On October 4, the Financial Industry Regulatory Authority (FINRA) announced its decision to fine Merrill Lynch a total of $1 million. In an investigation conducted under the supervision of FINRA’s Enforcement Chief Counsel, Susan Light, investigators Brian Vincent and Richard Chin found that Merrill Lynch did not have an adequate…
The North American Securities Administrators Association Inc. and the Securities and Exchange Commission issued an investor alert on September 23, which warned of the risks of self-directed IRAs. According to InvestmentNews.com, this scrutiny by regulators will likely influence the implementation of tougher restrictions on self-directed IRAs by small- to mid-sized…
Together, the FINRA Investor Education Foundation and Stanford University’s Center on Longevity have launched the Research Center on the Prevention of Financial Fraud. The new research center will supplement work by the government, research groups and law enforcement to better understand how fraud causes Americans to lose money. Stanford’s Center…
The investment community has often heard those now-familiar words: “If it seems too good to be true, it probably is” when warning against stock broker fraud. Not only is this phrase only partially true, it’s dangerous. Investors who only watch out for the investments that are “too good to be…
Over the years, computers have somewhat reduced the necessity of brokers. But until recently, dealers maintained their status as the rulers of the market world. However, with quant trading, broker status is being threatened, as well — and its effect on the market has earned a closer look. Mathematicians, who…
The words “market volatility” seem to be used now more than ever. One recent report from The New York Times said, “Market Swings Are Becoming New Standard,” a scary sentiment for investors. One possible explanation for the increased volatility is the use of computerized high frequency automated trading, which accounts…
Carlo Chiaese, an investment adviser, has been sentenced to 58 months in prison and must pay restitution totaling $2.5 million for broker misconduct including failure to invest and falsified documentation. Rather than investing his client’s money, Chiaese used the money to pay for his extravagant lifestyle. Purchases included leases on…
Though investors who have already been “burned” by stock broker fraud or broker misconduct may have a perfectly understandable fear of getting back into the securities game, there are ways investors can help protect themselves in the future. One of the most significant protective measures an investor can take is…
The SEC’s new whistleblower office, which officially opened August 12, hopes to have a significant effect on corporate and stock broker fraud. Under this new program, cash awards will be issued to corporate employees who report fraud to the SEC in order to expose corporate crime. Individuals who report fraud…
This July, a jury found Sky Capital founder Ross Mandell and ex-broker Adam Harrington guilty of securities fraud and conspiracy. Allegedly topping $140 million, the stock broker fraud occurred between 1998 and 2006, according to prosecutors. Preet Bharara, Manhattan U.S. attorney, stated that Mandell and Harrington are, “masters of deception…