On Thursday, November 1st, 2012, FINRA Dispute Resolution issued guidance to attorneys who represent investors and those who represent non-FINRA investment advisers as to the availability of the arbitration and mediation services of the FINRA forum to resolve their disputes.
FINRA, The Wall Street funded watchdog, has long acted as the arbitration system in which investors and securities brokerages could, and were often forced by contract, to settle their legal disputes. However, until now, whether that system was open to registered investment advisers and individual investors was dubious and unclear.
Despite the fact that using FINRA arbitration might be more cost effective than going to court, most investment advisers are opposed to the changes. David Tittsworth, executive director of the Investment Adviser Association questioned the ruling, noting that there are few registered investment adviser account agreements requiring clients to forgo court and instead arbitrate any disputes.
Those favoring the changes say that using FINRA will be more cost effective than going through the expensive process of court and that for those investment adviser contracts which currently require arbitration, FINRA offers a much better financial deal than other arbitration services.
While the guidance provides some clarity as to how lawyers and investors can proceed, one thing to note is that FINRA does not regulate investment advisers. Therefore, FINRA can only do so much. Even with a ruling that goes against an investment adviser, unlike rulings against brokers, FINRA lacks the authority to suspend the adviser for failure to pay.
Carlson Law Firm is reviewing potential claims against investment advisers. To speak with an attorney regarding your, please call Carlson Law Firm 619-544-9300 for a free consultation.
Tags: Arbitration, Dispute resolution, Financial adviser, FINRA, Investment, investment recovery lawyer, Investor, Securities Fraud Attorney San Diego, Wall Street
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The Financial Industry Regulatory Authority (FINRA) recently received a withdrawal request from Boogie Investment Group, a small brokerage house that sold failed Provident Royalties private placements to its investors. Of the 52 brokerage houses that sold Provident private placements, Boogie Investment is the eleventh to call it quits this year.
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Private placements amounting to roughly $410K were sold by Boogie, whose revenues dropped from 1.2M three years ago to $422K this last fiscal year. But reduced earnings aren’t the only reason Boogie is exiting the brokerage business. The company has been hard hit by securities litigation. The firm is not only fighting a class action suit comprised of investors to whom they sold Provident private placements, but it’s also contending with a suit filed by those who bought Provident Shale Royalties products. Moreover, Boogie is combating other lawsuits that are unrelated to its sale of Provident Royalties private placements.
FINRA has forcefully dealt with brokerage firms as well individual brokers who sold private placements, alleging that they failed in their due diligence, both in investigating the placements and in assessing their suitability for their clients.
Other defunct brokers who sold Provident Royalties private placements include Workman Securities, Investlinc Securities/Meadowbrook, WFP Securities, Okoboji Financial, Matheson Securities, United Equity, CapWest, Private Asset Group Inc., Community Banker Securities LLC, E-Planning Securities Inc., Empire Financial, GunnAllen Financial and Barron Moore.
Have you incurred investment loss due to broker misconduct? Contact a stockbroker fraud lawyer in San Diego. It may be possible for you to recoup some or all of your losses. For a free consultation, contact Daniel Carlson, Esq. at Carlson Law 619-544-9300.
Tags: Boogie Investment Group, broker misconduct, brokerage house, CapWest, Community Banker Securities LLC, E-Planning Securities Inc., Empire Financial, FINRA, GunnAllen Financial and Barron Moore, Investlinc Securities/Meadowbrook, investment loss, investors, Matheson Securities, Medical Capital, Okoboji Financial, Private Asset Group Inc., private placements, Provident, Provident Royalties, Securities Fraud Attorney San Diego, Securities Lawyer, Securities Litigation, stockbroker fraud lawyer, United Equity, WFP Securities, Workman Securities
Posted in Fiduciary Duty Breach, Investment Fraud, Negligent Misrepresentation, Securities Arbitration, Securities Fraud, Securities Law | Comments (0)
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)