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Last 20 posts indexed in the Securities Law category on Justia

In a series of rulings culminating in the January 2016 decision in Trulia (about which refer here), Delaware’s courts have evinced their hostility to the kind of disclosure-only settlement in which merger objection suits are frequently resolved. Since that time, plaintiffs’ lawyers increasingly have filed merger-objection lawsuits outside of Delaware, either in federal court or courts in other states. The question since then has been whether other jurisdictions’ courts would follow Delaware’s courts’ lead in rejecting disclosure-only settlements. Many courts have followed Delaware, but others have followed a different path. In particular, New York, in an intermediate appellate court decision in Gordon v. Verizon (about which refer here), set a lower standard than Delaware’s courts for accepting disclosure-only settlements.   However, the apparently more lenient New York standard did not stop New York Supreme Court Judge Shirley Werner…
Author: Kevin LaCroix
Posted: February 19, 2018, 12:45 am
For the first time since 2015, the SEC has its full complement of five commissioners.  That’s a good thing.  And at least one new Commissioner – Robert Jackson – seems to have hit the ground running.  For example, he made a speech in San Francisco just the other day in which he expressed his disfavor of dual-class stock, suggesting that it would create “corporate royalty”. Specifically, because shareholders in at least some dual-class companies have no voting rights, leadership of the company could be passed down through the generations in perpetuity. Commissioner Jackson is a smart man – I’ve seen him speak at a number of programs, and he’s demonstrated his intelligence as well as his telegenic appearance.  His use of the “corporate royalty” meme also shows that he’s witty, though don’t think we need to worry too much about CEO titles becoming hereditary. What I do think we may need to…
Author: Robert B. Lamm
Posted: February 17, 2018, 7:42 pm
According to a report at, a company known for having a veterinary products patent and developing new ways to test for disease changed its name to Riot Blockchain, and watched its stock soar from $8 per share to $40 per share. The article is here. If the story is true it would be additional evidence of the cryptocurrency craze being real, and a significant problem for some investors. While it appears that the company did in purchase some mining equipment after the name change, it certainly wasn't in the cryptocurrency business, if the CNBC article is correct. Which of course means that its new shareholders bought shares in a company based on nothing. Add to this allegations that a major shareholder sold as the stock price was rising and the issuance of additional shares around the same time, and you have an interesting series of events which could lead to significant shareholder losses.Public company changes name to Riot Blockchain, ---Mark Astarita is a securities…
Author: Mark Astarita
Posted: February 17, 2018, 12:04 pm
Publicly available records published by the Financial Industry Regulatory Authority (FINRA) and accessed on February 16, 2017 indicate that New York-based broker-dealer firm CL King & Associates has been sanctioned by FINRA in connection to alleged rule violations. Fitapelli Kurta is interested in hearing from investors who have complaints regarding C.L. King & Associates (CRD# 6183). According to the firm’s BrokerCheck report, FINRA found that from January 1, 2014 until November 1, 2014, the firm failed to enforce procedures related to the “distribution of research between the Firms’s research and its trading and sales personnel,” and additionally that it failed to properly supervise the process by which research reports were distributed by the firm to its customers, contravening NASD Rule 3010 as well as FINRA Rules 5280(b) and 2010. Rule 5280 mandates the establishment, maintenance and enforcement of policies and protocols “reasonably…
Author: Fitapelli Kurta
Posted: February 16, 2018, 9:40 pm
Public records published by the Financial Industry Regulatory Authority (FINRA) and accessed on February 15, 2017 indicate that Missouri-based broker-dealer Stifel Nicolaus & Company has been sanctioned by FINRA in connection to alleged rule violations. Fitapelli Kurta is interested in speaking to investors who have complaints regarding Stifel Nicolaus & Company (CRD# 739). According to the firm’s BrokerCheck report, FINRA sanctioned the firm in connection to findings that in 18 occasions between April and June 2014, the firm “accepted and held 12 customer orders in over-the-counter (OTC) securities, traded for its own account at prices that would have satisfied the customer orders,” and subsequently failed to enter or to immediately enter the clients’ orders “up to the size and at the same price at which it traded for its own account or at a better price.” FINRA’s findings state that the firm asserted its “no-knowledge…
Author: Fitapelli Kurta
Posted: February 16, 2018, 9:17 pm
