Law Offices of Peter C Rageas P.C.

Embezzlement Case Against Michigan Credit Union CFO Michigan Embezzlement Case Against Local Credit Union CFO Comes to an End Michigan investors may remember the 2015 embezzlement case against Michael LaJoice of Tyrone Township. LaJoice was charged with 14 counts related to the embezzlement of approximately $20 million from the Clarkston Brandon Community Credit Union, where was had been the CFO since 2003. The embezzlement took place over a 12-year period, from 2007 to 2015. As CFO, LaJoice wrote large deposits and approved them with minimal oversight. He also committed check fraud by addressing checks out to himself. In addition, he concealed the missing funds by creating fictitious CDs and bonds and then claimed to auditors and bank examiners the missing funds had been invested into these vehicles. In Jan 2016, LaJoice turned himself into the Oakland County Jail. The cases involving LaJoice included two criminal cases (one in state and one in federal court), two forfeiture cases (one state and one federal) and two civil cases. In May, 2017, LaJoice received an 11-year federal sentence. His sentence also includes seven to 20 years in state prison. The 20-year maximum is more than double Michigan’s guidelines. However, he can be paroled after seven years in state court. There is no chance of parole for his federal sentence. LaJoice will, however, receive credit for time already served. Prior to these embezzlement charges, LaJoice had been considered a charitable award-winning community member. LaJoice owned six properties, a ballroom and Latin Dance studio and a million-dollar home. His assets have been sold and used toward restitution payment. Due to LaJoice’s fraudulent actions, the Clarkston Brandon Credit Union became insolvent and merged with the Michigan State University Federal Credit Union. If you feel that you may have been a victim of securities fraud or investment fraud please contact Michigan securities law firm today. We have been helping investors recover losses from fraudulent financial advisors for over 20 years! We offer Free case evaluations. The post Embezzlement Case Against Michigan Credit Union CFO appeared first on Broker Securities Fraud Attorney. BROKERSECURITIESFRAUD.COM Embezzlement Case Against Michigan Credit Union CFO - Broker Securities Fraud Attorney

Wells Fargo Sanctioned by FINRA for Not Supervising Employees | MI Securities Law Firm Wells Fargo Sanctioned by FINRA for Not Supervising Variable Annuity Transaction Switches to Other Company Products In February, Wells Fargo settled a civil lawsuit and criminal prosecution filed ty the U.S. Department of Justice stemming from the 2016 disclosure that employees at the fourth largest bank in the nation had opened millions of fraudulent saving and checking accounts.1 Wells Fargo agreed to pay $3 billion in the settlement. Then, on September 2, the Financial Industry Regulatory Authority (FINRA) announced a settlement in another alleged breach of Wells Fargo’s responsibility to adequately supervise employees. In that breach, Wells Fargo agreed to a $2.1 million fine to settle allegations that it failed to supervise brokers in relation to variable annuity transactions involving switches to one or more investment company products including commission-generating mutual fund shares and unit investment trusts (UITs). In this settlement Wells Fargo neither accepted nor denied FINRA’s charges. Requirements Investment firms are required to have a supervisory system in place to detect possible unsuitable switches. “Wells Fargo failed to meet this standard,” said Jessica Hopper, head of FINRA’s Department of Enforcement.2 FINRA alleged that for five years, between January 2011 and August 2016, Wells Fargo Clearing Services, LLC, and Wells Fargo Advisors Financial Network, LLC, “failed to supervise recommendations that customers switch from variable annuities to investment company products.” 3 The allegations involved approximately 100 customers who will receive restitution and interest from Wells Fargo totaling more than $1.4 million. Wells Fargo will also pay FINRA fines totaling $675,000. Wells Fargo did have a directive in the firms’ supervisory procedures that required supervisors to review the suitability of product switches by comparing costs and benefits associated with the new and existing products. Despite having that directive, supervisors did not obtain the necessary data, including surrender fees, to make the required comparisons. Procedures Wells Fargo also had procedures which required that letters be sent to the clients affected by switches. These required letters would have confirmed that customers understood the transactions. The letters would have also provided information on related risks and expenses. No letters were sent out even though Wells Fargo procedures stipulated that these letters were supposed to be sent out automatically based on alerts generated by Wells Fargo’s supervisory system. According to FINRA, during the period noted Wells Fargo did not have a switch alert to identify switches from variable annuities to investment company products. FINRA noted that just after the period in question, around August 2016, Wells Fargo did improve their supervision of switches involving variable annuities. These improvements instituted by Wells Fargo included “developing a switch