The Wall Street Legal & Regulatory Feed
Securities Industry Commentator by Bill Singer Esq WEEK IN REVIEW
August 4, 2018
Advance-Fee Frauds Keep Dropping the FINRA Name -- Don't Fall for "Regulator" Imposter Ploys (FINRA Investor Alert) As asserted in the Investor Alert, An investor from the United Kingdom purportedly notified FINRA that he had received a detailed document that appeared to be signed by Susan Schroeder, FINRA's Head of Enforcement. In consideration of a $28,000 advance payment, the letter offered "guarantees" related to the conversion and registration of shares of stock that would be transferred to the investor. The document contained 60 pages of detailed information including fake Nasdaq trade reports, false FDIC "Data Capture Forms," and other quasi-official documentation designed to build credibility. FINRA reiterates that "its officers and employees do not offer investment guarantees."
You Owe Me! A Referral Fee FINRA Arbitration Battle (BrokeAndBroker.com Blog) Wall Street's old commission system ain't what it used to be. We got fewer big broker-dealers and they arbitrarily adjust the compensation grid in ways that inexorably lower the percentages earned on increasingly higher production levels coupled with so-called "incentives" to push dubious house-product and to cross-sell and up-sell. As the trend seems to be in the direction of jettisoning commissions for salaries, many who once walked the broker-dealer registered representative path are now headed for the registered investment advisor byway. Unfortunately, with the growth of robo-advisors and a sense that we may be nearing an RIA saturation point, a lot of folks are caught between staying and going, or simply throwing in the towel and finding another career. Bitcoin anyone? Cannabis sales anyone? For the intrepid who are still hanging in with the FINRA member firm model, they are increasingly apt to explore outside business activities, private securities transactions, and ways to generate referral fees. In a recent FINRA arbitration, we have a registered person who believes he was screwed out of a fee for referring VA/Medicaid planning clients. It would seem that the contra-parties to his referral fee agreement have a different view. Hence, the genesis of a lawsuit.
CFTC Announces Multiple Whistleblower Awards Totaling More than $45 Million (CFTC Release 7767-18) Section 748 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 created the CFTC's Whistleblower Program. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected. The CFTC can pay awards not only on CFTC enforcement actions but also related actions brought by foreign futures authorities if certain conditions are met. CFTC announced multiple whistleblower awards totaling more than $45 million: READ the FULL TEXT Awards.
Founder And Managing Partner Of Accounting Firm Pleads Guilty To Making False Filings With The U.S. Department Of Labor (DOJ Press Release) Salvatore Armao, founder, managing partner, Certified Public Accountant, and Certified Fraud Examiner for Armao LLP pled guilty to a one-count Information in the United States District Court for the Southern District of New York charging him with making false statements in employee benefit plan records and reports required by the Employee Retirement Income Security Act of 1974 ("ERISA").in order to conceal an embezzlement scheme in which more than $100,000 was embezzled from a labor union (the "Union") and its employee welfare benefit plan (the "Plan"). READ the FULL TEXT Information https://www.justice.gov/usao-sdny/press-release/file/1084871/download. As set forth in part in the Press Release, the president of the Union, who also served as a trustee of the Plan (the "President-Trustee"), repeatedly used Union funds to pay for his personal expenses, including payments for spa treatments, a gym membership, a second car, medical expenses, dues for an actors' union, personal credit card charges, and ATM cash withdrawals. The President-Trustee used his Union credit card to pay for personal expenses and then "reimbursed" the Union with funds transferred from the Plan. In total, the President-Trustee embezzled more than $100,000 from the Union over approximately three years. To facilitate and conceal the President-Trustee's embezzlement, Armao falsely classified as "loans" the personal expenses for which the President-Trustee paid using Union and Plan funds in accounting records and in DOL filings for the Union.
Former Hillsborough Resident Indicted In Investment Fraud Scheme / Michael James Frew Arrested in Nevada for Wire Fraud, Mail Fraud, and Money Laundering Charges (DOJ Press Release) Michael James Frew was indicted in the United States District Court for the Northern District of California on two counts each of wire fraud, mail fraud, and money laundering in connection with allegations that he had fraudulently solicited investments from numerous individuals on the premise that their money would be invested into real estate in the United States and abroad. The Indictment alleges that Frew diverted the investments to support his personal lifestyle, to speculate on the stock market using an account in his name, and/or to repay other victims a portion of their investments.