FINRA Bars Brian M. Travers for Refusing on-the-record Testimony According to the Financial Industry Regulatory Authority (FINRA), on December 13, 2017, the regulator issued an AWC in which Brian M. Travers (CRD #4767891, Kings Park, New York) was barred from association with any FINRA member in all capacities. Without admitting or denying the findings Travers consented to the sanction and to the entry of findings that he refused to appear for FINRA on-the-record testimony in connection with an investigation into, among other things, potential undisclosed outside business activities and private securities transactions while he was associated with his member firm. According to his FINRA BrokerCheck Report, Travers was registered with MML Investor Services in Melville, New York from November 2013 until April 2017 when he was “terminated in connection with undisclosed outside activity.” For FINRA’s full findings see FINRA Case #2016051017101. Failure to Supervise…
Author: Renae Lloyd
Posted: February 16, 2018, 9:08 pm
Public records provided by the Financial Industry Regulatory Authority (FINRA) and accessed on February 15, 2017 indicate that Iowa-based broker-dealer Berthel Fisher & Company has been sanctioned by FINRA in connection to alleged rule violations. Fitapelli Kurta is interested in speaking to investors who have complaints regarding Berthel Fisher & Company (CRD# 13609). According to the firm’s BrokerCheck report, Berthel Fisher & Company was named respondent in a FINRA complaint alleging that one of its registered representatives created more than $421,000 in concessions for himself and the firm, at his customers’ expense, when he recommended an executed a series of unsuitable short-term trades involving unit investment trust products. FINRA’s findings state that the firm is liable for the registered representative’s unsuitable recommendations, which were allegedly inconsistent with the design of the products and which incurred significant…
Author: Fitapelli Kurta
Posted: February 16, 2018, 9:04 pm
Public records provided by the Financial Industry Regulatory Authority (FINRA) and accessed on February 15, 2017 indicate that Georgia-based Center Street Securities broker Gina Cheney was discharged from a former employer in connection to alleged rule violations. Fitapelli Kurta is interested in speaking to investors who have complaints regarding Ms. Cheney (CRD# 1628957). Gina Cheney has spent 24 years in the securities industry and has been registered with Center Street Securities in Stone Mountain, Georgia since November 2017. Previous registrations include Next Financial Group in Houston, Texas (2016-2017); Dempsey Lord Smith in Stone Mountain, Georgia (2011-2016); Fintegra in Stone Mountain, Georgia (2011); and ING Financial Partners in Decatur, Georgia (2005-2011); and Walnut Street Securities in El Segundo, California (1993-2005). She has passed four securities industry examinations: Series 63 (Uniform Securities Agent State Law Examination), which she obtained on…
Author: Fitapelli Kurta
Posted: February 16, 2018, 9:02 pm
Publicly available records provided by the Financial Industry Regulatory Authority (FINRA) and accessed on February 15, 2017 indicate that Nevada-based Allegis Investment Services broker/adviser Pete Klaas has been named in a pending regulatory complaint as well as resolved or pending customer disputes. Fitapelli Kurta is interested in speaking to investors who have complaints regarding Mr. Klaas (CRD# 2381681). Pete Klaas has spent 23years in the securities industry and has been registered with Allegis Investment Services in Las Vegas, Nevada since April 2017. Previous registrations include Allegis Investment Services in Idaho Falls, Idaho (2014-2017); Signator Financial Services in Idaho Falls, Idaho (2011-2014); LPL Financial in Idaho Falls, Idaho (2007-2011); Financial Network Investment Corporation in Idaho Falls, Idaho (2003-2007); Edward Jones in St. Louis, Missouri (2002-2003); Cuna Brokerage Services in Waverly, Iowa (1995-2002); WMA Securities in Duluth, Georgia…
Author: Fitapelli Kurta
Posted: February 16, 2018, 9:01 pm
Recovery of Investment Losses in Bakken Drilling Fund IV The White Law Group is investigating potential claims involving broker dealers who may have unsuitably recommended high risk oil and gas partnerships like Bakken Drilling Fund IV LP to investors. For many investors, the decline in oil prices in the last two years may be cause for concern. Oil and gas investments involve substantial risks and are only appropriate for sophisticated investors. Bakken Drilling Fund IV is sponsored by Coachman Energy Partners.  Coachman Energy operates as an energy company that focuses on pursuing opportunities in the Bakken Shale and other unconventional shale oil plays in North America, according to Bloomberg. The company reportedly  focuses on acquiring oil and gas assets in Kansas, Oklahoma, Wyoming, and Texas. The company was founded in 2006 and is based in Greenwood Village, Colorado. Coachman Energy Partners often raises money through Regulation D private placements like the…
Author: Renae Lloyd