alert to identify when the proceeds from a variable annuity liquidation are used to purchase an investment company product.”4 In a statement, a Wells Fargo spokesperson, Shea Leordeanu said, “At Wells Fargo Advisors we take our supervisory responsibilities seriously. We are pleased to have this matter behind us as the conduct at issue occurred between January 2011 and August 2016.”5 ##### If you have any questions related to securities fraud or investment fraud, please contact our Securities Law Office. We are experienced in all types of securities litigation, investment fraud, stockbroker negligence and more. Call 313-344-7767 and speak to an experienced Securities Attorney about your case today. ____________________________ 1 Wells Fargo to Pay $3 Billion Over Fake Account Scandal, by Pete Williams, February 21, 2020 Link: https://www.nbcnews.com/news/all/wells-fargo-pay-3-billion-over-fake-account-scandal-n1140541 2,3,4 FINRA Sanctions Wells Fargo Clearing Services LLC and Wells Fargo Advisors Financial Network, LLC More Than $2 Million for Supervisory Violations Related to Variable Annuity Switches by Michelle Ong, September 2, 2020 Link: https://www.finra.org/media-center/newsreleases/2020/finra-sanctions-wells-fargo-clearing-services-llc-and-wells-fargo 5 Wells to Pay $2.1 Million for Brokers’ Variable Annuity Switching by Mason Braswell, 9/2/2020 Link: https://advisorhub.com/wells-to-pay-2-1-million-for-brokers-variable-annuity-switching/ The post Wells Fargo Sanctioned by FINRA for Not Supervising Employees | MI Securities Law Firm appeared first on Broker Securities Fraud Attorney. BROKERSECURITIESFRAUD.COM Wells Fargo Sanctioned by FINRA for Not Supervising Employees | MI Securities Law Firm - Broker Securities Fraud Attorney

Morgan Stanley Fined by FINRA | MI Securities Law Office Morgan Stanley Fined by FINRA for Failing to Supervise a Registered Representative There are some investments that because of their upfront sales charges are only advantageous to investors if they are held for a long-term. On August 12, 2020, the U.S. Financial Industry Regulatory Authority (FINRA) entered into a settlement with Morgan Stanley Smith Barney LLC, for failing to reasonably supervise one of their registered representatives who recommended short-term trades of corporate bonds and preferred securities in the accounts of ten customers from January 2012 through December 2017.1 Those customers suffered losses of more than $900,000. 2 Hundreds of times during the time period stated, the registered representative, identified only as KG, recommended that customers buy, and then promptly sell, corporate bonds or preferred securities. FINRA Rule 2111 requires registered representatives to have a “reasonable basis to believe that a recommended securities transaction or investment strategy is suitable for the customer, based on information obtained through the reasonable diligence of the firm or associated person to ascertain the customer’s investment profile.”3 FINRA Rule 3110 and its predecessor, NASD Rule 3010, require “that each member firm take reasonable steps to ensure that the activities of each associated person comply with applicable securities laws and regulations, investigate red flags of potential misconduct, and take appropriate action when misconduct has occurred.”4 When KG recommended the short-term trades of corporate bonds and preferred securities, Morgan Stanley’s automated alert system identified 100 separate issues. The alert system flags trading activity and accounts that warrant further review by a supervisor, including alerts that identify accounts in which the trading exceeds certain turnover and cost-to-equity ratios.5 A Morgan Stanley representative did discuss the alerts with KG and even contacted affected customers to confirm whether they were satisfied with KG and his recommendations. In September 2014, over two years after some of the short-term trades were executed, the Central Compliance Department at Morgan Stanley reviewed KG’s securities recommendations. They concluded that his recommendations were “generating high costs/commissions and the products/investment strategies were costing the clients more money than they were making the clients.”6 Even after that review was conducted and conclusions drawn, FINRA alleges that Morgan Stanley didn’t take sufficient actions to address the issue, as those 10 affected customer accounts continued to generate alerts for potentially excessive turnover and cost-to-equity ratios. It wasn’t until January 2016 that Morgan Stanley instructed KG to stop short-term trading in corporate bonds and preferred securities in all of his customer accounts. Even with those instructions, KG still executed a small number of short-term trades in some customer accounts between June 2016 and December 2017. In the settlement with FINRA, Morgan Stanley neither admitted nor denied FINRA’s findings. They agreed to a censure and to pay a $175,000 fine and restitution to those affected customers in the amount of $774,574.08 plus interest.7 If you have any questions related to securities fraud, broker misconduct, or investment fraud, please contact our Securities Law Office. We have been helping investors recover losses from fraudulent financial advisors for over 20 years! ____________________________ 1,3,4, 6 Financial Industry Regulatory Authority Letter of Acceptance, Waiver