The Financial Industry Regulatory Authority (FINRA) announced today that it has fined HSBC Securities (USA) Inc. $375,000 for recommending unsuitable sales of inverse floating rate Collateralized Mortgage Obligations (CMOs) to retail customers. HSBC failed to adequately supervise the suitability of the CMO sales and fully clarify the risks of an inverse floating rate or other risky CMO investment to its customers.FINRA’s investigation found that HSBC recommended the sale of CMOs, including inverse floating rate CMOs, to its retail customers.
Posts Tagged ‘Financial Industry Regulatory Authority’
FINRA Fines HSBC For CMO Sales to Retail Customers
August 19th, 2010 
Before You Invest 
Posted in Finance Fraud 
Tags: Collateralized Mortgage Obligations, Executive Vice, Financial Industry Regulatory Authority, Fixed Income, Hsbc Securities, Hsbc Usa, Income Security, Instances, Inverse Floaters, Matu, Pre Approval, Principal Payments, Restitution, Retail Customers, Risk Investments, Suitability, Suitable Recommendations, Supervisory System, Unsophisticated Investors, Usa Inc 
Comments OffFINRA Fines Merrill Lynch Over UIT Abuse
August 19th, 2010 Before You Invest The Financial Industry Regulatory Authority (FINRA) announced today that it has fined Merrill Lynch $500,000 for failing to provide sales charge discounts to customers on eligible buys of Unit Investment Trusts (UITs). FINRA also found that Merrill Lynch failed to have an adequate supervisory system in place to ensure customers received appropriate UIT discounts.
Morgan Stanley Fined By FINRA Over Failure to Disclose
August 14th, 2010 Before You Invest The Financial Industry Regulatory Authority on Tuesday said it ordered Morgan Stanley to pay $800,000 for failing to tell conflicts of interests in thousands of stock-research reports since 2006. The group said that Morgan Stanley & Co., a subsidiary of the investment bank, failed to tell accurate information about the firm’s relationships with those companies it covered in more than 6,500 equity research reports.
Posted in Finance Fraud Tags: Conflicts, Decade, Desire, Disclosures, Equity Research, Failure, Financial Industry Regulatory Authority, Finra, Household, Infractions, Investment Bank, Morgan Stanley, Morgan Stanley Co, Public Appearances, Relationships, Research Analysts, Research Recommendations, Stock Research, Subsidiary, Wall Street Comments OffASTA and Mat Municipal Arbitrage Claims Continue to Be Investigated by Aidikoff, Uhl & Bakhtiari
August 12th, 2010 Before You Invest Aidikoff, Uhl & Bakhtiari announces it’s continuing investigation into the ASTA/Mat municipal arbitrage funds launched by Citigroup Global Markets, Inc. and sold through Smith Barney, part of Citigroup’s (NYSE:C) Global Wealth Management Group. The ASTA/Mat funds were first rolled out in 2002 and imploded in February 2008 causing catastrophic losses to investors.
Posted in Finance Fraud Tags: Arbitrage, Arbitration Panels, Bakhtiari, Brokerage Firms, Catastrophic Losses, Citigroup Global Markets, Citigroup Global Markets Inc, Financial Disputes, Financial Industry Regulatory Authority, Financial Institutions, Finra, Global Wealth, Initial Capital, Institutional Investors, Litigation Matters, Municipal Bonds, Securities Arbitration, Smith Barney, Traditional Portfolio, Uhl Comments Off1861 Capital Investigation Continues…
August 11th, 2010 Before You Invest Aidikoff, Uhl & Bakhtiari announces an investigation into the 1861 Capital Management municipal arbitrage funds sold by UBS and other broker dealers. The 1861 Capital funds imploded in February 2008, causing catastrophic losses to investors. “1861 municipal arbitrage funds were marketed to clients as a fixed income product producing a couple of extra points above municipal bonds,” according to Philip M.
Posted in Finance Fraud Tags: 1861, Arbitrage, Arbitration Panels, Asta, Bakhtiari, Bet, Broker Dealers, Capital Management, Catastrophic Losses, Citibank, Extra Points, Financial Industry Regulatory Authority, Fixed Income, Investors, Municipal Bonds, Traditional Portfolio, Truth, Ubs, Uhl, Volatility Comments OffUptick in Ponzi Scheme Filings At FINRA Arbitration
August 2nd, 2010 Before You Invest A year after Bernard Madoff went to prison for masterminding the largest-ever Ponzi scheme, lawyers and regulators say a growing number of these scams are preying on investors and their hunger for high yields.Razor-thin interest rates are squeezing the flow of income to Americans putting savings into CDs, money-market accounts and bonds.
