Breach of Contract

FAQ’s Margin – Fort Lauderdale, Florida Margin Abuse and Negligence FINRA Arbitration and Litigation Attorney

Published on: November 18, 2013 | By Russell L. Forkey, P.A.

Margin Abuse, Margin Miscalculation and Excessive Margin – South Florida FINRA Arbitration and Litigation Attorney:

“Margin” is borrowing money from your broker to buy a stock and using your investment as collateral. Investors generally use margin to increase their purchasing power so that they can own more stock without fully paying for it. But margin exposes investors to the potential for higher losses. Consequently, the use of margin is not appropriate for all investors, especially the unsophisticated or those who are risk adverse.

The Federal Reserve Board and many self-regulatory organizations (SROs), such as the NYSE and FINRA, have rules that govern margin trading. Brokerage firms can establish their own requirements as long as they are at least as restrictive as the Federal Reserve Board and SRO rules. Here are some of the key rules you should know:

Post-Employment Restrictive Covenants – South Florida Restrictive Covenant Litigation and Arbitration Attorney

Published on: November 10, 2013 | By Russell L. Forkey, P.A.

Post-Employment Restrictive Covenants – Insurance and other Businesses:

This post provides a general discussion concerning post-employment restrictive covenants that may be found in employment agreements in the State of Florida. The statute governing this issue is Florida Statute 542.335.

Florida, by statute, has determined that post-employment restrictive covenant agreements are valid restraints of trade or commence under certain conditions. Specifically, section 542.335, Florida Statutes (2005), which took effect on July 1, 1996, contains a comprehensive framework for analyzing, evaluating and enforcing restrictive covenants contained in employment contracts. A violation of an enforceable restrictive covenant creates a presumption of irreparable injury. Section 542.335 employs the term “restrictive covenants” and includes all contractual restrictions such as noncompetition/nonsolicitation agreements, confidentiality agreements, exclusive dealing agreements, and all other contractual restraints of trade. If valid, a restrictive covenant may be enforced by way of temporary and permanent injunctive relief. § 542.335(1)(j), Fla. Stat. (2005).

Common Stock, Preferred Stock, Corporate Bonds, Municipal Bonds, ETF’s and Mutual Funds – South Florida Securities and Investment Fraud, Negligence and Breach of Fiduciary Duty FINRA Arbitration and Litigation Attorney

Published on: November 6, 2013 | By Russell L. Forkey, P.A.

Common Stocks, Preferred Stocks, Corporate Bonds, Municipal Bonds, Promissory Notes, Exchange-Traded Funds (ETF’s), and Mutual Funds – South Florida Securities and Investment Fraud, Negligence and Breach of Fiduciary Duty FINRA Arbitration and Litigation Attorney:

The elements of a breach of fiduciary duty action are (1) the existence of a fiduciary duty and (2) the breach of that duty that was the proximate cause of the plaintiff’s damages. A fiduciary relationship exists when confidence is reposed by one party and trust accepted by the other. Such a relationship exists where confidence is reposed on one side and there is resulting superiority and influence on the other. When a fiduciary relationship has not been created by an express agreement, the question of whether the relationship exists generally depends upon the specific facts and circumstances surrounding the relationship of the parties in a transaction in which they are involved.

The law is clear that a broker owes a fiduciary duty of care and loyalty to a securities investor. The type and extent of this duty is fact specific. In other words, your relationship with, in the case, your broker/dealer and/or account executive will be determinative of the type of duty that you are owed. However, please keep in mind that the extent of this duty is organic. It is constantly changing. It is for this reason that your specific circumstances need to be reviewed by a qualified professional.

Charlotte Bredal Oliver – Florida Variable and Fixed Annuity, Life and Health Insurance Fraud and Misrepresentation Litigation and Arbitration Attorney

Published on: October 27, 2013 | By Russell L. Forkey, P.A.

Florida Variable and Fixed Annuity, Life and Health Insurance Fraud and Misrepresentation Attorney:

In the Matter of: Charlotte Bredal Oliver, Case No.: 140535-13-AG:

On September 20, 2013, the Florida Department of Financial Services (“Department”) issued a Consent Order against Charlotte Bredal Oliver, which, in part, required the Respondent to surrender to the Department all licenses issued to the Respondent pursuant to the Florida Insurance Code.

Matthew Watson Shaw Consent Order – South Florida Insurance and Variable Annuity Consumer Advocate Litigation and Arbitration Attorney

Published on: October 26, 2013 | By Russell L. Forkey, P.A.

Variable Annuity Misrepresentation – Florida Litigation and Arbitration Attorney:

In the Matter of: Matthew Watson Shaw, Administrative Case No: 139968-13-AG:

On September 4, 2013, the Florida Department of Financial Services entered a Consent Order against Matthew Watson Shaw, which was based upon a Settlement Agreement for Consent Order dated August 9, 2013. In the Consent Order, the Respondent’s licensure and eligibility for licensure as an insurance agent within the State of Florida was surrendered to the Department.

OX Trading, LLC, optionsXpress, Inc. and Thomas E. Stern – South Florida Option Fraud and Breach of Fiduciary Duty FINRA Arbitration and Litigation Attorney

Published on: October 23, 2013 | By Russell L. Forkey, P.A.