and Consent No. 2019063917801 Link: https://www.finra.org/sites/default/files/fda_documents/2019063917801%20Morgan%20Stanley%20Smith%20Barney%20LLC%20CRD%20149777%20AWC%20%20VA.pdf 2 FINRA fines Morgan Stanley for failure to reasonably supervise representative Link: https://financefeeds.com/finra-fines-morgan-stanley-failure-reasonably-supervise-representative/ 5,7 Morgan Stanley Accepts $175.000 Fine from FINRA to Settle Charges, by Celeste Skinner, 8/13/2020 Link: https://www.financemagnates.com/institutional-forex/regulation/morgan-stanley-accepts-175000-fine-from-finra-to-settle-charges/ The post Morgan Stanley Fined by FINRA | MI Securities Law Office appeared first on Broker Securities Fraud Attorney. BROKERSECURITIESFRAUD.COM Morgan Stanley Fined by FINRA | MI Securities Law Office - Broker Securities Fraud Attorney

SEC Files Fraud Charges Involving NAC Foundation / AML Bitcoin – MI Securities Law Firm Banks are subject to rules which require them to verify the identity of their customers. This is a problem for criminals who have large sums of cash from illegal activities. Increasingly, criminals have turned to cryptocurrency to launder their cash. Chainalysis, a New-York based blockchain analysis company, reports that in 2019 criminal entities moved $2.8 billion in Bitcoin to exchanges where the bitcoin is converted back into cash.1 That figure jumped exponentially from the $1 billion that Chainalysis reported as being converted in 2018.According to a Securities and Exchange Commission (SEC) complaint Nevada-based NAC Foundation fraudulently assured investors that AML BitCoin was “superior to the original bitcoin, with anti-money laundering, anti-terrorism, and theft-resistant technology built into the coin on NAC’s own ‘privately regulated public blockchain’.”2 NAC Foundation and Marcus Andrade, its chief executive officer, along with a political lobbyist, Jack Abramoff, were charged in the SEC complaint. The SEC alleges in the complaint that from at least August 2017 through December 2018, the Foundation garnered $5.6 million from 2,400 investors, primarily in the United States, through the sale of tokens that could later be converted to AML Bitcoin.3 While investors were told that AML BitCoin was superior to the original bitcoin because of its safeguards and technology advances, the SEC alleged that none of the anti-money laundering, anti-terrorism and theft-resistant capabilities existed and “the development of AML BitCoin and its blockchain was in the very early stages.”4 The SEC DAO Report, issued July 25, 2017, advised those using blockchain-enabled means for capital raising to take appropriate steps to ensure compliance with U.S. federal securities laws warning that digital assets were investment contracts and therefore securities.5 These securities laws include full and fair disclosure which requires those offering and selling securities to the investing public to provide “sufficient, accurate information to allow investors to make informed decisions before they invest.”6 The SEC believes that the tokens that NAC sold to its investors, including through an initial coin offering (ICO) phase offered to the general public, were an investment contract, which constituted a “security” under federal securities laws. NAC never filed a registration statement with the SEC for its offer and sale of securities and did not receive an exemption from registration, thus depriving its investors of important information about the investment opportunity and why it was speculative and risky. The SEC also alleges that NAC and Andrade deceived investors by telling them through social medial posts, press releases and other promotional materials that government agencies were interested in using AML BitCoin in their payment systems. Only initial meetings were held, with no follow-up meetings. The also deceived investors by falsely suggesting that the National Football League and NBC rejected an AML BitCoin ad because of its political content when in fact, NAC did not have the funds to run a Super Bowl commercial. Approximately $1.1 million from AML BitCoin sales was allegedly used by Andrade to purchase a personal residence and vehicles as well as a property for his father. Investors considering initial coin offerings and digital asset purchases should gain knowledge on these types of investments by visiting the Investor.gov website.7 The Law Offices of Peter C. Rageas has been helping victims of Investment and Securities Fraud recover financial losses for over 20 years. We Are a Full-Service Securities Law Firm handling all aspects of Investment & Securities Fraud. If you feel that you may have been a victim of securities fraud, or broker negligence please contact our Investment Fraud and Securities Fraud Law Offices serving the Greater Detroit Area and beyond. We offer consultations and are happy to talk to you about your unique case today! ____________________________ 1 Criminals Laundered $2.8 Billion in 2019 Using Crypto Exchanges, Finds a New Analysis, MIT Technology Review, 1/16/2020 Link: https://www.technologyreview.com/2020/01/16/130843/cryptocurrency-money-laundering-exchanges/ 2,4 SEC Charges Issuer, CEO, and Lobbyist with Defrauding Investors in AML BitCoin, www.sec.gove, 6/25/2020 Link: https://www.sec.gov/news/press-release/2020-145 3,5,6 U.S. Securities and Exchange Commission Complaint Link: https://www.sec.gov/litigation/complaints/2020/comp-pr2020-145-nac-andrade.pdf 7 Spotlight on Initial Coin Offerings and Digital Assets Link: https://www.investor.gov/additional-resources/spotlight/spotlight-initial-coin-offerings-and-digital-assets The post SEC Files Fraud Charges Involving NAC Foundation / AML Bitcoin – MI Securities Law Firm appeared first on Broker Securities Fraud Attorney. BROKERSECURITIESFRAUD.COM SEC Files Fraud Charges Involving NAC Foundation / AML Bitcoin - MI Securities Law Firm - Broker Securities Fraud Attorney

