Investor Lawyers Blog

Recent Financial Industry Regulatory Authority (FINRA) securities arbitration resulted in the order for units of Merrill Lynch to pay compensatory damages to Staton Family Investments Inc. totaling $8.1 million for breach of fiduciary duty. Staton Family Investments and Daniel Staton accused Merrill Lynch of securities fraud, negligence, breach of contract and common stock theft. According…

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 who had no qualms about…

Shane Selewach, a former Ameriprise Financial Services Inc. broker, has been convicted of stealing nearly $335,000 from clients and sentenced to 8-12 years in prison for broker misconduct. Selewach’s misconduct includes six counts of larceny, six counts of securities fraud and conducting business as an unregistered broker dealer. Selewach was employed with Ameriprise from September…

Janney Montgomery Scott, a broker-dealer from Philadelphia, and his firm, Janney Montgomery Scott LLC, will pay $850,000 in his settlement with the Securities and Exchange Commission for not taking proper precautions to prevent insider trading. According to securities regulators, Janney didn’t establish proper policies and, in some cases, didn’t enforce what policies were in place,…

William Bailey, a former broker for NEXT Financial Group Inc., was suspended for two years in Financial Industry Regulatory Authority (FINRA) securities arbitration. Bailey’s official cause for suspension, according to FINRA, was “unsuitable and excessive trading of mutual funds and variable annuities.” In addition, Bailey was charged with discretionary trading without prior written approval. Bailey’s…

A jury in the New York State Supreme Court found James W. Margulies guilty of conspiracy, grand larceny, falsifying business records, scheming to defraud and violation of general business law. The date currently scheduled for sentencing is August 9; Margulies could receive up to 25 years in prison. Margulies served both as the CEO and…

Jennifer Kim, an ex-Morgan Stanley trader, will pay $25,000 and is barred from broker-dealer association for three years in her settlement with the SEC regarding its claim that she concealed trades and falsified books. The firm’s risk limits were exceeded by the proprietary trades she concealed, intending to cancel the swap orders almost immediately. This…

Securities arbitration ended this month for a claim made by three clients against Neuberger Berman. The Financial Industry Regulatory Authority (FINRA) panel ruled on July 15th that Neuberger Berman must pay $5 million in damages, $450,000 in (3 percent annual) interest and $7,500 in legal fees. Investment attorneys stated that the financial award covered the…

Steven T. Kobayashi, a former financial adviser for UBS, was charged by the SEC on March 3, 2011. He was charged with misappropriating investors’ funds totaling $3.3 million. Allegedly, Kobayashi established a pooled life insurance policy investment fund, Life Settlement Partners LLC, and then solicited funds from many of his UBS customers. The problem, however,…

While stock broker fraud is always a despicable crime to the victims of the fraud, the case of Joshua Gould’s broker misconduct seems infinitely worse for the close relationship between victim and perpetrator, as well as the vulnerable nature of other investors. Gould, a former independent broker for Woodbury Financial Services in University City, defrauded…