The Securities and Exchange Commission has filed a complaint charging Brent S. Lemons, a former AG Edwards Inc. and Bank of America Investment Services Inc. stockbroker, with misappropriating over $1.3 million from at least three clients. He allegedly used the money to pay off his gambling debts. The Commission is…
Prudential Securities has been plagued by claims over its deferred compensation plan, known as MasterShare. A number of former representatives have filed claims and recovered damages. Started in 1999, MasterShare allowed Pru employees to deduct up to 25 percent of their gross pay to purchase discounted shares of a stock…
A recent Morningstar article outlines seven mutual fund horror stories. In addition to the Legg Mason Value Fund (symbol LMVTX) and Schwab YieldPlus Fund (symbol SWYPX) and the Regions Morgan Keegan funds, which are the subject of stories we have reported recently, several other hard-hit mutual funds are discussed. For…
Just as auction rate securities were sold by most investment firms as safe alternatives to money market funds which paid a higher rate, so also were a number of mutual funds. Packaged and sold as ultra-short term bond funds and a safe haven for funds which were to be secure…
Connecticut Attorney General Richard Blumenthal has filed a lawsuit against Fitch Inc., Moody’s Corp., and McGraw-Hill Companies. He is charging them with deliberately giving lower credit ratings to bonds issued by public entities, such as municipalities, in comparison to corporate and other kinds of debt. Blumenthal says that by purposely…
SSEK law firm, which specializes in investor claims, is investigating compliants over the liquidity and security of so-called “ultra-short term” bond funds. Because these funds were sold as cash alternatives, any loss of principal is not acceptable. Recently, investors have experienced subtantial losses on a number of these funds, including:…
Citigroup Global, Merrill Lynch, Wachovia Securities, UBS, Charles Schwab, and Morgan Stanley have volunteered to participate in a Financial Industry Regulatory Authority pilot program that would allow investors to have their cases heard by a panel consisting of three public arbitrators. Currently, investors have the option of having their cases…
In its most recent survey of auction-rate securities holders, Pluris Valuation Advisors LLC found that 281 out of 460 public companies have taken write-downs on auction-rate securities worth $2.1 billion (a total par value of $32.2 billion). However, the remaining 179 companies still have to file 10-Q second quarter reports,…
The Massachusetts Secretary of the Commonwealth has filed securities fraud-related charges against Merrill Lynch for allegedly promoting the sale of auction rate securities while providing misleading information about market stability. According to Secretary William Galvin, Merrill Lynch aggressively sold ARS to investors while telling research analysts to downplay market risks…
The Securities and Exchange Commission has issued a staff letter reporting on the “common weaknesses and deficiencies” shared by SEC-registered companies. The findings were based on examinations given to the firms. The “ComplianceAlert Letter” is intended to provide key information, encourage compliance officer to address these issues, and foster “robust…