SEC Settlement with Major Investment Firm Results in $5M Penalty – MI Securities Law Firm SEC Settlement with Major Investment Firm Results in $5M Fund Benefitting Harmed Wrap Fee Program Investors Investment firm, Morgan Stanley Smith Barney, LLC (MSSB), recently settled charges brought by the U.S. Securities and Exchange Commission (SEC) that the company misled retail investment clients about trade execution services and transaction costs related to its retail wrap fee programs. Without admitting or denying the SEC findings, MSSB agreed to a Cease-and-Desist Order and remedial sanctions which included payment of a $5 million penalty. The penalty funds will be distributed to harmed investors. MSSB was one of the largest sponsors of wrap fee programs in the nation from at least October 2012 until June 2017, the period in which the SEC alleged that MSSB was negligent in providing complete and accurate information regarding trade execution services and transaction-based execution costs incurred by certain retail clients in the wrap fee program.1 A wrap fee is a comprehensive charge, generally a percentage of the assets under management, levied on a client by an investment professional for providing a bundle of services such as investment advice, investment research and brokerage services.2 One advantage of a wrap fee is that it is less complicated for the client as they are only charged one set fee and another advantage is that a wrap fee discourages brokers from making trades to generate higher commissions. The SEC asserted that from at least October 2012 to June 2017 MSSB led retail clients in the wrap program to believe that MSSB executed most client trades and that the clients did not incur transaction-based charges. In fact, MSSB marketed its wrap fee accounts as offering clients professional investment advice, trade execution, and other services within a “transparent” fee structure.3 The SEC alleges that MSSB knew that some wrap managers directed most, and sometimes all, client trades to third-party broker-dealers for execution. Clients were then levied transaction-based charges but these charges were not revealed to them. Some MSSB clients were not aware that they were actually regularly paying execution costs in addition to the MSSB wrap fee charges. Clients were also not aware that, contrary to what they had been told, MSSB did not routinely, if ever, execute their transactions. The SEC maintained that MSSB did not have an adequate system to detect when wrap managers directed trades to MSSB affiliated broker-dealers resulting in client’s incurring transaction-based charges — a violation of MSSB’s own affiliate trading policies. Morgan Stanley oversaw $2.4 trillion of client assets, including $1.13 trillion from fee-based clients, as of March 31, according to a regulatory filiing.4 “Investment advisers are obligated to fully inform their clients about the fees that clients will pay in exchange for services,” said Melissa R. Hodgman, Associate Director in the SEC’s Division of Enforcement .5 “The SEC’s order finds that Morgan Stanley Smith Barney failed to provide certain clients in its retail wrap fee programs accurate information about the costs they incurred for the services they received.” The Law Offices of Peter C. Rageas is a full-service Securities Law Firm that has been helping victims of Securities and Investment Fraud recover financial losses for over 20 years. It is important to be informed and know your rights. If you feel that you may have been a victim of securities fraud, or broker negligence please contact our Securities Law Offices serving the Greater Detroit Area and beyond. We offer consultations and are happy to talk to you about your unique case today! Any information on our website is for general information purposes only. ____________________________ 1 United States Securities and Exchange Commission Order in the Matter of Morgan Stanley Smith Barney, 5/12/2020 Link: https://www.sec.gov/litigation/admin/2020/34-88856.pdf 2 Wrap Fee, by Julia Kagan, www.investopiedia, 1/3/2018 Link: https://www.investopedia.com/terms/w/wrap-fee.asp 3, 5 SEC Charges Morgan Stanley Smith Barney with Providing Misleading Information to Retail Clients, 5/12/2020 Link: https://www.sec.gov/news/press-release/2020-109 4 Morgan Stanley Pays $5M Fine to Settle SEC Charges it Misled Investing Clients, by Jonathan Stempel, 5/12/2020 Link: https://www.reuters.com/article/us-morgan-stanley-sec-settlement-idUSKBN22O1W0 The post SEC Settlement with Major Investment Firm Results in $5M Penalty – MI Securities Law Firm appeared first on Broker Securities Fraud Attorney. BROKERSECURITIESFRAUD.COM SEC Settlement with Major Investment Firm Results in $5M Penalty - MI Securities Law Firm - Broker Securities Fraud Attorney

