Legal Matters

On November 19, 2020, the Securities & Exchange Commission announced an award of $900,000 to a whistleblower whose timely and important information resulted in a significant expansion of an ongoing investigation. The Frankowski Firm is currently assisting whistleblowers to report securities fraud and misconduct. If you believe your company might be participating in securities fraud, please contact us and continue reading below. Overview of the SEC Whistleblower Program In 2010, Congress passed The Dodd-Frank Wall Street Reform and Consumer Protection Act, which  amended the Securities Exchange Act of 1934 by creating a Whistleblower Program to provide monetary incentives for individuals to come forward and report possible violations of the federal securities laws to the SEC. In addition to providing monetary incentives for individuals, the Program also prohibits retaliation by employers against employees who provide the SEC with information about possible securities violations. The SEC Whistleblower Program is an important tool to reward individuals who provide the SEC with high-quality tips [...]

On December 1, 2020, the Securities & Exchange Commission announced an award of $6 million to joint whistleblowers whose information and assistance led to the successful enforcement of SEC and related actions.  The whistleblowers’ substantial assistance, provided to the SEC and another government agency, included submitting documents, participating in interviews, and identifying key individuals involved in the misconduct. The Frankowski Firm is currently assisting whistleblowers to report securities fraud and misconduct. If you believe your company might be participating in securities fraud, please contact us and continue reading below. Overview of the SEC Whistleblower Program In 2010, Congress passed The Dodd-Frank Wall Street Reform and Consumer Protection Act, which  amended the Securities Exchange Act of 1934 by creating a Whistleblower Program to provide monetary incentives for individuals to come forward and report possible violations of the federal securities laws to the SEC. In addition to providing monetary incentives for individuals, the Program also prohibits retaliation by employers against employees who [...]

Moloney Securities Co. Inc. was recently censured and fined $100,000 and required to pay $15,574.13, in restitution to a customer. The FINRA findings stated that Moloney, from January 2013 through April 2015, violated FINRA Rules 3110 and 2010 and NASD Rule 3010 by failing to create and enforce a supervisory system to comply with FINRA’s suitability rule regarding qualitative suitability and concentration in high-risk products. Moloney Failed to Establish and Maintain a Supervisory System that Complied with FINRA Rule 2111. FINRA discovered that Moloney did not provide any training to any of its regional managers on how to review recommendations of products or issue instructions or alerts. The electronic surveillance system used was not designed to look for concentration in high-risk products or qualitative suitability. While general instructions on potential suitability concerns were provided to the regional managers, FINRA determined that Moloney did not provide reasonable guidance, written procedures, training programs, or specific tools to properly handle those concerns. This [...]

The Financial Industry Regulatory Authority (“FINRA”) has banned Louis Cook, who was a Staten Island, New York-based representative for National Planning Corporation and Securities Service Network. FINRA found that Cook induced elderly customers and parents of disabled children to sign third-party authorization forms through intentional misrepresentations, violating FINRA Rules 2010 and 2150(a). According to FINRA’s findings, from August to December 2016, Cook sent letters to at least 11 of these customers requesting their signatures for Third Party Authorization Forms giving Cook the power to make changes and/or withdraw funds from their variable annuity policies. In the letters, Cook claimed that the Department of Labor's "Fiduciary Rule" required him to ask for Third Party Authorization Forms from the customers. Without them, he claimed he could not continue to handle their variable annuity policies. FINRA found these were intentional misrepresentations and that Cook’s customers signed the forms based on Cook’s fraud. FINRA found that Cook was aware his customers did not intend [...]