Investment and Stock Broker Fraud Attorney
Court Requirements for Recommendations from a fiduciary advisors
NASD Rule 2310 requires that a member have reasonable grounds for believing that the recommendation is suitable for each customer upon the basis of the facts.
Courts also impose a fiduciary duty to recommend investments
Courts also impose a fiduciary duty to recommend investments to clients only after studying them sufficiently to become informed as to their nature, price, and financial prognosis and a duty to inform the customer of risks involved in purchasing or selling a particular security. Ward v. Atlantic Security Bank, 777 So.2d 1144 (3rd DCA Fla. 2001).
Hedge Funds Under Scrutiny
Category: Investment Fraud News
It has been estimated that a large percentage of the daily trading in the stock market is due to hedge funds. Relieved of many disclosure requirements, fund owners can only hope the trading straegies pay off.
Connecticut Attorney General Richard Blumenthal (D) urged Congress yesterday to heighten federal scrutiny of the secretive hedge fund industry or face the prospect of a patchwork group of state authorities stepping in to monitor the rapidly growing investment pools to prevent fraud.Blumenthal, whose state is the headquarters for scores of hedge funds, told the Senate Judiciary Committee that last week's federal appeals court ruling striking down oversight of the funds by federal regulators left investors "in a regulatory void, without any disclosure or accountability."
As fiduciaries, financial advisors and brokers owe a duty
As fiduciaries, financial advisors and brokers owe a duty to: (1) provide full, candid, and truthful communication to their customers of all known facts; (2) refrain from making any misstatement, misrepresentation, or omission concerning any matter; (3) always place the client's welfare and best interests above its/their own and refrain from self-dealing; (4) transact business only after receiving approval; and, (5) recommend an investment only after studying it sufficiently. Gochnauer v. A.G. Edwards & Sons, Inc., 810 F.2d 1042, 1049 (11th Cir. 1987).
Brokers owe a fiduciary duty to a securities investor
It is well established that a broker owes a fiduciary duty to a securities investor. See Gochnauer v. A.G. Edwards & Sons, Inc., 810 F.2d 1042, 1049 (11th Cir. 1987); Ward v. Atlantic Security, 777 So.2d 1144 (Fla. 3d DCA 2001); State ex. rel. Painewebber v. Voorhees, 891 S.W.2d 126 (Mo. 1995); Glisson v. Freeman, 532 S.E.2d 442 (Ga. App. 2000); Beckstrom v. Parnell, 730 So.2d 942 (La. App. 1st Cir. 1998).
Today hedge funds are 'sophisticated' investment tools
Today hedge funds are 'sophisticated' investment tools designed to increase returns while minimizing risks. Ordinarily, hedge funds are created as limited partnerships with one general partner and many limited partners. The general partner receives a management fee of 1% - 3% and up to 20% of the profits.
Hedge fund is a generic term used to describe many unique investments.
Put simply, the term is derived from the purpose - hedging the risk of investing. The underlying premise is that hedge funds provide lower long-term returns in exchange for less volatility. Hedge funds are not new but their popularity is. This newfound popularity has morphed hedge funds into investment vehicles shrouded in secrecy.
Are hedge funds suitable for you?
Hedge funds are suitable for qualified purchasers with a net worth above a million dollars and annual income over two hundred and fifty thousand dollars. Purchasers are often required to sign an acknowledgement affirming they are qualified to invest in hedge funds. The trouble is: the risk associated with the funds is often misrepresented and investors are misled into skewing their qualifications.
Securities fraud is stealing
Loosely translated, securities fraud is stealing, and federal officials estimate that investment fraud costs U.S. taxpayers billions of dollars each year.
Investor fraud and broker misconduct
Category: Investment Fraud News
Investor fraud and broker misconduct are more common than you may think. The U.S. is experiencing an epidemic of fraud among corporate and financial executives, and large investment firms.
Direct TV - Rebounding
Category: Investment Fraud News
For all of you who lost money on Direct TV, you will be glad to hear the stock may bounce back. DirecTV Group is the nation's largest satellite TV company, Inc. and it returned to a profit in the first quarter of this year.
