The Financial Industry Regulatory Authority (FINRA) recently fined the independent broker-dealer Berthel Fisher & Co. Financial Services Inc. and one of its affiliates $775,000 for compliance failures. According to FINRA, Berthel Fisher failed to supervise the sale of alternative investments, including non-traded real estate investment trusts (REITs) […]

The FBI recently indicted Michael Stewart of Phoenix, Arizona, and John Packard, of Long Beach, California, for allegedly operating a massive real estate ponzi scheme fraud through their companies, Pacific Property Assets (PPA) and Apartments America, LLC (AA). According to the SEC, which previously brought civil […]

The FBI recently announced a 12-count federal indictment against Anthony Barreiro and Ernest Ray Parker, a/k/a Ray Parker Gaylord, two art dealers who reside in San Francisco and Dallas. The indictment alleges that Barreiro and Parker operated a Ponzi scheme fraud through several phony businesses, including ARTLoan Financial […]

The FBI recently announced that it has arrested Luis Alonso Serna, a pastor based in the San Fernando valley area of Los Angeles, in connection with a federal indictment alleging he ran a Ponzi scheme which bilked upwards of 70 investors out of more than $4 […]

A new technology glitch is impacting Morgan Stanley Wealth Management’s ability to re-balance its clients’ brokerage accounts. According to an anonymous source at the firm, the glitch was so significant that the firm’s wealth management division called a “crisis management” meeting late last week. Morgan Stanley […]

Congress enacted the “Jumpstart Our Business Startups Act”-or JOBS Act-as part of the federal government’s ongoing efforts to stimulate the economy. The Act was intended to spur small business growth by loosening decades-old rules prohibiting the solicitation and sale of private placement investments […]

The virtual currency Bitcoin was the subject of a hearing held this week by the U.S. Senate Committee on Homeland Security and Governmental Affairs. The hearing focused on potential implications of the rise of virtual currencies, also known as digital currencies, in today’s market. Appearing at […]

Introduction In April 2012, Congress enacted the “Jumpstart Our Business Startups Act”—or JOBS Act—as part of the federal government’s ongoing efforts to stimulate the economy. The Act was intended to spur small business growth by loosening decades-old rules prohibiting the solicitation and sale of private placement investments to the general public. Through the new “crowdfunding exemption” to the registration requirements of the Securities Act of 1933, Title III of the JOBS Act gives startup companies the go-ahead to raise up to $1 million in investment capital per 12 month period from everyday (e.g., non-accredited) investors. While there is no question crowdfunding will allow businesses easier access to startup capital, crowdfunding investors will not have the benefit of reviewing all the financial and other company information they otherwise would have in a traditional investment scenario. And given the fact securities crowdfunding–which the SEC considers amongst the riskiest investments available–will take place almost exclusively through the internet, investors may be more vulnerable to fraud or other misconduct. The regulation of crowdfunding under the JOBS Act is a new and fluid area of the law. In fact, the Securities and Exchange Commission (SEC) only released its proposed crowdfunding regulations in late October of this year. Until those regulations are formally adopted–which is expected to take place shortly after the SEC’s comment period expires in January 2014–crowdfunding in the securities context will remain illegal.3 When crowdfunding becomes legal, however, investors should have a clear understanding of the rules and limitations governing crowdfunding before considering these inherently risky investments. Crowdfunding Defined In the securities context, crowdfunding involves the solicitation of small capital investments from a large number of investors to finance a new or expanding business venture. In return, those investors receive a small stake in the company (usually shares of stock, but sometimes debt…

The Financial Industry Regulatory Authority (“FINRA”) is making it easier than ever to research an investment professional’s background. On November 12, 2013, FINRA announced its release of an enhanced version of BrokerCheck, the online tool that allows investors to check the background of registered brokers and brokerage firms. In its news release, […]

Hedge fund SAC Capital Advisors has agreed to pay $1.8 billion in fines and plead guilty to securities fraud charges, according to United States prosecutors. Manhattan federal Judge Laura Taylor Swain issued an order today setting a hearing for this Friday, where SAC Capital will plead guilty […]

Litigants often overlook the value of non-retained expert witnesses in commercial litigation. Yet these witnesses can educate a judge or jury on countless complex topics without the costs associated with a retained expert that may be perceived to be a “hired gun” being paid to provide a specific expert opinion. Both California and the Federal Rules of Civil Procedure distinguish between retained and non-retained expert witnesses. A retained expert is a witness that is hired by a party for the specific purpose of providing expert opinions. A non-retained expert, in contrast, is anyone else who is capable of providing expert testimony but was not hired for purposes of the litigation. A treating physician is not hired to provide expert witness testimony; instead, their testimony is based on their own treatment of the plaintiff. The physician, therefore, is designated as a non-retained expert so he or she can testify about the plaintiff’s treatment and diagnosis. Schedule a free initial consultation by calling Shustak Reynolds & Partners, P.C. toll free at 888-748-8748, or contact us online.