What Does FINRA Do? | MI Securities Law Firm Securities markets need broad public confidence in their integrity to function correctly. Without confidence in the markets, trading securities would entail an unacceptably high level of risk with untold consequences. Because most of the world’s investors believe that U.S. securities markets are well-regulated and supervised by competent compliance professionals, the U.S. markets enjoy safe haven status compared to securities markets in other parts of the world. The Financial Industry Regulatory Authority (FINRA) is a private, not-for-profit company created by the securities industry as a form of self-regulation. As such, FINRA does not have the power to directly enforce compliance with securities laws, such as the ban on insider trading. However, FINRA works hand-in-hand with the Securities Exchange Commission (SEC) to prevent securities fraud and abuse. When FINRA discovers cases of fraud, it reports them to the SEC. It is then the SEC’s job to bring civil litigation against offenders. These lawsuits sometimes recover funds for the victims. In addition, the SEC evaluates if offenses constitute criminal acts. When such a determination is made, the SEC refers the matter to federal prosecutors, who will bring criminal charges against offenders if the evidence is strong enough. FINRA works under the auspices of the SEC. The organization handles specific compliance issues that bolster the SEC’s operations, including developing rules, investigations and education for securities pros and the public. FINRAs Roles in Protecting the Public’s Money Writing Rules FINRA employs securities experts who understand markets and market manipulation and have the skills needed to craft sensible regulations. The organization works closely with the SEC in addressing securities misconduct with rules that protect investors. For example, FINRA has created regulations that address “churning”. Unethical securities brokers “churn and burn” their clients by placing unnecessary trades just to generate sales commissions. They may do this by convincing clients to over trade using deceptive techniques that take advantage of less experienced market participants. In more egregious cases, brokers place trades without their client’s knowledge that benefit the broker and hurt the client. How do securities professionals know at what point they are conducting legitimate trades and what constitutes over trading and, in some cases, fraud? FINRA writes the rules brokers must follow and requires all securities professionals to take courses and pass tests that demonstrate they understand their legal obligations. Enforcement In conjunction with the SEC, FINRA monitors the markets and activities of securities professionals. It looks for red flags that indicate wrongdoing, such as excessive trading by brokers or strange moves in the stock market by people with insider knowledge. For example, FINRA’s website tells the story of an enforcement action against an egregious case of churning. In that instance, a broker defrauded a 77-year-old blind widow with egregious churning that resulted in 700 trades across 200 securities, costing her $184,000. FINRA identified the suspicious behavior, collected evidence and referred the matter to the SEC for prosecution. Fostering Market Transparency Investors rely on transparency to make informed investment decisions. FINRA creates regulations that require the securities industry to provide disclosures to investors that make the underlying risks of certain investments transparent. In addition, securities sellers must only recommend investments that are suitable for the investor’s risk tolerance and disclose their legal responsibilities to investors. FINRA’s Five Steps to Protecting Market Integrity FINRA follows five principals in protecting market integrity. These help define its mission and focus its actions. FINRAs five steps are vital to its success and include the following: • Deter misconduct by enforcing the rules • Discipline those who break the rules • Detect and prevent wrongdoing in the U.S. markets • Educate and inform investors • Resolve securities disputes FINRA plays a vital role in the success of the U.S. financial system. Investing underpins the American economy. Because investment is so vital, both the government and the securities industry work hard to protect it. A key part of protecting the securities industry is maintaining the public perception that markets are transparent and safe. As a private not-for-profit company, FINRA does not engage directly in the prosecution of offenders however, it can bring sanctions against wrongdoers and works hand-in-hand with the SEC to build cases against fraudsters. In addition, it endeavors to educate and inform investors and can arbitrate securities disputes. Because of FINRA’s vital work, the U.S. stock markets are trusted by investors around the world. The SEC and FINRA were established to enforce the regulation of securities firms and the goal of securities fraud lawyers is to collect money damages for investors. If you have suffered economic losses due to mistakes by brokers, you need the assistance of an experienced FINRA attorney. The attorneys at the Law Offices of Peter C. Rageas are the ideal choice to recover your losses. We have been representing and protecting our clients from fraudulent stockbrokers, investment fraud and Ponzi schemes for over 20 years. Call Today! The post What Does FINRA Do? | MI Securities Law Firm appeared first on Broker Securities Fraud Attorney. BROKERSECURITIESFRAUD.COM What Does FINRA Do? | MI Securities Law Firm - Broker Securities Fraud Attorney