Wells Fargo Agrees to Pay $2.09 Billion Penalty for Allegedly Misrepresenting Quality of Loans Used in Residential Mortgage-Backed Securities (DOJ Press Release) Without admitting liability, Wells Fargo Bank, N.A. and several of its affiliates (Wells Fargo) entered into a settlement with DOJ and agreed to pay a civil penalty of $2.09 billion under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) based on the bank's alleged origination and sale of residential mortgage loans that it knew contained misstated income information and did not meet the quality that Wells Fargo represented. Investors, including federally insured financial institutions, purportedly suffered billions of dollars in losses from investing in residential mortgage-backed securities (RMBS) containing loans originated by Wells Fargo. In part, DOJ alleged that in 2005, Wells Fargo began an initiative to double its production of subprime and Alt-A loans. As part of that imitative, Wells Fargo loosened its requirements for originating stated income loans - loans where a borrower simply states his or her income without providing any supporting income documentation. Despite Wells Fargo's alleged knowledge that a substantial portion of its stated income loans contained misstated income, Wells Fargo failed to disclose this information, and instead reported to investors false debt-to-income ratios in connection with the loans it sold. Further, Wells Fargo sold at least 73,539 stated income loans that were included in RMBS between 2005 to 2007, and nearly half of those loans have defaulted, resulting in billions of dollars in losses to investors. READ the FULL TEXT Settlement Agreement
GUEST BLOG: That Long Strange Trip from SunTrust to Wells Fargo (BrokeAndBroker.com Blog, by Aegis J. Frumento, Partner, Stern Tannenbaum & Bell) Most lawyers brag about the cases they won and hope no one notices the others. But the life of a law practice takes many odd turns. I had just started packing up the files of one case that got away when I heard that Wells Fargo had agreed to pay over $2 billion to settle a mortgage fraud case dating back to 2007. "Wells Fargo Agrees to Pay $2.09 Billion Penalty for Allegedly Misrepresenting Quality of Loans Used in Residential Mortgage-Backed Securities" (DOJ Press Release) My case heading to the warehouse involved the same thing by SunTrust Bank, and I could not help thinking, as I read about Wells Fargo and thought about other cases that came before it, that our work on SunTrust had not entirely gone to waste. Sure, I'd rather have had a piece of a billion-dollar settlement. But this is still a tale worth the telling.
SEC Charges Scientist for Insider Trading (SEC Litigation Release No. 24221) In a Complaint filed in the United States District Court for the Western District of Washington, the SEC alleged that Anup Madan, a principal scientist with Laboratory Corporation of America Holding's Covance Genomics Laboratory, purchased 9,300 shares of Sequenom stock after learning of LabCorp's proposed acquisition of that company. Madan sold his shares for a profit of over $14,000. Without admitting or denying the allegations, Madan agreed to the entry of a final judgment permanently enjoining him from future violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. Madan will disgorge his ill-gotten gains and pay a penalty of $14,023, which is equal to the disgorgement amount.READ the FULL TEXT ComplaintSEC Charges Former Corporate Officer for Insider Trading (SEC Litigation Release No. 24222) Without admitting or denying the allegations, Robert Lozuk, former Senior Vice President at Sequenom, Inc. greed to the entry of a final judgment permanently enjoining him from future violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder, and to a five-year bar prohibiting him from acting as an officer or director of a public company. Lozuk will pay a penalty of $26,643. Individual A, who provided timely and valuable assistance to the SEC's investigation, entered into a deferred prosecution agreement wherein he agreed to disgorge his ill-gotten gains of $26,643, and among other things, agreed not to violate the federal securities laws for the deferred period of two years.READ the FULL TEXT SEC Complaint and Deferred Prosecution AgreementOn a somewhat lighter note, was someone at the SEC in a rush to go on vacation or leave early for a summer Friday when tasked with coming up with a headline for this first press released? I mean, seriously, "SEC Charges Scientist . . ."? What's next? SEC charges florist? SEC charges doctor? And let's not pretend that you didn't laugh and wonder whether the SEC was charging a "mad" scientist. After all, who the hell knows what they're really doing at that Covance Genomics lab and what nefarious man-shark genetically engineered humanoid was Madan's main project. You didn't really think that Sharknado was fiction, did you? And did Madan put Hans Delbruck's brain into the monster or did he and Lozuk surreptitiously substitute Abbie Normal's when no one was watching them?
