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Articles Tagged with compensation

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Stoltmann Law Offices is investigating Edward Chin, a former Goldman Sachs Group Inc. trader in residential mortgage-backed bonds (RMBS). Chin was recently barred from the securities industry over allegations that he misled customers and caused them to pay higher prices. Chin “generated extra revenue for Goldman by concealing the prices at which the firm had bought various securities,” according to a statement Tuesday from the Securities and Exchange Commission (SEC). He wanted to increase his own compensation. Chin agreed to pay $400,000. RMBS tend to be risky, illiquid investments that are not suitable for all investors. A broker must take into account a customer’s net worth, investment savvy, age and portfolio. If he does not, his brokerage firm may be liable for investment losses.

Edward Chin was registered with Goldman, Sachs & Co. in New York, New York from September 2003 until January 2013. He is not currently registered with any firm and is not licensed within the industry. Please call our Chicago-based securities law firm today to speak to an attorney for free about your options of suing Goldman Sachs if you suffered losses with Edward Chin. We may be able to help you bring a claim against the firm to be tried in the FINRA arbitration forum on a contingency fee basis. 312-332-4200.

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On Friday, dozens of former Credit Suisse advisers were victorious against the firm. The brokers had been fighting for their deferred compensation after leaving the bank last year. The Financial Industry Regulatory Authority (FINRA) determined that member firms cannot make workers waive their rights to settle disputes in the regulator’s own arbitration forum. The advisers had previously been forced by Credit Suisse to use two other arbitration services they didn’t want. Now, FINRA claims that members have the right to request arbitration “at any time and do not forfeit that right” by signing an agreement saying they must choose otherwise. Before, Credit Suisse had required that disputes go through either the American Arbitration Association or JAMS (which was once the Judicial Arbitration and Mediation Service) instead of FINRA, which lawyers for the advisers claimed put them at a disadvantage. Many of the advisers switched to Morgan Stanley or UBS, leaving behind hundreds of millions in accumulated deferred compensation that Credit Suisse said they forfeited because they left voluntarily. Some of the advisers may begin filing arbitration claims at FINRA as early as next week.

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Fidelity Management Trust Co. has been accused of breaching its ERISA fiduciary duties for allegedly receiving unreasonable compensation through its brokerage window feature and a kickback scheme with an investment advice company. Fidelity allegedly selected mutual funds with higher expense ratios for the plan brokerage window that allowed the investment firm to rake in “significant amounts” in revenue-sharing payments in violation of the Employee Retirement Income Security Act. The lawsuit was filed in the U.S. District Court for the District of Massachusetts by participants in the Delta Air Lines Inc. retirement plan. As of 2014, the plan had approximately $7.5 billion in assets, of which more than $2.8 billion were invested through Fidelity’s brokerage window. The participants paid Fidelity enormous fees simply for obtaining access to mutual funds that were already established on Fidelity’s platform. It was also alleged that Fidelity earned unreasonable compensation by engaging in a kickback scheme with Financial Engines Advisors or to participants, according to the complaint.

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The U.S. Securities and Exchange Commission (SEC) settled charges with Tobin Smith and his former company, NBT Group. The former market analyst and TV news commentator agreed to settle charges that he and his company fraudulently promoted a penny stock to investors. The SEC alleged that Smith and NBT were paid to prepare and disseminate emails, online blogs, articles and other communications touting the stock of IceWEB, a data storage company. Smith and NBT did not fully disclose their compensation to investors, who did not find out the increase in IceWEB’s share price. The SEC also claimed that promotional materials contained false and misleading statements intended to artificially increase the trading volume and share price of IceWEB’s stock.

According to the SEC, Smith entered into two separate agreements on NBT’s behalf to promote IceWEB and its stock in exchange for $330,000 in cash and IceWEB stock. The company could earn incentive fees of more than $250,000 if the marketing campaigns succeeded in increasing share price. Smith and NBT only disclosed some of their compensation and never informed investors that they would earn incentive fees if the stock price increased above a certain amount. They also falsely touted that IceWEB provides the cheapest storage box and the lowest cost/highest performance solution to public and private data storage centers such as Dropbox, iCloud, Evernote, Google Drive and Facebook. Smith did not know whether or not these companies were actually customers of IceWEB.

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Stoltmann Law Offices is interested in speaking to investors who may have lost money with Jeffrey E. Rodgers, a former broker with Morgan Stanley. Rodgers recently accepted an Offer of Settlement with the Financial Industry Regulatory Authority (FINRA) after an investigation into him taking “unapproved personal loans from a client in 2012.” He allegedly took $33,800 from a firm customer and entered into unapproved outside business activities while registered with Morgan Stanley. Rodgers worked as a Senior Business Developer/software salesman/consultant for an information technology and business consultancy company. He received compensation in connection with these activities. He then inaccurately represented to Morgan Stanley that he had not borrowed money from a firm customer and that he had not engaged in outside business activities. For this, he was suspended from the industry for two years.

