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Securities Fraud Blog

Greco & Greco, P.C.

W. Scott Greco

Fight Investment Fraud

Greco & Greco's lawyers represent investors to recover losses caused by securities fraud, churning, lack of suitability, negligence, sales of unregistered securities, unauthorized trading, and other misconduct by stock brokers, investment advisors, financial planners and their firms.

For a Free Attorney Consultation, call us at 877-821-5550 orĀ 

Brokerage Firms

Fraud charges by SEC against Former UBS broker

Fraud charges related to the sale of a hedge fund operated as a ponzi scheme were settled with a former broker of UBS according to this CCH Wall Street article..  The SEC alleged in its Complaint that the UBS broker made misrepresentations regarding the GLT Venture Fund, L.P. while raising $14.1 million for the fund.  The broker agreed to pay disgorgement and civil penalties in addition to an injunction forbidding future violations.

Posted by W. Scott Greco on 01/25/08.
Brokerage FirmsUBSHedge FundsSECPermalink

New York subpoenas firms in mortgage fraud probe

Reuters has reported here that the state of New York has subpoenaed three large Wall Street banks (Merrill Lynch, Bear Stearns, and Deutsche Bank) pursuant to a probe related to the creation of mortgage-backed securities.  The New York probe reportedly is looking into how mortgages were packaged together by Wall Street to create securities sold to investors and the banks’ relationship with credit-rating firms.

Posted by W. Scott Greco on 01/11/08.
Brokerage FirmsBear StearnsDeutsche BankMerrill LynchCMOs / CDOsState RegulatorsNew YorkPermalink

Morgan Stanley Fined Over Failure to Produce E-mails in Arbitrations

Morgan Stanley was fined $3 million and forced to pay $9.5 million in restitution to arbitration Claimants as a result of its failure to produce emails in response to document requests in arbitrations with customers.  According to the FINRA press release, Morgan Stanley incorrectly represented in the arbitration proceedings that “the destruction of the firm’s email servers in the Sept. 11, 2001 terrorist attacks on New York’s World Trade Center resulted in the loss of all pre-9/11 email.”

The unknown at this point is the amount of financial benefit gained by Morgan Stanley by this behavior through arbitration settlements and awards, and whether this benefit far exceeds the relatively small punishment ordered by FINRA.

Posted by W. Scott Greco on 11/02/07.
ArbitrationBrokerage FirmsMorgan StanleyFINRANASD RegulationPermalink

Merrill reduces value of assets linked to subprime mortgages

Merrill Lynch warned last week that it was reducing the value of certain securities linked to subprime mortgages, thereby reducing its third quarter profits.  Reuters article.

Posted by W. Scott Greco on 09/21/07.
Brokerage FirmsMerrill LynchCMOs / CDOsPermalink

Securities Fraud Guilty Plea for IPOF Fund Manager

A fund manager who had utilized Ferris Baker Watts accounts for his IPOF fund plead guilty in Cleveland, Ohio to securities fraud related to stock price manipulation.  According to this Baltimore Sun article, David A. Dadante lost $28 million dollars of investors? monies in a scheme that started as a ponzi scheme and led to at least four different illegal trading techniques to artificially increase the price of a specific stock, Innotrac. 

The Baltimore Sun has extensively covered the involvement of Ferris Baker Watts in this matter in these linked articles, which discuss the early retirement of several executives since the investigation began, a 2003 company memo regarding concerns, and internal flags of potential problems in Dadante?s accounts.

Stephen J. Glantz, a former Ferris broker, has recently been charged with related securities fraud by federal prosecutors in Cleveland.  According to this Baltimore Sun article, the Ferris broker is charged with engaging in unauthorized trading in his clients’ account to aid Dadante’s scheme.

Posted by W. Scott Greco on 08/17/07.
Brokerage FirmsFerris Baker WattsPonzi SchemeStock ManipulationUnauthorized TradingPermalink

Morgan Stanley fined for corporate bond overcharges

As set out in this FINRA press release Morgan Stanley was fined and forced to pay restitution to retail customers for overcharging for corporate bond sales and for “having an inadequate supervisory system for monitoring the pricing of corporate fixed income securities sold to customers.”

Posted by W. Scott Greco on 08/03/07.
BondsBrokerage FirmsMorgan StanleyFINRAPermalink

CMOs and Mortgage Backed Securities

CMOs, or collateralized mortgage obligations, are bundles of mortgages which are then divided up for sale by investment banks.  Different types of these mortgage backed securities can vary widely in risk for investors, but recent problems with the subprime mortgage lending market could portend future problems for individual investors who have been sold these types of securities without their brokers fully explaining the risks involved.  As set out in the following linked news stories, customers of Brookstreet Securities and Wedbush Morgan Securities have filed arbitration claims against their brokerage firms related to the sale of CMOs and other mortgage securities.
Wall Street Journal article
Orange County Register Article

Posted by W. Scott Greco on 07/20/07.
Brokerage FirmsBrookstreetCMOs / CDOsSuitabilityPermalink

Wachovia Fine Related to Fee Based Accounts

Fee based accounts with brokerage firms are typically an alternative to commission accounts in which the account is charged a fixed annual fee or an annual percentage fee based on the assets in the account.  These accounts may not be suitable for all customers.  As set out in the link below, the NASD fined Wachovia for ?failing to adequately supervise its fee-based brokerage business between 2001 through 2004.?
NASD Press Release

Posted by W. Scott Greco on 07/20/07.
Brokerage FirmsWachoviaNASD RegulationSuitabilityPermalink

Merrill Lynch Fine for Supervisory Practices

In the below release, the NASD announced that it had ?fined Merrill Lynch, Pierce, Fenner & Smith Inc. $5 million for supervisory failures, registration violations, impermissible sales contests and other violations in connection with the operation of its Financial Advisory Center (FAC) located in Hopewell, NJ and Jacksonville, FL.?
NASD Press Release

Posted by W. Scott Greco on 07/20/07.
Brokerage FirmsMerrill LynchNASD RegulationPermalink

Early Retirement Pitches

Beware of sales pitches allowing early retirement which are based upon aggressive unrealistic annual returns without disclosure of the risks involved with such an aggressive strategy.  As set out in the below NASD Investor Alert, following such a program may result in the depletion of your retirement nest egg if the broker is unable to meet the aggressive advertised annual returns. 
NASD Investor Alert
See also the NASD charges against Citigroup regarding early retirement seminars in Charlotte, North Carolina for employees of Bellsouth.
NASD News Release

Posted by W. Scott Greco on 07/20/07.
Brokerage FirmsCitigroupNASD RegulationRetirementSuitabilityPermalink

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