Three Members of Notorious International Cybercrime Group "Fin7" In Custody for Role in Attacking Over 100 U.S. companies / Victim Companies in 47 U.S. States; Used Front Company ‘Combi Security' to Recruit Hackers to Criminal Enterprise (DOJ Press Release) Indictments filed in the United States District Court for the Western District of Washington, charge t Ukrainian nationals Dmytro Fedorov, Fedir Hladyr, and Andrii Kopakov each with 26 felony counts alleging conspiracy, wire fraud, computer hacking, access device fraud, and aggravated identity theft. The Indictment alleges that the three are members of a hacking group widely known as FIN7 (a/k/a the Carbanak Group, the Navigator Group, and others), and that these hackers engaged in a malware attack of over 100 U.S. companies, predominantly in the restaurant, gaming, and hospitality industries, and targeting such firms as Chipotle Mexican Grill, Chili's, Arby's, and Red Robin.
READ the FULL TEXT Superseding and initial Indictments
Former Law Firm Office Manager Sentenced to Prison, Ordered to Pay Restitution for Bank Fraud Scheme (DOJ Press Release) Former law firm office manager Anthony Calaiaro was sentenced in the United States District Court for the Western District of Pennsylvania to 21 months imprisonment, three years of supervised release, and ordered to pay $827,020.39 in restitution on his conviction of one count of bank fraud. Apparently, the former manager wrote some $827,020.39 in checks to himself, forged a law partner's signature on the checks, cashed the forged checks , and used the money for his personal needs. Just thinking out loud here but, mmmmm, was there something that he could have done or not done which if he had or hadn't done could have prevented the detection of his scam? Not that I personally would ever think of doing something like that but there is this lovely beachfront property that's just a bit beyond my financial reach and, gee, I'm not writing anything that I'm thinking about am I?
Man Sentenced for Craigslist Classic Car Fraud Scheme (DOJ Press Release) Shakir McNeal was sentenced in the United States District Court for the Eastern District of Virginia to 63 months in prison for engaging in a fraud conspiracy to defraud purchasers of classic cars and muscle cars on Craigslist and other Internet websites. As accurate as the aforementioned is, it truly doesn't do justice to the conspiracy among McNeal and Anthony V. Newton, Shaquana K. Taylor, Dewrel L. Burleson, and others. Read the fuller commentary in the release.
Man Sentenced for Falsely Pretending to be a General in The U.S. Army (DOJ Press Release) Christian Gerald Degroux pled guilty to to pretending to be a United States Army Lieutenant General in violation of Title 18, United States Code, Section 912., and was sentenced in the United States District Court for the Eastern District of North Carolina to six months imprisonment followed by one year of supervised release. As much as I would like to summarize the allegations in the press release, I can't do the facts any more justice beyond merely quoting this extract -- and wondering when the space aliens began taking over our planet:
On November 6, 2017, DESGROUX, while dressed in a military battle dress uniform (BDUs) with U.S. Army rank and insignia, disembarked a private helicopter that landed at the headquarters of Statistical Analysis Systems (SAS) located in Cary, North Carolina. SAS security officers approached DESGROUX who claimed that he was a Lieutenant General in the United States Army and was authorized by the President of the United States to land the helicopter there in order to pick up a female employee of SAS for a classified debriefing at Fort Bragg, North Carolina. After the female and the defendant entered the helicopter, they flew around the area, refueled at a local airport, and returned to SAS.When questioned by law enforcement, the female stated she was unaware that DESGROUX would be picking her up via helicopter. She believed that although they were not in a romantic relationship, DESGROUX was trying to impress her by flying her around. Her understanding was she would be meeting with the defendant to assist with a design project, but she had no knowledge of DESGROUX's claims of a debriefing or joint special assignment involving the U.S. President. Investigation revealed DESGROUX had never been in the U.S. military.
