachs offloaded much of its subprime mortgage risk to innocent clients. The firm also purportedly took its time fulfilling customer requests to close out their failing accounts.
Last year, the Securities and Exchange Commission (SEC) filed a civil fraud suit against Goldman Sachs for its failure to disclose information linking it to complex mortgage securities. While the firm settled the charges, it refused to respond to the charges.
Are these current subpoenas a serious problem for Goldman Sachs? Financial experts disagree. Dick Bove, a Rochdale Securities analyst, says authorities are simply looking for someone to punish and Goldman Sachs seems like a likely candidate. Still, according to reporter Brad Hintz, any legal action against Goldman Sachs—whether successful or not—is bound to hurt the firm. Hintz advises that the company “make amends.” Other analysts maintain that the investigations will prove fruitless and have little impact on the company.
Meanwhile, Goldman Sachs has issued a public statement that it will “cooperate fully” with the Manhattan DA.
If you experienced financial loss during the recent financial crisis due to stockbroker malpractice, contact a stockbroker attorney at Carlson Law today at 619-544-9300 for a free consultation.
Tags: financial loss, Goldman Sachs, investment loss, investment recovery, mortgage securities, New York County District Attorney, Stock Fraud Attorney, stockbroker attorney, stockbroker malpractice, subprime mortgage, U.S. Securities and Exchange Commission, Wall Street
Posted in Broker Fraud, Fiduciary Duty Breach, Investment Fraud, Negligent Misrepresentation, Securities Arbitration, Securities Fraud, Securities Law, Securities Litigation | Comments (0)
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Although it’s been three years since financial misconduct on Wall Street rocked the nation, investors still have opportunity to recoup some or all of their financial loss.
If you suffered financial loss during the recent crisis, your broker, brokerage or financial advisor may be legally responsible for that loss. A variety of legal actions can be brought against financial professioals for malpractice, such as negligent investment misrepresentation for making inappropriate investment product recommendations, intentinal securities fraud and inapropriate account turnover/excessive trading or “churning” to name only a few examples.
“Each state has different statutes of limitations for different kinds of claims,” explains Daniel Carlson of Carlson Law, a securities litigation firm in San Diego. “Your ability to file for damages depends on where you live and the kind of claims you have. While one state may have a three-year statute of limitations for all claims, others may have deadlines as long as 10 years for claims like breach of fiduciary duty. And in some states, the ‘discovery rule’ applies to fraud. That means the statute of limitations’ clock doesn’t start ticking until an investor ‘discovers’ he or she has been defrauded.”
Defrauded investors may also be able to file claims in more than one state. “It depends upon where you live, where you transacted business with your broker and whether the account agreement has a ‘choice of law’ provision indicating the state law that applies in the event of any claims,” Carlson says.
“And of course there’s more than one way to file a claim,” he adds. “If there are several options available, a good litigator will choose the state and the claims that give their clients the best chance of success.”
Did you experience financial loss due to your financial advisor’s misconduct? Did your broker lie to you about an investment? Did he or she give you advice inappropriate to your financial goals? Don’t wait any longer to fight for the compensation you deserve. Remember, legal deadlines do exist, and your time could be running out.
To discuss your options, contact Carlson Law at 619-544-9300 for a free consultation with an experienced investment recovery lawyer.
“Even if claims seem to have exceeded the applicable statute of limitations, defrauded investors should still contact an attorney,” Carlson advises. “By using all the legal means at their disposal, securities fraud attorneys can sometimes still recover client losses through arbitration even after a statute of limitations has expired.”
Tags: breach of fiduciary duty, broker malpractice, churning, claims, damages, Dan Carlson, financial advisors, financial loss, fraud, investment recovery lawyer, Investor, Law, San Diego, securities fraud attorney, securities litigation firm, statutes of limitations, Wall Street
Posted in Broker Fraud, Fiduciary Duty Breach, Investment Fraud, Negligent Misrepresentation, Securities Arbitration, Securities Fraud, Securities Law, Securities Litigation, Stock Fraud, Stock Loss | Comments (2)
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In 2009, the Securities and Exchange Commission (SEC) began a civil fraud investigation of over a dozen banking firms that traded and sold mortgage-backed collateralized debt obligations (CDOs). This investigation has engendered subsequent probes into the behavior of Wall Street firms.
Did Wall Street bankers defraud investors by selling them CDOs in order to make a profit for themselves—and a few special clients—when the mortgage market collapsed? Federal prosecutors believe so. In fact, in the spring of 2010, they launched a criminal investigation into the matter, and it’s still ongoing.
Investigators allege that a number of major Wall Street banks (including Citigroup, Deutsche Bank, Goldman Sachs, J.P. Morgan Chase, Morgan Stanley and UBS) created CDOs in order to sell and then bet against (short) them in the event of a crash. These CDOs include Baldwin 2006-I and AB Spoke, which Morgan Stanley sold investors, and Carina, Cetus and Virgo, which Citigroup, Deutsche and UBS may have sold for fraudulent purposes.
New York’s Attorney General Andrew Cuomo has also begun an investigation into the behavior of Wall Street banks regarding CDOs. Investigators allege that Citigroup, Credit Agricole, Credit Suisse, Deutsche Bank, Goldman Sachs, Merrill Lynch, Morgan Stanley and UBS gave credit rating agencies misleading data in order to inflate CDO ratings. These agencies in turn have been harshly criticized and even sued for assigning high scores to numerous toxic CDOs.
Furthermore, the U.S. Attorney’s Office of Manhattan and the SEC are collaborating to determine if Wall Street banks misrepresented CDOs to their clients, failing to disclose pertinent facts when trading, marketing and selling them to clients.
Since hearings in Congress revealed that fraudulent conduct on Wall Street precipitated the nation into financial crisis, prosecutors have taken legal action against two traders for Bear Stearns without success. However, legislators are calling for more prosecutions, and criminal probes into Wall Street’s activities widening.
The SEC has subpoenaed Citigroup, Deutsche Bank, J.P. Morgan Chase and UBS, asking that they turn over a wide range of paperwork, including prospectuses and offering documents (final copies as well as drafts) and lists of investors associated with mortgage-related transactions. The SEC has also filed an action in federal court against Goldman Sachs, claiming that a trader on behalf of the company created an investment product designed to fail so that one of the company’s pet hedge-fund clients could bet against it and profit at the expense of less favored Goldman investors. Goldman is purportedly seeking to settle the case out of court.
From 2005 to 2007, diverse Wall Street banks issued CDOs totaling $1.08 trillion. The research firm Thomson Reuters reports that Citigroup, Deutsche Banks and Merrill Lynch issued the greatest dollar amount. J.P. Morgan, Morgan Stanley, UBS and Goldman were numbers five, seven, ten and 14 on the list, respectively.
If you believe that you’ve suffered financial loss due to CDO fraud, contact Carlson Law at 619-544-9300 for a free consultation today. The investment recovery litigators at Carlson Law are dedicated to getting justice for securities fraud victims.
Tags: CDOs, Collateralized debt obligation, Deutsche Bank, financial loss, fraud, Goldman Sachs, investment loss, investment recovery litigators, JPMorgan Chase, Merrill Lynch, Morgan Stanley, Securities Fraud, Stock Fraud Attorney, UBS, Wall Street, Wall Street banks, Wall Street firms
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)
