Affordable Care Act Update: IRS publishes figures and methods regarding Individual Mandate penalties.
One of the key components of the Patient Protection and Affordable Care act is the requirement that every individual have minimum essential coverage from some form of health insurance. If any person fails to obtain coverage, they must pay a penalty determined under IRC § 5000A.
The methods for calculating the penalty are fairly complex and depend highly on taxpayers’ individual cases.
This past Wednesday, July 23, 2014, the IRS published Revenue Procedure 2014-46 which sets forth important figures for determining the amount of a taxpayer’s liability under IRC §5000A.
There are essentially three (3) calculations that happen to determine a taxpayer’s penalty, and Wednesday’s Revenue Procedures lay out important numbers for one of those methods called the “National Average Premium Method.”
Under the National Average Premium Method (NAPM), the penalty is equal to the average monthly premium for each individual the taxpayer is responsible for, up to a maximum of five (5) people.
In Rev. Proc. 2014-46, the IRS set that figure at $204 per individual, per month for 2014, up to a maximum of $1,020 per month for families of (5) or more.
As mentioned earlier, there are two other methods which may apply to any particular taxpayer.
For anyone considering whether or not they should forego purchasing health insurance and simply accept the penalty, it would be wise to consult with your tax advisor to avoid some sticker shock come tax time.
“I hate weekends because there is no stock market.” Renee Rivkin
Renee Walter Rivkin should have enjoyed the weekends more. Born June 6, 1944, and studied law at the University of Sydney, Rivkin became the youngest member ever of the Sydney Stock Exchange. Over his 30-year career, he developed into a well-known stockbroker and entrepreneur gaining recognition with his publication of the Rivkin Report, in which he would advise what stocks to buy and sell.
In April 2003, following a long-running investigation by the Australian Securities and Investments Commissions, he was found guilty of insider trading.
Jordan Belfort was born in the Bronx and started his career at the L.F. Rothschild firm, before launching the brokerage firm Stratton Oakmont, functioning as a boiler room that employed over 1,000 brokers and was involved in more than $1 billion worth of stock issues. In 1988, Belfort’s firm was shut down and he was indicted for securities fraud and money laundering. He served 22 months in federal prison.
Ponzi schemes, indictments, and stories like Rivkin’s and Belfort’s only aid Hollywood and the court of public opinion. They are ready to capitalize on the stories of illegal brokers and brokerage practices. Unfortunately, tales of illegal dealings often hurt the profile of above-board firms and allow for unnecessary, unreasonable legal allegations from clients to ensue. Furthermore, Wall Street is a mecca for traders ready to make a buck with little regard for ethics, which can easily get the firm in just as much trouble. Now is the time for brokerage firms to arm themselves with the power of the law.
Whether you’re dealing with trader misconduct because of civil theft of funds, unauthorized trading, fraudulent asset transfers, or excessive trading, you cannot afford to be ignorant of laws and regulations directly affecting your brokerage firm. Additionally, client allegations that result in hearings before the SEC, FINRA, the NFA and other SRO’s can cripple a firm without the right representation.
You need a firm with a history of representing broker-dealer firms and registered representatives. Shustak Reynolds & Partners, P.C. understand the complexity of the securities and financial industry. We understand that when there is a dispute or an accusation of fraud, breach of fiduciary duty, churning or other misconduct, the stress can be overwhelming. Let the weight rest on our shoulders. Contact us today.
By the end of 2015, Merrill Lynch plans to have completed its rollout and integration of the Merrill Lynch “One” Technology Platform. The new platform, first introduced in 2013, combines five separate platforms–including Consults, Mutual Fund Adviser (MFA), Personal Adviser (MLPA), Personal Investment Advisory (PIA) and Unified Managed Account (UMA)–into one, fully integrated system. Merrill employees reportedly will lose access to the firm’s legacy platforms by early 2015.
While some advisers view the new, $100 million system as an upgrade, it is not without criticism. Some advisers and client associates have reported technology bugs, difficulties in adapting to the combined system and a loss in certain functionalities when compared to the firm’s legacy platforms.
With the new technology rollout, the firm also changed the way it charges fees for certain clients. According to the Wall Street Journal, some customers with managed accounts may end up paying as much as 50% more per year. While Merrill acknowledges fees for some clients may rise, the firm notes that some clients may also see a decrease in the overall fees charged. Merrill Lynch advisors will have until 2015 to update their client’s fee structures.
Shustak Reynolds & Partners, P.C. handles a wide range of securities and FINRA-related cases, including securities industry employment disputes. The firm has offices in San Diego, San Francisco and New York and represents select broker-dealers, registered persons, registered investment advisors and financial institutions in a broad spectrum of complex securities litigation, arbitration and regulatory matters. Contact us today to learn more and get started.
