Levin, Papantonio, Thomas, Mitchell, Rafferty & Proctor, P.A.'s Blog

Investment and Securities Fraud Lawyer - Levin, Papantonio, Thomas, Mitchell, Rafferty & Proctor, P.A.

Tuesday, August 12, 2014

Tuesday, August 12, 2014
Losing your life savings because of unsuitable investment advice by your financial advisor can leave you feeling helpless and wondering where to turn. You want answers and justice. A UBS Puerto Rico fund lawsuit may be able to give you both. At Levin, Papantonio, Thomas, Mitchell, Rafferty & Proctor, our experienced investment loss attorneys can help you find the justice you deserve. In consultation with one of our attorneys, we will evaluate the merits of your case and recommend whether... Read more
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Tuesday, July 22, 2014

Tuesday, July 22, 2014
Puerto Rico's power authority bonds dropped from trading at around 55 cents on the dollar to 45 cents on the dollar by the end of June as investors worry about the agency's inability to pay off its bonds and bank loans. The power authority is about $8.8 billion in debt. It owes Citigroup $146 million by mid-August and $525 million to Scotiabank de Puerto Rico by August 14 if it cannot renew its line of credit with Scotiabank. A spokesman for the Government Development Bank said there were... Read more
tags: UBS Puerto Rico, Citigroup, bond losses

Wednesday, July 16, 2014

Wednesday, July 16, 2014
The Securities and Exchange Commission (SEC) has recommend disciplinary action for possible securities violations, including the failure to disclose conflicts of interest, by BlackRock Advisors. The SEC provided BlackRock with a Wells Notice, the standard procedure used to inform a party it is under investigation and to give notice of the recommended action against the party. In this instance the SEC noted possible conflicts of interest and possible violations of the rules that require... Read more
tags: SEC, BlackRock

Monday, July 14, 2014

Monday, July 14, 2014
In an effort to tighten the rules for resolving investor disputes in arbitration, the Financial Industry Regulatory Authority (FINRA) has proposed a rule to narrow the definition of public arbitrator. Currently, there are 3,555 public arbitrators and 2,837 non-public arbitrators. The proposed rule would narrow the definition of a public arbitrator by: Allowing anyone who has worked in the financial industry for any amount of time to only be classified as a non-public arbitrator, not a public... Read more
tags: finra

Friday, July 11, 2014

Friday, July 11, 2014
After defrauding 76 investors, a New Jersey investment firm has been ordered to pay out $55 million. A group of hedge-fund managers at the firm were selling securities to investors by going through sales representatives that were not actually licensed by the state. The scheme was run between 2009 and 2011 and defrauded people described as "little guys and moms and pops." In addition to investing through unlicensed sales persons, the group of hedge-fund managers had also engaged in the following... Read more
tags: investment fraud

Monday, July 7, 2014

Monday, July 7, 2014
In an internal memo provided by UBS spokesman Gregg Rosenberg, the firm announced that UBS Puerto Rico Chairman Miguel Ferrer will leave the firm as of July 31. According to the memo, Ferrer's position is being eliminated. The announcement comes after hundreds of claims have been filed against UBS for misconduct surrounding the sale of Puerto Rican municipal bonds. UBS financial advisors inappropriately recommended that investors concentrate their life savings in high-risk bonds without... Read more
tags: UBS Puerto Rico

Friday, July 4, 2014

Friday, July 4, 2014
Chairman of the U.S. Securities & Exchange Commission (SEC), Mary Jo White, has issued some new controls on high-frequency trading. While her plan will impose new amounts of scrutiny on rapid-fire traders and private trading, the restrictions will not be as harsh as some of those that have been imposed internationally. Part of these new restraints are in response to the New York attorney general claiming that rapid-fire traders manipulate slower investors. Part of White's plan would include... Read more
tags: SEC

Tuesday, July 1, 2014

Tuesday, July 1, 2014
In a recent speech, the chairwoman of the SEC, Mary Jo White announced that she has asked the agency to enhance the transparency of bond prices. The initiative would require price quotes from alternative trading systems and other electronic markets to be publicly circulated. Increased transparency in this sector of Wall Street would decrease the advantage that middlemen currently have over other investors. The current municipal bond market is highly fragmented with no centralized exchange. And... Read more
tags: SEC, bond fraud

