Experts expect the number of investor arbitration claims filed with FINRA to increase as a result of the market disruptions that have occurred from the COVID-19 pandemic. This comes after a prolonged bull market which had seen a relatively low number of FINRA arbitration cases. However, the recent market downturn has experts predicting an increase in FINRA arbitration cases.
The Certified Financial Planner Board of Standards (“CFP Board”) is in the process of implementing new procedural rules, and is again seeking comments on the latest iteration of the proposed rules. The new procedural rules are designed to consolidate and replace the CFP Board’s Disciplinary Rules and Procedures and the Appeal Rules and Procedures. The CFP Board had previously sought comments on its new procedural rules from November 27, 2018 through January 29, 2019.
As detailed in an earlier post in the Eccleston Law Blog, Morgan Stanley Wealth Management experienced a system outage on March 25. According to Morgan Stanley, the outage, which lasted roughly 4 and a half hours, was caused by a bug in third-party software. During the outage, Morgan Stanley brokers were able to place trades via a back-up system. However, the back-up system was slower than the normal system.
On March 25, Morgan Stanley Wealth Management’s technology system crashed. As a result, both brokers and clients were unable to view account information or place orders. Brokers did report being able to complete orders by using a link they were provided. Investors who were not able to access their account online were told to call the firm to place trades.
Closed-end funds in the energy sector have been hit hard by the steep decline in the price of crude oil. Share prices of such closed-end funds from Goldman Sachs, Kayne Anderson and Tortoise have dropped between 70% and 89% this month.
Per the terms of a proposed consent judgment filed in New York Federal Court, International Investment Group LLC (“IIG”) has agreed to pay $35.2 million to resolve a case brought by the U.S. Securities and Exchange Commission (“SEC”). In the Complaint filed by the SEC, IIG was alleged to have run a Ponzi scheme going back to 2007. The agreed upon penalty consists of $30.9 million in disgorgement and $4.3 million in prejudgment interest.
While the stock market has suffered great losses recently, the performance of fixed income bond funds reminds us all that appropriate asset allocation is the prudent course of action.
A broker who left JPMorgan's banking channel to join Merrill Lynch has agreed to a preliminary injunction barring him from soliciting his former clients as the parties await a FINRA arbitration proceeding.
Although not sold directly to individual investors, investors should be aware of catastrophe bonds and other event-linked securities, which can be part of their mutual funds, closed-end funds or other investments. Highlighting the extreme risk that these bonds can carry, the Financial Industry Regulatory Authority (“FINRA”) previously issued an Investor Alert regarding catastrophe bonds and other event-linked securities.
Customer complaints and arbitration claims never are good news for financial advisors. But too often advisors go “from the frying pan to the fire” by agreeing to be represented by the legal counsel that their firm recommends or refers. Advisors are enticed by the word “free”, and they are lulled into a (false) sense of comfort and security knowing their lawyer is liked by his/her financial services firm, sounds smart and polite, is experienced, and reassuring that all will turn out okay.
It was really fun seeing you fight for us. You have an amazing way of thinking out of the box.
FINRA has disciplined 62 advisors for cheating on New York’s continuing education (CE) requirements tied to insurance license renewals.
In a significant development for investors in GPB Capital Holdings, the private equity firm will move into receivership following a prolonged legal battle.
The Securities and Exchange Commission (SEC) has charged Cantor Fitzgerald, L.P. with causing two special purpose acquisition companies (SPACs) under its control to make misleading statements to investors before their initial public offerings (IPOs).
