Category Archives: SEC Disciplinary Actions

SEC

NOTICE TO MORGAN STANLEY CLIENTS: Klayman & Toskes, P.A. Announces Investigation of Morgan Stanley Following $8 Million in SEC Fines for Exchange Traded Fund Violations

By | Exhanged Traded Funds, Featured Investigations, FINRA Sales Practice Violations, SEC Disciplinary Actions, Securities Arbitration | No Comments

New York, NY — February 21, 2017 – The Securities Arbitration Law Firm of Klayman & Toskes, P.A.,(K&T) www.nasd-law.com, announces an investigation into sales practice violations by Morgan Stanley (NYSE:MS) following $8 million in fines levied by the Securities Exchange Commission (SEC) related to Exchange Traded Funds (ETFs).

On February 14, 2017, the SEC imposed a Cease and Desist Order and Remedial Actions against Morgan Stanley for sales practice violations related to recommended investments in single-inverse ETFs for advisory clients in non-discretionary accounts.  According to Morgan Stanley compliance procedures, recommended investments in single-inverse ETFS had two requirements:

  • Advisory clients were required to sign Client Disclosure Notices which detailed the risks associated with the investment; and
  • Morgan Stanley supervisors were required to review the risky transactions for suitability based on client profile.

The SEC examination determined deficiencies were found in the supervisory procedures related to record keeping and the determination of “suitability” in advisory clients’ non-discretionary accounts.  No Client Disclosure Notices were signed for these risky transactions for nearly 44% of the non-discretionary advisory accounts at Morgan Stanley.  The supervisory review was considered “deficient or non-existent” for advisory clients who did not have a signed Client Disclosure Notice.

The sole purpose of this release is to investigate Morgan Stanley’s sales practices related to single-inverse exchange traded funds, which were supposed to be monitored on a daily basis and only considered suitable as a part of a hedging strategy. Morgan Stanley’s sales practice violations may include misrepresentations and omissions of material facts, conflicts of interest, unsuitable investment advice, and the failure to supervise financial advisor recommendations concerning these risky transactions. Current and former Morgan Stanley customers who have information about the firm’s sales practices are encouraged to contact Lawrence L. Klayman, Esq. or Raymond Gentile, Esq. of Klayman & Toskes, P.A.  at (888) 997-9956, or visit our website at www.nasd-law.com.

About Klayman & Toskes, P.A.

K&T is a leading national securities law firm which practices exclusively in the field of securities arbitration and litigation, on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm represents high net-worth, ultra-high-net-worth, and institutional investors, such as non-profit organizations, unions, public and multi-employer pension funds. K&T has office locations in California, Florida, New York and Puerto Rico.

Destination:  http://nasd-law.com/notice-to-morgan-stanley-clients-klayman-toskes-p-a-announces-investigation-of-morgan-stanley-following-8-million-in-sec-fines-for-exchange-traded-fund-violations/

Contact:

Klayman & Toskes, P.A.

Lawrence L. Klayman, Esq.

Raymond Gentile, Esq.

Toll Free: (888)-997-9956

Email: info@nasd-law.com

 

mutual-funds

SEC Bars LPL Financial advisor, Paul Lebel for Churning Client Mutual Fund Investments

By | Featured Investigations, SEC Disciplinary Actions | No Comments

On October 18, 2016, the Securities Exchange Commission (SEC) barred LPL Financial advisor, Paul Lebel for churning and excessively trading mutual funds in customer accounts for the sole purpose of his own personal enrichment.   The excessive trading, also known as “churning” occurred during the period from 2008 to 2014, “during his employment with LPL, he defrauded four customers by churning several of their accounts,” according to the SEC administrative proceeding.

According to the SEC which imposed Remedial Sanctions and a Cease and Desist Order which was a Paul Lebel. “In particular, Lebel exercised de facto control over these customers’ accounts and excessively traded mutual fund shares which carry large front-end load fees (A shares). Lebel’s excessive trading was inconsistent with the customers’ investment objectives, and willfully disregarded the customer s’ interest.”

The SEC complaint alleged, “Lebel’s excessive trading was inconsistent with the customers’ investment objectives, and willfully disregarded the customers’ interest.” The SEC stated, “In light of Lebel’s customers investment objectives, were fraudulent, made to the detriment of Lebel’s customers, and without justification other than the generation of commissions for Lebel.”

Mr. Lebel excessively traded A Share mutual funds, designed to be long-term, buy-and-hold investments, which generated $50,000 in commissions.  As a part of the settlement with regulators, Paul Lebel will pay $56,500 as part of the settlement.

Klayman &Toskes, P.A. represents investors for brokerage firms violations of FINRA sales practice rules which may include; excessive trading, mutual fund switching, unsuitable recommendations, breach of fiduciary duty, misrepresentations and omissions of material facts and a failure to supervise.   Investors who have information about the sales practices of Wells Fargo Advisors and their financial advisors are encouraged to contact Lawrence L. Klayman, Esq. or Raymond Gentile, Esq. of Klayman & Toskes at (888) 997-9956, or visit our website at www.nasd-law.com.