Monday, June 30, 2014

Monday, June 30, 2014
UBS is under investigation by U.S. authorities for criminal fraud because of the actions of a former  UBS broker who allegedly directed clients to borrow money in violation of lending rules in order to buy mutual funds that later plummeted in value. UBS executives in the United States and Puerto Rico could be held criminally responsible if they knew that loans made by UBS in Utah were used in violation of lending practices and did nothing to stop it. The non-purpose loans in question are backed... Read more
tags: UBS Puerto Rico

Friday, June 27, 2014

Friday, June 27, 2014
Over the last week, yields on Puerto Rico's $3.5 billion junk bonds issued in March have hit record highs. Yields move inversely to price. The price on the debt fell to a record low of 85.25 cents on the dollar. The spike in bond yields correlates with the threatened strike of public workers who are opposed to the budget law recently enacted by Puerto Rico's legislature. Governor Alejandro Garcia Padilla signed the law to declare a fiscal emergency. The territory has suffered years of economic... Read more
tags: UBS Puerto Rico
Friday, June 27, 2014
A settlement was issued between Liquidnet, Inc. and the Securities and Exchange Commission (SEC) due to improper access to confidential trading information. The SEC claims that Liquidnet allowed access to this information between 2009 and 2011 and shouldn't have. The SEC also censured Liquidnet, which allows for tougher sanctions if the violations are repeated. Separately, the SEC accused Wedbush Securities, Inc., of giving customers access to the trading market without properly utilizing risk... Read more
tags: SEC

Thursday, June 26, 2014

Thursday, June 26, 2014
UBS reported a rise of 7 percent in profits for the first quarter of 2014. Profits rose to 1.05 billion Swiss francs from the 988 million francs that the company reported for the same period last year. That's equivalent to almost 1.2 billion U.S. dollars for the first quarter. UBS chief executive Sergio P. Ermotti said he was pleased with the profitability and touted the dedication of the company to benefiting clients and shareholders. However, the financial success of the financial services... Read more
tags: UBS Puerto Rico

Monday, June 23, 2014

Monday, June 23, 2014
Halfway through 2014, the outlook for UBS Puerto Rico investors is bleak. The UBS Puerto Rico municipal bond crisis caused many investors to lose their savings and financial stability. In 2013, UBS Financial Services of Puerto Rico recommended that investors buy closed end bond funds that were highly leveraged and illiquid, despite investor needs for stable income investments. The value of the bonds plummeted and the bonds were eventually downgraded to junk status earlier this year. For... Read more
tags: UBS Puerto Rico

Friday, June 20, 2014

Friday, June 20, 2014
A Puerto Rico based non-profit has filed a claim against UBS Financial Services of Puerto Rico for $2 million in damages sustained because of investments in UBS Puerto Rico closed-end bond funds. The non-profit's mission is to protect certain employees and improve their working conditions in addition to promoting their social and financial interests. The claimant relied on UBS to recommend low-risk investments in order to safely grow the claimant's savings for the benefit of its members.... Read more
tags: UBS Puerto Rico

Tuesday, June 17, 2014

Tuesday, June 17, 2014
After the United States announced that it may delay payments to the Government Development Bank and the pension system, Puerto Rico's general obligation debt traded at its lowest level this month. Puerto Rico's GO debt traded at an average of $89.188 with an 8 percent coupon and a 2035 maturity date. It was the lowest since May 29. And just one of the financial hits the island is suffering from. Following the UBS Puerto Rico municipal bond crisis of last year, Puerto Rico continues to take... Read more
tags: UBS Puerto Rico

Monday, June 9, 2014

Monday, June 9, 2014
In an effort to strengthen the ability to monitor risks of mutual funds, the SEC (Securities and Exchange Commission) is developing a rule proposal that would improve data received  from mutual funds, in addition to closed-end funds and exchange-traded funds. By modernizing and streamlining the information that funds report to the SEC, the information would be easier to search and analyze. It would give the SEC the ability to look at trends for asset classes and ultimately help bring investment... Read more
tags: SEC, mutual funds

Thursday, June 5, 2014

Thursday, June 5, 2014
The California Department of Business Oversight have begun to question Inland American about the reasoning for some of their shares being offered for less than they were actually being sold. Inland American Real Estate Trust Inc., is the largest non-traded real estate investment trust (REIT). While Inland American Real Estate was offering shares for less than $7 per share and were selling them for over $8, a spokesman for the Department of Business Oversight reported that Inland American was... Read more
tags: Inland America, public non-traded REIT