The company earned $235.2 million, or 17 cents per share, for the three months ended March 31, compared to a loss of $41.4 million, or 3 cents per share, a year earlier. Revenue grew 8 percent to $3.39 billion from $3.15 billion.
A lot of people who sign up for Direct TV service end up dropping it. The company's U.S. pay TV service added 919,000 subscribers during the quarter, but after accounting for subscribers who later dropped their service, the service only added 255,000 net subscribers. (They call it "churn".) The number of new sign ups was actually a drop of 19 percent from the same period last year.
The worldwide number of DirecTV subscribers increased 7 percent in the quarter to 15.39 million.
"Similar to recent quarters, this solid growth was driven by our large and growing subscriber base, strong ARPU (average revenue per subscriber) growth and higher operating margins due mostly to the significant scale and operating leverage of our business," Chief Executive Chase Carey said in a statement.Analysts expected DirecTV to earn 10 cents per share, according to Thomson Financial.
Carey said the cost to add new subscribers was higher because of the cost of new set-top boxes with increased functionality. Those costs were also spread over few new subscribers as the company continues to tighten its credit policies to weed out those most likely to cancel their service early.
Carey said he continues to foresee a tough competitive environment as cable TV companies push bundled packages of services including phone and high-speed Internet access.
The company has not yet decided on its own strategy to offer broadband Internet service, Carey said.
DirecTV had been rumored to be discussing a partnership with rival Echostar Communications Corp., which operates the Dish TV service, to develop a broadband service to compete with cable.
But Carey said no progress has been made.
"It continues to be an area we spend significant time on," Carey said during a conference call with analysts. "We will move forward and do something when and if we have an arrangement that makes sense for us."
DirecTV offers customers its TV service along with DSL Internet from regional phone companies in many areas of the country.
Looking ahead, the company said two new additional satellites next year will drive future growth as they will make high definition TV signals available to three quarters of all U.S. households.
DirecTV shares fell 58 cents, or 3.4 percent, to close at $16.59 on the New York Stock Exchange. Company shares have gained 17 percent this year.
NASD out to help public?
Category: Investment Fraud News
If I have to go to another NASD hearing and listen to defense attorney objections to valid evidence, I will fromally write to the head of the NASD for corrective action.
Indictment for Investment Fraud
Category: Investment Fraud News
According to Empire State News, a couple who allegedly sold non-existent securities to friends and acquaintances was recently indicted by a grand jury in New York.
Peter and Tara Perun of Lake George, New York were charged with theft and securities fraud involving more than $900,000. The Peruns apparently convinced investors to purchase stock that did not exist in two frozen food companies operated by Modern Day Gourmet and Harvest Holdings, Inc.
Causes of Stock Broker Fraud Complaints
Category: Investment Fraud News
With stockbroker fraud on the rise, it is important for investors to understand the risks of using a stockbroker and do their research on prospective brokers and their firms. There are many causes of action in arbitrations and mediations involving securities fraud disputes.
Increase in Securities Fraud
Category: Investment Fraud News
In the last twenty years, there has been a large increase in investment and stock broker fraud in the securities industry. Since The U.S. Supreme Court has remanded all such securities fraud lawsuits to mediation or arbitration, most complaints now go to the National Association of Securities Dealers (NASD), the New York Stock Exchange (NYSE), or the American Arbitration Association (AAA).
April 25, 2005
By Staff Writer
Kristian Rasmussen, Investment Fraud Lawyer
Category: About Us
Kristian Rasmussen received his Bachelor of Arts degree in Political Science from The Citadel, The Military College of South Carolina, his law degree from Mississippi College School of Law, and he is a graduate of the Naval War College.
Continue reading "Kristian Rasmussen, Investment Fraud Lawyer"
April 24, 2005
By Staff Writer
Disclaimer
The information found on this website should not be construed as legal advice and is not a substitute for professional legal consultation. You should not base your legal decisions solely on the information found in this site and you are encouraged to seek the counsel of an attorney regarding your specific questions or situation.