Posted in Finance Fraud Tags: Arbitration, Bernard Madoff, Broker Dealers, Charles Ponzi, Financial Crisis, Financial Industry Regulatory Authority, Investment Business, Money Market Accounts, Namesake, Phony Investment, Ponzi Scheme, Ponzi Schemes, Promissory Notes, Real Estate Investment, Real Estate Investment Trusts, Reits, S Broker, Scams, Stock Markets, Uptick Comments OffFINRA Warns About Social Media Ponzi Schemes
July 16th, 2010 Before You Invest The Financial Industry Regulatory Authority (FINRA) warned investors today about Internet-based Ponzi schemes called high-yield investment programs (HYIPs), which purport to offer returns of 20, 30, 100 percent or more per day. HYIPs are unregistered investments sold by unlicensed individuals using sophisticated-looking websites.The con artists behind HYIPs are experts at using social media — including YouTube, Twitter and Facebook — to lure investors and make the illusion of social consensus that these investments are legitimate, but investors should know that HYIPs are just Internet-based scams.As FINRA’s investor alert HYIPs—Hazardous to Your Investment Portfolio points out, many HYIPs have a worldwide reach: the recently exposed Pathway to Prosperity scheme allegedly defrauded over 40,000 investors in over 120 countries of $70 million.
Posted in Finance Fraud Tags: Con Artists, Facebook, Federal Bureau Of Investigation, Financial Industry Regulatory Authority, Finra, Google, High Yield Investment, High Yield Investment Programs, Hyips, Investment Portfolio, Investor Alert, John Gannon, Ponzi Schemes, Search Engine Advertising, Searching The Internet, Senior Vice President, Social Consensus, Twitter, Unlicensed Individuals, Yield Investment Programs Comments OffFINRA to Make Additional Information About Brokers, Former Brokers Publicly Available Through BrokerCheck
July 15th, 2010 Before You Invest The amount of information available to the public about current and former securities brokers will expand significantly in coming months, as the Financial Industry Regulatory Authority (FINRA) implements changes to its free, online BrokerCheck service recently approved by the Securities and Exchange Commission.The changes will increase the number of customer complaints reported publicly; extend the public disclosure period for the full record of a broker who leaves the industry from two years to 10 years; and, make certain information about former brokers available permanently, such as criminal convictions and certain civil injunctive actions and arbitration awards against the broker.The changes will also formalize a dispute process for current or former brokers to dispute the accuracy of, or update, factual information told through BrokerCheck.”This additional information will benefit investors who are considering whether to conduct, or continue to conduct, business with a particular securities firm or broker,” said FINRA Chairman and CEO Rick Ketchum.
Posted in Finance Fraud Tags: Adjudicated, Arbitration Awards, Criminal Convictions, Customer Complaints, Electronic Filing, Factual Information, Financial Industry Regulatory Authority, Finra, Implements, Injunctive Actions, Ketchum, Own Accord, Public Disclosure, Regulatory Actions, Securities And Exchange, Securities And Exchange Commission, Securities Brokers, Securities Firm, Securities Industry, Segments Comments OffSEC To Review Marketing of Principal Protected Products
July 6th, 2010 Before You Invest The U.S. Securities and Exchange Commission is asking financial firms for information on how they market “principal-protected” notes,” Bloomberg reported on Friday, citing people familiar with the matter. Principal-protected notes, complex securities marketed as carrying a money-back guarantee, have started to make a comeback lately after losing much of their luster when Lehman Brothers collapsed in 2008.
Posted in Finance Fraud Tags: Bank Of America, Bank Of America Corp, Barclays, Barclays Plc, Bloomberg, Chase Co, Citigroup Inc, Financial Industry Regulatory Authority, Hsbc Holdings, Hsbc Holdings Plc, Initial Outlay, Jpmorgan Chase, Lehman Brothers, Luster, Money Back Guarantee, Principal Protected Notes, Promotional Materials, Regulatory Agency, Securities And Exchange Commission, Securities Industry Comments Off
FINRA Seeks Extension of Discovery Guide Comment Period
The Financial Industry Regulatory Authority has requested to extend the public-comment period for a rule proposal that would redefine the type of information that parties typically exchange during securities arbitration proceedings. Finra filed a regulatory notice with the Securities and Exchange Commission on Tuesday to extend the comment period for proposed changes to its arbitration discovery guide by 45 days until Oct.
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