Concorde Investment Services in Livonia to Settle FINRA Allegations | Securities Law Firm MI Concorde Investment Services in Livonia Proposes to Settle FINRA Allegations of Failure to Supervise a Registered Representative A Livonia, Michigan, Financial Industry Regulatory Authority (FINRA) member, Concorde Investment Services, LLC, submitted a Letter of Acceptance, Waiver and Consent (AWC) on June 26, 2020, for the purpose of proposing a settlement of alleged FINRA Rule violations involving the failure to reasonably supervise two former registered representatives of the Concorde Investment Services which resulted in one of the registered representatives recommending unsuitable trades in several customers’ accounts, among other things. With this AWC, Concorde Investment Services did not admit or deny FINRA’s findings. FINRA alleged that from April 2013 through March 2014, Concorde and Kimberlee Elizabeth Levy, the firm’s Chief Compliance Officer and a General Securities Principal, did not reasonably supervise a registered representative of the firm, named in the AWC document as JT. FINRA further alleges that JT allowed her then-husband, named in the document as RC, to conduct business with Concorde customers. However, during that period, RC had been suspended by FINRA. When RC’s suspension was over in March 2014, Concorde hired RC, failing to reasonably supervise him, which resulted in Levy not identifying that he recommended unsuitable trades in several customers’ accounts, among other things. RC’s suspension was initiated because, when working for another FINRA member firm, RC recommended unsuitable transactions involving complex products. He also sent his customers misleading and unapproved account summaries and failed to disclose customer complaints in a timely manner on his Uniform Application for Securities Industry Registration. JT was hired by Concorde Securities just before her then-husband, RC, began serving his FINRA suspension. She brought no customers of her own to the company. RC, who participated in JT’s employment negotiations, “explicitly told Concorde that he wanted JT to take over the business and service his customers while he was suspended.”1 Despite knowing this, doubts expressed by the firm’s CEO about JT’s competency to handle RC’s book of business, and recommendations by a third-party consultant, Levy did not schedule a timely branch inspection. That inspection was actually conducted more than ten months later and six months after the consultant had recommended a surprise inspection. During that inspection no one contacted customers, or inspected email communications or customer contact notes to determine if JT or her husband RC was actually servicing customers’ accounts. If they had reviewed the email records they would have found over 1,700 emails that RC sent to clients through a Concorde email address. A check made out to RC and Concorde in August 2013, and rejected by Concorde’s clearing firm because RC didn’t work for the company at the time, should have prompted Levy to initiate an investigation of who was servicing these accounts, but it did not. When Concorde hired RC after his suspension, knowing he had been suspended, they still did not adequately supervise him. Concorde’s own written supervisory procedures indicated that heightened supervision was required for employees with disciplinary backgrounds and that supervision should be done on a daily basis. It wasn’t. This lack of supervision enabled RC to advise unsuitable securities recommendations resulting in a 22-year old student and an 85-year-old widow suffering losses of $25,000 each based on his recommendation to purchase private placements, a high-risk investment for investors with a minimum $1M net worth, which neither of these investors had. In another instance, RC recommended fixed-to-floating securities that resulted in five customers suffering total losses of about $148,000. Concorde and Levy terminated RC and JT in July 2016. FINRA has accepted the AWC which had the following stipulations: Concorde will accept a censure; pay a fine of $300,000; and pay one of the customers that was harmed $76,344.20 plus interest. Concorde has reached settlements previously with the other affected customers. Levy will be suspended for four-months, starting 8/17/2020, from association with any FINRA member in any principal capacity; pay a fine of $10,000; and undertake 40 hours of continuing education concerning supervisory responsibilities. If you believe you have been a victim of securities or investment fraud or have questions about your broker’s management of your account, please contact our Michigan Securities Law Firm today. Our experienced securities lawyers can handle a wide variety of legal matters including securities litigation, broker misconduct, FINRA matters, and more. ____________________________ 1 Financial Industry Regulatory Authority Letter of Acceptance, Waiver and Consent No. 2018060577602 Link: https://www.finra.org/sites/default/files/fda_documents/2018060577602%20Concorde%20Investment%20Services%2C%20LLC%20CRD%20151604%20Kimberlee%20Elizabeth%20Levy%20CRD%204065593%20AWC%20sl.pdf The post Concorde Investment Services in Livonia to Settle FINRA Allegations | Securities Law Firm MI appeared first on Broker Securities Fraud Attorney. BROKERSECURITIESFRAUD.COM Concorde Investment Services in Livonia to Settle FINRA Allegations | Securities Law Firm MI - Broker Securities Fraud Attorney

