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FINRA Tackles Senior Financial Exploitation

FINRA Tackles Senior Financial Exploitation

By the year 2050, the number of U.S. residents 65 and older is projected to more than double — from 41 million to 86 million.[1] Baby boomers, defined by the U.S. Census Bureau as those born between 1946 and 1964, have begun to retire and control about 50 percent of the total investable assets in the U.S. — more than $30 trillion in net household wealth.[2] Equally significant, by some estimates, one in five Americans aged 65 and older has been victimized by financial fraud.[3] As wealth continues to concentrate in America’s elderly population, and the elderly population grows ever...

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Jury Awards $15 Million in Punitive Damages Against MetLife for Ponzi Scheme Involvement

Last year MetLife and one of its subsidiaries were assessed $15 million in punitive damages by a jury for its failure to discover one of its agents was selling unregistered securities along with life insurance policies. The unregistered securities were actually promissory notes which were allegedly invested in a $200 million Ponzi scheme. The plaintiff, Christine Ramirez, claimed that MetLife’s subsidiary New England Life Insurance Company had an agent who was selling her these unregistered securities at the same time he was selling her life insurance. ...

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What is the “Fraud-on-the-Market” Doctrine of Securities Fraud?

In the United States Supreme Court case of Basic, Inc. v. Levinson, 485 U.S. 224 (1988), the Court ruled that in certain circumstances a securities class action would be appropriate notwithstanding what otherwise would be individualized issues of reliance.  Basic created the Fraud-on-the-Market Doctrine. The Fraud-on-the-Market Doctrine pertains to the reliance element of the federal section 10(b) claim.  Because 10(b) claims require reliance, courts historically had found class wide treatment was inappropriate in Section 10(b) claims because individualized reliance issues would predominate, precluding class certification under Federal Rule 23(b)(3).  In Basic, the United States Supreme Court created a solution to this...

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SEC’s Office of Compliance Inspections and Examinations Identifies Frequent Advisor and Brokerage Firm Shortcomings

Starr Austen & Miller has represented over a thousand victims of either investment advisor negligence or stockbroker fraud.  In almost every case the guilty advisor or broker failed to comply with his firm’s own compliance manual.  Typically, such conduct has been ongoing for years and the brokerage firm has chosen to pay lip service to its compliance rules and procedures by not truly watching its broker with sufficient care or otherwise properly supervising the broker’s bad conduct.  In essence, the compliance manual becomes a worthless piece of paper the brokerage firm shows the regulators in an effort to show that...

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Indiana settles with securities firm over agent who ran Ponzi scheme

By: Indianapolis Business Journal Staff and Associated Press The state has reached a $275,000 settlement with NYLife Securities LLC over the activities of an Indiana wealth manager who killed himself in 2013 while being investigated for operating a Ponzi scheme that took millions of dollars from dozens of investors. Indiana Secretary of State Connie Lawson announced the settlement Thursday. Former NYLife agent Richard Schwartz operated a Kokomo-based company called RAS & Associates that sold investments totaling $16.3 million to 53 Indiana investors. The state says most of that money was never invested but went to support Schwartz’s “extravagant lifestyle” and an apparent gambling problem. Attorney...

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Oil Futures Trader Gets 10 Years For $1.4M Ponzi Scheme

By Matthew Guarnaccia of Texas federal judge on Tuesday sentenced a New York-based oil futures trader to 10 years in prison for orchestrating a Ponzi scheme in relation to his operation commodity pool, which took more than $1.4 million from investors. U.S. District Judge Lynn Hughes handed down the 120-month sentence to 33-year-old Christopher Donrick Daley, who was convicted of one count of mail fraud and three counts of wire fraud following a two-day jury trial in September. Judge Hughes also ordered Daley to pay $614,950 in restitution. He will serve three years of supervised release after his time in prison. The...

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Securities watchdog bans second broker in alleged Veros Ponzi scheme

By: Jared Council of Indianapolis Business Journal Financial industry regulators have permanently barred a local broker alleged to have participated in a Ponzi scheme. The Financial Industry Regulatory Authority said Tobin Joseph Senefeld of Indianapolis has been disbarred from associating with any FINRA member institution, according to its monthly disciplinary report released last week. The sanction is related to a 2015 civil suit filed by the Securities and Exchange Commission that claimed Senefeld and two others operated a multimillion-dollar Ponzi scheme involving farm loans. According to FINRA, Senefeld was banned because he refused to provide on-the-record testimony about the Ponzi scheme allegations. Senefeld,...

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