Stock Broker Fraud Blog

MERRILL LYNCH: The firm’s retail brokerage revenues increased 13% to $3.3 billion, and new profits were up 23.7 %. Its broker count rose to 16,200 and it claims “net positive recruiting against all our major competitors, along with its lowest turnover of top producers in years. The firm also reported a rise in fee-based business, as it and other Wall Street firms operate on a short reprieve from the SEC to either register its representatives under the Investment Advisor’s Act, reassign the accounts to those already registered or restructure those accounts.

BEAR STEARNS: The firm continues to suffer the slings and arrows of critics over its CMO hedge fund debacle. Meanwhile, head manager of those funds was previously reported to have maintained his golf scores at the climax of the funds. Or did he? It has been reported that a three-member committee at the Hollywood Country Club in Deal, N.J., is investigating his victory at a July 4 golf tournament, to determine whether he changed his scores. Apparently, allegations of such cheating by executives at the club are frequent.

“We're FINRA - the Financial Industry Regulatory Authority”, announced the old NASD, plus the NYSE’s regulatory functions. As we reported weeks ago, it was the third try at names for the NASD. First it offended 1.4 billion Islamic persons, then embarrassed itself with an acronym that sounded like a disease. Finally, it chose FINRA, which brought criticism from those in the financial industry that it doesn’t regulate. As we predicted, the NASD was much too arrogant to make yet another change. As well, it was intent on replacing “association” with “authority,” so it would not appear to be a fox in charge of a henhouse, despite its structure being similar to a country club (see above).

SECURITIES ARBITRATION FILINGS: Only 1,650 securities arbitration cases were filed in the first half of 2007, an annualized rate of 3,400 compared to approximately 4.500 last year. During the same period, 2,752 cases were completed, also down about 30% from the same period last year. Turnaround on all cases fell to 13.5 months, but still over 16 months when hearings were required. The stated goal of the arbitration forums for years has been for such cases to be completed in an average of less than a year.

UBS: The Company’s CEO was replaced after its international hedge fund reported millions in losses. Peter Wuffli was replaced by Marcel Roehner, who was previously deputy CEO and head of global wealth management and business banking. The Swiss banking firm expressed disappointment in its U.S. Operations, which would include several units, including recently acquired Paine Webber, Piper Jaffray and McDonald Investments.

WACHOVIA SECURITIES: Federal anti-trust regulators (I envision one guy with a big rubber stamp) this week approved the acquisition of A.G. Edwards by Wachovia. The combined firm will have 15,000 brokers, second only to Merrill Lynch (see above). The securities operation will be based in the A.G Edwards headquarters in St. Louis. Wachovia’s banking base remains in Durham NC, while builds a huge new Manhattan headquarters for its New York operations. When you learn that Wachovia is moving its entire base of operations to New York, including securities, remember that you heard it here first.

WALL STREET & FEE-BASED BUSINESS: Will Wall Street lose its fee-based business? For decades Wall Street firms have sought assets under management and shied away from commission based business. Rather than “stock jockeys” they wanted “asset gatherers”. The goal was to earn a predictable 1% to 2% return on a larger asset base. A Federal Court in D.C. upset Wall Street’s applecart by deciding its brokers’ licenses did not exempt them from coverage under The Investment Advisor’s Act (IAA) when were acting as investment advisors. Wall Street sought time to adjust. They could simply license all their brokers under the IAA, some are already licensed, but they desperately seek to avoid the “fiduciary” duty of the IAA. Meanwhile, the SEC (Securities Executives’ Comrade) hurries to “tighten” the IAA. Mark my words, the final version of any bill will include an exemption for Wall Street!

Shepherd Smith and Edwards represents investors nationwide in claims against the securities industry. If you, your firm or your pension fund has sustained losses as a result of fraud, negligence or other wrongdoing and are curious whether you may be able to recover all or part of your losses contact us to arrange a free consultation with one of our attorneys.

“There are two things I worry about: Clients dying and the government putting me out of business,” said a Merrill Lynch rep who says he gets about 80% of his revenue from B-shares shares and fee-based business. Apparently, the safety of his clients' assets must be down the list.

