Articles Posted in Investor Education

Florida legislation, likely to be enacted Summer 2013, will make broker dealer and investment advisor branch office set-up instantaneous. A bill that would replace the current registration process with one that grants instant approval once an application is filed has been approved by the financial committees in the Florida state House and Senate. Under current…

Under the recent federal budget proposal by the President, the SEC’s funding would increase an extra $256 million allowing the SEC to hire hundreds of additional examiners to increase investment advisor oversight. Under the proposal, the SEC’s budget would rise to $1.67 billion, from $1.42 billion. The SEC wants to use part of the money to “beef…

On April 10, 2013, four top executives of DBSI Inc. were indicted by a federal grand jury in Idaho on 83 charges, including conspiracy to commit securities fraud, wire fraud, mail fraud and interstate transportation of stolen property. Allegedly, DBSI was acting like a Ponzi scheme to continue operations and pay returns to other investors. The…

With many baby boomers entering retirement every day, FINRA is increasing its focus on how financial advisory firms are selling financial products to seniors. FINRA is gathering data from firms regarding the products firms marketed to seniors, the percentage of revenue firms derived from those sales, and the designations firms are using to market themselves to…

Last week, U.S. District Judge Kiyo Matsumoto dismissed a class action lawsuit against David Lerner. According to a spokesman for Lerner, the federal court dismissed all of the class action’s federal securities law claims as well as the state law claims against David Lerner Associates, with prejudice. The dismissed suit alleged that Lerner’s sale of more…

On April 17, 2013, NASAA members visited Washington D.C. to raise support among lawmakers to help their effort to restrict, or end, the use of mandatory arbitration clauses in client contracts with brokers. SEC Commissioner Luis Aguilar agrees with them. In a speech at the NASAA conference on April 16, 2013, Aguilar called for an end to…

On July 3, 2012, Netflix CEO, Reed Hastings, possibly violated Reg FD when Hastings posted corporate information on his personal Facebook. However, on April 2, 2013, the SEC decided not to initiate an enforcement action or allege wrongdoing by Hastings or Netflix. The SEC recognized that there has been market uncertainty about the application of Regulation…

For the past 13 years Britain’s main financial regulator has been the Financial Services Authority. The agency’s tenure, however, is ending and Britain’s largest overhaul of its financial regulation is occurring as we speak. Starting in April 2013 the Financial Conduct Authority, a new consumer protect agency, will replace the Financial Services Authority. Furthermore, the Prudential Regulatory…

The SEC has agreed in principle with eight former directors of five Morgan Keegan mutual funds to settle a civil enforcement action brought in December 2012. In the December action, the SEC charged the directors with failing to exercise their responsibilities to ensure accurate valuations of the assets in mutual funds, which included holdings in…

On March 26, 2013, the SEC charged a California-based hedge fund analyst, Matthew Teeple, with insider trading in advance of a merger of two technology companies Foundry Networks Inc. and Brocade Communication Systems Inc. Teeple received nonpublic information from his friend, Foundry’s Chief Information Officer David Riley. The SEC also charged Riley and another trader, John Jonson,…