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Jump In Securities Class Action Settlements

Cornerstone Research has reported that a total of $3 billion worth of securities class-action settlements occurred in 2015, involving 80 cases – a 184 percent increase over the previous year. Last year there were eight “mega settlements” – cases with a value at $100 million or more – compared with only one in 2014. In 2015, there were more cases featuring very high estimated damages. Average estimated damages rose 151 percent from 2014. The average settlement increased in size from $17 million in 2014 to $37.9 million in 2015. The proportion of securities class action settlements involving financial sector firms was lower...

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SEC Hands Industry Bar To Pa. Ponzi Schemer

By Carmen Germaine of Law360, New York (April 25, 2016, 7:02 PM ET) -- A broker who pled guilty in Pennsylvania federal court to bilking at least $3.2 million from investors through fake certificates of deposit has agreed to be barred from associating with broker-dealers, the U.S. Securities and Exchange Commission announced Monday. Malcolm Segal, 69, agreed to be barred from associating with brokers, dealers, investment advisers and other financial firms and from participating in penny stock offerings in administrative proceedings with the SEC after pleading guilty in February to running a fraudulent scheme that stole more than $3.2 million from...

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JPMorgan Units Pay $1M FINRA Fine Over Unsent Letters

By Carmen Germaine of Law360, New York (April 25, 2016, 3:26 PM ET) -- J.P. Morgan Securities LLC and J.P. Morgan Clearing Corp. have agreed to pay just over $1 million to settle Financial Industry Regulatory Authority allegations they failed to send a number of required letters to customers and didn’t properly supervise employees’ outside accounts. According to the letter of acceptance, waiver and consent accepted by FINRA on Friday, JPMS committed a number of violations arising from supervisory and recordkeeping deficiencies, while JPMorgan Clearing Corp. failed to send over a million privacy notices to account holders as required by the...

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SEC Whistleblower Award Total Rises To $10M For Past Week

By Stewart Bishop of Law360, New York (May 20, 2016, 10:15 PM ET) -- The U.S. Securities and Exchange Commission on Friday said it will jointly pay over $450,000 to a pair of whistleblowers for a tip that led the agency to launch a corporate accounting investigation, and for their assistance with the probe, bringing the past week’s award total to $10 million. The latest award comes days after the SEC announced it would pay a former company employee who tipped the regulator to potential violations between $5 million and $6 million — the third-largest award to date under the SEC's...

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TD Ameritrade Added To $350M Ponzi Suit Naming Sidley

By Suevon Lee of Law360, Los Angeles (May 19, 2016, 9:11 PM ET) -- TD Ameritrade Inc. and Integrity Bank & Trust were added Thursday to a proposed class action against Sidley Austin LLP, Deloitte & Touche LLP and others alleging the firms are liable for aiding an Oregon investment group as it allegedly misled investors in what regulators have called a $350 million Ponzi scheme. The April 4 complaint by a group of California and Oregon-based investors against Sidley, Oregon law firm Tonkon Torp. and accounting firms Deloitte and EisnerAmper LLP said the firms are responsible for losses investors suffered...

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Brothers Hit With $2.2M Judgment Over RE Ponzi Scheme

By Shayna Posses of Law360, New York (March 30, 2016, 4:30 PM ET) -- A New Jersey federal judge on Wednesday ordered two brothers to fork over more than $2.2 million in a U.S. Securities and Exchange Commission suit alleging they duped investors out of millions through a sham real estate investment firm as part of a Ponzi scheme. U.S. District Judge Mary L. Cooper issued final judgment against Matthew Rivera, 48, of Saylorsburg, Pennsylvania, and Daniel Rivera, 46, of Staten Island, New York, for allegedly running a scam in which the latter brother told investors they would share in the...

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Real Estate Promoter Gets 19 Years For Texas Ponzi Scheme

By Pete Brush of Law360, New York (March 30, 2016, 5:49 PM ET) -- Real estate investment manager Derek A. Nelson was sentenced to 19 years in prison a day after being convicted of running a $37 million Ponzi scheme through his Capital Mountain Holding Corp., state authorities said Tuesday. Investors delivered money in exchange promissory notes sold by Nelson, only to lose almost every cent, the Texas State Securities Board said. Nelson, of Oklahoma, was sentenced in Collin County court, the board said. "Nelson falsely represented to investors that their investments were secured by first liens on the properties he acquired....

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FINRA Charges Lawson Financial With Fraud For Bond Sales

By Matthew Perlman of Law360, New York (May 19, 2016, 7:46 PM ET) -- The Financial Industry Regulatory Authority said Thursday that it has slapped brokerage firm Lawson Financial Corp. and its chief executive with a complaint alleging they defrauded investors who purchased millions of dollars in municipal bonds by propping up the borrowers using funds from a deceased customer’s charitable trust. The complaint names the brokerage as well as its president and CEO, Robert Lawson, and his wife, Pamela Lawson, who serves as the firm’s chief operating officer. Regulators said the fraud involved a $10.5 million bond offering for an...

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Raymond James To Pay $17M For Money Laundering Flubs

By Jody Godoy of Law360, New York (May 18, 2016, 12:25 PM ET) -- Raymond James Financial Services Inc. and an affiliate agreed on Wednesday to pay $17 million in fines to the Financial Industry Regulatory Authority to settle allegations of widespread failure to institute adequate anti-money laundering controls. As a part of the settlement, Raymond James and Raymond James & Associates Inc. neither admitted nor denied FINRA's claims that rapid growth since 2006, particularly at RJA, had outstripped the firms' ability to detect and report money laundering. FINRA held RJA's former AML Compliance Officer, Linda L. Busby, personally responsible for...

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MetLife Pays Record $25M FINRA Fine Over Variable Annuities

By Carmen Germaine of Law360, New York (May 3, 2016, 10:49 AM ET) -- The Financial Industry Regulatory Authority announced Tuesday that MetLife Securities Inc. has agreed to pay a $20 million fine and $5 million in restitution for misleading customers over variable annuity replacements, the largest FINRA fine related to variable annuities to date. MetLife will pay a total of $25 million for misleading customers over variable annuity replacements. (Credit: AP) MetLife agreed to the sanctions without admitting or denying FINRA’s allegations that it omitted or misrepresented at least one material fact about customers’ existing variable annuities in nearly three-quarters of...

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