Investors' Rights Law Blog

The most important of investors’ rights is the right to be informed! This Investors’ Rights blog is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call [phone], or email Mr. Pearce at [email protected] for answers to any of your questions about this blog post and/or any related matter.

[floridasecuritiesattorney]

COMMONWEALTH FINANCIAL NETWORK SUBPOENAED BY MASSACHUSETTS REGULATORS OVER SALES OF ALTERNATIVE INVESTMENTS TO SENIORS

Commonwealth Financial Network was subpoenaed by Massachusetts in connection with a sweep investigation, which is looking into sales practices involving alternative investments sold to seniors. Commonwealth Financial Network's principal office is located in Waltham, Massachusetts. On July 10, 2013, the state's securities division sent the subpoena to Commonwealth Financial Network asking for information on sales of the products to state residents who are 65 or over. Some of the non-traditional investments include oil and gas partnerships, private placements, structured products, hedge funds, and tenant-in-common offerings. The state demanded information from Commonwealth Financial Network on any such products that have been sold over the past year, the investors who purchased them, the commissions generated, how the sales were reviewed, and all relevant compliance, training and marketing materials - Commonwealth Financial Network has until July 24 to respond. The state added that being on the list of targeted firms does not indicate wrongdoing.

Although non-traded REITs were not part of the information request, Massachusetts has expressed its heightened concern "that the senior marketplace is being targeted for the sales of these high-risk, esoteric products," Massachusetts Secretary of the Commonwealth William F. Galvin said in a statement. The state has already cracked down on a number of firms for alleged improper sales of non-traded REITs. In February 2013, the state reached a settlement with LPL Financial to pay at least $2 million in restitution and $500,000 in fines related to the sale of non-traded REITs. In May 2013, it settled REIT cases with Ameriprise Financial Services Inc., Commonwealth Financial Network, Lincoln Financial Advisors Corp., Royal Alliance Associates Inc. and Securities America Inc. The five firms agreed to pay a total of $6.1 million in restitution to investors and fines totaling $975,000.

Senior investors have become the targets of unscrupulous brokers, investment advisors and insurance agents. This is due in part to the fact that as we age, our ability to understand newer and complex investments diminishes every year. Therefore, senior retirement savings are ripe for picking and an epidemic of fraud is underway all across America. As a result many states, such as Massachusetts, have enacted laws with harsh penalties and are performing investigative sweeps to protect senior investors.

Broker-dealers have a duty to protect senior investors from broker misconduct by establishing and implementing an adequate supervisory system to oversee sales practices. If broker-dealers do not so, they may be liable to senior investors for damages flowing from an unreasonable recommendation and sale. Are you a senior investor suffering losses in your Commonwealth Financial Network account due to an unreasonable recommendation and sale by your broker? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Commonwealth Financial Network stockbrokers who may have engaged in misconduct and caused investors losses.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call [phone], or email Mr. Pearce at [email protected] for answers to any of your questions about this blog post and/or any related matter.

[floridasecuritiesattorney]

THOMAS GERALD RECCK BARRED BY FINRA FOR CONVERTING BROKERAGE ACCOUNT FUNDS

Thomas Gerald Recck, a former broker at New York, New York based MetLife Securities, Inc., submitted a Letter of Acceptance, Waiver and Consent in which he consented to the described sanction and to the entry of the Financial Industry Regulatory Authority's findings that he converted funds from an account he serviced for personal use. Mr. Recck was the treasurer of a non-profit organization that maintained an account that he serviced at his firm. Mr. Recck transferred approximately $80,000 from the organization's firm brokerage account to one of the organization's bank accounts. Mr. Recck then converted a total of approximately $140,000 in funds from that bank account and another organization bank account for his personal benefit. FINRA stated that Mr. Recck failed to appear for a FINRA on-the-record interview and indicated that he would not cooperate with FINRA's investigation by providing testimony. Mr. Recck, of Wethersfield, Connecticut, was barred from association with any FINRA member in any capacity.

Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and implement a reasonable supervisory system, they may be liable to investors for damages flowing from the misconduct. Therefore, investors who have suffered damages due to alleged illegal acts such as those alleged against Mr. Recck can bring forth claims to recover losses against broker-dealers like MetLife Securities, which should have prevented Mr. Recck from committing the above described conduct. Have you suffered losses in your MetLife Securities, Inc. account due to similar misconduct by your broker? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against MetLife Securities, Inc. stockbrokers who may have engaged in misconduct and caused investors losses.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call [phone], or email Mr. Pearce at [email protected] for answers to any of your questions about this blog post and/or any related matter.

[floridasecuritiesattorney]

GUAYNABO, PUERTO RICO BOND INVESTORS WILL SOON OWN JUNK BONDS

We last wrote about UBS Puerto Rico, Santander Securities and Popular Securities brokers recommending that their Guaynabo, Puerto Rico clients get back into the Puerto Rico bond market and we warned you against doing so. We hope you listened because yesterday the Fitch Ratings agency said it may soon strip the heavily indebted Puerto Rico of its investment grade credit rating. Fitch Ratings threatened to tag the U.S. territory with junk bond status. Fitch Ratings said it had placed Puerto Rico's BBB- General Obligation bond rating on negative watch, meaning it was considering a further reduction in the ratings to junk bond status. Undoubtedly, Puerto Rico bond prices will continue to fall, interest rates will continue to rise and the cost of issuing new debt in Puerto Rico will rise as well.

None of this looks good for Guaynabo, Puerto Rico bond investors because the Puerto Rican economy, where interest rates have risen sharply in the last 3 months amid worries about its finances, appears to be tumbling back into recession. The additional financing costs will only accelerate the economic decline.