Meanwhile, regulators are currently engaged in a crackdown on brokers who shove clients into B-shares when the breakpoints of A-shares are much more appropriate, and those who use wrap accounts then ignore their clients. Hundreds of millions of mutual fund load refunds have been ordered. It has been discoverd that some clients have paid $5,000 to $20,000 per transaction while ignored in fee-based accounts at major firms.

Loss of the fees “would make me wonder whether I should stay in business,” said Curtis Mohr, a Pasco, Wash., broker affiliated with Royal Alliance Associates Inc. Good riddance!

“I’m in trouble” if 12(b)-1 fees are eliminated, said Graham Parsons, an Erie, Pa.-based rep affiliated with LPL Financial Services. “I’ve had sleepless nights over this….They could literally legislate me out of business!” Worth considering. How much sleep has he lost over retirees who may be paying 20% of their income to him and his firm?

The total expense ratio on C-chares is 1.95%, according to Lipper Inc. of New York. Annual B-Share costs are about the same. Fees for separately managed accounts, which are all-inclusive, average 1.68%, according to a consumer group. Unless the assets of diversified portfolios consistently earn 9% (which has never happened over any 10 year period) 20% or more of these clients’ earnings are going to the house!

Thus, if one worked for 40 years to save a half million dollars to retire and put to work at an average of 8%, that person would earn $40,000 - less about a $10,000 haircut to the investment community, leaving the retiree $30,000. One-fourth - 10 years - of the retiree's work went to pay others, including an advisor who lays awake nights thinking he is a victim.

“The 12(b)-1 fee structure ... allows advisers to have relationships with lots of small accounts,” Mr. Nachmany said. An adviser doesn’t “have to be a collection agent.” “12(b)-1s make it easy to sit down with the little guy,” Mr. Mohr said. Changing the current system of 12(b)-1 fees will force brokers to evaluate what they charge each client, Mr. Nachmany said. “The market will tell them they’d be right to charge more than they’re charging now,” he said, and as a result, some small accounts might be dumped.

Such statements need no comment. As a group, stockbrokers earn more than Doctors, Lawyers, CPA’s and Engineers. No special degree is needed, in fact, not even a high school diploma is required to become licensed as a stockbroker, mutual fund or annuity salesperson.

Shepherd Smith and Edwards represents investors nationwide in claims against members of the securities industry. We have represented investors in more than 1,000 securities cases. To learn whether we are able to assist you with a claim contact us to arrange a free consultation with one of our attorneys.

Former Merrill Lynch employee Hydie Sumner sued that firm saying she was sexually harassed. She was represented by lawyer Linda Freidman. In 2004, a panel of three NASD arbitrators decided Hydie was right and awarded her $2.2 million. They also forced Merrill to reinstate her.

Meanwhile, an email was allegedly sent to Merill Lynch by Ms. Sumner’s attorney Linda Freidman, reportedly at Sumner’s direction, questioning Merrill’s ethics for employing “a man like [Blas] Catalani,” Sumner’s Merrill Lynch manager. According to Catalini, this defamed him and caused him to be fired, his clients were then distributed to other brokers at Merrill and he found it “extremely difficult” to becoming re-employed in the securities industry.

Catalini therefore filed a lawsuit against Sumner and her lawyer, claiming defamation. Not to be outdone, Hydie Sumner then filed a counterclaim against Catalini claiming that he damaged her reputation by reporting that she was the reason he was terminated by Merrill Lynch.

Making things more complicated, Catalini also filed suit against Merrill Lynch claiming sexual discrimination, saying that firm terminated him to make room for Sumner. The claims against Merrill have now been moved to arbitration.

How much damage has Catilini actually suffered? Apparently, he is now managing a seven broker private client unit in San Antonio for Dallas-based Southwest Securities. Reportedly, a spokesman for Southwest, Jim Bowman, stated: “We think there’s a growing market in [San Antonio] and we’re trying to grow that office.” Southwest Securities did not comment on Catalani’s ongoing lawsuit(s).

Who is the victim of what, when, why and to whom? Hard to say. But if you are keeping score: Hydie and her lawyer are a couple million ahead, Catalani is apparently doing well in River City, Merrill has already earned a couple of billion this year. I just wonder when anyone has the time to take care of investors - you know - the clients.

