Jun 5, 2015

U.S. Supreme Court Rules on Duty to Monitor 401(k) Plans

The U.S. Supreme Court made its decision on a key 401(k) lawsuit, Tibble v. Edison. This suit was initially filed in 2007 by employees against their employers for having mutual funds with excessive fees in the 401(k) plan. Their retirement plan had a selection of 40 funds, six of which were retail share class funds and are more costly than institutional share class funds. The U.S. District Court granted the plaintiffs a judgment of $370,732 from the high fees in three of the retail share funds. The other three funds appealed to the ninth U.S. Circuit Court of appeals and eventually to the Supreme Court.

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May 4, 2015

Liberty Partners Stockbroker Barred by FINRA for the Fraud of an Elderly Client

Ronald Paul Rafaloff, a former registered representative with the Bakersfield, California branch of Liberty Partners Financial Specialists, LLC (Liberty Partners) submitted a Letter of Acceptance, Waiver and Consent in which he consented to, but did not admit to or deny, the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he converted $168,000 of an elderly customer’s investment funds for his personal use and benefit. According to FINRA, Ronald Rafaloff’s only client, a 74 year old retiree, invested $405,000 of her retirement money into three speculative business entities. The business entities, for which Mr. Rafaloff claimed to provide consulting services, were actually founded and controlled by Mr. Rafaloff. In order to persuade his elderly client to invest, Mr. Rafaloff allegedly promised annual returns of 30-40% and a repayment of her principal in three years. He also allegedly provided the elderly investor with written guarantees against losses, agreeing to personally make payments to the investor if the business entities should default. FINRA found that none of the companies held sufficient funds to cover the return of principal or the high rates of returns promised by Mr. Rafaloff.

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May 2, 2014

William Coolidge Permanently Barred by FINRA for Unsuitable Recommendations to Elderly Investors

William Bradford Coolidge, a former Registered Representative with Memphis, Tennessee-based Stifel, Nicolaus & Company, Inc. (Stifel Nicolaus) submitted a Letter of Acceptance, Waiver and Consent in which he consented to, but did not admit to or deny, the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he effected approximately 233 trades in the accounts of three elderly customers with neither the customers’ written authorization nor the acceptance by Stifel Nicolaus of the accounts as being discretionary. According to FINRA, William Coolidge, of Cordova, Tennessee, allegedly implemented a trading strategy in an 86 year old customer’s individual retirement account (IRA) wherein he switched from mutual funds and Unit Investment Trusts (UITs) to other mutual funds or UITs after holding them for a time period. Mr. Coolidge’s alleged unsuitable recommendations, especially considering the customer’s age, risk profile and income, caused the elderly investor over $43,000 in losses and paid over $52,000 in commissions.

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Apr 14, 2014

Santander Securities Investors Lose Life Savings

This arbitration arises out of a Santander stockbroker’s recommendation that a retired couple invest their life savings, $500,000 in Westernbank preferred stock. The clients had never made any stock market investments before they met the Santander stockbroker and the Westernbank preferred stock was the only investment in their accounts.

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Feb 28, 2014

EIGHTY YEAR OLD INVESTOR SUES UBS PUERTO RICO

The client is an 80 year old retiree living alone in San Juan, Puerto Rico. He was introduced to the UBS Puerto Rico broker 10 years ago, believing at the time that the broker worked for Oriental Financial Services, Corp. Upon the recommendation of the broker, the client purchased a Sunlife annuity from him and held that annuity for many years. Thereafter, the UBS Puerto Rico broker solicited client to make other investments, but the client had a long standing relationship with a Santander Securities and later Popular Securities broker and declined the stockbroker’s solicitations until last year.

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