For example, the cost to insure Puerto Rico debt against default has soared as measured by the credit default swaps market. A contract to insure 100 million of Puerto Rico bonds for 5 years is just below its peak last month of 799 basis points that including the 20.4% or $20.4 million in upfront costs to insure $100 million of Puerto Rico's bonds.

The negative ratings were not limited to Puerto Rico's General Obligation bonds but also attached to the Puerto Rico building authority government facilities revenue bonds, the Puerto Rico Aqueduct and Sewer us Authority bonds and debt issued by the Employees Retirement System of the Commonwealth of Puerto Rico.

We can clearly see a market decline in the prices for the individual Puerto Rico bonds. However, and perhaps it's because UBS Puerto Rico wants to hide the bad news, we cannot see the immediate effect of the lower ratings on the prices of the UBS Puerto Rico Closed-End Bond Funds. UBS Puerto Rico has not published the most recent valuation of the funds. The last reported valuation on the UBS Puerto Rico website was November 6, 2013 as follows:

Name of the Fund  -  NAV

Tax-Free Puerto Rico Fund    5.189

Tax-Free Puerto Rico Fund II    4.614

Tax-Free Puerto Rico Target Maturity Fund    4.432

Puerto Rico AAA Portfolio Target Maturity Fund    7.779

Puerto Rico AAA Portfolio Bond Fund     7.291

Puerto Rico AAA Portfolio Bond Fund II    8.202

Puerto Rico GNMA & US Govmt. Target Maturity Fund    8.108

P.R. Mortgage-Backed & US Govmt. Securities Fund    6.161

Puerto Rico Fixed Income Fund    3.637

Puerto Rico Fixed Income Fund II    4.267

Puerto Rico Fixed Income Fund III    4.047

Puerto Rico Fixed Income Fund IV    5.204

Puerto Rico Fixed Income Fund V    4.648

Puerto Rico Fixed Income Fund VI    5.549

Think back Guaynabo, Puerto Rico investors and remember what they were telling you last year as the market started to decline. These advisors are only looking for investors to swap out Puerto Rico closed-end bond funds and Puerto Rico bond investments with other investors who have threatened to sue (and rightfully so) for the misrepresentations, unsuitable recommendations, the use of margin or non-purpose loans to buy the bond funds, and/or excessive concentration of their retirement nest eggs in junk bonds.

Have you suffered losses in a Puerto Rico closed-end bond fund investment? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. We have associated with an attorney nearby Guaynabo, Puerto Rico, namely Lcdo. Julio Cayere-Quidgley, who will meet with you and discuss your case at no charge. Mr. Pearce and Mr. Cayere are accepting clients with valid claims against UBS Puerto Rico, Santander Securities and Popular Securities for misrepresentations, overconcentration and/or unsuitable recommendations of its bond funds.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 33 years, Attorney Robert Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. Attorney Adam Kara-Lopez habla español. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website,www.secatty.com, post a comment, call [phone], or email Mr. Pearce [email protected] for answers to any of your questions about this blog post and/or any related matter.

[floridasecuritiesattorney]

MERRILL LYNCH SUBPOENAED BY MASSACHUSETTS REGULATORS OVER SALES OF ALTERNATIVE INVESTMENTS TO SENIORS

Merrill Lynch was subpoenaed by Massachusetts in connection with a sweep investigation, which is looking into sales practices involving alternative investments sold to seniors. Merrill Lynch's principal office is located in New York, New York. On July 10, 2013, the state's securities division sent the subpoena to Merrill Lynch asking for information on sales of the products to state residents who are 65 or over. Some of the non-traditional investments include oil and gas partnerships, private placements, structured products, hedge funds, and tenant-in-common offerings. The state demanded information from Merrill Lynch on any such products that have been sold over the past year, the investors who purchased them, the commissions generated, how the sales were reviewed, and all relevant compliance, training and marketing materials - Merrill Lynch has until July 24 to respond. The state added that being on the list of targeted firms does not indicate wrongdoing.

Although non-traded REITs were not part of the information request, Massachusetts has expressed its heightened concern "that the senior marketplace is being targeted for the sales of these high-risk, esoteric products," Massachusetts Secretary of the Commonwealth William F. Galvin said in a statement. The state has already cracked down on a number of firms for alleged improper sales of non-traded REITs. In February 2013, the state reached a settlement with LPL Financial to pay at least $2 million in restitution and $500,000 in fines related to the sale of non-traded REITs. In May 2013, it settled REIT cases with Ameriprise Financial Services Inc., Commonwealth Financial Network, Lincoln Financial Advisors Corp., Royal Alliance Associates Inc. and Securities America Inc. The five firms agreed to pay a total of $6.1 million in restitution to investors and fines totaling $975,000.

Senior investors have become the targets of unscrupulous brokers, investment advisors and insurance agents. This is due in part to the fact that as we age, our ability to understand newer and complex investments diminishes every year. Therefore, senior retirement savings are ripe for picking and an epidemic of fraud is underway all across America. As a result many states, such as Massachusetts, have enacted laws with harsh penalties and are performing investigative sweeps to protect senior investors.

Broker-dealers have a duty to protect senior investors from broker misconduct by establishing and implementing an adequate supervisory system to oversee sales practices. If broker-dealers do not so, they may be liable to senior investors for damages flowing from an unreasonable recommendation and sale. Are you a senior investor suffering losses in your Merrill Lynch account due to an unreasonable recommendation and sale by your broker? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Merrill Lynch stockbrokers who may have engaged in misconduct and caused investors losses.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call [phone], or email Mr. Pearce at [email protected] for answers to any of your questions about this blog post and/or any related matter.

