New York Securities Lawyer Blog

Published on: October 11, 2011

Bloomberg: Citi Moves to Stay Customer’s $383mm FINRA Claim

Below is a story about CGMI’s attempt to stay a $383 million FINRA arbitration filed by our firm related to inappropriate behavior with respect to derivatives, hedge funds, and private equity transactions.

Oct. 6 (Bloomberg) — A Citigroup Inc. unit sued two Saudi investors seeking to block Financial Industry Regulatory Authority arbitration of their $383 million claim that the bank “wiped out” their family’s wealth.

Abdullah and Ghazi Abbar, a father and son from Jeddah who put family money into hedge funds, have no customer agreements or accounts with Citigroup Global Markets Inc., a New York-based broker dealer that they blame for mismanaging their family’s life savings, according to a complaint the Citigroup unit filed yesterday in federal court in Manhattan.

Published on: July 13, 2011

OTC Derivatives Fraud – CFTC, SEC Differ on New Derivatives Rules

by Ross B. Intelisano

OTC Derivatives fraud aspect to an interesting Futures Magazine piece

CFTC, SEC Differ on New Derivatives Rules

6/26/2011

Published on: July 13, 2011

Securities Fraud Tweets

by Ross B. Intelisano

Recent Securities Fraud tweets by Ross Intelisano:

FT: Investigators listened in on almost 100 clients of Primary Global. Buyer (and Seller) Beware. http://t.co/GRNEcNs · reply · retweet · favorite

MBIA Drops Merrill Fraud Case.Hard to tell if ML settled with dollars or MBIA forced to just withdraw.Bad news if latter http://t.co/kwPT9t8 2 hours ago · reply · retweet · favorite

Published on: June 22, 2011

Regions Selling Morgan Keegan After $200M Bond Fund Hit

by Ross B. Intelisano

Below is the Regions press release related to regulatory order for it to pay $200 million due to its actions related to the Morgan Keegan bond funds. Strangely, it announced also that it retained Goldman to explore selling Morgan Keegan. Regions has been extremely aggressive in defending the scores of arbitration claims filed by aggrieved investors of the Morgan Keegan bond funds, even consistently challenging in court arbitration awards it’s lost. A big issue going forward for our clients and other investors with pending arbitrations is how will the restitution fund, the SEC Order, the FINRA AWC and the potential sale of Morgan Keegan effect the cases.

Morgan Keegan Settles Regulatory Issues with SEC, FINRA, and State Regulators Regarding Former Fund Management Business; Regions to Explore Strategic Alternatives for Morgan Keegan

BIRMINGHAM, Ala., Jun 22, 2011 (BUSINESS WIRE) — Regions Financial Corp. (NYSE:RF) announced today that its brokerage and investment banking subsidiary, Morgan Keegan & Company, Inc., and its asset management subsidiary, Morgan Asset Management, have agreed to a settlement of previously disclosed regulatory matters with the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and a group of state securities regulators with respect to issues concerning certain mutual funds and closed-end funds (the RMK Funds), a business that Morgan Asset Management divested in 2008.

Published on: June 22, 2011

SEC & FINRA Order RMK to Pay $200M for Bond Funds

by Ross B. Intelisano

Below is FINRA’s press release of the $200M restitution order the SEC and FINRA levied on Regions Morgan Keegan (RMK) related to bond funds it misrepresented to investors. Big for investors. We had blogged about this in April 2010 when the SEC charged Morgan Keegan & Company, Morgan Asset Management and two employees with fraudulently overstating the value of securities backed by subprime mortgages. These were the first federal government allegations related to the Regions Morgan Keegan bond funds which lost significant value in 2008. Many law firms around the U.S., including our firm, have been retained by investors who lost money in the Regions Morgan Keegan funds. Big fight will be to get fines into evidence during the pending arbitrations.

Morgan Keegan Ordered to Pay $200 Million to Investors to Settle Allegations Regarding Sales of Bond Funds Sales Materials Made Exaggerated Claims and Failed to Disclose Risks; Supervisory System Failures

WASHINGTON – The Financial Industry Regulatory Authority (FINRA), the Securities and Exchange Commission (SEC) and five state regulators from Alabama, Kentucky, Mississippi, South Carolina and Tennessee announced today that each has settled enforcement proceedings against Morgan Keegan & Company, Inc. Morgan Keegan will pay restitution of $200 million for customers who invested in seven affiliated bond funds, including the Regions Morgan Keegan Select Intermediate Bond Fund (Intermediate Fund). Morgan Keegan’s affiliate, Morgan Asset Management, managed the funds.

Published on: May 16, 2011

OTC Derivatives Fraud – FT Piece

by Ross B. Intelisano

Fraud in the privately traded markets? Aline van Duyn of the FT wrote a fascinating piece over the weekend about the lessons of the Galleon case going much wider than stocks. We agree. Next wave of large and complex fraud will be in non-exchange traded products. Here is the piece.

Lessons of Galleon case go wider than stocks

By Aline van Duyn in New York

Published on: May 16, 2011

Reuters Quote by Ross Intelisano on Securities Fraud

by Ross B. Intelisano

Below is an interesting Reuters piece by Matt Goldstein which quotes Ross Intelisano regarding securities fraud and Ponzi schemes.

Special Report: A fame-seeking Philly trader’s rap falls flat Photo Thu, May 12 2011

By Matthew Goldstein

Published on: May 3, 2011

Ross Intelisano Now on Twitter

by Ross B. Intelisano

I couldn’t fight it any more. I started tweeting on securities fraud a few weeks ago. Here is the link: http://twitter.com/#!/rossbi – Basically, I’m curating (hipster word alert) news stories related to Wall Street with a little comment layered over it. Have found it very helpful to follow breaking news and long form stories related to the Street via Twitter. Over-tweeting frustrates me – similar to people who talk too much. Take a look if you’re interested.

Published on: April 12, 2011

Citi Hit With $54 Million MAT Award

by Ross B. Intelisano

Sophisticated investors won a $54 million arbitration award against Citigroup Global Markets Inc. related to the MAT leveraged municipal arbitrage hedge fund. It is by far the largest FINRA award rendered against Citi related to MAT. The award in the matter named Hosier v. Citi also includes $17 million in punitive damages and $3 million in attorneys’ fees.

We have been retained by many MAT investors and have numerous pending arbitrations against Citi related to MAT and it’s sister fund Falcon. This award is a potential game changer.

It’ll be interesting to see if Citi attempts to move to vacate the award in court, especially due to the punitive damages amount. It is very difficult to vacate an arbitration award, however firms have been more aggressive in challenging arbitration awards in recent years. Either way, this is one of the largest arbitration awards ever rendered against a broker dealer at FINRA and a tremendous sign for MAT/Falcon investors with outstanding claims.

Published on: April 11, 2011

FINRA Fines UBS for Principal Protected Notes

by Ross B. Intelisano

FINRA fined UBS Financial Services, Inc. $2.5 million, and required it to pay $8.25 million in restitution for omissions and misleading statements made regarding the “principal protection” feature of Lehman Brothers100% Principal-Protection Notes (PPNs).

Our firm is presently representing investors of the Lehman PPNs against UBS in arbitrations at FINRA. It’s good to see FINRA stepping up and fining UBS in this matter. It’ll be a battle in the many pending arbitrations against UBS for investors to enter the fine into evidence as an indication of wrongdoing by UBS.

According the FINRA press release, UBS had described the structured notes as principal-protected investments and failed to emphasize they were unsecured obligations of Lehman Brothers, which eventually filed for bankruptcy in September 2008.