Rodgers was registered with Merrill Lynch in Bend, Oregon from August 2005 until September 2010 and Morgan Stanley in Bend from September 2010 until May 2013. He has one customer dispute against him. He is not licensed within the industry. Please call our Chicago-based securities law firm today if you would like to speak to an attorney about your options of suing Morgan Stanley for not properly supervising Rodgers while he was associated with the firm. They can be held liable for investment losses.

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The Securities and Exchange Commission (SEC) recently issued a complaint against The Rhode Island Economic Development Corporation (RIEDC) after it allegedly issued $75 million in bonds for the 38 Studios project. The project was intended to spur economic development and increase employment opportunities by loaning bond proceeds to private companies. The SEC alleged that RIEDC loaned only $50 million in bond proceeds to 38 Studios. Remaing proceeds were used to pay related bond offering expenses and establish a reserve fund and a capitalized interest fund. Wells Fargo offered the bonds and the brokerage firm allegedly failed to disclose to investors that 38 Studios had conveyed it needed at least $75 million in funding to produce a video game. Therefore, investors were not fully informed when deciding to purchase the bonds that 38 Studios faced a funding shortfall. Because they were unable to produce more funding, the video game did not materialize and the company defaulted on the loans.

Wells Fargo’s lead banker, Peter M. Cannava, and two RIEDC executives, Keith W. Stokes and James Michael Saul were charged with aiding and abetting the fraud. Stokes and Saul each paid a $25,000 fine. They were prohibited from participating in any future municipal securities offerings. SEC continues litigation against Cannava, Wells Fargo and RIEDC. The SEC complaint also alleged that Wells Fargo and Cannava misled investors in bond offering materials. Investors were not informed that the brokerage firm had a side deal with 38 Studios that enabled the firm to receive nearly double the amount of compensation disclosed in offering documents. Cannava was ultimately responsible for failing to disclose additional fees.

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Last week, JP Morgan agreed to pay $4 million to settle charges that it misled customers about its brokers’ compensation, according to the Securities and Exchange Commission (SEC). The SEC said that the bank falsely stated on its private banking website and in marketing materials that advisers are compensated “based on our clients’ performance; no one is paid on commission.” The subsequent investigating revealed that brokers are, in fact, paid a salary and a discretionary bonus. The SEC also stated that the claims were made from 2009 until 2012 and in marketing materials including a prospecting card, a pitch book and a marketing letter. There were four separate instances between the dates, but the firm did not make moves to correct the statement until May 2012. JP Morgan Securities agreed to be censured and cease and desist from future similar violations.

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Stoltmann Law Offices is investigating Jack Stuart O’Brien who recently entered into a Letter of Acceptance, Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA). O’Brien is accused of accepting compensation for personal services he provided to a firm customer. For this he was barred from the industry. O’Brien was registered with New York Life Variable Contracts Corp, Linsco Corp, Pacific Equity Sales Company, USLife Equity Sales Corp, Travelers Equities Sales, Elder-Nelson Equities Corp, The Saxon Group, Certified Equities Corp, Chubb Securities, Canada Life of America Financial Services, Sunset Financial Services, Washington Square Securities, Intersecurities Inc., Metropolitan Life Insurance Company, MetLife Securities, Ameritas Investment Corp and Princor Financial Services in San Jose, California from January 2005 until May 2015. He has one customer dispute against him. He is not licensed within the industry and has been permanently barred by FINRA. If you lost money with Jack Stuart O’Brien, please call our securities law firm to speak with an attorney about your options.

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Stoltmann Law Offices is investigating Joseph E. Hache, a former broker with Equity Services. He recently entered into a Letter of Acceptance, Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA) in which he was fined $2,500 and suspended from the industry for 20 business days. According to his AWC, Hache allegedly engaged in outside business activities without providing written notice. He allegedly received $18,000 in aggregate compensation for assisting a friend with a tax preparation, and referred another friend to a lender. This is against securities rules and regulations. Hache was registered with Equity Services in New York, New York from August 2010 until September 2014. He is not licensed within the industry. His former firm, Equity Services, had a duty to reasonably supervise him while he was employed with them. Because they did not, they may be liable for financial losses you may have suffered because of Hache. Please call our securities law firm at 312-332-4200 to speak to an attorney for free. There is no obligation and we take cases on a contingency fee basis only.

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Stoltmann Law Offices is investigating master limited partnerships (MLPs). A master limited partnership is a type of limited partnership that is publicly traded. There are two types of partners in it: The limited partner is the person or group that provides the capital to the partnership and receives periodic income distributions from the MLP’s cash flow, and the general partner is the party responsible for managing the MLP’s affairs and receives compensation that is linked to the performance of the venture. It is publicly traded on an exchange and combines the tax benefits of a limited partnership with the liquidity of publicly traded securities. Many of them own pipelines, storage tanks and other cash-generating energy infrastructures and give almost all of their income to shareholders in the form of distributions. MLP’s can be very risky for investors, as they can be difficult to understand. Also, in order to grow, they must borrow money or issue new shares, and banks, not investors, earn fees on those transactions. MLP’s typically generate high rates of return, therefore are riskier investments.

Stoltmann Law Offices is investigating the following MLP’s:

Enterprise Products Partners LP (EPD)

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