Shepherd Smith and Edwards has represented thousands of investors nationwide in claims against securities brokers and their firms. If you, your company or pension fund, or someone you know has been harmed by fraud, negligence or other wrongdoing by those in the securities industry contact us today to arrange a free consultation with one of our attorneys.

Usually lawsuits must be filed within a few years after the wrongful acts, or when one knew or should have known of the wrongdoing. For example, federal and most state securities laws require lawsuits to be filed by 2 or 3 years after the problem is known or made public, but no later than 5 years in any event.

However, if a class action is filed on behalf of shareholders, this “tolls” the limit for filing a case for those the case seeks to represent. If, for example, if a shareholder decides to “opt out” of the class action, or it is later decided the class action can not be maintained, the “window” for such shareholders to file their own cases remains open. (Caution: The remaining time to file a case may then be quite short.)

WorldCom Inc. bondholders were in this position. A class action was filed, including a class of bondholders. Some of these bondholders decided to file their own case before the class was “certified” (when the court decides whether the class members have claims common to all of them, etc.) Using strange reasoning, the federal judge presiding over their case decided that, because these bondholders did not wait for the class to be certified, they could not use the tolling benefit of the class action. Because the case was otherwise filed too late, it was dismissed.

The U.S. Court of Appeals for the Second Circuit disagreed and reversed that decision. (In re WorldCom Securities Litigation, 2d Cir., No. 05-6979-cv, 7/26/07). The appeals court said that the initiation of a class action puts defendants on notice of the claims, whether or not plaintiffs choose to become part of the class and whether or not they file their cases before the class is certified.

Victims of securities fraud are often included in class actions without their knowledge. Often they are notified of class actions years later. Either way, class actions can keep the window open to file lawsuits for as long as a decade. Currently Enron shareholders await word from the U.S. Supreme Court whether the recent dismissal of their case against Merrill Lynch and others will become final. If so, they could individually or in small groups sue Merrill Lynch and the other defendants. All Enron shareholders should already be in contact with an attorney.

Shepherd Smith and Edwards represents victims of securities fraud. If you, your company or pension fund, or someone you know lost in Enron, it is worthwhile to learn whether it is too late to act. For more information contact us today to arrange a free consultation with one of our attorneys.

For more almost forty years I could fell safe knowing that if a company's stock symbol had three letters it was listed on the New York Stock Exchange or possibly the American Stock Exchange. If the symbol had four or five letters, it was listed on the NASDAQ.

Delta Financial Corp. (DFC) recently transferred its listing to from the Amex to Nasdaq and sought to use the same symbol. Despite numerous (well-founded, I hasten to add) objections, the SEC decided to approved a rule change to permit an issuer to keep its three-character ticker symbol if it transfers its listing to Nasdaq from another domestic listing market.

The SEC says it approved the change to avoid the anti-competitive effect of the prior ban. It added that there was little reason to impose the costly and disruptive burden involved in changing a company's ticker symbol if it simply wants to list on another exchange.

So, Delta, are you happy now? Why ruin it for the rest of us? I do not really know why this is such a big deal for us diehards. There was just something comfortable in knowing that if it was three letters ... Look, I was finally learning how to post blogs on the internet when you hit me with this! If you think for one minute I will buy a single share of your stock, forget it.

By: William S Shepherd

After joining the securities industry in 1970, William Shepherd left in 1990 to found of the law firm of Shepherd Smith and Edwards. This securities law firm represents investors seeking to recover losses in accounts at investment firms. If you or someone you know has suffered investment losses, contact Shepherd Smith and Edwards today.

What do Bear Stearns, Deutsche Bank, Lehman Brothers, Merrill Lynch, UBS, Wachovia and Wells Fargo and other big securities firms have in common? No conscience. For decades we have thought that Wall Street will do anything for money. Now we are sure.

Two years ago, about 250 people attended an event in New York to discuss yet another exotic product to come out of Wall Street. This spring, as the subprime mortgage market was crumbling, nearly 600 representatives of most largest players in the finance industry met to talk about the product, one they could sell investors which had enough pricing difficulty that large mark-ups could easily be generated. That product is “death bonds.”

