Thirteen Firms Sanctioned for Improperly Selling Puerto Rico Junk Bonds in Violation of New Retail Investor Protection Law

By Daniel Wolfe On November 3, 2014, the Securities and Exchange Commission (SEC) brought sanctions against 13 firms for improperly selling Puerto Rico municipal bonds. The violations stem from a relatively new rule entitled Municipal Securities Rulemaking Board (MSRB) Rule G-15(f), which has established what’s called a “minimum denomination requirement” that must be followed when [&hellip

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SEC Files Charges Against Fraudsters who Utilized Social Media to Attract Investors

By Jordan Hadley On November 12, 2014, the Securities and Exchange Commission (“SEC”) announced that it would bring charges against Pankaj Srivastava and Nataraj Kavuri, two operators of a high-yield investment scheme that targeted investors using social media. The SEC alleges that from April 2013 until February 2014, the two individuals operated a website called [&hellip

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Investing in a Technology-Driven Society

By Andrea Nickerson On September 29, 2014, the Securities and Exchange Commission (“SEC”) announced the discovery of a probable fraudulent investment scheme in South Florida. Two Miami Beach men allegedly raised more than $5.7 million in capital from a mere 100 investors for a purported startup television network and production company called Vision Broadcast Network. [&hellip

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VIE Structure Makes Alibaba Less Attractive to Foreign Investors

By Zhen Pan When asked what Alibaba is, most people think of “Alibaba and the 40 Thieves” but on September 18, 2014, Alibaba Group Holding Ltd. (“Alibaba”), a Chinese e-commerce company, announced its initial public offering (IPO) at the New York Stock Exchange. The price of the stock (ticker: BABA), was set at $68 per share, raising [&hellip

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Variable Life Insurance: The Devil is in the Details

By Jack Korte For most investors, the goals of their investments change with time. As investors age they often seek to secure their financial future for retirement, while also providing and protecting an inheritance for their loved ones. As such, traditional, equity based investing often becomes less appealing. As a result, investors tend to look [&hellip

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Counter-suing Investors Jeopardizes Integrity of Arbitral Forum

By Neda Ghomeshi Investors take their cases to arbitration before the Financial Industry Regulatory Authority, (FINRA), as they are typically required to in any dispute with their broker or brokerage firm. Often, investors sue their brokerage firms for suitability, fraud, negligence, breach of fiduciary duty, failure to supervise, among many other causes of action. Recently, [&hellip

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Securities and Exchange Commission Files Suit Against Jupiter Based Penny Stock Fraudsters

By George Pita On September 30, 2014, The Securities and Exchange Commission (“SEC”) filed a civil injunctive action against Positron Corporation (“Positron), a microcap company based in Illinois, Patrick G. Rooney, the company’s then-CEO, and John R. Rooney of Jupiter, Florida. The SEC charged the three with masterminding a manipulation scheme involving the company’s stock. [&hellip

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Top Executives Involved in Financial Fraud Cases Are Still Innocent Until Proven Guilty … For Now

By Claudio Arruda “The scars of the Great Recession, its lingering impacts and its echoes throughout our financial system are not hard to find.” These words, spoken by then Attorney General, Eric Holder, to an auditorium filled with judges, U.S. Attorneys, law students, faculty members, administrators, staff and alumni at the New York University School of [&hellip

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Are You Being Offered an Opportunity to Invest in a Small Company with Tremendous Growth Potential? Ask Yourself, “Why Me?”

By Craig Tompkins In 2012, the Jumpstart Our Business Startups (JOBS) Act was passed by Congress with the goal of expanding the potential pool of investors from which small businesses can raise capital. While the final rules governing how this new game will be played are still pending, what is known, is that the average [&hellip

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Elements of Portfolio Management: Recognizing Potential Unsuitability Claims

By David Newfield The most common claim customers make against their brokers in FINRA arbitrations are unsuitability claims. Under FINRA Rule 2111, a broker has a duty to make sure any recommended transaction is suitable for the customer. Many factors contribute to an assessment of suitability for a portfolio. FINRA issued guidance on the specifics [&hellip

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