- other investments;
- financial situation and needs, which might include questions about annual income and liquid net worth;
- tax status, such as marginal tax rate;
- investment objectives, which might include generating income, funding retirement, buying a home, preserving wealth or market speculation;
- investment experience;
- investment time horizon, such as the expected time available to achieve a particular financial goal;
- liquidity needs, which is the customer's need to convert investments to cash without incurring significant loss in value; and
- risk tolerance, which is a customer's willingness to risk losing some or all of the original investment in exchange for greater potential returns.
Tuesday, September 30, 2014
Recently a former client of Linsco Private Ledger called our law firm asking whether he could sue LPL for making unsuitable investment recommendations. The answer to this question is yes, depending on the individaual facts and circumstance of the investor. Suitability claims are decided in the FIRNA arbitration claims process. LPL, like every other brokerage firm, requires clients who wish to sue the firm to do so through binding arbitration at FINRA. FINRA's suitability rule states that firms and their associated persons "must have a reasonable basis to believe" that a transaction or investment strategy involving securities that they recommend is suitable for the customer. This reasonable belief must be based on the information obtained through the reasonable diligence of the firm or associated person to ascertain the customer's investment profile. The rule requires firms and associated persons to seek to obtain information about the customer's
For investors who lost money with former Stifel Nicolaus broker Guy Deemer, legal options exist. Recently, Deemer entered into a consent order with the Illinois Securities Division where he agreed to a $10,000 fine and a suspension from association with any FINRA member for 20 business days. The conduct at issue related to 64 customer orders involving six thinly traded bank stocks between July of 2008 and October of 2009. According to regulators, he failed to tell his customers that he was on the opposite side of the transactions, selling or purchasing the same securities from his own accounts on the same day. In some instances, Deemer placed good till canceled orders to sell or purchase the bank stocks in his own accounts in the trading system as much as six months in advance, until the opposing customer trades were matched and the trades were executed. If you lost money investing with Guy Deemer, please call our law firm in Chicago, Illinois for a review of your case.
Monday, September 29, 2014
Today the U.S. Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the U.S. District Court, Northern District of Illinois, charging Defendants Gerald J. Considine, a/k/a Jerry J. Considine, of Oak Park, Illinois, and his companies, Novo Trading LLC (Novo) and Considine Trading Corp. (CTC), with fraudulently soliciting more than $2.4 million from at least nine customers to open managed commodity futures or foreign exchange (forex) accounts and misappropriating more than $1.65 million of those funds. Specifically, the CFTC Complaint alleges that from at least January 2010 through December 2013, Considine and his two companies fraudulently solicited customers to purportedly open individual managed commodity futures or forex trading accounts and grant Novo or CTC discretionary authority to trade such accounts. However, instead of instructing customers to open and fund individual trading accounts at registered Futures Commission Merchants for Novo and CTC to trade on their behalf, Considine instructed customers to transfer their funds directly to CTC or Novo and the funds were converted. To learn about all legal options for recovery, please call our securities law firm in Chicago, Illinois.
The Securities and Exchange Commission's (SEC) Investor Advisory Committee (IAC) is preparing to vote on a plan on October 8th of this year that may change the definition of an accredited investor. The Dodd-Frank financial reform law, put in place in 2010, states that the accredited investor standard must be reviewed every four years. As the rule stands now, an investor only has to have a net worth of more than $1 million or a yearly income of at least $200,000 to be deemed "accredited." The IAC will propose that the accredited investor definition be altered so that the standard be contingent upon the investor being sophisticated financially, rather than just monetarily sound. The reason for this standard is to limit how much money an accredited investor may put into private placements, which tend to be risky and speculative. If the SEC were to approve the new standard that financial sophistication be a factor in defining the investor "accredited" status, the question arises as to how that sophistication will be determined. The subcommittee will recommend professional credentials, investment experience, financial knowledge and/or a financial skills test as possible answers. Brokers, investment advisors, accountants and attorneys are all professionals who could oversee and assist in the determining process. While some argue that accredited investors need not be protected from themselves, many others insist that an investor's wealth can be mutually exclusive from his or her financial knowledge. By implementing further regulatory rules when it comes to investing in private placement offerings, the SEC will be ensuring that the term accredited investor is held to a more stringent standard.
