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FINRA January 2017 Disciplinary Actions

FINRA takes disciplinary actions against firms and individuals for violations of FINRA rules; federal securities laws, rules, and regulations; and the rules of the Municipal Securities Rulemaking Board. Below are a number of penalties announced by the regulator in January 2017. If you have been a victim of any of the below behavior, you may have legal recourse. Please contact attorney Richard Frankowski today at 888-741-7503 for a free consultation. FINRA censured and fined VFG Securities, Inc. of Culver City, California $50,000, $10,000 of which is joint and several with Jason Bryce Vanclef. According to FINRA, the firm and Vanclef distributed and listed for sale online Vanclef's self-published book, which contained, false, exaggerated, unwarranted, or misleading statements, and omitted material facts or qualifications where the omissions caused the communication to be misleading. The findings also state they provided customers with misleading personalized recommendation spreadsheets. Advisors Clearing Network, Inc. of Pasadena, California was also censured and fined $50,000. FINRA found that it [...]

By |January 24th, 2017|Broker Check, FINRA, Fraud, Legal Matters, Press Releases & News, SEC|
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Charles Schwab Sued Over Own 401(k) Plan

A participant in the Charles Schwab Corp. 401(k) plan has sued the plan and corporate executives, claiming they violated their duties under the Employee Retirement Income Security Act (ERISA) by offering Schwab funds that were “more expensive than comparable alternatives available in the marketplace.” The suit was filed in United States District Court in San Francisco on January 19, 2017. It claimed that executives breached their fiduciary duties, stating they “imprudently and disloyally larded the plan with unnecessary, expensive and poorly performing investment products and services.” The suit is currently seeking to be certified as a class-action suit.   Plaintiff Christopher Severson, a participant in the SchwabPlan Retirement Savings and Investment Plan, asserted in his complaint that offering Charles Schwab products and services enabled the company to reap “significant fees and profits at the expense of the plan and its participants.” The complaint claims that Schwab included among the plan's investment options certain mutual funds and collective trusts that [...]

By |January 23rd, 2017|Legal Matters, Press Releases & News|
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Edward Jones Hit With Second Excessive Fee Suit

Edward Jones has been hit with a second excessive fee and self-dealing suit regarding its 401(k) plan. This is the second suit of this nature this year against the brokerage firm and just one of many that have been filed against other defendants this year. The suit alleges that the firm and a number of employees overseeing the retirement plan breached their fiduciary duties by selecting high-cost mutual funds when identical, lower-cost ones were available, choosing "an unreasonable number" of high-risk investment options, and including a "poorly performing" money market fund in place of a stable value fund. The excessive fee suit also claims Edward Jones entered into arrangements with such “product partners” whereby fund companies paid for access to the “captive market” of 401(k) participants by giving revenue-sharing fees to Edward Jones in return for “shelf space” on the retail side of the brokerage business. These revenue-sharing agreements, as the suit states, were "contingent upon" Edward Jones offering the [...]

By |November 16th, 2016|Press Releases & News|
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Morgan Stanley Charged with Unethical Sales Contest

Massachusetts is seeking a censure, cease and desist and equitable relief for customers after charging Morgan Stanley with conducting an unethical sales contest, according to a recent Investment News article.  The sales contest, which ran from January 2014 to April 2015, encouraged advisorsto get their clients to take out Morgan Stanley loans against their Morgan Stanley securities account. The securities in their accounts acted as the collateral to back the loans. The advisors were rewarded monetarily for obtaining loans. The article stated advisors would receive $1,000 for 10 loans, $3,000 for 20 loans and $5,000 for 30 loans and the contest produced $24 million in new loans for Morgan Stanley. The article quoted the Massachusetts Secretary of the Commonwealth as saying the advisors violated their fiduciary duty by recommending investors take on new debt. A spokesperson for Morgan Stanley stated Massachusetts' complaint was without merit. If you or someone you know has lost money as a result of [...]

By |October 7th, 2016|Uncategorized|
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