Monday, August 3, 2015

FINRA Dissident Candidate Wins Board Seat.

Brian Kovack, who ran for the Finra Board of Governors as a self-described "dissident" candidate, won his bid for a seat on the 24-member board, Finra announced Thursday.

UBS Puerto Rico Investment Problems Expand

UBS’ involvement in Puerto Rico investments continues to explode, as the customer arbitrations against the firm start to heat up.  UBS has confirmed that FINRA and the SEC are not only looking into the recommendations of the funds, but now they are investigating the structure of the funds.

This week UBS reported that it is facing criminal investigations into the use of non-purpose loans to invest in closed-end funds, in violation of various agreements and policies.

In 2014 UBS settled allegations with the Office of the Commissioner of Financial Institutions for the Commonwealth of Puerto Rico (OCFI) in connection with OCFI’s examination of UBS’s operations from January 2006 through September 2013. Pursuant to the settlement, UBS contributed $3.5 million to an investor education fund, offered $ 1.68 million in restitution to certain investors and, among other things, committed to undertake an additional review of certain client accounts to determine if additional restitution would be appropriate.

UBS has been defending an onslaught of customer claims from investors in its Puerto Rican bond funds, who claim that the products were improperly structured, and/or were unsuitable for the particular investor.  More information regarding the investigations and arbitration is here.

UBS has been settling the cases with its customers who are making allegations of unsuitable investments; breach of contract and fiduciary duty; negligence; and failure to supervise , as well as violation of Section 10(b) of the Securities Exchange Act, Rule 10b-5 of the Securities Exchange Commission, NYSE and FINRA rules, and the securities laws and other laws and regulations of Puerto Rico; and violation of Article 1802 of the Civil Code of Puerto Rico 31 Laws of Puerto Rico §5141, relating to the purchase and recommendation of UBS’s funds, including Puerto Rico AAA Portfolio Target Maturity Fund and a Note of the Employees Retirement System of Puerto Rico and a variety of Puerto Rico closed-end mutual funds concentrated in Puerto Rico bonds.


For the cases that UBS has not settled, it continues to lose the cases with arbitrators awarding damages to the injured investors.  Just this week a FINRA arbitration panel in San Juan awarded $250,000 to investors against UBS.

Our firm is offering to review the statements, and details regarding these investments from investors and brokers who have been involved with these securities. Call us at 212-509-6544 to see if we can be of assistance.

Wednesday, July 29, 2015

SEC News - Whistleblower Award, Insider Trading, Microcap Market Manipulation

Three Penny Stock Promoters Behind Pump-and-Dump Schemes

Three alleged microcap stock scammers have been charged with defrauding investors by disseminating promotional e-mails exhorting readers to immediately buy purportedly hot stocks so they could secretly sell their own holdings at a substantial profit.

The SEC announced a whistleblower award of more than $3 million to a company insider whose information helped the SEC crack a complex fraud.  The multi-million dollar payout is the third highest award to date under the SEC’s whistleblower program.

A Pennsylvania attorney has been charged with insider trading in the stock of Harleysville Group, Inc. in advance of the 2011 announcement of a $760 million merger of Harleysville and Nationwide Mutual Insurance Company.

A purported investment adviser in San Diego has been charged with stealing money from clients for personal use and conducting a Ponzi scheme to pay customers making redemption requests.

15 individuals and 19 entities are now facing charges for their roles in alleged schemes to manipulate the trading of microcap stocks.  The 34 defendants include six firms alleged to have acted as unregistered broker-dealers catering to customers who sought to conceal their stock ownership and manipulate the market for microcap securities. 



Monday, July 27, 2015

SEC News - Ponzi Schemes, Rule Violations, Fraudulent Funds


Oil Company and CEO Charged in Scheme Targeting Chinese-Americans and EB-5 Investors
A Bay Area oil and gas company and its CEO have been charged with running a $68 million Ponzi-like scheme and affinity fraud that targeted the Chinese-American community in California and investors in Asia, including some solicited as part of the EB-5 Immigrant Investor Program.


SEC Halts Pyramid/Ponzi Scheme Targeting Spanish and Portuguese Communities
Fraud charges and an asset freeze have been announced against the operators of a pyramid and Ponzi scheme falsely promising a gold mine of investment opportunity to investors in Spanish and Portuguese-speaking communities in Massachusetts, Florida, and elsewhere in the U.S.

Deloitte & Touche Charged With Violating Auditor Independence Rules
Deloitte & Touche LLP has been charged with violating auditor independence rules when its consulting affiliate maintained a business relationship with a trustee serving on the boards and audit committees of three funds it audited. Deloitte agreed to pay more than $1 million to settle the charges.