Brokers at Wells Fargo are obligated to make suitable investment recommendations to their clients. Despite this requirement, each year dozens of investors sue the brokerage firm in the FIRNA arbitration forum for making unsuitable investment recommendations. The suitability of a transaction for one client might not also be suitable for another client. For example, what is suitable for a 35 year old client might not be suitable for a 75 year old client. For elderly, retired or conservative clients, the requirements for making a suitable investment recommendation increase dramatically. Year year FIRNA Enforcement brings actions against brokerage firms for in effect taking a square peg to a round hole approach for making recommendations. For clients of Wells Fargo who receive an unsuitable investment recommendation, they can sue the firm in order to recover those investment losses. Below we discuss how wells Fargo can be sued for making unsuitable investment recommendations. To receive a free evaluation by an experience securities fraud lawyer, please call us in Chicago at 312.332.4200.
Brokers and financial advisers are required to make suitable investment recommendations to their clients. Factors like the client's net worth, annual income, actual investment objective and age are the sort of factors that go into determining what is or is not a suitable investment recommendation. Each year thousands of investors sue brokerage firms in the FIRNA arbitration forum against firms like Raymond James, Wells Fargo and Edwards Jones arguing the broker made an unsuitable recommendation to their client. In the video below we discuss investor suitability claims against brokerage firms and what clients can do to recover investment losses. For a free evaluation by a lawyer, please call our securities fraud law firm.
For former clients of Howard J. Allen, the FINRA arbitration process can be used to recover investment losses in private securities transactions. Allen previously worked for Allen Partners, JP Turner, Portfolio Advisors Alliance, and Sands Brothers. Allen has four regulatory events, one criminal action and six customer complaints, according to his CRD. In May of 2014, Allen was suspended for 8 months by his main regulator, FINRA Enforcement. Fortunately for clients who lost money with Howard Allen while investing in private placements, his previous employers may be able to be held liable for any investment losses sustained. To learn how to recover these losses through the FINRA arbitration claims process or through a lawsuit, please call our law firm in Chicago, Illinois.
If you lost money with Frank Brickell, his former employer, World Trade Financial Group can be sued to potentially recover those losses. Recently, Brickell's registration with the state of Illinois was revoked. Finra Enforcement recently took action against Brickell for actions related to the sale of 27.8 billion shares of common penny stock that werent registered or exempt from registration. Brickell's employer was reasonable for supervising his activities while affiliated with the firm. To learn how World Trade Financial Group can be sued for investment losses related to Frank Brickell recommendations, please call our law firm in Chicago, Illinois.
For investors who invested with Robert Couch in Oil2 Inc., legal options exist for the recovery of these losses. Recently the Illinois Securities Department entered an Order of Prohibition against Robert Couch and Couch Financial Services Inc. for the selling of Oil2 Inc. interests through the radio show Wealth Off Wall Street. To learn more, please call our law firm in Chicago for a no cost review by an attorney.
We are currently representing multiple former clients of ex Waddell and Reed financial advisor Jeffrey Meyer. In August of 2014, FINRA's Department of Enforcement filed a complaint against him. The complaint alleges that while employed at Waddell & Reed and WRP Investments, Inc. Meyer acted outside the scope of his employment with those firms by participating in 37 private securities transactions totaling more than $1.5 million, without providing prior written notice to the firms of his proposed roles in the transactions. FINRA alleges that as a result of the foregoing, Mr. Meyer violated FINRA Rule 2010. FINRA Rule 2010 states that "A member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade." Private securities transactional, also know as selling away, can subject the brokerage firms for which he was affiliated with to damages incurred by the broker. If you'd like to get a free evaluation by an attorney as to whether Jeffrey Meyer related investment losses can be recovered on a contingency fee basis, please call our securities fraud law firm with offices in Chicago and Barringtion, Illinois at 312.332.4200.