Fugitive Lawyer Brought to South Florida to Face Federal Fraud Charges (DOJ Press Release) Federal prosecutors alleged in the United States District Court for the Southern District of Florida that Michael R. Casey and co-defendants Patricia S. Saa, Louis N. Gallo, III, and James C. Howard, III had defrauded individuals who invested in Commodities Online LLC (COL). as part of a scheme that obtained over $20 million from over 700 investors. Allegedly, the conspirators used COL to sell COL ownership units, subscriptions to the COL website, and investments in purported transactions to buy and sell commodities. Howard and Saa allegedly diverted a large part of those funds for other purposes. Shortly after that, Casey became President of COL, learned of the diversion of funds, but did not disclose it to investors. Among material facts allegedly not disclosed by the conspirators to investors was that both Howard and Gallo had previously been convicted of federal felonies, and that Gallo was still serving a term of supervised release. Casey Howard, Saa, and Gallo were indicted on one count of conspiracy to commit mail and several counts of mail and wire fraud. Additionally, Howard, Saa, Gallo, and another defendant, Rita Balbirer, were also charged with conspiracy to commit money laundering and various counts of money laundering. In April of 2014, Casey failed to appear at a status hearing while pending trial and a bench warrant was issued for his arrest. Howard pled guilty to one count of conspiracy to commit mail and wire fraud, and was sentenced to 189 months in prison. Gallo pled guilty to one count of conspiracy to commit mail and wire fraud, and was sentenced to 168 months in prison. Balbirer pled guilty to two counts of money laundering, and was sentenced to 17 months in prison. Other co-conspirators in the COL fraud scheme were charged separately with conspiracy to commit mail and wire fraud, and three pled guilty for their involvement in the scheme and were sentenced to prison terms of 36, 38, and 40 months.
Memory Sinks Customer In CD And CMO FINRA Arbitration (BrokeAndBroker.com Blog)
Memories. They are the stuff of popular songs. They are the bases for many lawsuits. Good, decent folks have a tendency to misremember stuff -- and some will swear to their dying day, even in the face of proof to the contrary, that their memory of events is accurate. In some cases, you put a document in front of a witness or you show them a video and, Eureka!, it jogs their memory and an epiphany comes upon them. They unmisremember and reremember and truth triumphs. On the other hand, how often has Nietzsche's observation been proven correct? "Memory says, 'I did that.' Pride replies, 'I could not have done that.' Eventually, memory yields."
SEC Charges Arizona Man with Making False and Misleading Statements and Misappropriating Investor Funds (SEC Litigation Release No. 24220) In a Complaint filed in the United States District Court for the District of Arizona, the SECcharged David A. Harbour with violating Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5(b) thereunder, as well as Section 17(a)(2) of the Securities Act of 1933. Without admitting or denying the allegations, Harbour has agreed to settle the charges and pay a $1,535,000 disgorgement plus $97,072 prejudgment interest, and a $1,535,000 penalty. Also, Harbour also agreed to be enjoined from future securities laws violations. The SEC alleged that Harbour raised money from four friends and business acquaintances by representing to them that their funds would be used to finance various businesses, including an American Indian business entity engaged in high-interest installment lending to consumers. The SEC alleges that Harbour promised investors annual returns ranging from 12% to 20%.. The Complaint alleges that Harbour diverted substantial portions of investors' funds for personal purposes that included paying off hundreds of thousands of dollars in personal credit card expenses, such as expenses for private jets, cruises, stays at resorts, and a payment to a Beverly Hills plastic surgeon. Allegedly, Harbour used investor funds to make payments on personal loans and prior-business debts..READ FULL TEXT SEC Complaint.