Interactive Brokers, Robinhood Brokerage Affected by Stock Trading Outages Interactive Brokers, the popular stock trading platform went down which left traders unable to place trades for several hours. Take a look at the article below posted by Annie Massa and Misyrlena Egkolfopoulou from Bloomberg. Outages at Interactive Brokers, Robinhood Leave Stock Traders Furious Interactive Brokers Group Inc. apologized to clients in a letter Monday evening, after an outage left some users unable to trade for hours while markets were open. The brokerage said its issues, which drew fury from customers, stemmed from a “high availability” data system provided by another company, which it didn’t name. “The system was specifically designed to minimize the likelihood of the kind of technology failure that we experienced and it has performed well to date,” said Chief Executive Officer Milan Galik in the message to customers, a copy of which was obtained by Bloomberg News. “Nonetheless, it did not work as expected today.” Read Full article here. The Law Offices of Peter C. Rageas is a full-service Securities Law Firm handling all aspects of Investment and Securities Fraud including securities litigation, broker misconduct, FINRA Assistance and more. If you have questions about investment fraud, financial schemes, broker misconduct, or about your broker’s management of your account, call our Securities Firm and speak with an experienced attorney today. The post Interactive Brokers, Robinhood Brokerage Affected by Stock Trading Outages appeared first on Broker Securities Fraud Attorney. BROKERSECURITIESFRAUD.COM Interactive Brokers, Robinhood Brokerage Affected by Stock Trading Outages - Broker Securities Fraud Attorney

U.S. Department of Justice Issues Indictment Against BitMEX Crypto Currency Exchange Executives The United States District Court for the Southern District of New York on October 1, 2020, unsealed a criminal indictment against four BitMEX executives for violations of the U.S. Bank Secrecy Act (BSA).1 It is a move that is noteworthy in that the “Department of Justice has rarely, if ever, filed a standalone criminal indictment against individual executives for failing to maintain an adequate Anti-Money Laundering (AML) program.”2 In just the first seven days after the indictment was issued over $818 million had been retrieved from BitMEX.3 The Bitcoin Mercantile Exchange (BitMEX) is an online trading platform which operates through the website www.bitmex.com. BitMEX, which deals in bitcoin, is one of the world’s biggest cryptocurrency trading exchanges, handling more than $1.5 billion of trades daily prior to the indictment.4 It was founded in Hong Kong in 2014, but is currently registered in the Seychelles, which is a purported tax haven. According to a New York Times article, “BitMEX allowed traders to buy and sell contracts tied to the value of Bitcoin — known as derivatives or futures — with few restrictions and rules that were in place in other exchanges, thus allowing investors to take out enormous loans and make risky trades and to easily move money in and out of BitMEX without the basic identity checks that can prevent money laundering.5 According to the indictment, BitMEX at one point around March 2017 offered its customers up to 100 times leverage on certain of its products. This means that “a deposit of $1,000 resulted in a trader having the ability to trade $100,000 worth of bitcoin and futures trading, allowing investors to bet on the future prices of bitcoin.”6 Since several thousand of its customers are in the United States the DOJ maintains that the Bank Secrecy Act, which was designed to prevent, detect and prosecute international money laundering and the financing of terrorism, requires that futures commission merchants register as such with the U.S. Commodity and Futures Trading Commission (CFTC) under the Commodity Exchange Act, which BitMEX failed to do. The Bank Secrecy Act also requires that futures commission merchants establish anti-money laundering programs, including Know Your Customer (KYC) programs that prevent them from being used for money laundering or the financing of terrorism. The indictment alleges that BitMEX leadership, while aware that AML and KYC regulations did apply to BitMEX, actually took steps to attempt to exempt BitMEX from U.S. laws. One of these steps was to formally incorporate in the Seychelles, although they never had a physical presence in the country and, in fact, had offices in Hong Kong and New York City. BitMEX, which issued a statement on their website saying they “strongly disagree with the U.S. government’s heavy-handed decision to bring these charges” is reported to have recently taken steps to improve AML procedures.7 Each of the four BitMEX executives named in the indictment face up to 10 years in jail and the fines to the company could top $1.3B USD.8 If you have any questions related to securities fraud, broker negligence or investment fraud, please contact our Securities Law Office. We have been helping investors recover losses from fraudulent