Former Stockbroker Charged With Conducting Ponzi Scheme
A former stockbroker in Pennsylvania has been charged with conducting a Ponzi scheme and stealing investor money to purchase a condominium in Florida and afford his own vacations and other luxuries.

Hedge Fund Advisory Firm Charged With Conducting Fraudulent Fund Valuation Scheme
A Greenwich, Conn.-based investment advisory firm and its two owners have been charged with fraudulently inflating the prices of securities in hedge fund portfolios they managed.

Wednesday, July 8, 2015

Your Spending Choices Often Reflect Your Values

Your Spending Choices Often Reflect Your Values  http:://ift.tt/1KKVtuf

Our credit card statements show how we spend our money and our time. As a result, we obtain a clear picture of what we value versus what we say we value.

Tuesday, June 30, 2015

FINRA Reports $1 Billion in Revenue, Shares Profit with Firms

LogoThe Financial Industry Regulatory Authority (FINRA) brought in $997 million in net revenues, up from $901 million in 2013. FINRA also lowered its expenses to $965 million, from $999 million in 2013. Revenues and other factors combined to boost FINRA's profit from just $1.7 million in 2013.


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The attorneys at Sallah Astarita & Cox, LLC include veteran securities litigators and former SEC Enforcement Attorneys. We have decades of experience in securities litigation matters, including SEC and FINRA investigations, insider trading cases, securities arbitrations and class actions, nationwide. For more information call 212-509-6544 or send an email to mja@sallahlaw.com

Monday, June 29, 2015

SEC News - Suspicious Activity, Unregistered Brokers, Defrauding Investors

Microcap Promoter Charged With Illegally Selling Penny Stock Shares
A microcap promoter has been charged with illegally selling more than 83 million penny stock shares that he secretly obtained through at least 10 different offshore front companies.

SEC Obtains Asset Freeze Against China-Based Trader for Suspicious Activity
An emergency court order has been obtained to freeze the assets of a trader in China who profited by more than $1 million after trading in a U.S. brokerage account in advance of last week’s public announcement that China-based Qihoo 360 Technology Co. Ltd. had received a buyout offer at a significant premium from its CEO and a consortium of other affiliates.

Unregistered Brokers Charged in EB-5 Immigrant Investor Program
Two firms that illegally brokered more than $79 million of investments by foreigners seeking U.S. residency are now facing charges. The charges are the first against brokers handling investments in the government’s EB-5 Immigrant Investor Program and follow earlier SEC actions against fraudulent EB-5 offerings.

Microcap Oil Company, CEO, and Stock Promoter Charged With Defrauding Investors
A Texas-based oil company and its CEO have been charged with defrauding investors about reserve estimates and drilling plans, and charged the author of a stock-picking newsletter for his role in a fraudulent promotional campaign encouraging readers to buy the oil company’s penny stock shares.

36 Firms for Fraudulent Municipal Bond Offerings
Enforcement actions have been announced against 36 municipal underwriting firms for violations in municipal bond offerings. The cases are the first brought against underwriters under the Municipalities Continuing Disclosure Cooperation (MCDC) Initiative, a voluntary self-reporting program targeting material misstatements and omissions in municipal bond offering documents.

Tuesday, June 16, 2015

SEC News - Insider Trading, Hedge Fund Theft, and Fraud

Swiss Trader to Pay $2.8 Million to Settle Insider Trading Charges
A Swiss trader has agreed to pay more than $2.8 million to settle charges that he traded on nonpublic information ahead of a Florida-based biometrics company’s acquisition by Apple Inc.

Phony Hedge Fund Manager Charged With Theft of Money Invested by Small Businesses
Fraud charges have been announced against a New Jersey man accused of posing as a hedge fund manager and defrauding small companies out of more than $4 million.

Biotech Employee and Two Stockbrokers Charged With Insider Trading on Nonpublic Information About Pharmaceutical Trials and Merger
Three men living in California have been charged with insider trading in the stock and options of a biotechnology company where one of them worked.

Trader to Pay $1 Million for Short Selling Violations
A trader residing in Canada has agreed to pay more than $1 million to settle charges that he shorted U.S. stocks in companies planning follow-on offerings and then illegally bought shares in the follow-on offerings to lock in significant profits with little to no market risk.

CSC and Former Executives Charged With Accounting Fraud
Computer Sciences Corporation and former executives have been charged with manipulating financial results and concealing significant problems about the company’s largest and most high-profile contract. The SEC additionally charged former finance executives involved with CSC’s international businesses for ignoring basic accounting standards to increase reported profits.