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Securities Fraud

Fiduciary Duty Rule by Scott L. Starr, Partner

Fiduciary Duty Rule by Scott L. Starr, Partner

Law 360’s Allison Noon recently published an article entitled “Facing Fiduciary Duty, Brokers Threaten to Exit Nevada” (included below).  According to Ms. Noon: “Top stock brokerages are accusing Nevada regulators of playing a dangerous game with fiduciary rules and are threatening to leave the Silver State if officials don’t back off.” Ms. Noon goes on to report that various Wall Street trade associations and brokers Morgan Stanley, Charles Schwab, Edward Jones, TDAmeritrade, and Wells Fargo “offered ominous promises that investment options would disappear in Nevada if Nevada’s security regulators adopted the fiduciary standard.” This just goes to show how Wall Street does not really care...

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Former powerhouse investment broker Buck sentenced to more than 3 years in prison

By Susan Orr of the Indianapolis Business Journal A federal judge on Wednesday sentenced former powerhouse Merrill Lynch broker Thomas Buck to three years and four months in prison. Buck, who pleaded guilty to one count of securities fraud in October 2017, also agreed at that time to pay a $5 million civil penalty after prosecutors alleged he charged clients $2 million in excessive commissions and failed to recommend fee-based accounts. The 40-month sentence imposed by Judge James Sweeney fell short of the 78-month sentence prosecutors had sought. Sweeney also imposed two years of supervised release on Buck, 65, and ordered him to complete...

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More Seniors Victimized by Financial Scams

More Seniors Victimized by Financial Scams

By Yuka Hayashi of The Wall Street Journal The number of suspected cases of elder financial abuse reached a record last year, an increase that comes as new federal and state laws prompt banks to take a more active role in curbing frauds and scams that target older customers. Banks for their part have been beefing up training programs for employees on how to detect, stop and report issues without violating a customer’s privacy.  Employees are even learning to recognize early signs of cognitive decline. Last year, banks reported 24,454 suspected cases of elder financial abuse to the Treasury Department, more than double...

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FINRA Awards $4.2M For Morgan Stanley’s Lack Of Oversight

FINRA Awards $4.2M For Morgan Stanley's Lack Of Oversight

By Darcy Reddan of Law360.com A Financial Industry Regulatory Authority arbitration panel has ordered Morgan Stanley Smith Barney LLC to pay a former NFL player and a Mega Millions lottery winner a combined $4.2 million, ruling the wealth manager failed to adequately supervise the adviser who squandered the funds. The panel awarded $3.3 million to James Groves, a Mega Millions lottery winner, and $879,000 to retired NFL player Asante Samuel. The ruling relates to the conduct of Aaron R. Parthemer, a former adviser at Morgan Stanley Smith Barney and a Miami Beach nightclub owner, who steered Samuel and Groves to invest in...

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Indiana Secretary of State Fines LPL Financial (Linsco Private Ledger) $450,000 for Failing to Supervise Its Indiana Brokers

Indiana Secretary of State Fines LPL Financial (Linsco Private Ledger) $450,000 for Failing to Supervise Its Indiana Brokers

Written by Scott L. Starr December 3, 2018 The securities industry is designed so that the first line of defense against fraud is the requirement that a brokerage firm must police its own brokers. A principal rule in the securities industry is that brokerage firms are required to supervise each of its broker’s offices. LPL Financial has recently agreed to pay a civil penalty of $450,000 for “various deficiencies” related to the supervision of its Indiana brokers, the Indiana Secretary of State’s Office recently reported.  In addition to the payment of this civil penalty, Linsco Private Ledger agreed to conduct a third party...

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Asset Management Firm CEO Charged With $16M Fraud

Attached below is a copy of an article recently reported by Rachel Graf and Law360 entitled “Asset Management Firm CEO Charged With $16M Fraud”. This article defines a pattern of conduct that is occurring everywhere. Scott Starr of Starr Austen & Miller within the last five years has represented over 100 victims of similar schemes, wherein a life insurance salesman, a stockbroker, or an investment advisor convinces his clients to purchase promissory notes, LLC membership interests, stocks, or such similar investments for the purported purpose of “investing in real estate” promising high returns, typically in the 10% range. In reality,...

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SEC Charges Indiana Investment Advisor With Securities Fraud

SEC Charges Indiana Investment Advisor With Securities Fraud

September 18, 2018 The Securities Exchange Commission recently charged a former middle school math teacher now working as an investment advisor, Tammie Steele, with securities fraud.  Steele sold securities through Pendleton-based Steele Financial Inc., 131 N. Pendleton Avenue, which she founded in 2000.  Steele allegedly defrauded a significant number of her clients by causing them to invest in a Houston, Texas based software firm called BRS.  The SEC complaint charges that Steele convinced her clients to purchase the extremely risky BRS investments while failing to tell her clients that she was incentivized to push these risky investments by the huge commissions...

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Secretary Of State Connie Lawson Reminds Investors And Offerors To Use Caution With Cryptocurrency Investments

Secretary Of State Connie Lawson Reminds Investors And Offerors To Use Caution With Cryptocurrency Investments

By: www.wbiw.com Indiana Secretary of State Connie Lawson is again reminding Hoosiers to be cautious about investments involving Initial Coin Offerings (ICOs) and cryptocurrency-related investment products. She is also reminding those who seek to sell these products to be aware of the laws pertaining to these investments. "While not every ICO or cryptocurrency-related investment is a fraud, it is important for individuals and firms selling these products to be mindful that they are not doing so in a vacuum; Indiana laws or regulations may apply, especially securities laws. Sponsors of these products should seek the advice of knowledgeable legal counsel to ensure they...

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Adviser admits defrauding former [Indianapolis] Colt of $4.7M

“Anyone can be the victim of securities fraud. See the Indianapolis Business Journal article below. If you or a loved one has been victimized by a bad broker or bad investment advisor, contact Starr Austen & Miller for a free consultation.” - Scott Starr By: Greg Andrews of the Indianapolis Business Journal Cory Redding, a defensive end for the Colts from 2012 to 2014, was referred to financial adviser Kenneth Ray Cleveland by a business professor at Redding’s alma mater, the University of Texas. (AP photo) It might be little consolation to former Indianapolis Colt Cory Redding—the latest in a long line of...

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Pastor, Partner Must Pay $9M To Settle Fraud Allegations

By: Dean Seal of Law360.com A Florida federal judge on Monday ordered a fund run entirely by a North Carolina man and a convicted pastor-turned-fraudster to pay $9 million to settle claims it duped Florida churchgoers and their associates out of $2 million. The settlement with the U.S. Commodity Futures Trading Commission resolves claims against the corporate entity Maverick International Inc., its sole officer Edward Rubin and Wesley A. Brown, the two men accused of soliciting investors into a pooled fund that they then entirely embezzled. U.S. District Judge Brian J. Davis ordered $2,151,318.73 in restitution along with $6.8 million in civil monetary penalties. “Upon...

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