Securities Fraud Lawyers Blog

Balancing Investor Protection and Industry Competitiveness: The Debate Over Mandatory Insurance for FINRA Registered Representatives

Published on: November 2, 2023 | by Savage Villoch Law, PLLC

By Alfred Villoch, III

The issue of unpaid arbitration awards issued by FINRA against FINRA registered representatives is a growing concern in the financial industry, and it has garnered attention from organizations like PIABA (Public Investors Advocate Bar Association). Many investors who have been wronged by FINRA registered stockbrokers rely on FINRA arbitration to seek restitution, but the enforcement of these awards can be problematic, especially when FINRA representatives refuse to pay them. To address this issue, one proposed solution is to mandate that all FINRA-registered individuals carry insurance as a safeguard against unpaid awards.

The concept of mandatory insurance for FINRA registered representatives has its merits, as it could potentially reduce the risk of investors being left without recourse. However, this solution isn’t without its complexities and potential downsides.

Prohibiting Time and Price Discretion – A Case Study of Dominic Joseph Carlo

Published on: October 16, 2023 | by Savage Villoch Law, PLLC

Prohibiting Time and Price Discretion – A Case Study of Dominic Joseph Carlo

Introduction

The Financial Industry Regulatory Authority (FINRA) is a self-regulatory organization that oversees the conduct of broker-dealers and their associated persons. One of the key principles that FINRA enforces is the prohibition of time and price discretion in customer accounts. In this article, we will delve into the specifics of this rule and its implications by using a real-life example involving Dominic Joseph Carlo, a financial professional based in North Bellmore, New York.

How unsuitable investments, unnecessary commissions and fees can hurt a vulnerable investor: FINRA disciplines Christopher F. Harrington Jr.

Published on: October 3, 2023 | by Savage Villoch Law, PLLC

Christopher F. Harrington Jr., a financial advisor based in New York, finds himself in the spotlight as the Financial Industry Regulatory Authority (FINRA) issues an Acceptance, Waiver, and Consent (AWC) order. The order comes after a series of troubling allegations involving Harrington’s financial advice and its impact on a vulnerable investor.

The Allegations

The heart of the matter revolves around allegations that Harrington recommended transactions within a customer’s account that not only served to inflate his own compensation but also inflicted undue financial burdens on the customer. The allegations suggest that these transactions were made without a reasonable basis to believe they were suitable for the customer’s financial situation and investment objectives.

INVESTOR ALERT: Jermaine K. Benjamin, a Former Raymond James Financial Advisor, Faces FINRA Investigation Over Customer Complaint

Published on: September 25, 2023 | by Savage Villoch Law, PLLC

Trust and transparency are the cornerstones upon which clients rely in the financial services industry. Financial advisors are expected to adhere to these principles and maintain the highest ethical standards. However, in a recent matter involving Jermaine K. Benjamin, formerly registered with Raymond James Financial Services, questions about compliance have arisen.

The Allegations

Jermaine K. Benjamin has come under scrutiny due to allegations of unauthorized transactions and misappropriation/defalcation. These serious allegations were brought to light when the FINRA member firm filed an amended Form U5, disclosing a written customer complaint related to these issues.

Are You Planning for Retirement or Are You Already Retired? Potential Problems To Consider Before Entrusting Your Retirement Assets to a Registered Investment Adviser

Published on: May 22, 2023 | by Savage Villoch Law, PLLC

Whether you are in retirement or are planning for retirement, you may consider working with a Registered Investment Adviser (RIA) to manage your retirement assets. RIAs offer professional financial advice and are bound by the fiduciary duty to act in your best interest. However, there are potential issues you should be aware of as you consider working with an RIA. Here is a list of 10 potential problems with entrusting your retirement assets to an RIA.

Misalignment of Interests: While RIAs are held to a fiduciary standard by the Investment Advisers Act of 1940, this does not entirely eliminate the risk of self-interest affecting an RIA’s advice. For instance, RIAs might favor only those investment products from firms that are paying significant commissions to the RIA for selling that product. This means there is a significant potential conflict of interest causing an RIA to recommend the same small set of investment products to every potential client.
Limited Product Offering: Many RIAs have a limited range of investment products due to affiliations with certain investment companies. This could mean you may not have access to the full spectrum of investment options that might be more suitable for your retirement needs.

