COVID-19 (Coronavirus) MARKET Losses: Sue your Financial Advisor/Firm now for your losses!! Video conferencing and remote meetings are readily available

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Dawn Deshean Davenport (CRD #6280800) Chicago, Illinois
(February 13, 2017)

FINRA Case #2015047703701

Davenport voluntarily resigned while under internal review at J. P. Morgan Securities LLC on October 9, 2015 for performing external bank account transfers to her personal chase bank account without sufficient funds available

(FINRA Case #2015045020501)

James Rose (CRD #4842996, Asheville, North Carolina) was assessed a deferred fine of $25,000 and suspended from association with any FINRA member in any capacity for six months. The suspension is in effect from February 6, 2017, through August 5, 2017.

Without admitting or denying the findings, Rose consented to the sanctions and to the entry of findings that he engaged in six outside business activities without seeking approval from or disclosing these outside business activities to his member firm, United Advisors Service.

Statim Holdings Inc., an Atlanta-based firm that has guaranteed investors that its Arjun hedge fund won’t lose money, is under investigation by the U.S. Securities and Exchange Commission and the Georgia Securities Division.

Georgia regulators began a probe into Statim Holdings Inc. in 2015 after the company failed to submit to a surprise audit. Statim filed some but not all of the required paperwork related to audits. The missing paperwork was among multiple irregularities that led to the investigation.

Statim, led by Joseph A. Meyer, said that he employs a computerized system of his own design but invests most of his clients’ money in safe Treasury bonds.  Statim and Meyer have not been accused of any wrongdoing and an investigation doesn’t mean they will face legal action.

Without admitting or denying the findings, Falla consented to the sanction and to the findings that he failed to disclose the use of non-market foreign exchange (FX) rates in connection with a series of bond swap transactions in retail customer accounts. Effective February 9, 2017 Falla barred from association with any FINRA member in any capacity.

The findings stated that Falla’s member firm, operating through Falla, executed numerous retail customer transactions with inaccurate valuations when converted into U.S. dollars, which affected multiple customer accounts.

The findings also stated that the firm’s confirmations and account statements did not disclose to customers the use of a non-market FX rate or the excessive nature of the markups in connection with the bond swap transactions. Falla did not disclose that he used non-market FX rates away from the spot rate to value retail customer bond transactions, and did not disclose to retail customers its impact on the valuation of the bond swap transactions.

SBLs are loans that use stocks and bonds for collateral.  It offers borrowers cheap and fast money without having to sell their underlying securities. It is a risky form of debt marketed to wealthy investors who typically use it to buy large assets.  It is a great option for the borrower when the Dow is growing.

If the market takes a nose dive, brokers can sell the collateral holdings at discounted prices and go after the asset purchased with the loan.

As interest rates and stocks rise, individuals with a high net-worth are using SBLs to borrow against stocks and bonds in their portfolios.  It is not clear how much debt has been taken out in the form of SBLs.  FINRA and the Securities and Exchange Commission doesn’t track SBLs but both have warned investors about the risks.

Fox Financial Management Corporation (Carrollton, Texas), Brian Andrew Murphy (CRD #4743164, Frisco, Texas) and James Edward Rooney Jr. (CRD #1857754, Carrollton, Texas). 

Fox Financial Management Corporation (Carrollton, Texas), firm was expelled from FINRA® membership and fined $100,000.

Brian Andrew Murphy (CCO)was fined $25,000, barred from association with any FINRA member in any principal or supervisory capacity, and suspended from association with any FINRA member in any capacity for three months effective March 6, 2017 through June 6, 2017.

A federal jury convicted Vegas Big-Wig Billy Walters of an insider-trading scheme with the former CEO of Dean Foods (Thomas Davis) that netted him $43 million. The jury returned a guilty verdict on all 10 counts of conspiracy, securities fraud and wire fraud charges.  Walters will be sentenced on July 14, 2017, facing up to 20 years in prison for each of eight counts, plus five years apiece on the other two.

Dean Foods is the company behind Land O’Lakes, Horizon and other major supermarket brands.

Walters’ co-conspirator, former Dean Foods chairman Thomas Davis has already pleaded guilty to sharing tips on Dean Foods that allowed Davis to profit by tens of millions of dollars between 2008 and 2014.

FINRA (Financial Industry Regulatory Authority) announced that the National Adjudicatory Council (NAC) revised guidelines regarding financial exploitation of vulnerable individuals or individuals with diminished capacity. In addition, the new Sanction Guidelines include three new guidelines relating to systemic supervisory failures, borrowing and lending arrangements, and short interest reporting. The NAC revised the guidance concerning sanctions imposed by other regulators, indicating that these sanctions may be considered as mitigating factors.

The NAC is FINRA’s appellate tribunal for disciplinary cases and is a 15-member committee composed of industry and non-industry members. The Sanction Guidelines were originally published in 1993 and were most recently updated in May 2015.  The purpose was to familiarize member firms with some of the typical securities law or FINRA rule violations that occur, and the range of disciplinary sanctions that may result from those rule violations.

The Sanction Guidelines are intended to assist FINRA’s adjudicators—Hearing Panels and the NAC—in imposing appropriate sanctions consistently and fairly in disciplinary proceedings. FINRA’s Sanction Guidelines are also used in determining the appropriate level of sanctions to seek in settled and litigated cases.

FINRA (Financial Industry Regulatory Authority) issued an Investor Alert warning anyone involved in binary options trading through unregistered non-U.S. companies. Binary options are inherently risky all-or-nothing propositions. When a binary option expires, it either makes a pre-specified amount of money, or nothing at all, in which case the investor loses his or her entire investment.  Consumers using unregistered non-U.S. trading platforms or services may be particularly vulnerable to follow-up scams.

Customers of binary options platforms hear from individuals who appear to know about their accounts and claim to be able to help them get back lost funds, provided the customers pay an upfront fee.

Another scam involves phone calls from an IRS imposter claiming that taxes are owed because of binary options trading. The IRS imposter asks for a debit or credit card number, or may pressure for payment with a prepaid debit card. The IRS never calls taxpayers and demands that they wire or send money — instead the IRS sends a written notification of any tax due through the U.S. mail.

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