In brightly lit rooms with a festive atmosphere, the wizards of Wall Street discussed how they could profit off diseased and dying folks who happen to have life insurance. Death bonds are securitized products which, instead of mortgages, are backed by life insurance policies.

Almost one-third of Americans own life insurance – guarantees to pay a total of trillions of dollars. Yet, many policy owners are unable to pay the premiums, often because they are ill and can’t work and/or have medical costs consuming their resources. While some of those insured simply decide they would rather have the money while alive, others desperately need "life settlements" to pay for medical needs or avoid bankruptcy.

Viaticals, as death bonds are often called, are the result of policies being sold to investors, who then keep up the premiums until the sellers die, then collect the payout. The quicker the death, the higher the profit. Viaticals have been around for years, but were handled mostly by smaller firms with rampant fraud surrounding the industry. Hedge funds then seized on the opportunity to profit. Now, Wall Street sees huge profits in selling bonds backed by such policies, since valuations are problematic, which affords CMO-like sales pitches and higher mark-ups than on generic debt instruments.

Like many mortgage backed securities, there is a guarantee these will pay someday, so long as the insurance company remains solvent, because everyone will die sooner or later. Lets just hope impatient hedge fund managers and other investors do not decide to hasten the process in order to increase their returns.

Shepherd Smith and Edwards represents investors nationwide in claims against those in the securities industry. We handled claims in all types of investments. If you are a victim of worngdoing and suffered losses in any type investment contact us to arrange a free consultation with one of our attorneys.

FSC created "an extremely cozy environment for a man bent on defrauding his customers," said three NASD Securities Arbitrators, “management ineptness was broad" and the firm ignored red flags that the broker had "selling away" issues (using one's status at a firm to aid in the sale of investments not approved by the firm).

FSC Securities of Atlanta, part of the AIG Financial Group, had warning when it hired broker Scott Hollenbeck that he had problems during his past employment, said a panel of three arbitrators in their award to several investors. During his past employment, they say, he even embezzled money from a church organization.

Hollenbeck was based in Kernersville, N.C. where he was employed by FSC for over 5 years, ending in 2002, not counting a 20 month hiatus. Not named in the arbitration claim, Hollenbeck faces charges over an alleged Ponzi investment scheme which reportedly took place after he left FSC and included the use of billboards.

Securities arbitration is a private process, without records available to the public, and the decisions made ("awards") generally do not include much discussion about the case. However, these arbitrators saw fit to blast FSC while awarding victims almost $700,000, including legal fees and expenses. FSC claims the award includes payment to non-parties to the arbitration, a problem for all the victims if true and the award is challenged.

Shepherd Smith and Edwards represents investors nationwide in claims against members of the securities industry. We have represented investors in more than 1,000 securities arbitration cases. To learn whether we are able to assist you with a claim contact us to arrange a free consultation with one of our attorneys.

The Independent Directors Council (IDC) recently provided the Securities and Exchange Commission with a list of “reforms” regarding 12b-1 mutual funds, including that mutual fund directors should oversee the fees. The group claims that the fees are used to pay for advice and shareholder servicing, when the true use is to pay high comissions that can be hidden or obfuscated from investors.

In 2006, the mutual fund industry collected $11.8 billion in 12b-1 fees. The SEC sponsored a roundtable discussion on B-shares in June to discuss whether to do away with such shares. Seeking compromise, The IDC now suggests "clarification" of 12b-1 plans, improved disclosures to investors and send-it-to-committee type delay tactics - all intended to avoid the proposed end to the issuance of such shares.

Three decades ago Wall Street sought to compete with “no-load” mutual funds being sold directly by mutual fund companies. In 1980, it got help from Washington to create “B shares,” so-called because these are authorized under section 12-b of the Investment Advisors Act. While no front end load is paid to buy such shares, sellers are paid up front to sell the shares. Buyers are then charged fees each year for 5 years and, if they try to get our earlier, are charged a penalty for early withdrawal.