CFTC Sues Forex Dealer for Registration and Disclosure Violations / JAFX, Ltd. Solicits U.S. Retail Customers to Trade Forex without Registering as a Retail Foreign Exchange Dealer (CFTC Press Release 7765-18) CFTC filed a civil enforcement action in the U.S. District Court for the District of Utah against JAFX, Ltd. (JAFX), a/k/a JAFX, EOOD, of Sofia, Bulgaria and Kingstown, St. Vincent and the Grenadines. The Complaint alleges that JAFX has been the counterparty to leveraged, retail forex transactions for customers located in the United States, who are not Eligible Contract Participants (ECPs). Allegedly, JAFX solicits orders from non-ECP U.S. customers for leveraged, retail forex trading accounts through JAFX's website, as well as YouTube videos, where JAFX is, or offers to be, the counterparty. Allegedly,JAFX operates as an unregistered retail foreign exchange dealer, and fails to provide customers with the required Risk Disclosure Statement. READ a FULL TEXT Copy of the Complaint
Former Owner of Sleep Study Businesses Convicted of Fraud Conspiracy (DOJ Press Release) Hey, how are you? This is Bill Singer, Esq the publisher of the BrokeAndBroker.com Blog and the Securities Industry Commentator, and I am writing directly to you. Pretty clever how I snuck this seemingly official looking bit of legal commentary in here, no? Now, to be clear, I don't refer to myself as Bill Singer "Esq" but you gotta admit the title makes me come off in a more impressive manner. I mean, you know, plain-old Bill Singer isn't as impressive as Bill Singer, Esq. In any event, I don't have anything to write about the sleep study business referenced in the DOJ Press Release, but if you're like me, your curiosity is going to get the better of you and you're going to click on the link to see how a former owner of a sleep study business got convicted of federal fraud conspiracy. Like what the hell is a sleep study anyway and, assuming there is such a thing, how do you turn that not just into a single business but into multiple businesses, and, afterwards, how do you wind up in the cross-hairs of the feds when all you're doing is charging someone for listening to folks snore? If you're like me and I don't think you are because I'm told that I'm an original but, just for argument's sake, let's say that you're somewhat like me, you may be wondering how much money is in the snooze biz. I mean, after all, it can't be big bucks, right? Boy, are you in for a shock. I'm thinking I should set up an LLC and start crowdfunding. Okay, okay, you're right, I should be more respectful of your time and I'm going to change my mind and give you a titillating extract from the DOJ Press Release:
According to the evidence presented at trial, Yi used her business bank accounts to purchase personal luxury goods and real estate that she nonetheless booked as business expenses. Those falsely booked purchases included a $25,000 Rolex watch, $10,500 in mink coats, several luxury vehicles and a $1.1 million home in Sterling, Virginia. Yi also used the proceeds of her crimes to purchase five condominiums worth more than $2.8 million in McLean, Virginia; Chicago, Illinois; and Honolulu, Hawaii. Yi used money that she falsely booked as payments for medical supplies and health insurance reimbursements to purchase land in Great Falls, Virginia. After a February 2014 search warrant was executed at her businesses, Yi and her husband formed a purported charity, and transferred assets into that foundation to protect them from law enforcement.
(FINRA Special Notice July 30, 2018 / Comment Period Expires: October 12, 2018)
FINRA's Innovation Outreach Initiative And Fifth Harmony Taxonomy As Utilized In Fintech AI (BrokeAndBroker.com Blog) Bill Singer is hot, angry, and discomforted by the summer heat-wave. As such, he has penned a particularly dyspeptic diatribe this morning -- notwithstanding the faux seriousness of the title of the blog. Frankly, if you know Bill, it's pretty funny stuff. The Financial Industry Regulatory Authority has issued yet another "Notice" -- this time not merely a regular, normal, run-of-the-mill notice but, OMG!!!, a "Special Notice." Lemme stop here so that I can catch my breath because I am breathless, breathless with anticipation, I say. Just off the press, we have: FINRA Requests Comment on Financial Technology Innovation in the Broker-Dealer Industry (FINRA Special Notice July 30, 2018 / Comment Period Expires: October 12, 2018).
CFTC Orders R.J. O'Brien & Associates LLC to Pay a $600,000 Civil Monetary Penalty for Supervisory Failures and Violation of a Prior Commission Order (CFTC Release 7764-18) CFTC issued an Order filing and simultaneously settling charges against Futures Commission Merchant R.J. O'Brien & Associates LLC (RJO). The Order asserts that between at least January 2013 and January 2014, RJO failed to diligently supervise its employees to ensure that they properly processed bunched orders allocated post-execution, and that they appropriately monitored post-execution trade allocations for unusual activity -- which delayed the detection of a post-execution trade allocation scheme carried out by an RJO client (Client). Further, the Order asserts that cited supervisory failures by RJO violated a 2013 Commission Order, in which the firm was charged with failure to supervise its employees in their processing of certain bunched orders, including the failure to employ adequate procedures to monitor, detect, and deter unusual activity concerning trades allocated post-execution.The CFTC Order requires RJO to pay a $600,000 civil monetary penalty and to cease and desist from further violations of the Commodity Exchange Act, as charged. READ the FULL TEXT CFTC Order
What's in a Name? Regulation Best Interest v. Fiduciary (Speech by SEC Commissioner Hester M. Peirce) A thoughtful and provocative bit of commentary and observation by SEC Commissioner Peirce. As always, whether BrokeAndBroker.com Blog agrees or disagrees with a given perspective, we welcome those who prompt constructive dialog and those who further discourse in a credible fashion. We commend Commissioner Peirce's full speech to our readers.