The 1920’s were roaring and just on the cusp of the communication age. The United States Postal Service was at the forefront of connectivity, especially across the pond. If you were generous and mailed a letter overseas, you might include an international reply coupon, a voucher that paid the required postage to send a response.
It was a common system, so few questioned an entrepreneurial Italian immigrant who saw it as an interesting investment opportunity. His idea? Purchase the reply coupons outside the U.S, where they were significantly cheaper, and resale them in the states at a higher cost. The idea intrigued investors who saw a clean, straight forward route to producing returns of up to 50% in as little as 45 days.
Unfortunately, the idea worked better in theory than in practice. Conducting business overseas, shipping internationally, exchange delays and additional costs kept Charles Ponzi, the originator of the idea, from paying his investors as quickly. Instead of facing the truth, Ponzi invited more investors to participate, using the “new” money to pay dividends to the original shareholders and beginning a never-ending cycle. Because investors were actually “making money,” no one was complaining and Charles Ponzi was living extravagantly on the millions he had collected in the process.
When the smoke cleared, Ponzi had purchased and sold over 160 million reply coupons. To his dismay, only 27,000 actual coupons physically existed in the world, and he was busted.
Reply coupons are a thing of the past, but Ponzi Schemes are not. In 2008, Bernard Madoff, founder of Bernard L. Madoff Investment Securities LLC, admitted that the asset management arm of his firm was a ruse. He swindled humble investors, small companies and even charities out of a cool $65 billion over the course of 20 years. Because of his stature and influence in the finance industry, he had the trust of his investors.
Ponzi schemes defraud investors by assuring returns that in actuality are paid from the percentage of the capital acquired by the next round of investors. They often come in the way of fraudulent certificates or interest rates too good to be true.
If your financial security has been shaken because you’ve fallen prey to Ponzi Scheme sharks, the office of Shustak Reynolds & Partners wants to fight for you. Don’t lose hope. Contact us today for a free consultation.
On June 30, 2014, a California appellate court reinstated and confirmed a $5 million arbitration award Shustak Reynolds & Partners had obtained against Morgan Stanley in favor of two brokers Morgan Stanley had recruited from UBS. The appellate court overturned a lower court’s order vacating the award on the grounds that Barry Kersh, one of three arbitrators who heard the case, failed to disclose certain connections between some of his family members and Morgan Stanley. Kersh was the “industry” arbitrator in the claim, selected for his experience in the brokerage industry. He is the long time branch manager of another brokerage firm also located in San Diego, where the arbitration took place and where the two brokers work.
Morgan Stanley argued Kersh should have disclosed that one of his sons-in-law worked for Morgan Stanley and was going through a contentious divorce with Kersh’s daughter. The firm also argued Kersh should have disclosed that his daughter previously worked for a brokerage firm and may have maintained an investment account with Morgan Stanley. Judge Lisa Schall of the San Diego Superior Court sided with Morgan Stanley two years ago and vacated the award. Vitale and Paladino appealed Judge Schall’s ruling.
In reversing the lower court’s ruling, the Court of Appeal reasoned that while Kersh “failed to make certain disclosures, [the] undisclosed facts could not cause an objective observer to doubt the arbitrator’s impartiality.” The court also noted that “Morgan Stanley was aware of certain key facts, namely its efforts to recruit two of the arbitrator’s coworkers, and thus the arbitrator was not required to disclose those facts.”
Erwin J. Shustak, Esq. and George C. Miller, Esq., of Shustak Reynolds & Partners, P.C. represented Morgan Stanley brokers Todd Vitale and John Paladino in the arbitration. According to Mr. Shustak, the appellate court’s decision totally vindicated his clients and made it clear that large brokerage firms like Morgan Stanley cannot play fast and loose with the arbitration process.
“Morgan Stanley selected this same arbitrator to sit on this and three other FINRA cases in which the firm was a party. The firm had successfully recruited one of Kersh’s sons-in-law away from Kersh’s firm and unsuccessfully attempted to recruit his other son-in-law. As the appeals court found, MS knew these facts all along. Only after they lost this case and faced a $5 million award, did the firm cry foul,” said Shustak. “The appellate court held that Morgan Stanley could not sit back, wait to see the outcome of the case and, only when it was hugely unsuccessful, play ‘gotcha’ by trying to vacate the award relying on facts the firm knew all along,” Shustak added.
Shustak Reynolds & Partners, P.C., handles a wide range of securities and FINRA-related cases. The firm has offices in San Diego, San Francisco and New York and represents select broker-dealers, registered persons, registered investment advisors and financial institutions in a broad spectrum of complex securities litigation, arbitration and regulatory matters.
If you need strong representation for your arbitration or securities dispute, schedule a free initial consultation by calling Shustak Reynolds & Partners, P.C., toll free at 888-748-8748, or contact us online.