Such shares have been the subject of constant concern for more than 25 years. Salespersons often misrepresent the shares as “no load” and seek to avoid volume discounts available on old-fashion front end load A-shares to make higher commissions on the B-shares. While the industry does not want to end this $12 billion per year gravy train, the time has come to simply end the sale of such shares in order to stop the abuse.

Shepherd Smith and Edwards represents investors nationwide in claims against the securities industry. We represent clients who have been victims of wrongdoing by brokers and their firms, including in the sale of B-shares and other mutual funds. To learn whether we can also assist you to recover, contact us to arrange a free consultation with one of our attorneys.

A NASD arbitration panel ordered Merrill Lynch & Co. Inc. to pay an Iranian former employee $1.6 million, for claims that his boss set him up to be fired after discovering his ethnicity. Merrill is currently defending a suit filed in court by another Iranian who has also accused the firm of discrimination.

In an unusually lengthy decision, the securities arbitration panel awarded Fariborz Todd Zojaji $400,000 in compensatory damages and $1.2 million in punitive damages. The arbitrators explained that Merrill Lynch defamed Mr. Zojaji in a required exit disclosure form (Form U-5), which "destroyed claimant's ability to become employed in the securities industry."

This language may cause the award to be undone, since it was recently determined that brokerage firms have total immunity for statements made in such disclosures. Yet, the standard for vacating arbitration awards is quite high and a court could let the decision stand if it determines the arbitrators could have decided the case for any other reason. It is also possible the arbitrators heard evidence that the derogatory statements made in the U-5 were stated orally or in writing elsewhere, thus not be protected by the privilege.

The panel said an internal investigation of Zojaji was "so reckless and wanting in care that it constituted a conscious disregard and indifference to the rights of claimant." It also described that Mr. Zojaji, a broker in suburban Miami had been on a management track before his former manager relegated him to a reduced role after the terrorist attacks on September 11, 2001. In November 2004, Mr. Zojaji was fired on his manager’s charges he made unauthorized trades in two clients' accounts and broke the firm's privacy policy by allowing his wife to act as a translator during a phone call with a client who spoke Spanish.

Such determinations may keep the award viable even if the defamation claims are determined to be “manifest disregard for the law” by the arbitrators. While “manifest disregard” is not one of the statutory routes of overturning an arbitration award, it can be used in most jurisdictions as a “common law” reason to vacate an award. If the award is vacated, Mr. Zojaji would need to then file a new claim in arbitration to be determined by different arbitrators.

NASD securities arbitrators are not required to give reasons for their awards, which many lawyers would like to see changed. However, Mr. Zojaji’s and his lawyer are likely wishing the three arbitrators had simply awarded him the money without any discussion. It is likely that the parties will resolve the issue for a lesser amount rather than face lengthy litigation, and possibly additional arbitration to arrive at a final result.

Shepherd Smith and Edwards represents investors nationwide in claims against members of the securities industry. We do not represent brokerage firms but we often represent brokers who are victims of the conduct of brokerage firms. Whether client or broker, if you have a claim against a financial firm contact us to arrange a free consultation with one of our attorneys.

As a review: Instead of charging commissions to sell investments and products to their clients, as do brokerage firms, investment advisors charge a small percentage to advise clients how to invest their money. Wall Street decided this would be a lucrative addition to their business, but did not want to owe a fiduciary duty (of good faith) to their clients as required by the Investment Advisors Act of 1940. They therefore had their politically appointed friends at the SEC exempt them from registering as advisors. This was called the "Merrill Rule."

Investment advisors then cried foul and their largest association filed suit against the SEC. A few months ago, they won! After brooding for a few weeks but realizing the SEC had no power to exempt anyone from the law, the SEC's Chairman decided not to appeal. Instead, the Wall Street-friendly former Congressman began his retaliation.

The SEC Chairman first, without waiting for others at the SEC, personally asked Congress to investigate certain practices of investment advisors. The SEC then sprung a hasty investigation of some investment advisors and soon reported only one had properly disclosed facts in its performance claims.

Appearing to have now become a "regulator on steroids," the SEC is this week sending "Greetings" letters to RIAs. (These are reminiscent of letters sent during the Viet Nam War Era to notify young men they had been drafted, which began with "Greetings!") Such letters begin with a summary of the key provisions of the Investment Advisers Act.