Los pros y contras de las criptomonedas: desde el punto de vista de un abogado

Published on: April 12, 2023 | by Savage Villoch Law, PLLC

El auge de las criptomonedas ha sido una de las noticias más importantes del mundo financiero en los últimos años. A medida que las criptomonedas como Bitcoin y Ethereum se han vuelto más populares, muchas personas se han preguntado si deberían invertir en ellas. En este blog, discutiremos los pros y los contras de las criptomonedas desde la perspectiva de un abogado especializado en reclamos de pérdidas de inversión.

Pros de las criptomonedas

Potencial de ganancias significativas: Uno de los mayores atractivos de las criptomonedas es su potencial de ganancias significativas. Desde su creación, Bitcoin ha experimentado un crecimiento fenomenal, con un aumento de más del 900% en solo un año. Aunque el crecimiento pasado no garantiza el crecimiento futuro, el potencial de ganancias sigue siendo atractivo para muchos inversores.

Margin Accounts and Investors

Published on: April 10, 2023 | by Savage Villoch Law, PLLC

Margin accounts are a popular tool used by investors to amplify their trading power. However, margin accounts also come with increased risk, and it’s important for investors, particularly senior investors, to understand the responsibilities of their broker-dealer when trading on margin. In this blog post, we’ll explore the responsibilities of broker-dealers in margin accounts and what investors need to know.

A margin account is a type of investment account that allows investors to borrow funds from their broker-dealer to purchase securities. With a margin account, investors are able to leverage their trades by borrowing against the value of their portfolio. This means that investors can potentially earn larger returns on their investments but also exposes them to increased risk.

Broker-dealers have a number of responsibilities when it comes to margin accounts. One of their primary responsibilities is to ensure that investors understand the risks associated with trading on margin. This includes providing investors with a detailed explanation of how margin accounts work, the potential risks and benefits, and any costs or fees associated with trading on margin.

Artificial Intelligence Expanding Impact on Investing

Published on: February 6, 2023 | by Savage Villoch Law, PLLC

Artificial Intelligence (AI), as it develops capabilities far beyond ‘program trading’ has the potential to greatly impact the world of investing in the stock market. In the past decade, technology has advanced greatly, leading to its use in a wide range of industries, including finance. While there is still some uncertainty about how AI will impact the stock market, it is generally believed that it will bring about significant changes in the near future.

One of the biggest benefits of AI in investing is the speed and accuracy of decision-making. With the ability to process large amounts of data quickly, AI algorithms can analyze market trends and identify profitable investments much faster than human traders. In addition, AI algorithms can be programmed to avoid psychological biases that can negatively impact human traders’ decision-making. This could result in more rational and profitable investment decisions.

Another potential benefit of AI in investing is the ability to identify patterns in data that humans might miss. AI algorithms can analyze vast amounts of data, including financial data, news articles, and social media, to gain a comprehensive understanding of a company and its potential for growth. This can provide investors with a more accurate picture of a company’s financial health and future prospects, allowing them to make better investment decisions.

The Most Common Investment Fraud Tactics – Part Two

Published on: November 7, 2022 | by Savage Villoch Law, PLLC

One of the best ways an investor can protect the value of their investments is by equipping themselves with knowledge about common tactics scammers use to defraud investors. The Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) have identified five of the most common techniques used in committing investment fraud. [1]

More information on the first three of these tactics – the “phantom riches” tactic, the “social consensus” tactic, and the “credibility” tactic – and how investors can avoid them can be found in Part One of this two-part series.

Here, we will consider the remaining two most common investment fraud tactics identified by FINRA and the SEC: the “reciprocity” tactic and the “scarcity” tactic.

The Most Common Investment Fraud Tactics – Part One

Published on: October 31, 2022 | by Savage Villoch Law, PLLC

When it comes to protecting investments, one of the most useful strategies is awareness. Investors can empower themselves by knowing the basics of the most commonly used investment fraud tactics.

Per the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC), three of the most common investment fraud tactics employed by scammers in the United States are known as the “phantom riches” tactic, the “source credibility” tactic, and the “social consensus” tactic. [1]

Each tactic essentially functions by allowing the fraudster to build a false narrative surrounding their supposed investment opportunity, thereby garnering interest and ultimately investment dollars from unsuspecting investor victims.