Tuesday, May 20, 2014

Tuesday, May 20, 2014
Investors who lost their savings because of UBS recommending Puerto Rico bond fund investments have filed a class action in U.S. District Court against UBS. In the complaint, the victims ask for more than $5 million in damages.Investors allege that UBS marketed the bond funds as a stable "fixed income" investment when in reality the funds were high risk and highly leveraged. FINRA has already received more than 200 arbitration claims for UBS's misconduct regarding Puerto Rican bond funds. This... Read more
tags: UBS Puerto Rico

Friday, May 16, 2014

Friday, May 16, 2014
The New York Department of Financial Services (NYDFS) fined Axa Equitable Life Insurance Co. this month for limiting the returns of variable annuity clients without the proper notice. Although Axa had filed requests with the NYDFS to amend its Plans of Operation for annuity contracts by adding its Tactical Manager Strategy, Axa failed to identify the significance of these changes. Instead of being a routine change to the funds, the changes altered the products so that the changes potentially... Read more
tags: Axa, variable annuity

Tuesday, May 13, 2014

Tuesday, May 13, 2014
According to Peter Mougey, shareholder at Levin, Papantonio, Thomas, Mitchel, Rafferty & Proctor, P.A., "The losses caused by the protection afforded the rating agencies in our legal system  have been  shouldered by main street. The ratings model is conflict ridden, broken.  Incredibly, despite the disgusting conduct, the ratings agencies were given a free pass by our courts because its opinions are considered protected speech." The problem stems from the issuer-pays model that allows... Read more
tags: SEC, credit rating

Friday, May 9, 2014

Friday, May 9, 2014
The Financial Industry Regulatory Authority (FINRA) fined Morgan Stanley $5 million for not following proper procedures in the initial public offerings of 83 companies that included Facebook and Yelp. FINRA alleged that when Morgan Stanley solicited investors for IPOs, the bank failed to distinguish two different types of nonbinding offers. Morgan Stanley did not differentiate between “indications of interest” and “conditional offers.” It used both terms interchangeably and failed to establish... Read more
tags: finra, Morgan Stanley

Thursday, May 8, 2014

Thursday, May 8, 2014
The Financial Industry Regulatory Authority (FINRA) has lifted the hold it had placed on cases involving the victims who lost their life savings in closed-end Puerto Rico bond funds. FINRA had placed a hold on some cases because it lacked a sufficient number of arbitrators to hear them. More than 200 cases have been filed with FINRA regarding the misconduct of UBS Puerto Rico. Initially, FINRA only had a pool of about 60 arbitrators. As the number of cases increased, FINRA started searching for... Read more
tags: UBS Puerto Rico, finra

Monday, May 5, 2014

Monday, May 5, 2014
No one knows when the markets are going to move up or move down.  If this was possible over the long-term we would all simply invest and quit working.  The overwhelming majority of industry and academic studies demonstrate market timing over the long-term does not work. UBS is well aware of this modern portfolio theory commonly called a random walk. Instead, a well allocated portfolio invested across asset categories (stocks, bonds, and cash) and diversified in multiple industry sectors and... Read more
tags: UBS Puerto Rico

Friday, April 18, 2014

Friday, April 18, 2014
A Real Estate Investment Trust (REIT) allows investors to own and operate income-producing real estate through a corporation. The real estate in a REIT can range from offices and apartment buildings to warehouses or timberlands. The benefit of a REIT is the ability to avoid corporate income tax if certain requirements are met. One REIT requirement is that 90% of its income must be paid out in dividends. This makes REITs attractive for investors who are seeking a stable income. However, the... Read more
tags: public non-traded REIT

Monday, April 14, 2014

Monday, April 14, 2014
The nationally recognized investment fraud attorneys at Levin, Papantonio, Thomas, Mitchel, Rafferty & Proctor, P.A. are actively filing claims on behalf of investors who suffered unwarranted losses. UBS Financial Services of Puerto Rico routinely advised clients to take concentrated positions in closed-end bond funds filled with opaque and high risk bonds. The UBS Puerto Rican bond funds  were often described  as safe investments appropriate for investors seeking stable income, despite the... Read more
tags: UBS Puerto Rico