The letter is being sent by email and is posted to the SEC's website. The goal is to "educate newly registered advisers about their compliance obligations" to promote investor protection, the Securities and Exchange Commission said in a statement. The letter also introduces advisers to their local office of the SEC and directs them to its website.

Of the 10,500 or so investment advisors registered with the SEC, which is expected to continue to increase. Approximately one-third have become registered in the past 18 months. Perhaps the letters will alert both old and newly registered RIAs that challenging the SEC may be hazardous to their health.

Shepherd Smith and Edwards represents investors nationwide in claims against members of the securities industry. To learn whether we may be able to assist you to recovery losses contact us to arrange a free consultation with one of our attorneys.

In one of its final regulatory acts before being folded into the NASD, the New York Stock Exchange’s regulatory unit has censured and fined Smith Barney $50 million over illegal trades, failures to supervise and record-keeping violations. The firm agreed to the sanctions without admitting or denying the charges.

The Smith Barney unit of Citigroup Global Markets Inc. will pay a fine of $10 million to the NYSE, and a fine of $5 million to the State of New Jersey, related to a "separate regulatory matter arising out of the same conduct." An additional $35 million will be paid into a restitution fund to compensate victims.

The NYSE regulators say Smith Barney agreed to these huge sanctions to resolve charges related to a variety of fraudulent trading activities, including excessive trading, improper trading in mutual fund shares, improper trading in variable annuity mutual fund sub-accounts, illegal market timing trades, plus the firm’s failures to supervise and to maintain adequate books and records.

The market timing charges also included deceptive acts to conceal the identities of the brokers involved as well as their customers, said the NYSE adding that, during a two year period, Citigroup financial consultants engaged in 250,000 market timing trades, generating approximately $32.5 million in gross revenues.

Shepherd Smith and Edwards represents investors nationwide in claims against members of the securities industry. We have helped numerous clients to recover in claims against both Smith Barney and Citicorp. To learn whether we can also assist you to recover contact us to arrange a free consultation with one of our attorneys.

Each year the research firm of J.D. Power ranks the largest brokerage firms based on customer satisfaction. This year's survey polled 5,000 investors and asked them to rate factors such as the quality of their broker, account set-up, investment offerings, and investment performance. Similar polls are taken regarding airlines and other companies which serve the public.

For the second straight year, Morgan Stanley’s retail brokerage unit ranked 11th in customer satisfaction, which was last place in the poll. Highly publicized problems at Morgan Stanley, including a public uprising of high level executives, prompted the ousting of that firm's CEO.

The management shake-up also included replacement of the head of Morgan Stanley's retail unit, with James Gorman moving from Merrill Lynch to accept the position. Changes have been initiated by Gorman, including the release of almost 1,000 under-performing brokers and addition of several new products. While his efforts may be a work in progress, results so far have obviously been less than stellar.

Morgan Stanley is not the only major Wall Street brokerage firm to score poorly. Only one Manhattan-based firm, Merrill Lynch, even scored above average in customer satisfaction. Two other large retail operations, Citigroup Inc.’s Smith Barney unit and UBS, ranked below average.

St. Louis based Edward Jones ranked first in the survey for the third consecutive year. A.G. Edwards and Sons, another St. Louis-based company, ranked second. Wachovia, which placed just behind Merill at fifth in the survey, is in the process of acquiring A.G. Edwards to become second to Merrill in number of retail brokers.

Shepherd Smith and Edwards represents investors nationwide in claims against members of the securities industry. We have helped numerous clients to recover in claims against each of the firms ranked by J.D. Power in the survey. To learn whether we can also assist you to recover, contact us to arrange a free consultation with one of our attorneys.

It seems that Wall Street has convinced state and federal regulators, as well as Congress and Presidential candidates, that the regulatory bar must be lowered if we are to compete in the international securities market (or perhaps Wall Street's donations have affected the judgment of these politicians). Yet, studies continue to show that most investors prize a company’s behavior over rich returns.

