All Releases

Investors should be Aware of Bond Liquidity

August 22, 2015 | Silver Law Group

Recently, the Financial Industry Regulatory Authority (FINRA) published an alert for investors relating to bond liquidity. For most individuals who have bonds as part of their portfolio of investments, the liquidity of those bonds is not usually an issue that is considered. But, understanding bond liquidity can be important, particularly in times of market volatility.

What is Bond Liquidity?

Liquidity relates to the ease or difficulty of selling an investment with minimal impact on the price. The easier it is to buy and sell an investment, the more liquid it is. The most liquid assets are considered to be similar to cash because their prices maintain relative price stability when sold on the market. Some of the ways liquidity can be decreased is where there is an imbalance between the number of buyers and sellers or price volatility.

Mutual Fund Sales Violations

August 21, 2015 | Silver Law Group

Improper mutual fund switching and failing to provide mutual fund sales breakpoints can constitute violations of the Financial Industry Regulatory Authority (FINRA). These violations can lead to FINRA arbitration claims, which can result in significant damages being assessed against stockbrokers and financial advisors. Further, these violations can lead to financial loss for investors.

Switching and Breakpoint Violations

Mutual funds are an investment made up of funds that are collected from several investors that are used in order to invest in securities such as stocks, bonds, money market instruments, and similar assets. They are operated by money managers who invest the fund’s capital with the goal of producing capital gains for the investors of the funds. Mutual funds provide investment diversity for an investor, without having to purchase stock from several companies.

Firm Focus: Liberty Partners Financial Services, LLC Fined $20,000 by FINRA

August 14, 2015 | Silver Law Group

Firm Fined and Censured for Failure to Report Required Information

According to FINRA’s BrokerCheck website, Liberty Partners Financial Services, LLC of Bakersfield, California, put itself in the FINRA spotlight by failing to properly follow its own written supervisory procedures regarding Order Audit Trail System (OATS) reporting. Without admitting or denying the findings, Liberty Partners Financial Services, LLC has consented to sanctions, including the fine and the imposition of a censure.

To clarify, OATS is a system developed by FINRA to ensure that customer orders are transmitted to the marketplace in a timely manner. The system tracks each order through every stage of its life from receipt to execution or cancellation. Every firm is required to submit daily electronic OATS reports to FINRA. In the case of Liberty Partners Financial Services, the firm failed to transmit required information to OATS from January 29, 2007 through November 16, 2007.

Fined and Suspended by FINRA: Douglas J. Dannhardt of Prospera Financial Services, Inc.

August 14, 2015 | Silver Law Group

Broker faces $25,000 fine and 9 month suspension for excessive trading

As a broker in the securities industry for over 29 years, Douglas J. Dannhardt recently settled a FINRA disciplinary action relating to allegations of excessive trading in a customer’s account.

According to the FINRA BrokerCheck website, Dannhardt’s first disclosure event was a customer dispute in June 2012 in which the claimants alleged Dannhardt excessively traded within their accounts, made unsuitable investments, breached their contract, breached his fiduciary duty and failed to supervise their interests. The claim was ultimately settled for $300,000.

Lawrence LaBine Under Fire for Alleged Unsuitable Recommendations and More

August 13, 2015 | Silver Law Group

Newbridge securities advisor allegedly has conflict of interest between software company and his clients

According to FINRA, Lawrence Michael LaBine is the subject of a disciplinary action pending against him after an alleged conflict of interest leading to several customer disputes.

In his 29 years in the securities industry, LaBine has had 30 disclosures according to FINRA, many of which are related to his alleged relationship with a sinking software company, leading him to make what clients claimed to be inappropriate recommendations.

Boca Raton Oppenheimer Employees Settle SEC Investigation

August 11, 2015 | Silver Law Group

Each faces a one-year suspension for alleged unregistered sale of penny stocks

On Thursday, the Securities and Exchange Commission announced settlements in the cases of three Oppenheimer & Co. employees in Boca Raton, Florida. Scott A. Eisler, Arthur M. Lewis and Robert Okin allegedly were involved in the unregistered sale of more than 2.5 billion shares of penny stocks for a customer in 2009 and 2010.

The investigation alleges that Eisler should have conducted an inquiry into the customer’s trading activity, as it raised red flags that could point to illegal activity. According to the SEC, the proceeds from these transactions amounted to about $12 million, with Oppenheimer making more than $588,000 in commissions.

UBS Puerto Rico Under Federal Investigation for Alleged Violations

August 10, 2015 | Silver Law Group

Investigation focuses on one UBS financial adviser in particular

In a securities filing on July 28, 2015, the Swiss banking giant UBS AG reported that federal authorities are investigating one of its financial advisers and some of its customers for allegedly violating loan agreements and bank policies in Puerto Rico.

According to a Law360 release, the bank’s “second-quarter report included the news that it is responding to requests from the U.S. Securities and Exchange Commission and was aware of a U.S. Department of Justice criminal inquiry into the practice of unnamed customers and a UBS financial adviser of using loans backed by securities to invest in more securities, which is prohibited by bank policy and regulation.”

AlphaBridge Capital Management Charged By SEC for Fraudulent Fund Valuation Scheme

August 5, 2015 | Silver Law Group

Hedge fund firm owners agree to $5 million combined settlement

On June 1, 2015 the Securities and Exchange Commission charged Greenwich, Connecticut-based AlphaBridge Capital Management and its two owners with fraudulently inflating the prices of securities in funds they managed. These inflated valuations caused the funds to pay higher management and performance fees to AlphaBridge.

According to the SEC news release, AlphaBridge Capital Management and its owners – Thomas T. Kutzen and Michael J. Carino – “told investors and its auditor that it obtained independent price quotes from broker-dealers for certain unlisted, thinly-traded residential mortgage-backed securities.” In fact, what the firm did was give “internally-derived valuations to broker-dealers to pass off as their own.”

Giovanni Acevedo, of Voya Financial Advisors, Inc., Accused of Converting Funds

August 4, 2015 | Silver Law Group

Disciplinary action pending against Wilton Manors, FL financial advisor

Giovanni Acevedo could be facing disciplinary action from FINRA after a complaint that he allegedly converted more than $160,000 in customer funds. According to the report, he allegedly told a customer he would invest a $68,000 check she wrote to the company according to her instructions. He allegedly told her to leave 21 blank signed checks with him, resulting in a total of $145,848.42 converted to what is purported to be his own personal account or one of which he is a beneficiary, according to FINRA.

The official complaint, which was filed on April 8, asks that upon the conclusion that the allegations are proven as fact Acevedo be subject to sanctions according to FINRA Rule 8310, namely disgorgement, but the FINRA manual also allows for suspension or expulsion of a member’s registration.

Class Action Suit Sheds Light on Alleged NSC Negligence

August 3, 2015 | Silver Law Group

NSC listed as defendant after misinformation allegedly harms investors

A class action lawsuit filed in October 2014 seeks to right the wrongs done to investors when an Australian energy company went public last June. The suit also names National Securities Corporation (NSC), as one of the defendants listed in the suit, which served as the book-writing manager and underwriter of CBD Energy’s public offering.

To set the scene, it is important to have an understanding of the parties involved. CBD Energy (CBDE), a Sydney-based corporation, provides “clean, renewable and cost-effective sources of energy,” according to the suit. CBD Energy went public in June 2014 with 1.81 million shares valued at $4 per share, for a total sum of $7.24 million. This public offering was based primarily on the work done by NSC by preparing the corporation to go public.