FINRA Intends To Probe Brokerages’ Compliance Culture
FINRA intends to investigate whether complying with rules is part of brokerage firms’ culture during its examinations this year. The regulatory authority announced on Tuesday that it will more formally scrutinize how firm culture affects compliance and risk management practices. “A firm’s culture is both an input to and product of its supervisory system, including its approaches to identifying […]
Lawsuit Alleges Fiduciary Breach Under ERISA
A class-action lawsuit was filed last week alleging breach of fiduciary duty resulting from excessive record-keeping fees and use of proprietary investment funds. The suit, Pledger et al. v. Reliance Trust Co. et al., targets the fiduciaries of the Insperity 401(k) Plan for allegedly causing participants to pay excessive fees to the plan record keeper, […]
AR Capital Halts Creation Of New Nontraded REITs
AR Capital, the massive real estate investment trust sponsor established by Nicholas Schorsch, will cease creating and selling new alternative investment products. “As a result of regulatory and market uncertainty affecting capital raising for both new and existing offerings in the direct investment industry,” AR Capital will stop taking new investor funds for the programs […]
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 […]
Securities Industry, DOL Fight Over Cost Of Fiduciary Rule
Labor Secretary Thomas Perez backed a proposal to increase investment advice standards for retirement accounts by arguing that studies showing the need for such a rule are more reliable than those funded by the securities industry that question it. In a speech last week, Perez quoted the “conservative estimates” of a White House Council of […]
DOL Fiduciary Debate Heats Up
The fight over a Department of Labor proposal to increase investment advice standards for retirement accounts have begun to intensify. Over the last week, the writer of a bill that would prohibit the rule lashed out at Democrats for backing away from her measure, a well-known senator forced a critic of the bill out of […]
Whole Foods Hit With Shareholder Suit For Misleading Pricing Scandal
Whole Foods’ misleading product labeling drew the ire of the New York City Department of Consumer Affairs and illuminated a scandal that “irreparably damaged” the company’s image, according to a shareholder’s claim in court. Bryan O’Malley, a Whole Foods shareholder, sued the company’s top executives for breach of fiduciary duty and unjust enrichment pertaining to […]
Delaware Court Awards $148M In Damages, Finds Dole Food Company Directors Liable
The Delaware Court of Chancery found David Murdock and C. Michael Carter liable under the entire fairness standard. Murdock is Dole Food Company Inc.’s Chairman and CEO, and Carter is a director of the company and its President, Chief Operating Officer, and General Counsel. The two were found to have driven down Dole’s stock price […]
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 […]
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, […]