Recidivist Securities Fraudster Charged with Multi-million Dollar Stock Manipulation Scheme (DOJ Press Release) Former stockbroker Howard M. Appel was charged today in a criminal Information in the United States District Court for the Eastern District of Pennsylvania with one count of conspiracy to commit securities fraud. Appel purportedly had two prior securities fraud-related convictions. Parallel civil enforcement proceeding were filed by the SEC. SEC Charges Recidivist in Stock Manipulation Scheme READ the FULL TEXT SEC Complaint The DOJ Press Release asserts in part that Appel had:
secretly acquired large blocks of stock in publicly traded companies, including Virtual Piggy, Inc. (ticker symbol "VPIG"), and Red Mountain Resources, Inc. (ticker symbol "RDMP"), to manipulate the market in those stocks. As alleged, Appel acquired title to the shares in the names of nominees in order to hide his ownership block from investors and made between $3,000,000 and $4,000,000 from his scheme. Using nominee accounts was necessary because he previously lost his license and was barred by the Financial Industry Regulatory Authority ("FINRA") from selling securities or associating with any member firm.The information further alleges that Appel and his co-schemers manipulated the stock price by taking numerous actions that were hidden from investors and security regulators including: working as a paid "consultant" to recruit investors, raise capital, and get the companies running; engaging in coordinated buying and selling, which he closely monitored, to raise the share price; and preventing co-conspirators from selling their shares without his permission. The information further alleges that Appel encouraged unwitting investors to buy large blocks of stock by touting the companies' supposed impending success while, at the same time, selling off shares from his nominee accounts-sometimes to those same investors. Appel also allegedly traded on inside information that he obtained as a result of his "consulting" work for the companies, including the status of the companies' efforts to get listed on NASDAQ. As alleged, none of these facts was disclosed to the investing public in any of the public filings the company and Appel were required to make.
Justice Department Announces Resolution With Swiss Financial And Asset Management Firm Mirelis Holding S.A. (DOJ Press Release) According to the terms of the Non-Prosecution Agreement ("NPA"), Mirelis Holding S.A. (formerly known as Mirelis InvestTrust S.A.) agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts, and pay $10.245 million to the United States, in return for the Department's agreement not to prosecute this entity for tax-related criminal offenses. DOJ alleged that since Mirelis began its operations, the company was aware that its U.S. taxpayer-clients had a legal duty to report to the IRS, pay taxes on the basis of, all of the income, including income earned in accounts at Mirelis. Notwithstanding, Mirelis opened, maintained, and serviced accounts for U.S. taxpayer-clients where Mirelis knew or had reason to know that the U.S. taxpayer-clients were not complying with these obligations or were using their accounts outside of the United States to evade U.S. taxes and reporting requirements, filing false tax returns with the IRS, and/or concealing assets maintained outside of the United States from the IRS (hereinafter, "undeclared assets"). DOJ alleged that Mirelis facilitated the concealment of U.S. taxpayer-clients' undeclared accounts through the closure of accounts and transfer of account funds (in whole or in part and temporarily or permanently) to other accounts held at Mirelis where the named account holder and/or beneficial owner were not U.S. persons and may or may not have been related to the U.S. taxpayer-client. READ the FULL TEXT Non-Prosecution Agreement
The 93 Year Old Customer With Dementia, The Guardian, The Stockbroker, And The Compliance Officer (BrokeAndBroker.com Blog) Today's BrokeAndBroker.com Blog offers a chilling a tale about misconduct on Wall Street. We got a 93-year-old retiree with dementia and a court-appointed guardian. During a four-year period, we got a stockbroker who racks up 3,500 transactions, $723,000 in trading losses, and $735,000 in commissions and markups. We got a $470,000 settlement and the stockbroker gets barred from the industry. Did anyone at the broker-dealer notice the activity in the elderly client's accounts? Did anyone at the broker-dealer do anything about it?