Posted: February 16, 2018, 8:24 pm
Stoltmann Law Offices is investigating Tim Cusick, a San Diego, California-based Wells Fargo broker. Cusick allegedly made misrepresentations regarding the suitability of a recommended investment strategy, made unsuitable transactions and recommendations, and “demanded that a customer sign a document to enroll his account into a program that charged wealth management fees.” These are all against securities laws and internal firm rules. Timothy Cusick was previously registered with First Jersey Securities from July 1981 until August 1984, Smith Barney Shearson in New York, New York from August 1984 until May 1994, and Prudential Securities in New York from April 1994 until July 2003. He is currently registered with Wells Fargo Clearing Services in San Diego, California, and has been since July 2003. He has three customer disputes against him, one of which is pending. This is according to his online, public records with FINRA’s BrokerCheck. The post Tim Cusick;…
Author: Andrew Stoltmann
Posted: February 16, 2018, 7:02 pm
Public records published by the Financial Industry Regulatory Authority (FINRA) indicate that Portage, Michigan-based PFS Investments broker Daniel Hartley was sanctioned following allegations of “dishonest and unethical business practices,” by the State of Michigan in 2016. In 2014, FINRA sanctioned him following allegations he solicited a $150,000 loan from a customer which he structured as a promissory note between the customer and Mr. Hartley’s wife, which is against securities laws and internal firm rules. He was also accused of making unauthorized transactions, failing to follow instructions to sell stock certificates and liquidate mutual fund accounts, and other things. You may be able to bring a claim against PFS Investments in the FINRA arbitration forum on a contingency fee basis if you lost money because of Daniel Hartley. The firm had a duty to reasonably supervise him while he was employed there. Daniel Hartley, according to online, FINRA…
Author: Andrew Stoltmann
Posted: February 16, 2018, 7:01 pm
In a speech at the SIFMA AML Conference last week, FINRA Head of Enforcement Susan Schroeder openly explained the “straightforward framework” that Enforcement uses when making decisions about enforcement actions. The context for Schroeder’s speech was FINRA’s merger of two separate enforcement departments, resulting from FINRA head Robert Cook’s “listening tour” and FINRA’s recent self-evaluation, but Schroeder’s explanation appeared to be more of a response to broader industry complaints about FINRA Enforcement’s lack of consistency and transparency in its charging and sanctions decisions. If that was Schroeder’s mission, she was successful. She identified the goals of enforcement actions, and justified FINRA’s use of its enforcement tool based upon harms to investors and perceived market risks. Overarching Schroeder’s speech was the principle that firms should know “what to expect from their…
Author: Daniel Nathan
Posted: February 16, 2018, 6:53 pm
In recent months, the Securities and Exchange Commission (the “SEC”) and the Commodity Futures Trading Commission (the “CFTC”) have issued warnings to those involved in cryptocurrencies, initial coin offerings, and token generation events. Following the lead of the federal regulators, the state securities regulators have halted certain offerings of cryptocurrency and initial coin offerings citing fraudulent activity as chief among their concerns.On January 24, 2018, the Texas State Securities Board (the “TSSB”) prevented a “global cryptocurrency” from being offered to Texas residents in what the TSSB considered to be an offering of unregistered securities. Note that R2B Coin was a resident of Hong Kong, and its manager was an entity domiciled in Hong Kong and Dubai. R2B Coin promoters claimed that their coin would become one of the leading, most stable and most usable cryptocurrencies in the world. The Texas residents were…
Author: Arina Shulga
Posted: February 16, 2018, 5:16 pm
The European Parliament has published the text of a resolution confirming their decision to raise no objections to the Commission delegated regulation of 20 December 2017 amending Delegated Regulation (EU) 2017/2358 and Delegated Regulation (EU) 2017/2359 as regards their date of application. These Delegated Regulations relate to the product oversight and governance requirements for insurance undertakings and insurance distributors, and information requirements and conduct of business rules applicable to the distribution of insurance-based investment products, respectively. They supplement the Insurance Distribution Directive ((EU) 2016/97) (IDD), which has a proposed application date of 1 October 2018 as opposed to the 23 February 2018, the delay of its supplementing Delegated Regulations is intended to align with the IDD’s proposed new application date. The Parliament instructs that this decision is forwarded to the Council of the EU and the Commission, if the Council…
Author: Laura Hodgson
Posted: February 16, 2018, 4:22 pm
