Posts Tagged ‘securities fraud attorneys’

FINRA REACTS TO SEC CHARGES THAT IT MISHANDLED DOCUMENTS

December 7th, 2011
Seal of the U.S. Securities and Exchange Commi...

Image via Wikipedia

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: , , , , , , , , , , ,
Posted in Securities Law, Uncategorized | Comments (0)

Wells Fargo/Wachovia Respond to Broker Fraud Charges with Payouts to Investors

May 5th, 2011
Bank branch at the intersection of College Ave...

Image via Wikipedia

According to articles by analysts Liz Skinner (Investment News), Jean Eaglesham and Dan Fitzpatrick (Wall Street Journal), Wells Fargo & Co. has consented to dish out a whopping $11.2 million to investors. What’s the reasoning behind this generous payout? The financial giant is hoping to lay rest to charges by the Securities and Exchange Commission (SEC) that its Wachovia Capital Markets LLC affiliate engaged in investment fraud by price gouging customers.

According to SEC charges, Wachovia engaged in broker fraud when they fleeced investors by grossly overcharging them for collateralized debt obligations (CDOs). CDOs, which are mortgage-backed securities, were sold by Wachovia at a rate 70 percent higher than their own estimate of their mark-to-market value. Although several individuals were the victims of this flagrant swindle, the primary injured party was the Zuni Tribe of American Indians.

And Wells Fargo may not be the only culprit on Wall Street that dealt in overpriced CDOs. Wall Street investment firms have sold $1 trillion worth of CDOs. Were those sales examples of investment fraud, too? The SEC is looking into it by subpoenaing records from JP Morgan, UBS, Deutsch Bank and Citigroup—and arranging preemptive settlement discussions with suspect firms.

Recently, firms on Wall Street have been hard hit by SEC actions and lawsuits filed by securities fraud attorneys—and for good reason. Their promotion and sale of trillions of dollars in complex, illiquid securities backed by risky subprime mortgages was a major precipitating factor in the recent banking crisis.

At Carlson Law, we believe that these SEC investigations foreshadow future arbitration awards against firms that sold CDOs. For further questions and information, contact our securities fraud attorney in San Diego today.

Tags: , , ,
Posted in Broker Fraud, Fiduciary Duty Breach, Investment Fraud, Negligent Misrepresentation, Securities Fraud, Securities Law, Securities Litigation, Stock Fraud, Stock Loss | Comments (3)