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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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Investors Lose $11.7 Million In Risky Hedge Fund Through Lincoln Financial

According to a FINRA Letter of Acceptance, Waiver and Consent ("AWC"), between about October 2008 and April 2009, registered representatives in two of Lincoln Financial Advisors Corporation (“LFA”) branch offices allegedly recommended that customers invest in a hedge fund offered as a sub-account to a private placement variable annuity (the ”PPVA”). The Hedge Fund engaged in a complex options trading strategy, including trading uncovered options. LFA approved the PPVA and the Hedge Fund, after it was added as a sub-account by the PPVA sponsor, for investment by the LFA’s customers. According to the AWC, based on recommendations of the Firm’s registered representatives, 25 of the Firm’s customers invested a total of approximately $11.7 million in the Hedge Fund. In 2010, the Hedge Fund was shut down. Although the Hedge Fund allegedly engaged in a complicated options trading strategy that differed significantly from traditional investments and even other alternative investments, LFA also allegedly failed to provide adequate training or guidance to [...]

By |September 24th, 2015|FINRA, Press Releases & News|
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FINRA August 2015 Disciplinary Actions: Part III

Edward D. Jones & Co., L.P. of St. Louis, Missouri submitted a letter of acceptance, waiver, and consent that censured the firm and fined it $10,000. FINRA found that it failed to report the right trade execution time for transactions in TRACE-eligible securitized products to TRACE and failed to show the right execution time on the memoranda of brokerage orders. Julian Luis Alfonso of Miami, Florida submitted a letter of acceptance, waiver, and consent that barred him from being associated with any FINRA member in any principal or supervisory capacity for a month and mandated to requalify by exam as a Financial and Operations Principal ("FINOP") before doing so. As a result of his financial status, Alfonso was not given a monetary fine. FINRA found that Alfonso failed to enforce his member firm's written supervisory procedures pertaining to financial controls as well as books and records. As a result, the firm had several incorrect entries in its books and records. [...]

By |September 17th, 2015|FINRA, Press Releases & News|
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UBS Settles Hedge Fund Suit

UBS AG avoided going to trial today by mere hours by agreeing to settle a lawsuit in which it was alleged to have peddled "crap" and "vomit" securities during the financial crisis of 2007. Connecticut hedge fund Pursuit Partners claimed that UBS sold it asset-backed securities and failed to disclose that they were about to be downgraded. Lawyers for UBS and the hedge fund announced in court yesterday that they came to terms and have resolved the suit. The Stamford-based hedge fund brought suit against UBS in 2008, alleging that it sold the fund $40.5 million of collateralized debt obligations between July and October 2007 and knew the securities were on the precipice of downfall. "UBS knew, at least as early as July 2007, based upon private communications by and between UBS and Moody's, that Moody's no longer believed that CDO notes of the type that UBS later sold to Pursuit deserved an 'investment-grade' rating," the suit alleged. To further [...]

By |September 2nd, 2015|Press Releases & News|
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