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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 Economic Advisers study showing retirement savers lose $17 billion annually due to brokers selling them high-fee products, which the rule seeks to prevent. "When you look at all of the peer-reviewed empirical academic studies that have been published in this area, they overwhelmingly support our fundamental position that conflicts of interest are harming American savers to the tune of billions of dollars," stated Perez. Perez spoke directly about industry studies: "Most of the industry-commissioned research reaching the opposite conclusion does not meet equally rigorous analytical standards." The Securities Industry and Financial Markets Association performed its own review of the White House study, finding it unsatisfactory. [...]

By |October 19th, 2015|Press Releases & News|
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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 a Washington think tank, and a DOL official promised to charge ahead while acknowledging there will be changes in the proposal. Simultaneously, a pro-investor organization released best practices for financial advisers to place clients' interests ahead of their own. In a House Financial Services Committee vote last week on a bill by Representative Ann Wagner, R-MO., that would make the Labor Department stop its fiduciary rule until the SEC acted, practically preventing the measure, Republicans and Democrats took different sides and started a war of words. “To the pen pals and the panderers who supported this legislation in the past but are now siding with President [...]

By |October 5th, 2015|Press Releases & News, SEC|
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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 the grocer's deceptive labeling of pre-packaged food items. O'Malley, in his suit, claims that the debacle has ruined public confidence in the company. "For at least the foreseeable future, Whole Foods will suffer from the 'liar's discount,' a term applied to the stocks of companies who have been implicated in illegal behavior and have misled the investing public," the complaint states. The scandal came to light when the New York Department of Consumer Affairs issued a press release regarding its investigation of the grocer. The department alleged that a set of food packages that it had tested from the grocer's New York City stores displayed incorrect [...]

By |September 28th, 2015|Fraud, Press Releases & News|
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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 before a merger in which Murdock took Dole private and to have undermined the work of a special committee organized to evaluate Murdock's proposal. The court awarded $148 million in damages. The court also found, however, that Deutsche Bank, Murdock's financial advisor and lender, was not liable on an aiding and abetting claim. In order to ready Dole for Murdock's freeze-out plans, Carter attempted to depress Dole's stock price by knowingly furnishing the market with a "subterranean" estimate of Dole's estimated cost savings regarding another transaction and by abolishing a stock repurchase program. Murdock then gave his first proposal of $12.00 a share to Dole's [...]

By |September 1st, 2015|Fraud, Press Releases & News|
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