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Hedge Funds and Their Returns on Investment

Steve Mnuchin is expected to be the new Secretary of the Treasury Department for the U.S. Mr. Mnuchin is a former hedge fund manager, which got us to thinking about the complexity of these investments and the potential pitfalls investing in hedge funds. The first thing to know about hedge funds is that they are private investments. This means they are exempt from registration with the Securities and Exchange Commission. They are defined as “alternative investments using pooled funds that may use a number of different strategies in order to earn active return... for investors.” The second thing to know is that they are legitimate investment products; when properly managed, they may offer a substantial return for their investors. Because investors can choose to purchase any kind of products – real estate, currencies, derivatives, etc. – there are ample opportunities to make a significant amount of money. The issue with hedge funds, however, is that they are often not managed [...]

By |December 7th, 2016|Uncategorized|
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Oppenheimer & Co. Fined By FINRA

FINRA fined Oppenheimer & Co. $3.4 Million for failures in reporting internal discipline, giving information in arbitration cases, and offering sales discounts to customers. Between 2008 and 2016, the firm was on average four years late making 365 filings with FINRA, pertaining to disciplinary actions it took against its own brokers and arbitration and litigation settlements. The regulator also said that from 2010 to 2013, Oppenheimer did not provide documents to seven claimants in an arbitration case against ex-registered representative Mark Hotton. Oppenheimer has already paid $6 million to settle the claims alleged in that case. Additionally, FINRA said the firm overcharged 825 customers $1,010,327 between 2009 and 2015 for mutual funds shares because it did not apply the appropriate fee waiver. FINRA issued a $1.575 million fine and forced Oppenheimer to pay $703,122 to the arbitration claimants and $1,142,619 to its mutual fund customers. “It's important for firms to [...]

By |November 18th, 2016|FINRA, Press Releases & News|
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Paul Lebel Barred By SEC For Churning

Paul Lebel, a broker formerly with LPL Financial from 2008 to 2014, was barred by the SEC for churning and excessively trading mutual funds in customer accounts and generating excess fees. According to the SEC administrative proceeding, Lebel "defrauded four customers by churning several of their accounts. In particular, Lebel exercised de facto control over these customers' accounts and excessively traded mutual fund shares which carry large front-end load fees.” According to the commission, Paul Lebel bought and sold mutual fund A shares, which are meant to be long-term, buy-and-hold investments, generating $50,000 in commissions. Lebel will pay $56,500 as part of the settlement. “Lebel's excessive trading was inconsistent with the customers' investment objectives, and willfully disregarded the customers' interest,” according to the SEC. “From August 2008 through August 2014, Lebel executed numerous mutual fund A share trades that, in light of Lebel's customers investment objectives, were fraudulent, made to the detriment of Lebel's customers, and [...]

By |October 19th, 2016|Press Releases & News, SEC|
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Ex-Broker Charged With Improper Trading

FINRA charged David Randall Lockey, a former broker, with profiting as a result of improper trading of customer accounts over a span of nearly two years. According to FINRA's complaint, Lockey “engaged in unsuitable short-term trading and switching in” mutual funds and unit investment trusts in four accounts between May 2012 and March 2014 during his time as a representative of SWS Financial Services Inc., now known as Hilltop Securities Independent Network Inc. Lockey's improper trading created gross compensation of roughly $75,730 for him and SWS while three of the four customers lost a sum of $15,699. Those customers included a social worker, a bookkeeper for a family-owned business and a commercial services driver. The last customer, who is a retired engineer, had a "small gain" of $4,948, according to FINRA. According to FINRA's BrokerCheck, Lockey is a named Respondent in a recently filed customer complaint. The complain alleges that Lockey recommended and engaged in a pattern of unsuitable short-term trading [...]

By |April 5th, 2016|Press Releases & News, Broker Check, FINRA|
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