Wednesday, May 8, 2013

Wednesday, May 8, 2013
Those who pay attention to the goings-on at the U.S. Supreme Court are rarely surprised anymore when the majority decision on a given case benefits large, corporate institutions to the detriment of average citizens and the government agencies that protect their interests. Case in point: the recent ruling on a case involving a large investment firm and the powers of the Securities and Exchange Commission to investigate them. The case was SEC v. Gabelli, the defendants being Marc Gabelli,... Read more
tags: SCOTUS, SEC

Monday, September 9, 2013

Monday, September 9, 2013
According to Forbes, Philip Falcone is No. 377 on the list of the 1%, worth $1.2 billion as of March 2013 as well as one of the Top 40 hedge fund managers in the U.S. Except that he won't be doing that anymore - for awhile, anyway.  In a nation that finds it more expedient to bail out the wealthy and powerful (so-called “job creators”) and give them a free pass when they break the rules (“A rich man's prank is a poor man's felony” - Joseph Wambaugh), it's heartening to see when one of them is... Read more
tags: SEC, hedge fund

Monday, August 19, 2013

Monday, August 19, 2013
Author and talk show host Thom Hartmann periodically suggests that it is a form of mental illness – a pathological condition.  We're talking about the type of sociopathic greed that has become the “American Way” over the past generation, that has hollowed out our once great nation and left over half of its wealth under the control of 2% who produce nothing in the way of real goods or services, but simply play “money games,” moving funds from one place to another, buying legislation from their... Read more
tags: SEC

Monday, July 15, 2013

Monday, July 15, 2013
During an age in which so-called “public servants” have forgotten, or are deliberately ignoring the fact that they are supposed to be serving the citizens and not the corporations that line their pockets, it's refreshing to see a taxpayer-funded government bureau actually doing what they're supposed to do – which in the case of the Securities & Exchange Commission (SEC)  crack down on some of the most egregious abuses committed by brokers and firms in the almighty financial “services”... Read more
tags: SEC, churning

Thursday, July 11, 2013

Thursday, July 11, 2013
LPL Financial, one of the largest investment firms in the nation and – according to the company website – a “top RIA custodian,” appears to have a major liability on its hands.   This liability has a name: Blake Richards.  Last month, Richards was charged with the theft (the polite term is “misappropriation”) by the Securities and Exchange Commission of $2 million from the retirement savings and life insurance benefits of no fewer than six clients.   His was a contemptible, yet classic and... Read more
tags: LPL financial, broker misconduct

Friday, June 21, 2013

Friday, June 21, 2013
If you are a broker with a financial services firm and you want to do some trading of your own, should you be forced to do so exclusively through your employer? After all, that's like working for Mega-Lo Mart or Big Box Stores, Inc. and being told that as an employee, you may not shop anywhere else. Or is it? Recently, brokers in California working for Bank of America, Wells-Fargo and Morgan Stanley (admittedly, not the most popular firms among average working Americans today) brought a class... Read more
tags: Bank of America, Wells Fargo, Morgan Stanley

Tuesday, June 18, 2013

Tuesday, June 18, 2013
Often, we as a society are faced with difficult choices – and the issue of who is helped and who may potentially be harmed is not always clear.  Case in point – an employee's right to privacy when it comes to his/her activities on Internet social media sites, such as Facebook, Twitter, MySpace and others. Because alpha humans (not necessarily male) naturally crave power, control and domination over other humans in a weaker position, employers have in recent years demanded that their employees... Read more
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Wednesday, May 1, 2013

Wednesday, May 1, 2013
It's not surprising that public trust in the financial services industry has been eroding for the past several years. Every week for the past generation it seems, there have been more and more stories about brokers and other financial professionals who – for whatever reason – steer their clients into bad investments that wind up costing those clients big money. Sometimes, it's by design; other times, it's simply carelessness or ignorance. In some cases, when a broker works for a large firm, s/... Read more
tags: broker misconduct

Sunday, April 1, 2012

Sunday, April 1, 2012
Wolves in Sheep’s Clothing The SEC has issued an update of a previous alert warning investors of scammers posing as SEC employees soliciting personal and financial information.  In the warning, the SEC reminds the public that it does not allow financial solicitation offers, offer assistance in the sale or purchase of securities, or endorse money transfers; nor is the SEC linked to any drawings, sweepstakes, lotteries, or anything involving prizes, winnings, or cash windfalls. The SEC has seen a... Read more
tags: SEC, scam

