Two years after San Antonio broker was sentenced to prison for Texas securities fraud, FINRA has fined Merrill Lynch $1M for not properly supervising its former employer. These failures allegedly allowed Bruce Hammonds to run a Ponzi scam that defrauded investors of $1.4M. Hammonds persuaded 11 people to invest in…
House Financial Services subcommittee Chairman Scott Garrett (R-N.J.) is encouraging the Securities and Exchange Commission to refrain from rulemaking for establishing a uniform fiduciary standard that would apply to both broker-dealers and investment advisers unless the federal agency can come up with adequate evidence to support this action. Garrett made…
The United States Court of Appeals for the Second Circuit says that the Financial Industry Regulatory Authority does not have the authority to take its members to court in order to enforce disciplinary actions. The ruling comes after a years-long legal battle involving penny stock brokerage firm Fiero Brothers and…
The Securities and Exchange Commission is suing investment adviser Kurt Hovan for allegedly misappropriating $178K in “soft dollars” that he claimed was used for investment research. The federal agency contends that, in fact, the money was used to cover other business-related expenses. When Kurt, as Hovan Capital Management president, was…
Adley Abdulwahab and Christian Allmendinger, both principals of A&O Resource Management Ltd., must now serve decades prison for their involvement in a $100M life settlement scheme. Both defendants are from Houston, Texas. The Texas State Securities Board, the SEC, the IRS, the U.S. Postal Inspection Service, the FBI, and the…
The federal government has filed a securities lawsuit against 23-ex Washington Mutual employees and a number of WaMu’s subsidiaries. The complaint contends that these persons signed off on documents that included misleading and false information that was used to sell billions of dollars in mortgage-backed securities. The case stems from…
According to Investment News, the amended complaint of a prospective securities class action case is claiming that the nontraded REITs sold by David Lerner Associates Inc. used investor distributions and borrowed from a credit line to fulfill the targeted dividend payout. The broker-dealer is accused by the Financial Industry Regulatory…
Standard & Poor’s Ratings Services has received a Wells Notice from the Securities and Exchange Commission notifying the credit rating agency that it ma be subject to possible enforcement action over alleged violations of federal securities laws. The allegations involve S & P’s ratings for the Delphinus CDO 2007-1, a…
Sandra Venetis, a New Jersey investment adviser has been sentenced to 168 months behind bars. Venetis had entered guilty pleas to che charges of securities fraud and transacting in criminal property. She also must pay $11,579,781 in restitution to the investors she defrauded. The government had accused Venetis, who owns…
In separate securities lawsuits, the Securities and Exchange Commission and the Commodity Futures Trading Commission are both suing EagleEye Asset Management LLC, which a Massachusetts asset management firm, and Jeffrey A. Liskov, its principal. The CFTC is accusing the two defendants of defrauding at least one US-based client while trading…