[floridasecuritiesattorney]

HATO REY, PUERTO RICO BOND INVESTORS WILL SOON OWN JUNK BONDS

We last wrote about UBS Puerto Rico, Santander Securities and Popular Securities brokers recommending that their Hato Rey, Puerto Rico clients get back into the Puerto Rico bond market and we warned you against doing so. We hope you listened because yesterday the Fitch Ratings agency said it may soon strip the heavily indebted Puerto Rico of its investment grade credit rating. Fitch Ratings threatened to tag the U.S. territory with junk bond status. Fitch Ratings said it had placed Puerto Rico's BBB- General Obligation bond rating on negative watch, meaning it was considering a further reduction in the ratings to junk bond status. Undoubtedly, Puerto Rico bond prices will continue to fall, interest rates will continue to rise and the cost of issuing new debt in Puerto Rico will rise as well.

None of this looks good for Hato Rey, Puerto Rico bond investors because the Puerto Rican economy, where interest rates have risen sharply in the last 3 months amid worries about its finances, appears to be tumbling back into recession. The additional financing costs will only accelerate the economic decline.

For example, the cost to insure Puerto Rico debt against default has soared as measured by the credit default swaps market. A contract to insure 100 million of Puerto Rico bonds for 5 years is just below its peak last month of 799 basis points that including the 20.4% or $20.4 million in upfront costs to insure $100 million of Puerto Rico's bonds.

The negative ratings were not limited to Puerto Rico's General Obligation bonds but also attached to the Puerto Rico building authority government facilities revenue bonds, the Puerto Rico Aqueduct and Sewer us Authority bonds and debt issued by the Employees Retirement System of the Commonwealth of Puerto Rico.

We can clearly see a market decline in the prices for the individual Puerto Rico bonds. However, and perhaps it's because UBS Puerto Rico wants to hide the bad news, we cannot see the immediate effect of the lower ratings on the prices of the UBS Puerto Rico Closed-End Bond Funds. UBS Puerto Rico has not published the most recent valuation of the funds. The last reported valuation on the UBS Puerto Rico website was November 6, 2013 as follows:

Name of the Fund  - NAV

Tax-Free Puerto Rico Fund    5.189

Tax-Free Puerto Rico Fund II    4.614

Tax-Free Puerto Rico Target Maturity Fund    4.432

Puerto Rico AAA Portfolio Target Maturity Fund    7.779

Puerto Rico AAA Portfolio Bond Fund    7.291

Puerto Rico AAA Portfolio Bond Fund II    8.202

Puerto Rico GNMA & US Govmt. Target Maturity Fund    8.108

P.R. Mortgage-Backed & US Govmt. Securities Fund    6.161

Puerto Rico Fixed Income Fund    3.637

Puerto Rico Fixed Income Fund II    4.267

Puerto Rico Fixed Income Fund III    4.047

Puerto Rico Fixed Income Fund IV    5.204

Puerto Rico Fixed Income Fund V    4.648

Puerto Rico Fixed Income Fund VI    5.549

Think back Hato Rey, Puerto Rico investors and remember what they were telling you last year as the market started to decline. These advisors are only looking for investors to swap out Puerto Rico closed-end bond funds and Puerto Rico bond investments with other investors who have threatened to sue (and rightfully so) for the misrepresentations, unsuitable recommendations, the use of margin or non-purpose loans to buy the bond funds, and/or excessive concentration of their retirement nest eggs in junk bonds.

Have you suffered losses in a Puerto Rico closed-end bond fund investment? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. We have associated with an attorney nearby Hato Rey, Puerto Rico, namely Lcdo. Julio Cayere-Quidgley, who will meet with you and discuss your case at no charge. Mr. Pearce and Mr. Cayere are accepting clients with valid claims against UBS Puerto Rico, Santander Securities and Popular Securities for misrepresentations, overconcentration and/or unsuitable recommendations of its bond funds.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 33 years, Attorney Robert Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. Attorney Adam Kara-Lopez habla español. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website,www.secatty.com, post a comment, call [phone], or email Mr. Pearce [email protected] for answers to any of your questions about this blog post and/or any related matter.

[floridasecuritiesattorney]

KENNETH PATRICK PETTICOLAS SUSPENDED BY FINRA FOR SELLING AWAY VIATICAL CONTRACTS

Kenneth Patrick Petticolas, a former broker at Cincinnati, Ohio based The O.N. Equity Sales Company, submitted an Offer of Settlement in which he consented to the described sanction and to the entry of the Financial Industry Regulatory Authority's (FINRA) findings that he participated in a private securities transaction sale of a life settlement contract to an investor for approximately $455,925, which was not conducted through his firm. FINRA stated that prior to participating in the sale of the life settlement contract, Mr. Petticolas did not provide any written notice to his firm regarding that transaction. O.N. Equity Sales Company's insurance affiliate prohibited its agents, including Mr. Petticolas, from participating in any kind of viatical or life settlement transaction, except that they were permitted to assist a client who owned a non-variable insurance policy and wished to sell it to a viatical company. The findings also stated that Mr. Petticolas received approximately $50,151.75 from the entity as compensation for the sale of the life settlement contract to the investor. Mr. Petticolas failed to respond in a timely manner to FINRA's requests for documents and information regarding private securities transactions or outside business activities. Mr. Petticolas, of Hayden, Idaho, was suspended from association with any FINRA member in any capacity for one year. The suspension is in effect from May 6, 2013 through May 5, 2014.

"Selling away" is the inappropriate practice of an investment professional who sells or solicits securities or investments not held, approved, or authorized by the brokerage firm with which the professional is associated. Under NASD and FINRA rules, brokerage firms must approve investments offered by their investment professionals and supervise its sales.

Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and implement a reasonable supervisory system, they may be liable to investors for damages flowing from the misconduct. Therefore, investors who have suffered damages due to prohibited investment recommendations can bring forth claims to recover losses against broker-dealers like O.N. Equity Sales Company. Have you suffered losses in your O.N. Equity Sales Company account due to similar misconduct by your broker? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against O.N. Equity Sales Company stockbrokers who may have engaged in misconduct and caused investors losses.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call [phone], or email Mr. Pearce at [email protected] for answers to any of your questions about this blog post and/or any related matter.

