Articles Posted in Research and Credit Rating Fraud

Boca Raton, Florida Investment and Advertising Fraud and Misrepresentation FINRA Arbitration and Litigation Attorney:

SEC Charges Staten Island Man With Conducting Fraudulent Offerings and Stealing Investor Funds

The Securities and Exchange Commission trecently charged the operator of an online stock recommendation business with conducting several fraudulent securities offerings and siphoning some of the money raised from investors for a Caribbean vacation and plastic surgery.

Corporate and Corporate High Yield Bond Breach of Fiduciary, Unsuitability, Churining and Unauthorized Purchase and Sale FINRA Arbitration, Litigation and Probate Attorney:

If you are considering or if your account executive or investment advisor is soliciting you to purchase, hold or sell a corporate bond, you may wish to read this post to refresh your understanding of corporate bonds or, if you are an unsophisticated invesotr, arm youself with questions to ask your investment professional.

What Are Corporate Bonds?

Corporate Annual Report (10-K) – Florida Business Practice and Corporate Litigation and Arbitration Attorney:

An “Annual Report” is a record of a corporation’s annual financial condition that is required to be distributed to shareholders under Securities and Exchange Commissions rules and regulations.  Included in the report is a description of the company’s operations as well as its certified balance sheet and income statement.  The full version of the annual report is called the 10-K.  It is available from the company or or on-line at the Edgar Website of the SEC.  Other reports issued by a reporting company include forms 10-Q (quarterly reports) and 8-K (material disclosures). 

As an investor, these reports provide invaluable information when considering to purchase, hold or sell a security.  However, please keep in mind that this information is being provided for educational purposes only.  It is not designed to be complete in all material respects.  Thus, it should not be relied upon as legal or investment advice.  If the reader has any questions concerning this post, you should contact a qualified professional.

Solicitation of Investment Clients by Broker/Dealers and Investment Objectives Through the Use of Radio and Television Programing – South Florida False and Misleading Advertising FINRA Arbitration and Litigation Attorney

The Financial Industry Regulatory Authority, Inc. (FINRA) is a self-regulatory authority assigned the responsibility, by the Securities and Exchange Commission, to license, regulate and discipline securities broker/dealers and their employees, including account executives. In the event that FINRA elects to institute and enforcement action, firms and licensed individuals have the responsibility to reflect such action of their U-4 and/or U-5 filings, which can be viewed on the FINRA website under the broker-check section of the site or by viewing the monthly disciplinary information also provided on the FINRA site.

The monthly disciplinary information is referenced on the site generally in alphabetical order. This post relates to the following company or individuals. If the reader would like to review the entire FINRA release or the broker-check information concerning this matter, you can follow these highlighted links:

Types of Investment Risk and the Average Investor – South Florida Investment and Securities Risk FINRA Arbitration and Litigation Attorney:

Generally risk can be described as action or inaction that can lead to a loss of some sort.  It can be reduced or eliminated based on the action taken by the person that is exposed to it.

In the investment context, there are a number of commonly encountered types of risk some of which are set forth herein.  Please keep in mind that this post is being provided for educational purposes only and is not designed to be complete in all material respects.  Thus, it should not be relied upon as providing legal or investment advice.  If the reader has any questions concerning the contents of this post, you should contact a qualified professional.

Investment Objective, Risk and Suitability: Why are They Important?

An investment objective is, in reality, nothing more than a client’s financial objective, which assists a stock broker in determining what type of investments would constitute a “suitable” recommendation for a client.  It is one of the fundamental factors that any attorney looks at in attempting to determine whether the investments purchased, held or sold, in a client’s account, were appropriate (suitable) for that client.

For example, if an investor is seeking income, assuming that the account executive tells the truth about the investment or knows how to properly analyze the same, the client might opt-out of purchasing an investment that does not pay any type of income (for example dividends) to its shareholders as the investment would not be suitable to satisfy an income objective.  Conversely, if an investor is seeking growth of capital, he or she should consider investments that have a higher potential for capital appreciation then an investment whose primary function is to pay income to its holder.  Another popular type of investment objective is total return.  Obviously, this type of investment objective combines elements of the income and growth objective, attempting to maximize return.

Securities and Exchange Commission v. Hunter, Civil Action No. 12-cv-3123 (S.D.N.Y.)


The Securities and Exchange Commission recently announced that brothers Alexander John Hunter and Thomas Edward Hunter, both of Great Britain, have agreed to settle the Commission’s pending civil action against them. The Commission’s complaint, filed April 20, 2012 in the United States District Court for the Southern District of New York, alleges that the Hunters were just 16 years old when they began disseminating subscription-based e-mail newsletters through a pair of websites they created to tout stocks selected by a “stock picking robot,” which they described as a highly sophisticated computer trading program that was the product of extensive research and development. Some investors paid an additional fee for the “home version” of the robot software.


The Municipal Securities Rulemaking Board (MSRB) recently announced that it has begun providing on its Electronic Municipal Market Access (EMMA®) website statistics on the number and type of disclosure filings that issuers of municipal securities make available to investors throughout the life of a bond.

These documents consist of important information about a municipal bond that arises after the initial issuance of the bond, such as annual financial information, bond calls and credit rating changes, for example. The continuing disclosure statistics on the EMMA website represent monthly volumes since 2010, categorized by types of disclosure. The disclosures themselves are also available on the EMMA website.

Egan-Jones and Founder Sean Egan Agree to 18-Month Bars from Rating Asset-Backed and Government Securities Issuers as NRSRO

The Securities and Exchange Commission recently announced that Egan-Jones Ratings Company (EJR) and its president Sean Egan have agreed to settle charges that they made willful and material misstatements and omissions when registering with the SEC to become a Nationally Recognized Statistical Rating Organization (NRSRO) for asset-backed securities and government securities.

EJR and Egan consented to an SEC order that found EJR falsely stated in its registration application that the firm had been rating issuers of asset-backed and government securities since 1995 – when in truth the firm had not issued such ratings prior to filing its application. The SEC’s order also found that EJR violated conflict-of-interest provisions, and that Egan caused EJR’s violations.

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