Good news for registered reps seeking to expunge customer complaints from their CRD records. A report recently issued by PIABA, the association of lawyers who represent aggrieved investors, reveals that brokers were able to obtain the approval of arbitration panels to expunge the customer complaints from […]

The Financial Industry Regulatory Authority (FINRA) released a new report regarding conflicts of interest in the broker-dealer industry. FINRA began working on the report last year, when it started gathering data from 14 large firms regarding compliance procedures in place to monitor and prevent conflicts. The […]

Most of us who follow Ponzi schemes, scams and scoundrels remember R. Allen Stanford’s long standing Ponzi scheme. He now resides in a Fed Pen, serving a 110 year sentence for running a 20 year scam which offered high-interest cd’s purportedly on deposit with the Stanford Int’l […]

How is your smartphone so smart? How does your Xbox do that? The answers to these questions are what technology giants, like Microsoft and Google, are trying to keep quiet. Microsoft Corp and Google Inc’s Motorola Mobility division have requested a Seattle federal judge to keep several details from their recent trial concerning the value of technology patents confidential from the public. The trial ran from November 13 to November 20 and concerned what rates Microsoft should pay Motorola for the use of its patented wireless technology. The underlying lawsuit The lawsuit initiated by Microsoft alleges that Motorola promised to license its patents to Microsoft at a fair rate, but then demanded an unreasonable $4 billion a year in revenue. The Seattle judge must determine what a reasonable royalty is for the use of the patents. To do this he will have to compare the Microsoft deal with similar deals Motorola had with other technology companies. Both Microsoft and Motorola want to keep information revealed during this trial quiet. Motorola does not want the public to know the terms of its licensing deals with other third parties and Microsoft wants to keep its marketing plans for future products secret. During the trial, the judge cleared the courtroom when these trade secret details were discussed and evidence on these deals was revealed. Attorneys from both companies have recently requested that they file portions of their post-trial briefs under seal. The case between Microsoft and Motorola is one of many cases in which technology companies are concerned about confidential information being released to the public. Similar lawsuits involving Apple Inc, Samsung Electronics Co Ltd, Nokia and others have also requested the sealing of documents to protect trade secrets. To seal or not to seal Some legal experts believe that sealing intellectual property cases infringes…

Securities and Exchange Commission Chair Mary Jo White recently announced plans to widen the scope of SEC enforcement to investigate, uncover and punish smaller violations of securities regulations. In her speech before the Securities Enforcement Forum last Wednesday, White emphasized the goal of SEC enforcement to […]

as part of a broad change to the securities regulations, President Obama signed into law the “Jumpstart Our Business Startups Act”, or “JOBS Act”. Part of the government’s broader stimulus package, the Act was intended to encourage small business growth by loosening decades-old […]

the Financial Industry Regulatory Authority (FINRA), Wall Street’s largest self-regulatory agency, announced it would consider whether broker-dealer firms should be required to carry insurance to help ensure payment of arbitration awards issued through FINRA’s dispute resolution forum. Virtually all broker-dealers require their customers […]

Shustak Reynolds & Partners is pleased to announce that Jessica H. Antoniades has joined the firm as an associate in its San Diego office. Jessica’s practice focuses on civil litigation and arbitration, primarily in the areas of securities fraud and employment disputes. Prior to joining the firm, Jessica practiced civil litigation here in San Diego, representing plaintiffs in personal injury, medical malpractice, and employment matters. Jessica earned her Bachelor of Arts, cum laude, in Political Science and English from the University of Washington. She then graduated magna cum laude from the University of San Diego School of Law, where she was Executive Editor of the San Diego Law Review. During law school, Jessica also served as a Judicial Extern for the Honorable William Q. Hayes and the Honorable Marilyn L. Huff, both of the United States District Court for the Southern District of California.

San Diego, CA — Shustak Reynolds & Partners, P.C.,  announces that it obtained a FINRA Panel award of $5 million dollars for a team of two San Diego based financial advisors who were recruited by Morgan Stanley and falsely induced to leave their positions at UBS in the summer of 2008. The two former UBS brokers, who continue to work for Morgan Stanley’s successor, Morgan Stanley Smith Barney (“MSSB”), were promised by senior level Morgan management during the recruitment process that the more experienced member of the team would transition into a salaried management role within six months of transitioning his book to Morgan. The junior team member, in turn, was promised he would take over and be compensated for the combined book, which Morgan estimated would generate approximately $700,000.00 in annual gross commissions based upon their combined trailing twelve. (Todd Vitale and John Paladino v. Morgan Stanley Smith Barney, LLC, FINRA Case No. 11-01633.) Brokers Todd G. Vitale and John P. Paladino, who work in MSSB’s Rancho Santa Fe office, alleged they were recklessly and negligently lured to leave their long time positions at UBS to join Morgan Stanley six months before the early 2009 joint venture between Morgan and Smith Barney. Through oral and written assurances, the firm promised Vitale he would become a salaried sales manager and then a branch manager for Morgan Stanley and promised Paladino he would take over their combined book of business. After they successfully transitioned their combined books to Morgan and earned a bonus for that successful transition, they alleged Morgan simply ignored all promises made to them during the recruitment process. Vitale never was made a sales or a branch manager and was forced to continue to work his book. Paladino, in turn, never had the opportunity to service Vitale’s clients…