[floridasecuritiesattorney]

LPL FINANCIAL SUBPOENAED BY MASSACHUSETTS REGULATORS OVER SALES OF ALTERNATIVE INVESTMENTS TO SENIORS

LPL Financial LLC was subpoenaed by Massachusetts in connection with a sweep investigation, which is looking into sales practices involving alternative investments sold to seniors. LPL Financial's principal office is located in Boston, Massachusetts. On July 10, 2013, the state's securities division sent the subpoena to LPL Financial asking for information on sales of the products to state residents who are 65 or over. Some of the non-traditional investments include oil and gas partnerships, private placements, structured products, hedge funds, and tenant-in-common offerings. The state demanded information from LPL Financial on any such products that have been sold over the past year, the investors who purchased them, the commissions generated, how the sales were reviewed, and all relevant compliance, training and marketing materials - LPL Financial has until July 24 to respond. The state added that being on the list of targeted firms does not indicate wrongdoing.

Although non-traded REITs were not part of the information request, Massachusetts has expressed its heightened concern "that the senior marketplace is being targeted for the sales of these high-risk, esoteric products," Massachusetts Secretary of the Commonwealth William F. Galvin said in a statement. The state has already cracked down on a number of firms for alleged improper sales of non-traded REITs. In February 2013, the state reached a settlement with LPL Financial to pay at least $2 million in restitution and $500,000 in fines related to the sale of non-traded REITs. In May 2013, it settled REIT cases with Ameriprise Financial Services Inc., Commonwealth Financial Network, Lincoln Financial Advisors Corp., Royal Alliance Associates Inc. and Securities America Inc. The five firms agreed to pay a total of $6.1 million in restitution to investors and fines totaling $975,000.

Senior investors have become the targets of unscrupulous brokers, investment advisors and insurance agents. This is due in part to the fact that as we age, our ability to understand newer and complex investments diminishes every year. Therefore, senior retirement savings are ripe for picking and an epidemic of fraud is underway all across America. As a result many states, such as Massachusetts, have enacted laws with harsh penalties and are performing investigative sweeps to protect senior investors.

Broker-dealers have a duty to protect senior investors from broker misconduct by establishing and implementing an adequate supervisory system to oversee sales practices. If broker-dealers do not so, they may be liable to senior investors for damages flowing from an unreasonable recommendation and sale. Are you a senior investor suffering losses in your LPL Financial LLC account due to an unreasonable recommendation and sale by your broker? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against LPL Financial stockbrokers who may have engaged in misconduct and caused investors losses.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call [phone], or email Mr. Pearce at [email protected] for answers to any of your questions about this blog post and/or any related matter.

[floridasecuritiesattorney]

RONALD WAYNE NICHTER BARRED BY FINRA FOR FORGING CUSTOMERS' SIGNATURES AND MISAPPROPRIATING THEIR FUNDS

Ronald Wayne Nichter, a former broker at Boston, Massachusetts based Cantella & Co., Inc., submitted a Letter of Acceptance, Waiver and Consent in which he consented to the described sanction and to the entry of the Financial Industry Regulatory Authority's (FINRA) findings that he misappropriated approximately $140,000 from customers. FINRA stated that in order to carry out the misappropriations, Mr. Nichter forged the clients' signatures on Letters of Authorization that instructed his member firm's clearing firm to issue checks made payable to the customers. Mr. Nichter then intercepted the checks, endorsed them, deposited them into his personal account, and utilized the funds for his personal use without the customers' knowledge and consent. Mr. Nichter, of Greenfield, Indiana, was barred from association with any FINRA member in any capacity.

Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and enforce a reasonable supervisory system, they may be liable to investors for damages flowing from any misconduct. Therefore, investors who have suffered damages due to broker misappropriations such as those by Mr. Nichter can bring forth claims to recover losses against broker-dealers like Cantella & Co., which should oversee its brokers and prevent misappropriation and other misconduct.

Have you suffered losses in your Cantella & Co., Inc. account due to any misappropriation by your broker? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Cantella & Co., Inc. stockbrokers who may have engaged in misconduct and caused investors losses.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call [phone], or email Mr. Pearce at [email protected] for answers to any of your questions about this blog post and/or any related matter.

[floridasecuritiesattorney]

WELLS FARGO ADVISORS SUBPOENAED BY MASSACHUSETTS REGULATORS OVER SALES OF ALTERNATIVE INVESTMENTS TO SENIORS

Wells Fargo Advisors was subpoenaed by Massachusetts in connection with a sweep investigation, which is looking into sales practices involving alternative investments sold to seniors. Wells Fargo Advisors' principal office is located in San Diego, California. On July 10, 2013, the state's securities division sent the subpoena to Wells Fargo Advisors asking for information on sales of the products to state residents who are 65 or over. Some of the non-traditional investments include oil and gas partnerships, private placements, structured products, hedge funds, and tenant-in-common offerings. The state demanded information from Wells Fargo Advisors on any such products that have been sold over the past year, the investors who purchased them, the commissions generated, how the sales were reviewed, and all relevant compliance, training and marketing materials - Wells Fargo Advisors has until July 24 to respond. The state added that being on the list of targeted firms does not indicate wrongdoing.