About Klayman & Toskes, P.A.

K&T is a leading national securities law firm which practices exclusively in the field of securities arbitration and litigation, on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm represents high net-worth, ultra-high-net-worth, and institutional investors, such as non-profit organizations, unions, public and multi-employer pension funds. K&T has office locations in California, Florida, New York and Puerto Rico.

Notice to All United Development Funding IV Investors with Losses in Excess of $250,000 from the Securities Arbitration Law Firm of Klayman & Toskes, P.A.

By | Blog, Featured Investigations, Non-Traded REITs, SEC Disciplinary Actions | No Comments

New York (Globe Newswire) – March 2, 2016 – The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”), www.nasd-law.com, provides notice to all United Development Funding IV (NASDAQ:UDF) investors with full-service brokerage accounts. Class action lawsuits have been filed against company and its officers only.  Investors with full-service brokerage firms should consider all investment loss recovery options including, claims filed with the Financial Industry Regulatory Authority (“FINRA”) for sales practice violations. According to a study conducted by K&T, investors can expect to recover only a small fraction of their estimated damages through participation in a class action lawsuit.

According to securities attorney Steven D. Toskes, Esq., “The greater the investment loss, the more viable an individual securities arbitration claim becomes for recovery of investment losses. An individual arbitration claim filed with FINRA increases the likelihood of a larger recovery of your investment loss.” Mr. Toskes explains, “An individual securities arbitration claim for sales practice violations is based on facts specific to the handling of an individual investor’s entire brokerage account. As a result, investor-specific considerations provide the basis for recovery of losses from all of the securities held with a brokerage firm.”

Brokerage firms that sold and marketed investments in United Development Funding IV were obligated to conduct adequate due diligence of facts concerning the risks associated with the investments, including fraud. Investors in United Development Funding IV investors were told that these securities were suitable for current income investment objectives. Brokerage firms are obligated to give, and investors are entitled to rely upon brokerage firms for, suitable and competent investment advice in accordance with FINRA rules and regulations. Recommendations of unsuitable investments and/or failure to conduct adequate due diligence are both causes of action that form the basis for individual securities arbitration claims filed with FINRA. 

About Klayman & Toskes, P.A.

K&T is a leading national securities law firm which practices exclusively in the field of securities arbitration and litigation, on behalf of retail and institutional investors such as non-profit organizations, public and multi-employer pension funds in large and complex securities matters. K&T has office locations in California, Florida, New York and Puerto Rico. Investors, with losses in excess of $250,000 in United Development Funding IV, or who have knowledge of full-service brokerage firm sales practices, Contact Us, or call Steven D. Toskes, Esq. at 888-997-9956.

The Securities Arbitration Law Firm of Klayman & Toskes, PA Continues to Investigate UBS V10 Enhanced FX Carry Strategy Notes Following UBS Settlement with SEC for $19.5 Million

By | Alternative Investments, Blog, Featured Investigations, MArket-Linked Notes, Regulator Disciplinary Actions, SEC Disciplinary Actions, Securities Concentration, Structured Securities Products | No Comments

Boca Raton, Florida (BUSINESSWIRE) October 14, 2015 – The Securities Arbitration Law Firm of Klayman & Toskes, P.A., www.nasd-law.com announced today that it continues to investigate UBS Financial Services (UBS) in connection with the sale of senior unsecured notes, issued by affiliated banks of parent company UBS AG (NYSE: UBS). In response to a Securities Exchange Commission (SEC) Cease and Desist Order, UBS AG submitted an Offer of Settlement which included payment of $19.5 million for violations of securities laws related to the issue and sale of senior unsecured notes linked to the V10 Currency Index. According to the SEC, “The V10 was a proprietary index, developed and sponsored by UBS that measured the performance of a hypothetical algorithmic trading strategy designed to identify and exploit trends in G10 foreign exchange forward rates.”

According to yesterday’s SEC press release, “Between December 2009 and November 2010 approximately 1,900 U.S. investors bought approximately $190 million of structured notes linked to the V10 index.” As a part of the settlement offer, UBS agreed to refrain from similar future violations and pay “disgorgement and prejudgment interest of $11.5 million” and to pay “a civil monetary penalty of $8 million.”

Klayman & Toskes, P.A. is investigating UBS’ sales practices related to senior unsecured notes linked to UBS V10 Currency Index. UBS’ violations of FINRA sales practices may include misrepresentations and omissions of material facts, conflicts of interest, unsuitable investment advice, securities concentration or the failure to supervise its financial advisors. Our investigation relates to investments in UBS senior unsecured notes issued by affiliated banks that are designed to track the UBS V10 Currency Index.

About Klayman & Toskes, P.A.

Klayman & Toskes, P.A. is an experienced, qualified and nationally recognized securities litigation law firm, investigating UBS FINRA sales practice violations related to the sale of its proprietary UBS V10 Currency Index Linked Notes. Investors who have knowledge or experience related to the sales practices of UBS and its financial advisors’ recommended investments in UBS V10 Currency Index Linked Notes, contact Steven D. Toskes, Esq. at 888-997-9956.

 

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