[Post updated March 2021] When this post was first written in 2011, Ameriprise had just released its annual report, which showed its securities broker dealer subsidiary, Securities America, was hemorrhaging cash. Securities America’s capital had dropped by a whopping 86% in just one year as the company defended itself against investor lawsuits. The company’s actual […]
Can David Lerner Associates Survive?
My first encounter with David Lerner Associates came in July 2011. That month I spoke with a pleasant woman who had invested heavily with a David Lerner Associates broker in an Apple REIT (real estate investment trust). She was calling for advice on whether she accept their offer to buy back her REIT investment. “At […]
FINRA Attacks New Type Of Securities Fraud
Securities fraud costs investors billions of dollars annually. Sometimes the promoter is the fraudster (think Bernie Madoff) and other times it is the stockbroker trying to make a quick buck. This week the Financial Industry Regulatory Authority – FINRA – levied a whopping $7.5 million fine against LPL securities for email violations. Email violations? Thats […]
Hooters Girls and Investment Fraud
The story written by Bruce Kelly of Investment News had all the makings of a tabloid scandal. Stockbrokers, forged documents, sexual harassment, an SEC investigation, Hooters girls and the misappropriation of customer funds from a prominent brokerage firm. The problem is that Kelly is a real journalist and the story he penned today about Commonwealth […]
Bloomberg Column Calls For End FINRA Arbitration Panels
by Brian Mahany William Cohan, a journalist and author of a popular column on Bloomberg View, calls for the end of FINRA arbitration panels. For those readers not familiar with FINRA, the acronym stands for the Financial Industry Regulatory Authority. Virtually anyone who has opened a brokerage account has signed an agreement saying that all […]
First Republic Securities Tagged For Almost $1mm in Suitability Case
by Brian Mahany We have been seeing a number of large arbitration awards these days by the Financial Industry Regulatory Authority (FINRA). Claims against stockbrokers and investment advisors are usually sent to arbitration. Some believe that process is biased against the customer and in favor of the industry. Don’t try to tell that to First […]
Unauthorized Trading – A Serious Problem
by Brian Mahany No matter how many rules and regulations, securities fraud remains a big problem. Most cases involve unsuitable investment recommendations but unauthorized trades are a close second. An unauthorized trade occurs when a stockbroker or investment adviser purchases or sells a security in your account without your permission. Because investment advisers do not […]
LPL Financial Accused of Elder Fraud, Ordered to Pay Over $1mm
Earlier this week we warned about the risks of purchasing complex and exotic derivative securities. We also warned about illiquid real estate investments and how they can be difficult to sell when you need to raise cash. They may be perfect for some folks but are often a bad idea for seniors. Last Friday an […]
Chinese Reverse Merger Scams – What Will They Think of Next?
[Post updated 2021] Hundreds of small Chinese companies have figured out a way to enter the U.S. stock market. Their secret? Reverse mergers. Are these companies scams? Many seem to think so. Chinese companies looking for a quick way to raise capital merge with a defunct or nearly defunct U.S. public company. For all practical […]