Author Archives: FLSecurities
Investor Education: Suitability Rule
Every brokerage firm, investment advisor, and broker is required by securities rules to “know their customer,” so they can make appropriate recommendations given the investor’s age, net worth, risk tolerance and goals. FINRA Rule 2111 also known as the “Suitability Rule” requires that firms and their brokers have a reasonable basis to believe that… Read More »
FINRA Fines Pruco Securities LLC for Pricing Errors and Inadequate Supervisory Procedures
The Financial Industry Regulatory Authority (“FINRA”) announced that it has fined Pruco Securities LLC (“Pruco”) $550,000 and ordered it to pay $10.7 million in restitution for pricing errors and having inadequate supervisory procedures. The allegations relate to the pricing of mutual funds by one of Pruco’s retail brokerage units, COMMAND. According to FINRA, between… Read More »
UBS Securities Japan Co. Ltd. and Parent Company UBS AG to Pay Substantial Penalties for LIBOR Manipulation
The Justice Department announced that UBS Securities Japan Co. Ltd. (“UBS Japan”), a wholly owned subsidiary of Zurich-based UBS AG, has agreed to plead guilty to felony wire fraud for manipulating the London Interbank Offered Rate (“LIBOR”). The LIBOR is the interest rate at which banks can borrow funds from other banks in the… Read More »
Value of Wells Timberland REIT Down 35%
The board of directors for Wells Timberland REIT, Inc. (“Timberland REIT”) announced that they had determined the estimated value of the non-traded real estate investment trust (“REIT”) to be $6.56 per share. The shares were initially offered to the public in 2006 at $10 per share. The board blamed the 35% decline in value… Read More »
South Florida Man Charged With Selling Securities Without a License
The Palm Beach County Sheriff’s Office arrested Wellington resident Bartholomew Caso, Jr. for allegedly selling securities as an unregistered dealer. He was released after posting $3,000 bail. According to the arrest report, the police were alerted to Caso’s alleged wrongdoing in February 2012 when they received a complaint from Josephine Stetson, an elderly woman… Read More »
FINRA Backtracks From its Earlier Interpretation of Suitability Rule
On July 9, 2012, FINRA Rule 2111, the new suitability rule enacted by the Financial Industry Regulatory Authority (“FINRA”), took effect. Rule 2111 states, in pertinent part, that a broker “must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer….”… Read More »
LPL Financial in the Sights of State Securities Regulators Over Non-Traded REITs
The Enforcement Section of the Massachusetts Division of the Office of the Secretary of the Commonwealth has initiated an administrative complaint against LPL Financial LLC relating to its sales practices of non-traded real estate investment trusts (“REITs”.) In 2012, there were in excess of $500 billion in REIT offerings in the marketplace. REITs engage… Read More »
Connecticut Advisory Firm Charged With $276 Million Insider Trading Scheme
The Securities and Exchange Commission (“SEC”) has charged hedge fund advisory firm, Stamford-based CR Intrinsic Investors LLC (“CR”); its former portfolio manager, Mathew Martoma of Boca Raton, Florida; and medical expert Dr. Sidney Gilman of Michigan with perpetrating a $276 million insider trading scheme. The alleged scheme involved a clinical trial for an Alzheimer’s… Read More »
SEC Charges Former Morgan Keegan Directors in Connection With Valuation of Funds’ Assets
The Securities and Exchange Commission (“SEC”) charged eight ex-Morgan Keegan mutual fund directors with violations of the federal securities laws for allegedly failing to properly oversee the valuation of assets in the funds. Morgan Keegan was acquired from Regions Financial Corp. by Florida-based Raymond James in April 2012. The funds at issue are the… Read More »
South Florida Attorney Charged With Securities Violations
The Securities and Exchange Commission (“SEC”) has filed a civil complaint charging attorney Guy M. Jean-Pierre a/k/a Marcelo Dominguez de Guerra with issuing fraudulent attorney opinion letters. According to the SEC, Jean-Pierre currently resides in the Dominican Republic although the Florida Bar reflects his address as Boca Raton, Florida. In its Complaint dated December… Read More »