About Richard Frankowski

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So far Richard Frankowski has created 573 blog entries.

SEC Charges Atlanta Firm With Fraud Over Public Pension Funds

The SEC filed fraud charges against an Atlanta-based investment firm and two of its executives for their handling of the city's pension funds for police, firefighters, transit workers, and other employees. According to the SEC, Gray Financial Group Inc. placed public pension funds into an investment that did not adhere to state law and collected over $1.7 as a result. The group, its and founder and president, Laurence Gray, and co-Chief Executive Officer Robert Hubbard IV allegedly breached their fiduciary duties by soliciting investments in an alternative fund called GrayCo Alternative Partners II LP. The group's attorney responded by stating that the "claims and arguments in the SEC's filing today are without merit." The SEC claims that the investments violate Georgia law because they did not have at least four other investors and did not have a minimum of $100 million in assets. Also, a Georgia public pension fund's investment is limited to no more than twenty percent of the [...]

Nationwide Insurance To Pay $8M Penalty

Nationwide Life Insurance Company will pay $8 million to settle charges filed by the SEC alleging that the insurance giant consistently violated pricing rules when processing orders of many of its insurance products. A statement by the SEC claims that Nationwide knowingly waited to deliver mail in order to avoid using current-day prices. “For more than a 15-year period, Nationwide intentionally delayed the delivery of untracked mail containing orders from customers and processed them at the next day’s prices in violation of the law,” said Sharon Binger, director of the SEC’s Philadelphia regional office. According to a report by the Wall Street Journal, Nationwide requested that the post office separate mail directed to its variable contract business from mail directed to boxes for other lines of business. The company also asked the mail delivery service to travel to the post office at 3 A.M., 5 A.M., and 7 A.M. each business day to retrieve mail for other lines of business. [...]

UBS Loses Arbitration, Forced To Pay $200k

UBS lost an arbitration case this week pertaining to the offer and sale of a number of Puerto Rico Fixed Income and Bond funds. The Claimant in the arbitration asserted causes of action for violation of the Puerto Rico Uniform Securities Act, securities fraud, constructive fraud, breach of contract, negligence, negligent supervision, failure to supervise, breach of fiduciary duty, misrepresentation, omission of facts, manipulation, unsuitability, common law fraud, constructive fraud, and respondeat superior. The Claimant's allegations related to the her purchase of shares of Puerto Rico Fixed Income Funds I, II, and III and Puerto Rico Investors Bond Fund. In her statement of claim, the Claimant requested rescission of the closed end funds sold to her and $357,000 to $625,000 in compensatory damages, as well as interest, costs, attorneys' fees, and punitive damages. In her pre-hearing brief, the Claimant requested compensatory damages between $339,297 and $702,003. UBS requested dismissal of the claims and expungement of the action. After considering the [...]

LPL Financial Fined $11.7M For ‘Widespread Supervisory Failures’

FINRA ordered LPL Financial to pay $11.7 million in fines and restitution for what it called "widespread supervisory failures" pertaining to sales of complex products. According to the regulator authority, from 2007 to April 2015, LPL failed to adequately supervise sales of particular investments, such as exchange-traded funds, variable annuities, and nontraded real estate investment trusts. Additionally, LPL did not properly deliver over fourteen million trade confirmations to customers. LPL had no system set up to watch the amount of time customers held securities in their accounts or to enforce limits on concentrations of complex products in customer accounts. The systems that LPL did have set up to watch trading activity in customer accounts were ravaged by "multiple deficiencies." For example, LPL did not create proper anti-money laundering alerts and failed to deliver trade confirmations in 67,000 customer accounts. FINRA also penalized LPL for not supervising advertising and other communications, such as brokers' use of consolidated reports. The penalty includes [...]