FINRA Disciplinary Action Report: August 2015

FINRA disciplinary action report from August 2015 containing information about brokerage firm misconduct and financial advisor misconduct.

Wells Fargo Fined $500,000 over Structured Products

Investment products that offer alternatives to stocks and bonds tend to be both more complex—and more risky—than traditional investments, and often tempt investors with special features and higher returns than offered by basic investments.

SEC Charges Former Aegis Broker Malcolm Segal With Ponzi Scheme

The Securities and Exchange Commission (SEC) issued a litigation release to the public concerning Pennsylvania-based financial advisor Malcolm Segal. The SEC charged Malcolm Segal with numerous violations, including the operation of a Ponzi Scheme and stealing investor money to enrich himself.

Brokerage Fined $10M+ for Failure to Supervise Brokers

Many investors are not aware that the broker-dealer firm with whom their financial advisor is registered has a legal obligation to reasonably supervise its employees. Accordingly, firms that fail to adequately supervise agents may be fined and penalized by regulators.

Brokerages Create Illusion of Fiduciary Duty Through Savvy Marketing

Misleading advertising prevalent among brokerage firms lulls investors into a false sense of security over their investments. They stop checking up on their accounts and their broker because they trust him or her; they’ve been told that is, along with access to information and expertise, the main reason to invest with him or her.

Non Traditional ETFs Bury Gold Rushing Broker and Customers

Leveraged ETFs are one form of what are called nontraditional ETFs (the other form being inverse ETFs) which track a market benchmark, deliver multiples of return on that benchmark, and are designed to be traded on a single day only.

Regulators Worried About Senior Investors

In many cases, seniors don’t realize their investment portfolios no longer reflect the risk-tolerances and investment objectives they indicated in their broker-dealer account opening documents. On your account statements, your investor profile may not change. It may still be labeled “Conservative” or “Moderate-risk” while the actual investments or overall allocation of investments you hold are anything but conservative or moderate.

New Hampshire to LPL: Alt Investments Must Be Suitable

A recent lawsuit by the state of New Hampshire against LPL Financial, one of the nation’s largest networks of broker-dealers, should be setting off alarm bells among investors who were recommended non-traded REITs and other alternative investments by their brokers.

Beware Phony Senior-Specific Investment Professionals

The law prohibits the use of senior-specialization designations by any person who lacks certification from an accrediting organization. This law makes clear that using a phony senior-specific designation that falsely implies some financial expertise in the investment needs of our elderly investors is against the law.

Last Year, Energy Stocks Went Bust - Did Your Portfolio Go Bust With Them?

Energy securities once regarded as moderate risk can shift into high or very high risk if the natural resources or benchmarks they’re tied to swing dramatically, as did crude oil prices last year. That means that those oil and gas company stock and bonds your broker recommended or purchased prior to this year may have become unsuitable for you as the fracking boom went bust.

Investor Choice for Financial Dispute Resolution

Thanks to Democratic Representative from Minnesota, Keith Ellison, “The Investor Choice Act” has been introduced to Congress. The act would ensure that mandatory arbitration agreements are prohibited under US securities laws. As investor advocates ourselves, we support your right to choose, once the facts of your dispute have emerged, the venue most advantageous to you.