Wednesday, March 21, 2012

Wednesday, March 21, 2012
FINRA enforcement statistics experience hike in 2011 compared to 2010 An annual survey of FINRA sanctions revealed that 2011 was quite busier than 2010.  In addition to banning more reps, FINRA fines jumped 51% from $48 million in 2010 to $68 million in 2011. The information is located in the annual FINRA Sanctions Survey, recently released by law firm Sutherland Asbill & Brennan.  The Sutherland attorneys who conducted the survey, Brian Rubin, Deborah Helitzer, and Andrew McCormick, said... Read more
tags: finra

Wednesday, February 22, 2012

Wednesday, February 22, 2012
On February 15, 2012, the Securities and Exchange Commission (SEC) announced that it is strengthening its rule on investment advisory performance fees. It is raising the net worth requirement for investors who pay performance fees and excluding the value of the investor’s home from the net worth calculation. Current SEC rules allow RIAs (Registered Investment Advisors) to charge clients performance fees as long as the net worth the RIA is managing on behalf of the client meets specific dollar... Read more
tags: investment advisor fee, SEC

Sunday, November 6, 2011

Sunday, November 6, 2011
As the “occupy Wall Street” movement continues, UBS AG gives protestors more fuel for the fire.  On October 25, 2011, the Financial Industry Regulatory Authority fined the Swiss banking giant $12 million for its continuous failure to properly supervise millions of short-sale orders. Specifically, the case is against UBS Securities, the American branch of the Swiss-based bank, and it zeroes in on the practice of short-selling.  In a nutshell, short-selling occurs when investors bet that the... Read more
tags: UBS, occupy Wall Street, finra

Monday, October 24, 2011

Monday, October 24, 2011
Two years ago, former Merrill Lynch employee Bruce Hammonds, was sent to prison for securities fraud; now FINRA is fining Merrill Lynch for not properly supervising Hammonds. FINRA alleges that Merrill Lynch’s lack of monitoring allowed Hammonds to conduct a $1.4 million Ponzi scam that roped in 11 victims.  Hammonds operated the scam under the name B&J Partnership.  Under the guise of putting his clients’ money into a Merrill Lynch fund, Hammonds instead placed the cash in his working... Read more
tags: finra, Merrill Lynch, Ponzi
Monday, October 24, 2011
The United States Court of Appeals for the Second Circuit has ruled that FINRA does not have the authority to enforce disciplinary actions on its members through the court system. The ruling comes as a result of a legal skirmish FINRA has been involved with for years concerning Fiero Brothers, a penny stock brokerage firm, and its owner John J. Fiero.  NASD Regulation Inc. filed the original complaint, charging Fiero and his brokerage firm with practicing short selling securities in order to... Read more
tags: disciplinary action, finra

Monday, September 26, 2011

Monday, September 26, 2011
On September 13, the House of Representatives Financial Services Committee’s capital markets subcommittee will hold a hearing to discuss potential solutions for the regulation of investment advisors and broker/dealers.  The discussion will also include the hotly debated topic of implementing a fiduciary standard for broker/dealers who issue investment advice tailored to specific clients. The recent Dodd-Frank study of the current regulation of investment advisors offered several solutions to... Read more
tags: Dodd-Frank, SRO, finra
Monday, September 26, 2011
On August 24, 2011, FINRA issued an investor alert titled “Gold Stocks—Some Investments Mine Your Pocketbook”.  The alert addresses the current frenzy to invest in gold due to record-high prices of gold bullion.  While it is true that there are legitimate gold investments, FINRA is worried that investors are being mislead to invest in scams pushing gold stocks. Gold scams rely on exaggerated claims that involve the stocks of gold mining companies, whose stocks are based on unstable gold... Read more
tags: finra, gold scam

Sunday, January 23, 2011

Sunday, January 23, 2011
Investors are hungry for results, and they want them higher and faster than ever before.  Last Tuesday, the Financial Industry Regulatory Authority (FINRA) issued a watch list announcing a crackdown on ‘yield chasing’ (risky or nontraded REITs, VAs and private placements).  As the primary regulator of brokers, FINRA is warning them to be cautious of how they try to fulfill their clients’ demands for yields. The top issues listed on FINRA’s watch list include: Better Conduct In a 16-page letter... Read more
tags: finra, yield chasing