According to documents filed in the case by the US Attorney’s office, from February 2016 to August 2019, Philadelphia investment fund manager Brenda Smith used her investment fund, Broad Reach Capital, to collect more than $100 million in funds from investors who believed her lies about the funds assets and performance.
Investment Scams Target Elderly Investors
With the economy on a rocky footing, the climate is right for investment scams. These scams can impact investors of all ages, but those hit hardest are the seniors. Often isolated and suffering a diminishing capacity to discern truth from lies, elderly investors are particularly vulnerable to clever investment scams that promise high returns for low or no risk.
FINRA Disciplinary Action Report: August 2019
Each month, the agency that regulates the financial industry, FINRA (Financial Industry Regulatory Authority), produces a detailed report that runs down all disciplinary actions recently taken against brokerage firms and brokers. We strongly encourage any investor who suspects their broker and/or broker-dealer of having lost them money on dubious terms to at least skim this report to see if you recognize any names, schemes, products, or securities.
Why Is Investor Fraud So Common?
There are different degrees of investor fraud, ranging from the lack of alignment between your interests and those of your stock broker to the notoriety of billion-dollar scam artists like Bernie Madoff. How do you calculate a figure like this? It’s difficult. But between structural problems like a lack of fiduciary duty between investors and advisors to criminal enterprises like Ponzi Schemes, the losses to investors are in the many billions.
Investors: Ask These Five Questions
We are often asked how investors can best protect themselves against unscrupulous financial advisors and toxic investments. The truth is, most investors simply don’t ask the right questions before they sign on with a broker or put their hard-earned money into the next hot complex investment product. These five questions will at least give you a measure of protection against the worse depredations of the securities industry.
Investors Awarded $1.16M for REIT Sales
In a case that points up many of the problems that have been plaguing the securities industry for years, a FINRA panel of arbitrators awarded six investors more than $1M in relief after they alleged that a financial advisor and three executives for Berthel Fisher & Co sold them unsuitable complex products.
FINRA Disciplinary Action Report: July 2019
Each month, the agency that regulates the financial industry, FINRA (Financial Industry Regulatory Authority), produces a detailed report that runs down all disciplinary actions recently taken against brokerage firms and brokers. We strongly encourage any investor who suspects their broker and/or broker-dealer of having lost them money on dubious terms to at least skim this report to see if you recognize any names, schemes, products, or securities.
PA Ponzi Scheme Busted - What Investors Might Have Done Differently
A former Williamsport insurance agent, William E. Hocker, was sentenced to 17 years in prison and required to pay back almost $1.5 million which he took from unsuspecting investors, including his own mother. In October, Hocker pleaded guilty to securities fraud involving the scheme he perpetrated for 10 years. Hocker, who was licensed to sell insurance products but not annuities or securities, preyed mostly on family, friends, and the connections they brought to him. In the classic “too good to be true pitch,” Hocker lured investors in by promising them incredibly high returns of 25-30% with little to no risk.
Can I Trust My Broker?
Three Most Common Types of Financial Professional Malpractice
Interestingly, comparatively few Americans realize that, under certain circumstances, they can sue their stock broker and his or her brokerage firm in the even that something goes wrong in the account. The most important part of that sentence is really “under certain circumstances.” While those circumstances are certainly not unlimited, there are a number of issues related to financial professional malpractice that come up again and again.
Wall Street Advocate Applauds Proposal for Investor Compensation Fund
The Securities Industry and Financial Markets Association, or SIFMA, has long advocated free and efficient capital markets in the United States. Recently, the organization came out in favor of a proposal by the securities industry self-regulator, FINRA, to force registered brokerage firms to contribute to an investor compensation fund. The fund would be earmarked for investors who have been injured by broker misconduct and investment fraud, and it would allow them to recover even when a brokerage company has gone bankrupt or out of business.
Top 5 Ways to Identify a Financial Scam
Financial scam artists are some of the most sophisticated criminals around. However, if you ask many law enforcement officials and regulatory agencies, investors often play right into their hands by not being cautious enough when vetting a new investment opportunity or by getting carried away into believing a “too good to be true scheme” that involves “no risk” and “huge returns.” There’s a reason why the Ponzi Scheme, invented around the turn of the 20th century, is still doing big business one hundred years later.
FINRA Disciplinary Action Report: June 2019
Each month, the agency that regulates the financial industry, FINRA (Financial Industry Regulatory Authority), produces a detailed report that runs down all disciplinary actions recently taken against brokerage firms and brokers. We strongly encourage any investor who suspects their broker and/or broker-dealer of having lost them money on dubious terms to at least skim this report to see if you recognize any names, schemes, products, or securities.
Regulator Continues to Battle Unsuitable Leveraged ETFs
The securities industry self-regulator, FINRA, has once again warned broker-dealers and investors over its unsuitable sales of leveraged and inverse ETFs. Over the past few years, ever since these sophisticated products rose to prominence, FINRA has repeatedly issued regulatory notices and investor alerts about the perils of investing in leveraged ETFs. The agency has also fined numerous broker-dealers and individual brokers for poor sales practices and supervision of leveraged ETFs.
Unit Investment Trusts May Present Opportunity for Churning
At the end of the maturity period of a Unit Investment Trust, you and your financial advisor may decide to rollover the investment into a new UIT. While this is a perfectly legitimate transaction, it also opens up the opportunity for an unscrupulous broker to rollover the investment more than once — perhaps many times.
When this excessive rolling-over of a UITs is done to gain a financial advisor illegitimate fees, it’s called churning. Churning is considered a form of misconduct and may open a financial advisor up to regulatory action, fines, and disbarment from FINRA.
What Happens When Your Broker Leaves a Firm
As an investor, you may have already experienced the disorientation that comes with having your financial advisor switch from one broker-dealer to another; or to an investment advisory or insurance company. The practice is not at all common, and the reasons for such switches are by no means always a bad thing for investors. Often a high-performing broker will be poached from a smaller firm by a larger one; or an ambitious broker will move from one company to another because of the higher quality of support, compliance, and information offered at another shop. That’s all well and good — but where does it leave the investor?
FINRA Compiles List of "Bad Brokers"
As the securities industry regulator, FINRA, looks at new ways of cleaning up the brokerage business, it has zeroed in on “rogue brokers” as being responsible for a disproportionate number of infractions and instances of misconduct. FINRA has been motivating a new rule that would target a few hundred individual brokers who have checkered backgrounds by forcing firms that employ them to heighten supervision of high-risk financial professionals.
Senators Seek to Protect Seniors Who Will Wealth to Brokers
After a Maryland financial advisor inherited $500,000 from an elderly client, lawmakers have asked the governing body of the securities industry, the Financial Industry Regulatory Authority (FINRA), to provide guidance over whether and how brokers can inherit wealth from customers, especially senior investors.
FINRA Disciplinary Action Report: May 2019
Each month, the agency that regulates the financial industry, FINRA (Financial Industry Regulatory Authority), produces a detailed report that runs down all disciplinary actions recently taken against brokerage firms and brokers. We strongly encourage any investor who suspects their broker and/or broker-dealer of having lost them money on dubious terms to at least skim this report to see if you recognize any names, schemes, products, or securities.
FINRA Disciplinary Action Report: April 2019
Each month, the agency that regulates the financial industry, FINRA (Financial Industry Regulatory Authority), produces a detailed report that runs down all disciplinary actions recently taken against brokerage firms and brokers. We strongly encourage any investor who suspects their broker and/or broker-dealer of having lost them money on dubious terms to at least skim this report to see if you recognize any names, schemes, products, or securities.