Investors Rights & Alerts - Law Offices of Robert Wayne Pearce

Apr 9, 2025

FINRA Concerned About Conflicts of Interest and Complex Products Sold to Investors Throughout the United States

Speaking to attendees at the Financial Industry Regulatory Authority’s (FINRA’s)annual meeting, its Chairman and CEO Richard Ketchum, reportedly remarked that broker dealers need to do a better job to “assess and disclose” their conflicts of interest, and to inquire whether sales practices “put your firm’s or employees’ interests ahead of investors’.” Broker-dealers’ conflicts of interest and the proliferation of complex financial products being sold by financial advisers are the top areas of concern to the FINRA.

Apr 9, 2025

Watch Out Investors–Hedge Funds With Commodities Investments Have Taken a Beating!

Hedge funds and alternative investments that have invested in or are linked to commodities in particular have taken a beating. Slowing U.S. jobs growth, slowing growth in China, concerns about another global recession, and uncertainties relating to the Euro crisis, have turned commodities bulls into bears as hedge funds beat a hasty retreat from commodities for the third consecutive month, according to Businessweek (“Hedge Funds in Longest Rout Since Global Recession,” by Tony C. Dreibus). Sentiment is now at its most bearish this year on copper, oil, heating oil, corn, gold and silver. Net long positions declined 26 percent in May, according to the article, citing the Commodities Futures Trading Commission. Europe, which accounts for 18 percent of worldwide copper and wheat demand, is floundering and the Euro reached a 23-month low versus the U.S. dollar on June 1st.

Apr 9, 2025

Investors Nationwide Beware – Pre-IPO Investments Can Range from Risky Deals to Outright Frauds!

When a promising company is emerging or an industry sector becomes “hot,” investors cannot resist the desire to get a piece of the action. Oftentimes these companies are privately held, and investors cannot buy shares because the company has not conducted an initial public offering (IPO). Still, the lack of a public market for popular companies does not stop zealous investors from doing anything it takes to get a pre-IPO allotment. Some of the recent issues of high profile social media and internet companies such as Facebook and Zynga had investors searching for access to their pre-IPOs through any available means. As a result, social media has also become the latest hook on which con artists can perpetrate a scam. In this scenario, fraudsters tout the way these companies have dramatically changed the way people interact, and that future prospects alone should make investors rich by simply owning pre-IPO shares.

Apr 9, 2025

Watch Out Investors–“Stern Advice” On Alternative Investments

Alternative investments can include virtually any investment that is not a traditional stock or bond, such as gold or currency to mutual funds that employ hedges, leveraged exchange traded funds, options, short-selling, derivatives and non-traded REITs (“Stern Advice-Investors pressed to go alternative,” by Linda Stern, Reuters). “A majority of advisers — 66 percent of a mix of commissioned brokers and fee-only advisers — are inclined to employ alternative investment strategies, even for middle market clients,” according to the article, citing a study released earlier this month by Natixis Global Asset Management. Financial advisers need to know that dangers lurk in the complex world of alternative investments and they must disclose these dangers to their clients.

Apr 9, 2025

Watch Out Florida Seniors–More Swindlers Than Ever Will Prey On Your Golden Years

Senior citizens lose about $2.9 billion annually to scams and other abuses, according to Don Blandin, president and chief executive of Investor Protection Trust, (See “Survey reveals alarming rise in financial abuse of the elderly”), citing a June 2001 study by MetLife Inc. The number of financial scams targeting seniors is dramatically increasing according to the survey conducted by the non-profit Investor Protection Trust.

Apr 9, 2025

Watch Out Florida Retirees–Higher Yields Involve Greater Risk

The prospect of several more years of extremely low interest rates is causing people who depend on interest income to accept Wall Street’s recommendations to purchase relatively illiquid and opaque alternative investments like structured products, non-traded REITs, hedge funds and variable annuities. (“Itchy Investors Ramp Up the Risk,” Wall Street Journal). Regulators worry that the increased risks associated with such investments are not being explained to investors.

Apr 9, 2025

Senior Investors Throughout Florida and Nationwide–You Are Targets!

“Complaints [involving seniors and financial scammers] are rising,” according to Jack Herstein, president of the North American Securities Administrators Association (NASAA) and assistant director of the Nebraska securities regulator. Mr. Herstein added that the increased number of complaints is partly responsible for the increased number of enforcement actions. The association of state securities regulators reportedly filed 1,241 such enforcement actions in 2010, the latest year for which data has been compiled – more than double the 506 enforcement actions filed in 2009 (“Financial Scammers Prey on Seniors,” by Anne Teresen, Wall Street Journal).

Apr 9, 2025

Investors Nationwide Beware – Church Bonds Are Risky and Illiquid Investments!

The Financial Industry Regulatory Authority (FINRA) is concerned about sales of church bonds through inappropriate sales practices by brokers. This matter has earned church bonds a spot on FINRA’s list of examination and enforcement priorities for 2012. Inappropriate sales of church bonds are usually affiliated with affinity fraud, making it somewhat easier for scam artists to hide the real risks associated with the bonds. This is why FINRA is initiating efforts to prevent broker misconduct and to make sure that firms are performing their due diligence, which will ultimately aid it protecting investors’ assets.

Apr 9, 2025

Florida Fixed-Income Investors–Watch Out for “Death Puts” in CDs and Structured Notes!

With interest rates stuck at record lows, and retirees or those on the brink of retirement looking for higher yields, Wall Street has capitalized on this dilemma by selling an array of alternative products like “structured notes” that promise higher yields but come with higher (often undisclosed) risks, and by marketing dividend stocks as alternatives to bonds, when, in fact, they are riskier than bonds.

Apr 9, 2025

Elder Financial Abuse Epidemic Not Only in Florida But Nationwide

Elder financial abuse is an “epidemic” and likely to become much worse given that 77 million baby boomers are entering their so-called “retirement” years (See “Golden years? Financial elder-abuse now epidemic,” Andrew Osterland, InvestmentNews). Between 500,000 and 5 million elders are abused, neglected or exploited each year, and the abuse is often unreported. “Elders can be afraid to report abuse, for a variety of reasons,” one practitioner was quoted as saying, adding: “In many cases, they may depend on the abuser and fear reprisals from them. They may be afraid of being placed in a nursing home or dread the stigma of domestic violence.”