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FINRA panel directs broker to pay Wells Fargo almost $1 million after his termination

Robert Edward Loftus was discharged in 2013 and found in breach of a promissory note InvestmentNews.com By Christine Idzelis Broker Robert Edward Loftus must pay Wells Fargo almost $1 million in compensatory damages after his termination in 2013, according to the Financial Industry Regulatory Authority Inc. An arbitration panel decided that Mr. Loftus owes the firm $930,874 in damages for breach of a promissory note, a form of compensation that he received upfront when he joined Wells Fargo in 2009, according to a Finra document dated Aug. 3. Mr. Loftus is also responsible for $300,000 of the brokerage firm's attorney fees. Mr. Loftus, who now...

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Two Chattanooga brokers investigated for securities fraud

A release from the TDCI says James Hugh Brennan III and Douglas Albert Dyer, co-owners operating Chattanooga-based Broad Street Ventures, LLC., allegedly raised more than $5 million from investors without using the money as promised. By WTVC – newschannel9.com Two former brokers with disciplinary histories from Chattanooga are under investigation for securities fraud by the Securities & Exchange Commission (SEC), the Tennessee Department of Commerce & Insurance (TDCI) and the FBI. The investigation, started by the TDCI, ultimately led to a recent court-ordered asset freeze in order to stop the fraud. A release from the TDCI says James Hugh Brennan III and Douglas Albert...

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JPMorgan Settlement With Indiana Draws Interest of Other States

by Neil Weinberg, Bloomberg.com JPMorgan Chase & Co. has reached a settlement with Indiana regulators related to its asset management business, and now other states are expressing interest in how Indiana built its case. JPMorgan agreed on July 28 to pay $950,000 to settle claims by the Indiana secretary of state that the bank failed to disclose conflicts of interest to wealthy clients. Andrew Lang, a spokesman for Secretary of State Connie Lawson, said the settlement prompted officials from other states to ask how Indiana had pursued its claim. He wouldn’t identify the states. “Investors have the right to know all the facts...

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$21 Million Dollar Ponzi Scheme Exposed

Patrick E. Churchville, a Rhode Island investment adviser has pleaded guilty to running a massive $21 million ponzi scheme. Churchville used approximately $2.5 million of investor funds to purchase a home in Barrington, Rhode Island. Since the purchase of the home, he has failed to pay almost $1 million in personal federal income taxes, according to a statement from the U.S. Attorney’s Office. Churchville will plead guilty to one count of tax fraud and five counts of wire fraud, according to the statement. He is also a defendant in a civil case brought forth by the SEC in May 2015. Ponzi Scheme...

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Finra Bans Turner for Misrepresentation

Winston Wade Turner was banned by Finra for making unsuitable variable annuity recommendations while working for MetLife and Prudential Financial. It was revealed that Turner deceived his clients by neglecting specific material facts about their current variable annuities. In some cases, Turner suggested to his clients they sell their other investments in order to fund the purchase of variable annuities he recommended. It is a known fact that exchanging any annuity should be highly monitored, due to their relatively high commissions. In August of 2015, Turner was terminated by Prudential for his deceptive sales practices. In the July 8 Finra document...

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Bill Passed to Help Protect Elder’s Against Financial Abuse

Legislation was finally approved by the House of Representatives to help protect advisers from liability when attempting to stop the exploit of senior citizens. The document ensures advisers who report the abuse to the appropriate regulators or law enforcement, will not held liable for violation of privacy laws. In addition, the bill addresses specified training for advisers to undergo which will help them identify elder financial abuse. The vote on the house floor came shortly after the unanimous approval last month in the House Financial Services Committee. Sen. Susan Collins, R-Maine, wrote the legislation and urged state securities regulators to support...

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Banned Broker Ordered to Pay $4 Million Penalty

The SEC has banned Dawn J. Bennett, founder of Bennett Financial Group in Washington, DC, for using false performance documents to obtain wealthy clients. She is ordered to pay more than $4 million in fines and disgorgement. A civil penalty of $600,000 and a $2.9 million fine were handed down by Administrative Law Judge James Grimes. Morvillo LLP, the attorneys who represent Ms. Bennett stated she has no comment at this time regarding the ruling. Morvillo LLP has 21 days to appeal Grimes’s 48 page ruling. Bennett refused to attend this function as part of “unorthodox legal strategy.” The ruling focused...

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Beware of Ponzi Schemes!

There presently is a trial going on in California involving a woman who was among hundreds of investors who claimed that a Metropolitan Life Insurance agent tricked them into buying unregistered securities as part of 200 million dollar Ponzi scheme. The victim in that case is a 75 year old widow. A couple of years ago our office handled a very similar case here in Indiana involving a life insurance agent. In that case the agent convinced his clients to give him large sums of money to invest in a “retirement savings plan”. The fraudster then took the money and lived...

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Department of Labor Rolls Out New Rules for Financial Advisers: What They Mean for Reporters

by Jennifer Backer The Donald W. Reynolds National Center of Business Journalism Despite a shift towards more transparency in the financial planning industry, many investors still aren’t sure what they are paying their financial advisers, USA Today reported. But new rules the Department of Labor rolled out earlier this month are designed to clear things up for investors. The long-awaited and debated fiduciary rule requires that investment advisers put their clients’ interests before their own when it comes to fees and investment choices. The new rules are designed to clarify how much advisers are paid, who they work for, and how they get...

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Investment Branch of Fidelity Sued for Fiduciary Breach

Individuals that contribute to a Delta Air Lines Inc. 401(k) plan have sued sections of Fidelity Investments, on the claim of wrongdoing in the firm’s record keeping role. According to its latest Form 5500, the Delta Family-Care Savings Plan had approximately $7.8 billion in assets. The participants in this investment fund are seeking a class-action status and allege that Fidelity hired Financial Engines to provide investment advice and to collect a piece of the action. The complaint stated, “In order to be included as the investment advice service provider on Fidelity’s (record-keeping) platform, Financial Engines agreed to pay – and is paying – Fidelity a significant percentage of the fees it collects from...

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