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Mutation of the Bankruptcy Preference Claim into the Wrongful Payor Claim
By James J. Reynolds of Shustak Reynolds & Partners, P.C. posted on Wednesday, November 20, 2019.
Anyone who has been through it remains dumbfounded. Those about to experience it are sure to become flabbergasted. I am talking about a bankruptcy trustee’s ability to claw-back your hard-earned money because you were paid by the “wrong payor.” Some of you may be aware of a bankruptcy “preference claim” which occurs when one of your customers files for bankruptcy and the bankruptcy trustee seeks to force you to give back any payments from your customer during the 90 days preceding the bankruptcy, i.e. the Preferential Transfer ( 11 USC 547). The principal underlying “preference claims” is that all creditors should be treated equally and payments to any particular creditor made within 90 days of the bankruptcy is considered unfair, unless a valid defense is available, to the other creditors who may not have received any payment. This concern over financial abuse goes back to England’s Elizabethan era and the unscrupulous insolvent person giving away their money to friends or relatives rather than true creditors. [...] Read More
Investment Fraud Continues to Plague USCIS EB-5 Program
By George C. Miller of Shustak Reynolds & Partners, P.C. posted on Monday, November 18, 2019.
The SEC recently announced a series of new enforcement actions against EB-5 regional centers participating in the U.S. Citizenship and Immigration Services (USCIS) EB-5 Immigrant Investor Program. The EB-5 program allows certain foreign nationals to invest funds in the U.S. through USCIS-approved “regional centers.” If, after two years, those investors can demonstrate their investments are generating jobs in the United States, they may be approved for permanent residency status. With the high and growing demand for permanent U.S. residency and the rapid expansion of wealth in Asia and elsewhere around the world comes the perfect opportunity for bad actors to commit fraud. [...] Read More
J.P. Morgan, Schwab Pursue Claims Against Departed Advisors
By George C. Miller of Shustak Reynolds & Partners, P.C. posted on Friday, November 8, 2019.
Another week, and two more temporary restraining orders have been sought against advisors departing J.P. Morgan Securities and Charles Schwab. On Tuesday, a Florida judge issued a TRO barring transitioning financial advisor Justin Barroso from contacting clients after joining a UBS Wealth Management office in Fort Lauderdale, Florida. J.P. Morgan alleged Barroso, who reportedly managed $184 million in client assets at J.P. Morgan, aggressively solicited “at least 8” clients after joining UBS in alleged violation of her J.P. Morgan employment agreements [...] Read More
LPL to Debut Employee Financial Advisor Channel
By George C. Miller of Shustak Reynolds & Partners, P.C. posted on Wednesday, October 2, 2019.
What was old is new once again. LPL Financial, the nation’s largest independent broker-dealer, recently announced plans to debut a new “employee-based” advisor channel. As part of the roll-out, the firm acquired Florida-based Allen & Co., which has 30 financial advisors and approximately $3 billion in assets under management. [...] Read More
What is FINRA? Part 2 – What Does FINRA Do?
By Jonah A. Toleno of Shustak Reynolds & Partners, P.C. posted on Friday, September 6, 2019.
In Part 1 of this blog series, we established that FINRA (the Financial Industry Regulatory Authority), formerly known as the National Association of Securities Dealers (NASD), is a self-regulated organization (“SRO”) that engages in multiple functions in the financial services and securities industry. Our firm represents entities and individuals in varying capacities before FINRA. [...] Read More
Woodbridge CEO Pleads Guilty to $1.3 Billion Fraud
By George C. Miller of Shustak Reynolds & Partners, P.C. posted on Wednesday, August 14, 2019.
Robert Shapiro, the ex-CEO of the Woodbridge Companies, has pled guilty to orchestrating a $1.3 billion fraud impacting more than 7,000 investors across the country, according to prosecutors in Miami. According to a statement prepared by his lawyer, “Shapiro has taken personal responsibility for the failure of Woodbridge. [...] Read More
What is FINRA? Part 1 – FINRA’s Mission
By Jonah A. Toleno of Shustak Reynolds & Partners, P.C. posted on Monday, July 29, 2019.
FINRA (the Financial Industry Regulatory Authority), formerly known as the National Association of Securities Dealers (NASD), is a self-regulated organization (“SRO”) that engages in multiple functions in the financial services and securities industry. Our firm represents entities and individuals in varying capacities before FINRA. [...] Read More
FIRMS CONTINUE AGGRESSIVE TACTICS AGAINST DEPARTING ADVISORS BUT FACE OBSTACLES IN CALIFORNIA COURTS
By Katherine S. Bowles, Esq. of Shustak Reynolds & Partners, P.C. posted on Monday, July 1, 2019.
Since Morgan Stanley and others started withdrawing from the Protocol for Broker Recruiting in the fall of 2017, there has been a significant uptick in firms bringing legal action against departing advisors to prevent them from soliciting clients after they leave. [...] Read More
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