The Securities and Exchange Commission has filed charges against hedge fund manager Walter A. Morales and his Baton Rouge-based firm Commonwealth Advisors with allegedly defrauding investors by concealing the millions of dollars in losses sustained from investments linked to residential mortgage-backed securities during the economic crisis. The SEC wants a…
The California Court of Appeals says that while investor Irene Mastick can proceed with her securities litigation against Oakwood Capital Management LLC, she has to arbitrate her securities claim against TD Ameritrade Inc. Mastick had sued representatives of the two financial firms, along with M.E. Safris & Co. and her…
The CFTC is ordering Morgan Stanley Smith Barney LLC (MS) to pay a civil monetary penalty of $200,000 for alleged supervisory failures related to customer account handling by employees, which is a violation of CFTC regulation 166.3. Its Order maintains that Morgan Stanley did not have adequate supervisory and internal…
The producers of the Broadway musical “Rebecca” have filed a $100 million fraud lawsuit against former Oppenheimer & Co. broker Mark Hotton because they say he scammed them by pretending to raise $4.5 million from investors for the play while they paid him and his entities $60,000. Hotton was arrested…
The Financial Industry Regulatory Authority has expelled EKN Financial Services for a number of compliance violations and for letting firm CEO Anthony Ottimo act in the capacity of supervisor even after the Securities and Exchange Commission had barred him from doing so in 2008. FINRA has barred Ottimo from the…
JPMorgan Chase (JPM) must pay the trust of oil heiress Carolyn S. Burford $18 million for the “grossly negligent and reckless” way that the financial firm handled the account. In Tulsa County District Court in Oklahoma, Judge Linda G. Morrissey said that beneficiary Ann Fletcher was persuaded to invest in…
FINRA is fining Guggenheim Securities, LLC $800,000 for allegedly not supervising two collateralized debt obligation traders accused of hiding a trading loss. The traders are Alexander Rekeda and Timothy Day. Rekeda, who is the financial firm’s ex-CDO Desk head, has to pay $50,000 and is suspended for a year. Day’s…
Two former Linkbrokers Derivatives brokers have been arrested on criminal charges of securities fraud, wire fraud, and conspiracy to commit securities fraud. Benjamin Chouchane and Marek Leszczynski, along with others, are accused of taking part in a securities scam that cost customers $18.7 million. It involved the brokers secretly raising…
According to Commodity Futures Trading Commission Bart Chilton, the financial system needs to undergo a “cultural shift” that should include employing a risk-based compensation structure instead of one that is “purely profit-based.” Speaking at the Hard Assets Investment Conference last month, Chilton said that bonus systems and incentives create a…
According to the U.S. Court of Appeals for the Sixth Circuit, the Securities Litigation Uniform Standards Act bars state law breach of contract and negligence claims related to the way the plaintiffs’ trust accounts were managed. The appeals court’s ruling affirms the district court’s decision that the claims “amounted to…