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Former Sterne Agee Broker May Be Expelled

Dean Mustaphalli, a former broker at Sterne Agee Financial Services Inc., is looking at a potential expulsion. According to FINRA, Mustaphalli ran a $6 million hedge fund, Mustaphalli Capital Partners, that he failed to disclose. FINRA charged Mustaphalli for creating the fund and receiving commissions without notifying the broker-dealer. He sought cash for the fund from more than 25 investors for more than half of 2011. Between April and August of 2011, Mustaphalli received about $41,800 in management fees. The fund's value has allegedly dropped by about 90% since then. To date, FINRA is unsure if any of Mustaphalli's clients were customers of Sterne Agee, but a lawyer filing two arbitration claims against Mustaphalli claims that one of his clients was in fact a customer of Sterne Agee. FINRA states that Mustaphalli was not providing account statements for the hedge fund as requested. Under FINRA's rules, brokers are allowed to operate hedge funds as long as they are fully disclosed, [...]

By |July 15th, 2014|Press Releases & News|
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SEC Loses In High Profile Trial

Earlier this month, the SEC secured a huge win in SEC v. Wily, but on the same day the SEC was handed a crushing defeat in a bigger case, SEC v. Graham. Furthermore, a jury in Manhattan on Friday returned a verdict against the SEC and in favor of the three defendants in SEC v. Obus, a lengthy high profile insider trading case. The SEC had brought an insider trading action against Nelson Obus, Peter Black, and Thomas Strickland following the acquisition of SunSource, Inc. by Allied Capital Corporation in June 2001. In May of that year, Allied approached GE Capital about financing its acquisition of SunSource. While performing due diligence on SunSource, Strickland learned of the proposed deal. Strickland then discussed SunSource with Peter Black. Both claim that there was no tip, just a routine due diligence conversation. Black did, however, suspect that SunSource was considering a transaction that would dilute existing shareholders and relayed that information to his [...]

By |June 2nd, 2014|Press Releases & News|
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The Commodity Futures Trading Commission Investigating Managed Future Funds

The Commodity Futures Trading Commission (CFTC) is investigating the sky high fees that are charged to investors in managed futures funds. This comes after a December 19, 2013 letter that the Senate’s Special Committee on Aging sent to the CFTC asking them to work with the Securities and Exchange Commission (SEC) on investigating the fees and the means for their disclosure when associated with retirement accounts . A managed future fund is a variety of alternative investment that is overseen by the CFTC. These funds are normally sold to consumers via brokers. Fund managers then invest in futures, which are financial contracts in which the buyer promises to buy an asset at a predetermined date in the future. Such futures obligations typically obligate the buyer to purchase assets like global commodities (goods and services), and foreign currencies, among other speculative financial instruments . A review of these funds has shown that over 89% of the gains of $11.51 billion these [...]

By |March 11th, 2014|Uncategorized|
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TRIAL STARTS IN $68 MILLION INSIDER TRADING CASE

The jury has been selected for the trial of Anthony Chiasson and Todd Newman according to an article in the Dealbook section of the New York Times. Chiasson co-founded Level Global Investors and Newman was a portfolio manager at Diamondback Capital Management. Their charge- being part of a $68 million conspiracy that traded massive amounts of Dell and computer chip maker Nvidia shares based off an insider tip, right before an announcement of the negative value of the shares was released. The article discusses a greater conspiracy than just Chiasson and Newman. Six other traders have already pleaded guilty.One of the other traders worked for SAC Capital Advisors; Level Global and Diamondback were both started by former employees of SAC Capital Advisors. Prosecutors and investors alike are interested to see what information this trial will bring regarding the trading strategies and practices of SAC Capital Advisors. So far, the investigation into the Wall Street insider trading has lead to sixty-nine [...]

By |November 13th, 2012|Uncategorized|
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