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Former Broker Indicted On Fraud Charges

Claus Foerster, an ex-broker from South Carolina, was indicted by a grand jury for bilking customers out of $2.8 million during a fourteen-year span. Foerster operated his scheme from 2000 to 2014 while working as a financial advisor at Smith Barney & Co., Morgan Keegan & Co. and Raymond James Financial Inc., according to an indictment in the U.S. District Court in Spartanburg, South Carolina. The allegations stem from FINRA's 2014 decision to bar Foerster from the securities industry for operating a Ponzi scheme. Foerster would tell customers that he had an "excellent investment" for them at SG Investments, a fictional company that Foerster claimed would provide higher returns than the brokerage firms that employed him, according to the indictment. After clients agreed to the investment, Foerster then told them to take out money from their brokerage accounts and put it into their personal banking accounts. Deposits were then transferred to him in the form of checks. Foerster kept the [...]

By |March 11th, 2016|FINRA, Fraud, 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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SEC Finally Releases Morgan Keegan Fund Distribution

A recent press by the Secretary of State for the State of Mississippi announced that the SEC has published their proposed plan for fund distribution to those injured by Morgan Keegan investments. This comes two years after the $200 million dollar settlement with Morgan Keegan and Morgan Asset Management. The settlement funds are to be used as payments to investors who were damaged by Morgan Keegan and Morgan Asset Management’s failure to “disclose risks associated with certain investments and presenting misleading marketing materials to investors”, according to the Secretary of State’s press release. The settlement was to be paid originally in two parts, with the States involved in the suit distributing $100 million to injured investors and the SEC distributing the other $100 million. The States have already distributed their portion and have been waiting on the SEC, according to the press release. Secretary Hosemann stated in his press release that, “by their own administrative rule, the SEC is required [...]

By |April 11th, 2013|Uncategorized|
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Raymond James Drops Morgan Keegan’s Name After It Was Ordered to Buy Back Securities

Just a few weeks after the 11th Circuit Court ordered Morgan Keegan to buy back more of their ultra-risky auction rate securities, Raymond James dropped the name Morgan Keegan altogether. In November 2012, this blog reported that 11th Circuit Judge William Duffy dismissed an SEC claim against Morgan Keegan. According to the article , District Judge Duffy dismissed the SEC claims, ruling that the brokers’ misleading statements were not material and that the brokers could not predict the market. However, the Court of Appeals disagreed with Judge Duffy and remanded the case back to the judge for a non-jury trial. The Bloomberg.com article discussed Judge Duffy’s opinion, which said that the brokerage firm did not act fraudulently but some of its brokers negligently made misrepresentations and omitted important information about the securities sold. Though Morgan Keegan voluntarily bought back around $2 billion of the highly-risky auction rate securities, according to the article, Judge Duffy ordered still more of the risky [...]

By |March 1st, 2013|Uncategorized|
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