FINRA Press Release: Excessive Mark-Ups
(Dec 2010)
FINRA Expels APS Financial, Bars Former President and Former Broker for Targeting an Elderly Investor with Fraudulently Excessive Mark-ups
The Financial Industry Regulatory Authority (FINRA) issued a press release today announcing that
"it has expelled APS Financial Corporation, located in Austin, Texas, barred the firm's former President, George Conwill, and barred Peter Aman, a former broker at the firm, in a scheme which overcharged an elderly investor by $1.2 million."
The...
SEC Press Release: Banc of America Bid Rigging
(Dec 2010)
SEC Charges Banc of America Securities With Fraud in Connection With Improper Bidding Practices Involving Investment of Proceeds of Municipal Securities
The U.S. Securities and Exchange Commission (SEC) issued a press release today announcing that it had
charged Banc of America Securities, LLC (BAS) with securities fraud for its part in an effort to rig bids in connection with the investment of proceeds of municipal securities.
"BAS has agreed to pay over $36 million, together with...
FINRA Press Release: Disclosure of Wells Notices
(Nov 2010)
Goldman Sachs to Pay $650,000 for Failing to Disclose Wells Notices
The Financial Industry Regulatory Authority (FINRA) issued a press release today announcing that
"it has fined Goldman, Sachs & Co. $650,000 for failing to disclose that two of its registered representatives, including Fabrice Tourre, had received formal notices from the Securities and Exchange Commission (SEC) that they were the subjects of investigations. Tourre's "Wells Notice" was issued in connection with the...
FINRA Regulatory Notice: Commodity Futures-Linked Securities
(Oct 2010)
Sales Practice Obligations for Commodity Futures-Linked Securities
The Financial Industry Regulatory Authority (FINRA) published Regulatory Notice 10-51 reminding firms to make fair and balanced statements in its communication with the public on commodity futures-linked securities. They are reminded that the returns on such securities can often deviate from the returns on the underlying commodities to which they track.
In an effort to further educate public investors, SLCG has written...
In the News: Structured Notes
(Oct 2010)
Bloomberg issued a news release today reporting that the amount of sales and issuances of structured products had reached a record in 2010. The demand for higher yields and caution in investing in stock were factors which contributed to the growth in structured products. According to Bloomberg, a popular structured product was the step-up callable note, which is a callable note that increases ('steps up') its fixed rate over time.
This calls for active analysis of the merits of...
In the News: SEC Reviewing Sales of Structured Products
(Sep 2010)
Bloomberg issued a news release today announcing that sales practices of banks and broker-dealers for structured products are being investigated by the Securities and Exchange Commission (SEC) for product overcharging and disclosure of conflicts of interest.
This is not a surprising new release: it is consistent with our findings in our paper on reverse convertibles, 'What TiVo and JP Morgan teach us about Reverse Convertibles.' In this paper, we find that brokerage firms consistently...
FINRA Regulatory Notice: Municipal Securities
(Sep 2010)
FINRA Reminds Firms of Their Sales Practice and Due Diligence Obligations When Selling Municipal Securities in the Secondary Market
The Financial Industry Regulatory Authority (FINRA) published Regulatory Notice 10-41 reminding broker dealers including municipal securities dealers to
fully understand the municipal securities they sell in order to meet their disclosure, suitability and pricing obligations under the rules of the Municipal Securities Rulemaking Board (MSRB) and federal...
FINRA Press Release: Illicit Equities Trading Strategy
(Sep 2010)
FINRA Sanctions Trillium Brokerage Services, LLC, Director of Trading, Chief Compliance Officer, and Nine Traders $2.26 Million for Illicit Equities Trading Strategy
The Financial Industry Regulatory Authority (FINRA) issued a press release this week announcing that
it has censured and fined New York-based Trillium Brokerage Services, LLC, $1 million for using an illicit high frequency trading strategy and related supervisory failures. Trillium, through nine proprietary traders,...
FINRA Investor Alert: Equity-Indexed Annuities
(Sep 2010)
Equity-Indexed Annuities - A Complex Choice
The Financial Industry Regulatory Authority (FINRA) published an Investor Alert on the rewards and risks of equity-indexed annuities. An annuity makes periodic payments to the holder of the annuity. There are fixed annuities that make fixed payments and variable annuities that make variable payments. Equity-indexed annuities (EIA) are similar to both fixed and variable annuities. They pay an interest rate linked to an equity index and guarantee...
FINRA Press Release: Unit Investment Trusts
(Aug 2010)
Merrill Lynch to Pay More Than $2.5 Million Related to UIT Sales Charge Discount Failures
The Financial Industry Regulatory Authority (FINRA) issued a press release today announcing that
it has fined Merrill Lynch $500,000 for failing to provide sales charge discounts to customers on eligible purchases of Unit Investment Trusts (UITs). FINRA also found that Merrill Lynch failed to have an adequate supervisory system in place to ensure customers received appropriate UIT discounts....