financial advisors for over 20 years. Call 313-334-7767 and speak to an experienced Securities Attorney today. ____________________________ 1 Sealed Indictment, U.S. Justice Department, Southern District of New York Link: https://www.justice.gov/usao-sdny/press-release/file/1323316/download 2 BitMEX Indictment Warns of New Department of Justice Approach on AML Failures by David L. Kirman, Laurel Loomis Rimon, Nora Kahn and Braddock Stevenson, 11/03/2020 Link: https://www.law.com/therecorder/2020/11/03/bitmex-indictment-warns-of-new-department-of-justice-approach-on-aml-program-failures/ 3,6 Crypto Conversation: Facing U.S. Probe, BitMEX Sees $818M Evaporate, 10/7/2020 Link: https://www.thestreet.com/investing/cryptocurrency/bitmex-sees-818m-evaporate-after-criminal-probe 4,5 Owners of BitMEX, a Leading Bitcoin Exchange, Face Criminal Charges by Nathaniel Popper, 10/1/2020 Link: https://www.nytimes.com/2020/10/01/technology/bitmex-bitcoin-criminal-charges.html 7,8 CFTC, DOJ Charge BitMEX Owners with Illegal Operations and Anti-Money Laundering Violations, 10/13/2020 Link: https://ciphertrace.com/cftc-doj-charge-bitmex-owners-with-illegal-operations-and-anti-money-laundering-violations/#:~:text=CFTC%2C%20DOJ%20Charge%20BitMEX%20Owners%20with%20Illegal%20Operations,and%20maintain%20an%20adequate%20anti-money%20laundering%20%28%E2%80%9CAML%E2%80%9D%29%20program.%E2%80%9D The post U.S. Department of Justice Issues Indictment Against BitMEX Crypto Currency Exchange Executives appeared first on Broker Securities Fraud Attorney. BROKERSECURITIESFRAUD.COM U.S. Department of Justice Issues Indictment Against BitMEX Crypto Currency Exchange Executives - Broker Securities Fraud Attorney

SEC Form CRS: Why It Is Important to Review | Michigan Securities Law Office This past summer, many investors received what looks like a form letter in the mail from their investment firms. At first glance, many investors may have been tempted to pitch that form letter in the recycling bin without thoroughly reading the contents. If the letter is a U.S. Securities and Exchange Commission (SEC) Form CRS, it is in an investor’s best interest to take the time to read the contents. In June 2019 the SEC adopted a package of rules and interpretations “designed to enhance the quality and transparency of retail investors’ relationships with investment advisers and broker-dealers.”1 This package included a new Regulation Best Interest and two separate interpretations under the Investment Advisers Act of 1940. The Regulation Best Interest requires that broker-dealers “act in the best interest of a retail customer when making a recommendation of any securities transaction or investment strategy involving securities to a retail customer … making it clear that a broker-dealer may not put its financial interests ahead of the interests of a retail customer when making recommendations.”2 Also as part of this package, the SEC requires that all investment advisers and broker-dealers provide existing and new clients with a new form called a Customer Relationship Summary (CRS). Investors may also request this form at any time going forward. The SEC required that compliance begin by June 30, 2020. The CRS form is important as it will provide investors with summary information on the following: Firm registration information (including whether the firm is registered as a broker-dealer, investment advisor, or both) A description of all services offered by the firm Information regarding fees and costs (including principal fees and costs, custodian fees, account maintenance fees, and others) Information regarding conflicts of interest A summary of the firm and advisor’s disciplinary history “Conversation starters” for customers to ask their advisor or point of contact.3 Other information may be included based on the services provided by the firm. To make it easier for investors to compare investment advisers and broker-dealers and make informed decisions on their investments the summary will have a standardized question and answer format. “The rules and interpretations we are adopting today address issues that the Commission has been actively considering for nearly two decades,” said SEC Chairman Jay Clayton when the rules and interpretations were adopted. “This rulemaking package will bring the legal requirements and mandated disclosures for broker-dealers and investment advisers in line with reasonable investor expectations, while simultaneously preserving retail investors’ access to a range of products and services at a reasonable cost.”4 It is crucial for investors to research the companies in which and through which they are investing. Seeking advice from an experienced Securities Attorney can help protect your rights as an investor. The Law Offices of Peter C Rageas, P.C. has over 20 years’ experience in all types of securities litigation, investment fraud, stock broker negligence and more! If you have questions about your investments, broker misconduct, or about your broker’s management of your account, please contact our Securities Law Firm at: 313-334-7767 for a consultation. The post SEC Form CRS: Why It Is Important to Review | Michigan Securities Law Office appeared first on Broker Securities Fraud Attorney. BROKERSECURITIESFRAUD.COM SEC Form CRS: Why It Is Important to Review | Michigan Securities Law Office - Broker Securities Fraud Attorney