After the crash of 1929, and for over 70 years, our securities markets have been regulated by a network of federal and state securities laws. During that period, U.S. financial markets have thrived and becme the envy of the world. Conventional wisdom is that investors want to feel safe in investment waters - as shark free as possible. Yet, those on Wall Street, many of whom have proven themselves to be sharks, lobby regulators and lawmakers to attempt to win a “race to the bottom” in worldwide financial regulation.

Yet a recent study found, for example, that two-thirds of investors say they would sell their shares of a company that engages unethical but legal behavior—even if that behavior brought in higher returns. These results were found through poll research performed by Opinion Research Corp. for Pepperdine University’s Graziadio School of Business and Management.

Sixty-seven percent of the 482 investors polled said they knew about the ethical standards and practices of the companies they invest into and valued such standards even above performance. Only half of the investors said corporate boards are doing a good job of ensuring companies are managed ethically, while 42% said boards were doing fair or poorly.

“Clearly, investors are looking at more than the balance sheet and sales projections when it comes to investments,” said Linda A. Livingstone, dean of the Graziadio School of Business and Management, in a statement. “Corporate Board leadership that is centered on values and ethical behavior plays an important role in how investors evaluate options,” she added.

Similar results have been recorded regarding investment advisors, in which investors reflect that their feelings of trust, comfort and safety outweigh superior performance in their accounts.

Shepherd Smith and Edwards is a securities law firm which represents investors nationwide in claims against investment firms. To learn whether our firm can assist you contact us to arrange a free confidential consultation with one of our attorneys.

Ever notice how impressive titles are thrown around in the field of investments? Just what, if anything, to these mean. The Washington State Securities Division has proposed that that anyone who uses a professional designation that connotes some type financial planning expertise should fulfill the requirements and register as an investment adviser.

The Washington Department of Financial Instututions "notes the growth in the use of professional designations which state or imply that a person has special expertise, certification or training in financial planning," as quoted in a release by the North American Securities Administrators Association Inc. (NAASA).

The state therefore plans to clarify its rules to consider a person who uses such a professional designation as holding himself out as a financial planner. It would also prohibit the misleading use of other professional designations. Washington and other states have expressed the need to limit designations regarding advisors to senior citizens. Washington has now expanded its efforts to control the use of designations to protect investors of all ages.

Shepherd Smith and Edwards represents investors nationwide in claims against members of the securities industry. We have helped clients in more than 40 states, including victims of wrongdoing by those who call themsleves investment advisors, etc. To learn whether we can assist you, contact us to arrange a free consultation with one of our attorneys.

WIth securities class actions being dismissed at an alerming rate and charges being filed against high-profile securities class action attorneys, it's not suprising that securities class action filings fell 42% in the first half of 2007. In fact, this is the fourth consecutive semi-annual drop in filings of such cases, according to the Stanford Law School Class Action Clearinghouse and Cornerstone Research.

The study group has propounded a variety of possible theories for the precipitous drop in securities class actions. One absolutely preposterous theory, unsupported by data, is that securities fraud has dropped because of prior settlements and fines. A spokesman from the Stanford group states: "Economic theory suggests these factors should lead to a decline in the incidence of fraud--exactly what we have seen occur since the middle of 2005."

Another of the group's questionable explanations for the decrease in securities class action filings is a "strong stock market" hypothesis. Under that hypothesis, decreased levels of class action filings correlate to a strong stock market with low volatility. Yet, historical data also does not support this hypothesis.

Meanwhile, no mention was made in the group's report of the chilling effect of the wholesale dismissal of large numbers of class action cases by Wall Street friendly judges, for example, the case filed by Enron shareholders against Merrill Lynch and other firms. One Stanford Group spokesmen mentioned, but dismissed, any possible effect of indictments, guilty pleas and threats currently persued against leading class action attorneys by politically appointed federal prosecutors.

Judging from its irrational thinking, this study must have either been conducted in Stanford’s “Ivory Tower” or, more likely, the study group is funded by Wall Street, insurance companies and/or other anti-lawsuit factions.

Although securities class action claims may soon be extinct Shepherd Smith and Edwards specializes in representing clients one at a time. We have served thousands of individual and institutional victims of misconduct by members of the securities industry. Hiring an experienced law firm can greatly increase your chance of recovery