Although non-traded REITs were not part of the information request, Massachusetts has expressed its heightened concern "that the senior marketplace is being targeted for the sales of these high-risk, esoteric products," Massachusetts Secretary of the Commonwealth William F. Galvin said in a statement. The state has already cracked down on a number of firms for alleged improper sales of non-traded REITs. In February 2013, the state reached a settlement with LPL Financial to pay at least $2 million in restitution and $500,000 in fines related to the sale of non-traded REITs. In May 2013, it settled REIT cases with Ameriprise Financial Services Inc., Commonwealth Financial Network, Lincoln Financial Advisors Corp., Royal Alliance Associates Inc. and Securities America Inc. The five firms agreed to pay a total of $6.1 million in restitution to investors and fines totaling $975,000.

Senior investors have become the targets of unscrupulous brokers, investment advisors and insurance agents. This is due in part to the fact that as we age, our ability to understand newer and complex investments diminishes every year. Therefore, senior retirement savings are ripe for picking and an epidemic of fraud is underway all across America. As a result many states, such as Massachusetts, have enacted laws with harsh penalties and are performing investigative sweeps to protect senior investors.

Broker-dealers have a duty to protect senior investors from broker misconduct by establishing and implementing an adequate supervisory system to oversee sales practices. If broker-dealers do not so, they may be liable to senior investors for damages flowing from an unreasonable recommendation and sale. Are you a senior investor suffering losses in your Wells Fargo Advisors account due to an unreasonable recommendation and sale by your broker? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Wells Fargo Advisors stockbrokers who may have engaged in misconduct and caused investors losses.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call [phone], or email Mr. Pearce at [email protected] for answers to any of your questions about this blog post and/or any related matter.

[floridasecuritiesattorney]

MAYAGUEZ, PUERTO RICO BOND INVESTORS WILL SOON OWN JUNK BONDS

We last wrote about UBS Puerto Rico, Santander Securities and Popular Securities brokers recommending that their Mayaguez, Puerto Rico clients get back into the Puerto Rico bond market and we warned you against doing so. We hope you listened because yesterday the Fitch Ratings agency said it may soon strip the heavily indebted Puerto Rico of its investment grade credit rating. Fitch Ratings threatened to tag the U.S. territory with junk bond status. Fitch Ratings said it had placed Puerto Rico's BBB- General Obligation bond rating on negative watch, meaning it was considering a further reduction in the ratings to junk bond status. Undoubtedly, Puerto Rico bond prices will continue to fall, interest rates will continue to rise and the cost of issuing new debt in Puerto Rico will rise as well.

None of this looks good for Mayaguez, Puerto Rico bond investors because the Puerto Rican economy, where interest rates have risen sharply in the last 3 months amid worries about its finances, appears to be tumbling back into recession. The additional financing costs will only accelerate the economic decline.

For example, the cost to insure Puerto Rico debt against default has soared as measured by the credit default swaps market. A contract to insure 100 million of Puerto Rico bonds for 5 years is just below its peak last month of 799 basis points that including the 20.4% or $20.4 million in upfront costs to insure $100 million of Puerto Rico's bonds.

The negative ratings were not limited to Puerto Rico's General Obligation bonds but also attached to the Puerto Rico building authority government facilities revenue bonds, the Puerto Rico Aqueduct and Sewer us Authority bonds and debt issued by the Employees Retirement System of the Commonwealth of Puerto Rico.

We can clearly see a market decline in the prices for the individual Puerto Rico bonds. However, and perhaps it's because UBS Puerto Rico wants to hide the bad news, we cannot see the immediate effect of the lower ratings on the prices of the UBS Puerto Rico Closed-End Bond Funds. UBS Puerto Rico has not published the most recent valuation of the funds. The last reported valuation on the UBS Puerto Rico website was November 6, 2013 as follows:

Name of the Fund NAV

Tax-Free Puerto Rico Fund 5.189

Tax-Free Puerto Rico Fund II 4.614

Tax-Free Puerto Rico Target Maturity Fund 4.432

Puerto Rico AAA Portfolio Target Maturity Fund 7.779

Puerto Rico AAA Portfolio Bond Fund 7.291

Puerto Rico AAA Portfolio Bond Fund II 8.202

Puerto Rico GNMA & US Govmt. Target Maturity Fund 8.108

P.R. Mortgage-Backed & US Govmt. Securities Fund 6.161

Puerto Rico Fixed Income Fund 3.637

Puerto Rico Fixed Income Fund II 4.267

Puerto Rico Fixed Income Fund III 4.047

Puerto Rico Fixed Income Fund IV 5.204

Puerto Rico Fixed Income Fund V 4.648

Puerto Rico Fixed Income Fund VI 5.549

Think back Mayaguez, Puerto Rico investors and remember what they were telling you last year as the market started to decline. These advisors are only looking for investors to swap out Puerto Rico closed-end bond funds and Puerto Rico bond investments with other investors who have threatened to sue (and rightfully so) for the misrepresentations, unsuitable recommendations, the use of margin or non-purpose loans to buy the bond funds, and/or excessive concentration of their retirement nest eggs in junk bonds.

Have you suffered losses in a Puerto Rico closed-end bond fund investment? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. We have associated with an attorney nearby Mayaguez, Puerto Rico, namely Lcdo. Julio Cayere-Quidgley, who will meet with you and discuss your case at no charge. Mr. Pearce and Mr. Cayere are accepting clients with valid claims against UBS Puerto Rico, Santander Securities and Popular Securities for misrepresentations, overconcentration and/or unsuitable recommendations of its bond funds.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 33 years, Attorney Robert Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. Attorney Adam Kara-Lopez habla español. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call [phone], or email Mr. Pearce at [email protected] for answers to any of your questions about this blog post and/or any related matter.

