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SEC Adopts Best Interest Rule
By Joseph M. Mellano, Esq. of Shustak Reynolds & Partners, P.C. posted on Thursday, June 6, 2019.
On Wednesday, June 5, 2019, the Securities and Exchange Commission formally adopted Regulation Best Interest, establishing a new standard of conduct for broker-dealers in addressing conflicts of interest when making investment recommendations to retail customers. [...] Read More
SEC ISSUES RISK ALERT FOR BROKER-DEALERS AND INVESTMENT ADVISORS RELATED TO CLIENT PRIVACY ISSUE
By Katherine Bowles & Jason Jacobs of Shustak Reynolds & Partners, P.C. posted on Monday, May 6, 2019.
The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) has published a risk alert warning of widespread deficiencies in broker-dealers’ and investment advisors’ implementation of Regulation S-P.[...] Read More
Welcome Kara Siegel, the Newest Addition to our Shustak Reynolds & Partners Team!
By Erwin J. Shustak, Esq. of Shustak Reynolds & Partners, P.C. posted on Friday, April 5, 2019.
Kara Siegel has broad experience in complex commercial and employment litigation, including financial-services and class-action matters. She began her career at major New York law firms, where she litigated complex commercial matters on behalf of public corporations and privately held firms in the U.S. and abroad, as well as their individual directors, officers, and stakeholders.[...] Read More
Securities America Faces $18 Million Lawsuit Following Former Advisor’s Cop to Ponzi Scheme
By George C. Miller of Shustak Reynolds & Partners, P.C. posted on Friday, March 22, 2019.
In late February 2019, former music industry executive Robert Jamieson and his family sued their former broker, Hector A. May, and the FINRA firm with which he was registered, Securities America Inc., seeking $18 million in damages arising out of May’s alleged fraud and misappropriation of their funds. The suit follows May’s December 2018 plea of guilty to operating a multi-million dollar Ponzi scheme for nearly two decades. [...] Read More
WADDELL & REED CHOICE FINANCIAL ADVISORS MAY HAVE CLAIMS ARISING OUT OF THE CLOSING OF W&R OFFICES
By Erwin J. Shustak, Esq. of Shustak Reynolds & Partners, P.C. posted on Monday, March 18, 2019.
Recently, Waddell & Reed, Inc. announced it would be closing all of its offices by the end of 2020, forcing all of its representatives to find- and pay for- their own office space, assistants and other expenses that Waddell & Reed may be contractually obligated to pay for [...] Read More
MANDATORY FINRA ARBITRATION- IS THE END IN SIGHT?
By Erwin J. Shustak, Esq. of Shustak Reynolds & Partners, P.C. posted on Tuesday, March 12, 2019.
In the seminal, 1987 decision of Shearson v. McMahon, the U.S. Supreme Court decided that pre-dispute agreements to arbitrate securities disagreements were binding on investors. Since then, financial service firms have uniformly required that their customers sign these agreements and agree to waive a jury or court trial and, instead, head to the FINRA (formerly the NASD) arbitration panels to resolve their disputes with their firms. [...] Read More
Arbitrator, Not the Federal Court, Must Determine Arbitrability In Presence Of Delegation Clause according to U.S. Supreme Court
By James Reynolds of Shustak Reynolds & Partners, P.C. posted on Friday, March 8, 2019.
Justice Brett M. Kavanaugh, in his inaugural opinion as a U.S. Supreme Court member, vacated and remanded the federal court’s decision in Henry Schein, Inc. v. Archer & White Sales, Inc. (2019) 139 Sup. Ct. 524. Archer & White Sales had sued Henry Schein over violations of antitrust law. The contract between the parties provided for arbitration of any dispute related to the agreement, except for, inter alia, actions seeking injunctive relief. [...] Read More
Wells Fargo Woes Continue: Firm Reportedly Discussing Settlement With DOJ and SEC
By George C. Miller of Shustak Reynolds & Partners, P.C. posted on Friday, March 1, 2019.
As the latest in the seemingly endless flow of regulatory problems at Wells Fargo, the firm is reportedly engaged in preliminary settlement talks with the U.S. Department of Justice and Securities and Exchange Commission concerning alleged improper sales practices, potentially within the company’s wealth management units. According to recent Wells Fargo regulatory filings, regulators are reviewing the same type of sales conduct previously at issue in the firm’s record-breaking, $185 million settlement with the Consumer Financial Protection Bureau, Office of the Comptroller of the Currency and the Office of the Los Angeles City Attorney. [...] Read More
Wells Fargo, Ameriprise and Other Independent Firms Up Recruiting Ante
By George C. Miller of Shustak Reynolds & Partners, P.C. posted on Tuesday, February 12, 2019.
Large up-front, forgivable promissory notes were once the gold standard in financial advisor recruiting. From the early 2000’s through 2017, they were extremely common and used as a way to entice high producing brokers to join (or remain at) the firm recruiting the talent. Virtually all firms–including Morgan Stanley, Merrill Lynch, UBS and Wells Fargo–used these notes as their primary recruiting tool, and almost all were structured the same way--providing for a large, often multi-million dollar “bonus” tied to a promissory note and forgiven over time. Deals totaling 300-350%+ of an advisor’s trailing-12 production were not uncommon. The money was flowing, and many advisors were eager to jump from one firm to another chasing a big payout. [...] Read More
FINRA Highlights 2019 Examination Priorities
By Erwin J. Shustak, Esq. of Shustak Reynolds & Partners, P.C. posted on Wednesday, February 6, 2019.
In its 2019 Risk Monitoring and Examination Priorities Letter, The Financial Industry Regulatory Authority, FINRA, announced its 2019 priorities examination list. [...] Read More