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Massachusetts Charges Fidelity With Dishonest And Unethical Behavior

In an administrative complaint, Massachusetts charged Fidelity Brokerage Services with dishonest and unethical behavior for letting unregistered investment advisors perform trades on the Fidelity broker-dealer platform, thus creating fees for both the firm and the unregistered advisors. At minimum, thirteen unregistered Massachusetts investment advisors used Fidelity's platform, according to William Galvin, secretary of the commonwealth. For those advisers, “Fidelity served as a haven from regulatory oversight as it ignored blatant unregistered investment advisory activity,” according to a statement from Galvin's office. Fidelity believes it has done nothing wrong. “We do not believe that Fidelity has violated any laws or regulations in connection with this matter,” said Adam Banker, a Fidelity spokesman. “We look forward to reviewing the details of this matter and addressing them appropriately.” “Fidelity, of all companies, knows full well the range of investor protection provisions resulting from regulatory oversight,” Galvin stated. “For them to knowingly allow unregistered activity on their broker-dealer platform is a profound failure of [...]

By |October 29th, 2015|Press Releases & News|
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Five More Firms To Pay $18M For Overcharges

FINRA has ordered five broker-dealers to reimburse clients a sum of $18.4 million for charging them improper fees on mutual funds. Edward Jones will pay $13.5 million, Stifel Nicolaus & Co., $2.9 million, Janney Montgomery Scott, $1.2 million, Axa Advisors, $600,000, and Stephens Inc., $150,000. FINRA found that as far back as July 2009 the mutual funds these firms made available through their retail platforms failed to offer charities and retirement accounts waivers that they were due for some upfront sales charges on Class A shares. Other times, the firms placed investors into incorrect share classes, which subjected them to charges they should not have been assessed. Earlier this year, Wells Fargo Advisors, Raymond James, and LPL Financial were forced to pay a total of $30 million for similar violations. “These actions are further evidence of our commitment to pursue substantial restitution for adversely affected mutual fund investors who were not afforded the full benefit of available sales charge waivers,” said [...]

By |October 28th, 2015|FINRA, Press Releases & News|
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FanDuel, DraftKings Accused Of “Insider Trading”

FanDuel and DraftKings, the two major daily fantasy sports websites, have been accused of insider trading, raising questions as to whether the increasingly lucrative daily fantasy sports world should face more regulatory scrutiny. This month, a DraftKings employee admitted to accidentally releasing NFL data before the start of the third week of NFL games. That very employee won $350,000 at FanDuel, DraftKings' chief competitor. After the employee was accused of insider trading on social media, both companies announced temporary restrictions on employees from participating in fantasy sports for money. FanDuel and DraftKings both offer daily and weekly games in which users pay an entry of 25 cents to $1,000. Users then choose players in fantasy teams from a list of actual NFL athletes and earn points based on how well their players perform in actual games. The prize money can be as high as $2 million. DraftKings admitted that its employee released data on the company's blog that showed which [...]

By |October 27th, 2015|Press Releases & News|
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Legislators Frustrated As SEC Slogs Toward Proposing A Fiduciary Rule

Legislators have expressed frustration with how slowly the SEC has moved toward proposing a rule that would raise investment advice standards while the Department of Labor speeds along. In an appearance before a House Financial Services subcommittee, SEC Division of Investment Management Director David Grim was pressed about the timing of a potential rule. Grim denied to give a timetable but noted that his staff "has done extensive analysis" toward developing a proposal. When asked when the analysis would go to the commission, Grim replied, "As soon as it's ready." Rep. French Hill, R-Ark., called Grim's response "ridiculous." Hill, who is a critic of the Labor Department rule, is angered that the Department has preempted the SEC on the investment advice issue by proposing a rule that would require a best-interests standard on 401(k) and individual retirement accounts. Hill and other critics of the Labor Department rule believe the Department should wait until the SEC acts. Proponents of the Labor [...]

By |October 26th, 2015|Press Releases & News, SEC|
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