[floridasecuritiesattorney]

ROBERT RONALD LIGGERO FINED AND SUSPENDED BY FINRA FOR SIGNING CUSTOMERS' NAMES ON IRA DOCUMENTS

Robert Ronald Liggero, a former broker at Jacksonville, Florida based Bull and Bear Brokerage Services, Inc., submitted a Letter of Acceptance, Waiver and Consent in which he consented to the described sanctions and to the entry of the Financial Industry Regulatory Authority's (FINRA) findings that he signed customers' names on documents related to the opening of IRA accounts without the customers' knowledge or consent. Mr. Liggero, of Atlantic Beach, Florida, was fined $5,000 and suspended from association with any FINRA member in any capacity for 20 business days. The suspension is in effect from May 20, 2013 through June 17, 2013.

Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and implement a reasonable supervisory system, they may be liable to investors for damages flowing from the misconduct. Therefore, investors who have suffered damages due to prohibited activity such as unauthorized and/or fraudulent signatures can bring forth claims to recover losses against broker-dealers like Bull and Bear Brokerage Services.

Have you suffered losses in your Bull and Bear Brokerage Services, Inc. account due to unauthorized activities or other misconduct by your broker? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Bull and Bear Brokerage Services, Inc. stockbrokers who may have engaged in misconduct and caused investors losses.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call [phone], or email Mr. Pearce at [email protected] for answers to any of your questions about this blog post and/or any related matter.

[floridasecuritiesattorney]

BAYAMON, PUERTO RICO BOND INVESTORS WILL SOON OWN JUNK BONDS

We last wrote about UBS Puerto Rico, Santander Securities and Popular Securities brokers recommending that their Bayamon, Puerto Rico clients get back into the Puerto Rico bond market and we warned you against doing so. We hope you listened because yesterday the Fitch Ratings agency said it may soon strip the heavily indebted Puerto Rico of its investment grade credit rating. Fitch Ratings threatened to tag the U.S. territory with junk bond status. Fitch Ratings said it had placed Puerto Rico's BBB- General Obligation bond rating on negative watch, meaning it was considering a further reduction in the ratings to junk bond status. Undoubtedly, Puerto Rico bond prices will continue to fall, interest rates will continue to rise and the cost of issuing new debt in Puerto Rico will rise as well.

None of this looks good for Bayamon, Puerto Rico bond investors because the Puerto Rican economy, where interest rates have risen sharply in the last 3 months amid worries about its finances, appears to be tumbling back into recession. The additional financing costs will only accelerate the economic decline.

For example, the cost to insure Puerto Rico debt against default has soared as measured by the credit default swaps market. A contract to insure 100 million of Puerto Rico bonds for 5 years is just below its peak last month of 799 basis points that including the 20.4% or $20.4 million in upfront costs to insure $100 million of Puerto Rico's bonds.

The negative ratings were not limited to Puerto Rico's General Obligation bonds but also attached to the Puerto Rico building authority government facilities revenue bonds, the Puerto Rico Aqueduct and Sewer us Authority bonds and debt issued by the Employees Retirement System of the Commonwealth of Puerto Rico.

We can clearly see a market decline in the prices for the individual Puerto Rico bonds. However, and perhaps it's because UBS Puerto Rico wants to hide the bad news, we cannot see the immediate effect of the lower ratings on the prices of the UBS Puerto Rico Closed-End Bond Funds. UBS Puerto Rico has not published the most recent valuation of the funds. The last reported valuation on the UBS Puerto Rico website was November 6, 2013 as follows:

Name of the Fund - NAV

Tax-Free Puerto Rico Fund   5.189

Tax-Free Puerto Rico Fund II   4.614

Tax-Free Puerto Rico Target Maturity Fund   4.432

Puerto Rico AAA Portfolio Target Maturity Fund   7.779

Puerto Rico AAA Portfolio Bond Fund   7.291

Puerto Rico AAA Portfolio Bond Fund II   8.202

Puerto Rico GNMA & US Govmt. Target Maturity Fund   8.108

P.R. Mortgage-Backed & US Govmt. Securities Fund   6.161

Puerto Rico Fixed Income Fund   3.637

Puerto Rico Fixed Income Fund II   4.267

Puerto Rico Fixed Income Fund III   4.047

Puerto Rico Fixed Income Fund IV   5.204

Puerto Rico Fixed Income Fund V   4.648

Puerto Rico Fixed Income Fund VI   5.549

Think back Bayamon, Puerto Rico investors and remember what they were telling you last year as the market started to decline. These advisors are only looking for investors to swap out Puerto Rico closed-end bond funds and Puerto Rico bond investments with other investors who have threatened to sue (and rightfully so) for the misrepresentations, unsuitable recommendations, the use of margin or non-purpose loans to buy the bond funds, and/or excessive concentration of their retirement nest eggs in junk bonds.

Have you suffered losses in a Puerto Rico closed-end bond fund investment? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. We have associated with an attorney nearby Bayamon, Puerto Rico, namely Lcdo. Julio Cayere-Quidgley, who will meet with you and discuss your case at no charge. Mr. Pearce and Mr. Cayere are accepting clients with valid claims against UBS Puerto Rico, Santander Securities and Popular Securities for misrepresentations, overconcentration and/or unsuitable recommendations of its bond funds.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 33 years, Attorney Robert Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. Attorney Adam Kara-Lopez habla español. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website,www.secatty.com, post a comment, call [phone], or email Mr. Pearce [email protected] for answers to any of your questions about this blog post and/or any related matter.

[floridasecuritiesattorney]

SEC SWEEPS THE MARKET FOR RULE 105 REGULATION M VIOLATIONS

The Securities and Exchange Commission (SEC) has a task force that is sweeping the market for Rule 105 Regulation M (Rule 105) violations. Rule 105 makes it unlawful for a person to purchase equity securities from an underwriter, broker, or dealer participating in a public offering if that person sold short the security that is the subject of the offering during the restricted period defined in the rule, absent an exception. Rule 105 defines the restricted period as the shorter of the period: (1) beginning five business days prior to the pricing of the offered securities and ending with such pricing; or (2) beginning with the initial filing of such registration statement or notification on Form 1-A or Form 1-E and ending with the pricing. The SEC adopted Rule 105 to prevent potentially manipulative activity. Also, Rule 105 is a prophylactic. Therefore, its provisions apply regardless of the short seller's intent.