On 14 February 2018, the European Council published a press release confirming its agreement to delay the transposition deadline and application of new rules on insurance distribution. The Insurance Distribution Directive (IDD) is currently due to apply from 23 February 2018. However, on the basis of a proposal from the Commission, it has been agreed to postpone the transposition deadline to 1 July 2018 and the application date to 1 October 2018. The delay will enable the insurance industry to better prepare for the directive and for the changes necessary to comply with implementing rules. Given that the European Parliament and the Council are not expected to adopt the emending directive before March 2018, the delay will apply retroactively from 23 February. View: IDD delay approved by EU Council
Author: Laura Hodgson
Posted: February 16, 2018, 4:19 pm
The market volatility of the first half of February of this year has seen small investors lose hundreds of millions of dollars in VIX ETF’s they should never have been invested in the first place.  These unsuitable VIX ETF’s and investments include: VelocityShares Daily 2X VIX Short-Term ETN (TVIX) ProShares Short VIX Short-Term Futures (SVXY) iPath S&P 500 VIX Short-Term Futures ETN (VXX) VelocityShares Daily Inverse VIX Short-Term ETN (XIV) ProShares Ultra VIX Short-Term Futures (UVXY) ProShares VIX Short-Term Futures (VIXY) Nomura Next Notes S&P 500 VIX Short-Term Futures Inverse Daily Excess Return Index ETN Curiously, last year, FINRA reminded member firms of its obligation to protect small investors from potential catastrophic losses associated with VIX volatility-linked Exchange Traded Products .  Unfortunately, many financial advisors failed to heed this guidance. It has been widely known that VIX volatility-linked Exchange Traded Products…
Posted: February 16, 2018, 3:06 pm
By Brad Rosen, J.D.Commissioner Brian Quintenz led off the first meeting of the CFTC’s Technology Advisory Committee (TAC) in 22 months, noting the rapid evolution of technological developments in the derivative markets even since the committee’s last gathering in 2016. The TAC meeting, which was rescheduled due to the brief government shutdown in January, consisted of comprehensive and engaging discussions exploring five key areas impacting the global markets including digital ledger technology, virtual currencies, artificial intelligence, automatic trading, and cybersecurity. Chief Innovation Officer Daniel Gorfine, who serves as TAC’s designated federal officer, oversaw the day’s proceedings which included presentations from some of the leading figures in derivatives and technology space. Commissioner Quintenz, the TAC sponsor, was also joined by his fellow commissioners, Chairman J. Christopher Giancarlo and Rostin Behnam. Some of the highlights and…
Author: John Jascob
Posted: February 16, 2018, 2:59 pm
Update on Anthony Diaz – Securities Fraud Investigation Have you suffered losses investing with former financial advisor Anthony Diaz (CRD#: 4131948, Scotrun, PA)? If so, the securities attorneys at The White Law Group may be able to help you recover your losses by filing a FINRA arbitration claim against his employer. As we told you in January, Diaz, a Pennsylvania stockbroker, who was ousted from the securities industry, has reportedly been ordered to pay more than $4 million in damages ahead of his federal trial on criminal fraud charges. FINRA ruled that Anthony Diaz must pay damages to 19 former clients, noting he failed to respond to arbitration. The award includes compensatory damages of about $1 million, punitive damages of $2.9 million and attorneys’ fees of more than $400,000. Once regarded as one of the nation’s top brokers, FINRA claims that Diaz allegedly earned millions of dollars by pushing high-fee, high-risk alternative investments, such…
Author: Renae Lloyd
Posted: February 16, 2018, 2:52 pm
The European Securities and Markets Authority (ESMA) has launched a new interactive Single Rulebook. The Single Rulebook currently contains the Level 1 text of the UCITS Directive, and links to all relevant Level 2 and Level 3 measures already available elsewhere on ESMA’s website. ESMA’s objective is to provide an interactive version for each key Level 1 text under its remit incrementally, with the next texts being the Credit Rating Agencies Regulation and MIFID II / MiFIR. The European Banking Authority already has an interactive Single Rulebook covering the Bank Recovery and Resolution Directive, Capital Requirements Directive IV, Capital Requirements Regulation and the Deposit Guarantee Schemes Directive (found here). View ESMA launches interactive Single Rulebook, 14 February 2018
Author: Simon Lovegrove
Posted: February 16, 2018, 2:02 pm

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Mark J. Astarita, Esq. represents investors, financial professionals and firms in litigation, arbitration and regulatory matters across the country. He is a partner in the national securities law firm of Sallah Astarita & Cox, LLC and can be reached by email at or by phone at 212-509-6544.

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