In the Matter of OX Trading, LLC, optionsXpress, Inc., and Thomas E. Stern

The Commission issued an Order Making Findings and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 as to OX Trading, LLC and optionsXpress, Inc. (OX Order). The OX Order finds that OX Trading, LLC (OX Trading) willfully violated Sections 15(a) and 15(b)(8) of the Securities Exchange Act of 1934 by operating as an unregistered dealer from October 2009 to November 2010 and transacting in securities while not a member of a national securities association or a national exchange from March 2009 to November 2010, respectively. The OX Order also finds that optionsXpress, Inc. caused OX Trading’s violations. The OX Order ordered OX Trading and optionsXpress to cease and desist and ordered OX Trading to pay $2,750,000 in disgorgement, prejudgment interest of $253,094.39, and a civil money penalty of $750,000. (Rel. 34-70739).

The Commission also issued an Order Making Findings and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 and Section 9(b) of the Investment Company Act of 1940 as to Thomas E. Stern (Stern Order). The Stern Order finds that Thomas E. Stern (Stern), OX Trading’s Chief Financial Officer and Chief Compliance Officer during the relevant time period, willfully aided and abetted and caused OX Trading’s violations of Sections 15(a) and 15(b)(8) of the Exchange Act. The Stern Order ordered Stern to cease and desist and to pay a civil money penalty of $50,000. (Rel. 34-70740) Respondents consented to the issuance of the Orders. These proceedings were instituted on April 19, 2012. (Rel. 34-66831).

Broker – Dealers (How to Identify One) – Florida Securities and Investment Fraud and Mismanagement FINRA Arbitration and Litigation Attorney

Published on: October 12, 2013 | By Russell L. Forkey, P.A.

Miami, Fort Lauderdale, Boca Raton and West Palm Beach Florida Investment Fraud and Misrepresentation FINRA Arbitration, AAA Arbitration, JAMS Arbitration, State and Federal Court Litigation Attorney, Russell L. Forkey, Esq.

Who can be classified as a “Broker”.

Before considering if you were impacted by broker/dealer fraud, misrepresentation, mismanagement, breach of fiduciary duty or negligence, it is necessary for the reader to understand what constitutes a broker/dealer and what the difference is between the two. Section 3(a)(4)(A) of the Act generally defines a “broker” broadly as any person engaged in the business of effecting transactions in securities for the account of others.

Margin – Leverage Abuse and Exploitation – South Florida Leverage and Margin Abuse, Exploitation and Manipulation FINRA Arbitration and Litigation Attorney

Published on: September 30, 2013 | By Russell L. Forkey, P.A.

Leverage Abuse, Exploitation and Manipulation – South Florida State and Federal Fraud, Misrepresentation and Breach of Contract Attorney:

Leverage may be used in a number of circumstances. In the business arena, three common uses, of leverage, relate to investments, financial leverage and operating leverage.

Investment Leverage (also known as margin) uses the equity in your brokerage account as a means of attempting to enhance the return on your equity without increasing your investment capital. Using margin, as part of your investment strategy, carries with it a number of risks, which you should fully understand before putting this strategy into effect. Both the Federal Reserve and brokerage firms have a number of rules that regulate the use of margin. Some key phrases are “initial margin,” “maintenance margin,” “house call,” and “Reg. T. Call.”

Gignesh Movalia, Edwin V. Gaw and OM Investment Management, LLC. – Florida Investment Advisor and Hedge Fund Fraud, Misrepresentation and Mismanagement Litigation and Arbitration Attorney

Published on: September 28, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. OM Investment Management LLC, Gignesh Movalia, and Edwin V. Gaw, Civil Action No. 1:13-cv -23486-Martinez (S.D. Fla., filed September, 2013)

SEC Charges Tampa-Based Adviser with Fabricating Statements and Making Unauthorized and Undisclosed Investments

The Securities and Exchange Commission recently charged a formerly SEC-registered Tampa-based investment adviser, OM Investment Management LLC, its principal, Gignesh Movalia, and its director of investments, Edwin V. Gaw, with fraudulently raising money and making material misrepresentations and omissions relating to OM Global Investment Fund, LLC, an unregistered hedge fund.

Frank Dappah and Yatalie Capital Management – Florida Excessive Investment Advisory Fee Litigation and FINRA Arbitration Attorney

Published on: September 28, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. Frank Dappah and Yatalie Capital Management, et al., Civil Action No. 3:13-cv-00546 (W.D.N.C.)

SEC Charges Charlotte Investment Advisors with Excessive Fee Scheme

Recently, the Securities and Exchange Commission filed an action in federal court in the Western District of North Carolina, charging Frank Dappah of Charlotte, NC, and his firm, Yatalie Capital Management (a/k/a Yatalie Capital Management Co, Creato Funds L.P., a/k/a Yatalie Capital, Inc., a/k/a Creato Funds, L.P., a/k/a Yatalie Capital Management Co.), a sole proprietorship, with violations of the federal securities laws for charging grossly excessive fees to their advisory clients without authorization or notice and other violations. The Commission’s complaint seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, civil penalties, and an asset freeze against the defendants.