The latest victim to be sanctioned in the SEC sweep is Chicago, Illinois based UBS O'Connor, LLC. UBS O'Connor allegedly violated Rule 105 sixteen times between January 2009 and March 2011 in connection with short sales it executed within the Rule 105 restricted period and subsequent purchase of the securities in firm commitment public offerings. UBS O'Connor consented to the entry of the Order in anticipation of the institution of proceedings by submitting an Offer of Settlement, which the Commission has determined to accept. UBS O'Connor was ordered to cease-and-desist, pay disgorgement in the amount of $3,787,590, prejudgment interest totaling $369,766, and a civil penalty of $1,140,000 to the United States Treasury.

Robert Wayne Pearce, a former SEC Enforcement Attorney, has litigated SEC actions for over 33 years, including, but not limited to, Regulation M, section 16(b) short-swing profits, insider trading, stock market manipulation, and other alleged violations of the Federal securities laws. If you have been contacted by the SEC and believe that you may be subject to an investigation involving a Rule 105 Regulation M violation or any other SEC rule, call Mr. Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce defends companies and individuals who may be the subject of an SEC investigation or enforcement action regarding their alleged involvement in securities laws violations.

This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 33 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to representing investors and financial industry professionals throughout the United States and internationally! Please visit our website,  www.secatty.com post a comment, call [phone], or email Mr. Pearce at [email protected] for answers to any of your questions about this blog post and/or any related matter.

[floridasecuritiesattorney]

JONATHAN GORDON SORENSEN PERMANENTLY BARRED BY FINRA FOR ALLEGED CONVERSION AND MISUSE OF INVESTOR FUNDS

Jonathan Gordon Sorensen, a former broker at Jackson, Mississippi based Coker & Palmer, Inc., submitted a Letter of Acceptance, Waiver and Consent in which he consented to the described sanction and to the entry of the Financial Industry Regulatory Authority's (FINRA) findings that he failed to appear for a FINRA on-the-record interview and, subsequently through his attorney, informed FINRA that he would not appear for an on-the-record interview. The findings stated that Mr. Sorensen's appearance was requested as part of an investigation into his management of a limited partnership investment fund while associated with his member firm and whether he had converted and/or misused investor funds and falsified documents in connection with his management of the fund. Mr. Sorensen, of Maitland, Florida, was barred from association with any FINRA member in any capacity.

Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and implement a reasonable supervisory system, they may be liable to investors for damages flowing from the misconduct. Therefore, investors who may have suffered damages due to Mr. Sorensen's alleged conversion and misuse of funds may bring forth claims to recover losses against Coker & Palmer. Have you suffered losses in your Coker & Palmer, Inc. account due to broker misconduct? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Mr. Sorensen and Coker & Palmer, Inc. whose stockbrokers may have engaged in misconduct and caused investors losses.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call [phone], or email Mr. Pearce at [email protected] for answers to any of your questions about this blog post and/or any related matter.

[floridasecuritiesattorney]

PONCE, PUERTO RICO BOND INVESTORS WILL SOON OWN JUNK BONDS

We last wrote about UBS Puerto Rico, Santander Securities and Popular Securities brokers recommending that their Ponce, Puerto Rico clients get back into the Puerto Rico bond market and we warned you against doing so. We hope you listened because yesterday the Fitch Ratings agency said it may soon strip the heavily indebted Puerto Rico of its investment grade credit rating. Fitch Ratings threatened to tag the U.S. territory with junk bond status. Fitch Ratings said it had placed Puerto Rico's BBB- General Obligation bond rating on negative watch, meaning it was considering a further reduction in the ratings to junk bond status. Undoubtedly, Puerto Rico bond prices will continue to fall, interest rates will continue to rise and the cost of issuing new debt in Puerto Rico will rise as well.

None of this looks good for Ponce, Puerto Rico bond investors because the Puerto Rican economy, where interest rates have risen sharply in the last 3 months amid worries about its finances, appears to be tumbling back into recession. The additional financing costs will only accelerate the economic decline.

For example, the cost to insure Puerto Rico debt against default has soared as measured by the credit default swaps market. A contract to insure 100 million of Puerto Rico bonds for 5 years is just below its peak last month of 799 basis points that including the 20.4% or $20.4 million in upfront costs to insure $100 million of Puerto Rico's bonds.

The negative ratings were not limited to Puerto Rico's General Obligation bonds but also attached to the Puerto Rico building authority government facilities revenue bonds, the Puerto Rico Aqueduct and Sewer us Authority bonds and debt issued by the Employees Retirement System of the Commonwealth of Puerto Rico.

We can clearly see a market decline in the prices for the individual Puerto Rico bonds. However, and perhaps it's because UBS Puerto Rico wants to hide the bad news, we cannot see the immediate effect of the lower ratings on the prices of the UBS Puerto Rico Closed-End Bond Funds. UBS Puerto Rico has not published the most recent valuation of the funds. The last reported valuation on the UBS Puerto Rico website was November 6, 2013 as follows:

Name of the Fund - NAV

Tax-Free Puerto Rico Fund 5.189

Tax-Free Puerto Rico Fund II 4.614

Tax-Free Puerto Rico Target Maturity Fund 4.432

Puerto Rico AAA Portfolio Target Maturity Fund 7.779

Puerto Rico AAA Portfolio Bond Fund 7.291

Puerto Rico AAA Portfolio Bond Fund II 8.202

Puerto Rico GNMA & US Govmt. Target Maturity Fund 8.108

P.R. Mortgage-Backed & US Govmt. Securities Fund 6.161

Puerto Rico Fixed Income Fund 3.637

Puerto Rico Fixed Income Fund II 4.267

Puerto Rico Fixed Income Fund III 4.047

Puerto Rico Fixed Income Fund IV 5.204

Puerto Rico Fixed Income Fund V 4.648

Puerto Rico Fixed Income Fund VI 5.549

Think back Ponce, Puerto Rico investors and remember what they were telling you last year as the market started to decline. These advisors are only looking for investors to swap out Puerto Rico closed-end bond funds and Puerto Rico bond investments with other investors who have threatened to sue (and rightfully so) for the misrepresentations, unsuitable recommendations, the use of margin or non-purpose loans to buy the bond funds, and/or excessive concentration of their retirement nest eggs in junk bonds.

