FINRA Changes Rules to Address Perceived Investor-Sided Bias of Public Arbitrators

By Ranon Altman On February 26, 2015, the Securities and Exchange Commission (“SEC”) approved the Financial Industry Regulatory Authority’s (“FINRA”) proposed amendment to FINRA Rules 12100(p) and 12100(u), which define “non-public” and “public” arbitrators. FINRA arbitrators are decision makers that hear opposing sides of disputes, study the evidence, and render final decisions. Generally, public arbitrators [&hellip

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The Dangers of Affinity Fraud

By Kelsey Paine Between 2005 and 2012, according to SEC allegations, investment manager George Elia met with South Florida residents at expensive Fort Lauderdale restaurants to persuade them to invest millions in private equity funds that purported to buy and sell stock in public companies. In reality, these funds were owned by Elia, who used the [&hellip

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Purchasing Stock in the Newest Fads Can Often Result in Pump-and-Dump Devastation

By Ali Levenson On December 16, 2014, the U.S. Securities and Exchange Commission (SEC) suspended trading of securities of Las Vegas electronic cigarette company American Heritage International, Inc. (“AHII”). The SEC cited to concerns regarding potentially manipulative activity related to AHII common stock. The “potentially manipulative activity” was prompted by a series of unsolicited “robo” [&hellip

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Risk It to Get the Biscuit: The Dangers and Rewards of Tesla’s Stock Volatility

By Maxwell Levine On June 26, 2010, Tesla Motors (“Tesla”) became the first American automaker to go public since Ford in 1956. On its first day trading on the market, Tesla’s share price rose from $17 to $23.89, an impressive 41% surge. Even more surprising, from March 4, 2013 to September 4, 2014, Tesla’s stock [&hellip

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SEC Clawback Provision Costs Silicon Valley Executives Half a Million Dollars

By Amanda E. Preston Casting a blind eye may help executives sleep better at night, but it may also cost them half a million dollars. On February 10, 2015, the Securities and Exchange Commission (SEC) announced that it had entered into a settlement with William Slater and Peter Williams III, two former chief financial officers of Saba [&hellip

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New IRS Policies Regarding IRA Distributions May Affect Brokers and Investors

By David Tanner For over thirty years, the Internal Revenue Service (“IRS”) has taken the position that an individual with two IRAs, IRA1 and IRA2, could take a distribution from IRA1 and IRA2 within one year of each other without taxes or penalties. This is contingent upon the fact that the funds from the distributions [&hellip

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Does Arbitrator Diversity Matter? PIABA’s Study Finds Roughly Homogenous Roster of FINRA Arbitrators

By Jessica Neer Last fall, the Public Investors Arbitration Bar Association (PIABA) released a study titled “The Importance of Arbitrator Disclosure”.  The study analyzed the backgrounds of current Financial Industry Regulatory Authority (FINRA) arbitrators and the arbitrator recruitment and disclosure process.  The emphasis on the make-up of arbitrators stems from the concern that arbitration can [&hellip

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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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