Have you suffered losses in a Puerto Rico closed-end bond fund investment? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. We have associated with an attorney nearby Ponce, Puerto Rico, namely Lcdo. Julio Cayere-Quidgley, who will meet with you and discuss your case at no charge. Mr. Pearce and Mr. Cayere are accepting clients with valid claims against UBS Puerto Rico, Santander Securities and Popular Securities for misrepresentations, overconcentration and/or unsuitable recommendations of its bond funds.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 33 years, Attorney Robert Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. Attorney Adam Kara-Lopez habla español. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website,www.secatty.com, post a comment, call [phone], or email Mr. Pearce [email protected] for answers to any of your questions about this blog post and/or any related matter.

[floridasecuritiesattorney]

FINRA SUSPENDS MICHAEL ANTONIO ZURITA FOR SIX MONTHS FOR FAILURE TO ESTABLISH AND IMPLEMENT SUPERVISORY SYSTEM

Michael Antonio Zurita, a former broker at Orlando, Florida based Orion Trading, LLC, submitted a Letter of Acceptance, Waiver and Consent in which Mr. Zurita consented to the described sanction and to the entry of the Financial Industry Regulatory Authority's (FINRA) findings that he failed to reasonably supervise the sale of unregistered shares of low-priced stock of issuers on behalf of customers. One of the firm's registered representatives effected the sale of the unregistered stocks and failed to conduct a searching inquiry to ensure the sales did not violate Section 5 of the Securities Act of 1933. The representative completed deposited securities request (DSR) forms and submitted them to Mr. Zurita for review. Mr. Zurita's review process primarily involved ensuring the forms had been completed in full, but he failed to ensure that the information was accurate, consistent and did not raise any red flags. Mr. Zurita relied on the representative to obtain all relevant information and documentation and determine on his own that the shares were registered or exempt from registration and, according to FINRA, he failed to ensure the representative complied with the requirements of Section 5 and failed to reasonably supervise the sale of unregistered securities.

In FINRA's findings, the Regulator stated that as the President and CCO of his member firm, Mr. Zurita was responsible for developing and maintaining an adequate supervisory system as well as the firm's written supervisory procedures (WSPs) to ensure compliance with applicable laws. Mr. Zurita failed to have procedures in place to prevent the sale of unregistered securities not exempt from registration and that would have identified which individuals were to perform each step of the review and approval process. The findings also stated that Mr. Zurita failed to establish an adequate supervisory system to ensure that unregistered securities were freely tradable. The system was inadequate because it simply required that a principal ensure a DSR form was completed in full, rather than investigate each transaction to determine the existence of any red flags.

Thus, Mr. Zurita, of Orlando, Florida, was suspended from association with any FINRA member in any principal capacity for six months for failure to establish and implement a supervisory system. The suspension is in effect from April 15, 2013, through October 14, 2013.

Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and implement a reasonable supervisory system, they may be liable to investors for damages flowing from the misconduct. Therefore, investors who have suffered damages due to inadequate supervisory systems can bring forth claims to recover losses against broker-dealers such as Orion Trading. Have you suffered losses in your Orion Trading, LLC account due to stockbroker misconduct and/or unsupervised activities? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Mr. Zurita and Orion Trading, LLC whose stockbrokers may have engaged in misconduct and caused investors losses.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call [phone], or email Mr. Pearce at [email protected] for answers to any of your questions about this blog post and/or any related matter.

[floridasecuritiesattorney]

WOODBURY FINANCIAL SERVICES INVESTOR ALERT - WATCH OUT FOR CHURNING AND UNSUITABLE INVESTMENTS!

Woodbury Financial Services, a subsidiary of the AIG Insurance Company, is an independent broker-dealer headquartered in Oakdale, Minnesota and reportedly has over 2300 registered representatives across the United States operating in one or two person offices. Its branch offices are largely comprised of small producers earning commissions at higher pay out rates than the major full-service brokerage firms, a recipe for disaster when it comes to protecting investors from churning and unsuitable investments and unsuitable investment strategies!

Churning is a violation of Federal and state securities statutes, industry rules and regulations and a breach of fiduciary duty to investors under common law. Churning can occur if a Woodbury Financial Services broker exercises control over the investment decisions in your account and purchases stocks or recommends that you purchase and sell stocks for his benefit, i.e., commissions not yours! These trades rarely, if ever, make the investor any money. In fact, the additional commissions raise the break-even point for the investor to the level where the stock must perform at an extremely high level in order for the investor to make any money.

In every broker-investor relationship, the broker must assess what the investor's goals are as well as his or her risk tolerance. This assessment is based on a number of key factors, including the investor's stated objectives, risk tolerance, financial condition and tax status. It is the broker's responsibility to only pursue investments suitable for that investor based on these factors. A stockbroker is obligated to only recommend suitable investments and investment strategies. If a Woodbury Financial Services broker recommends unsuitable investments and unsuitable investment strategies, it can leave you vulnerable to unnecessary risk and losses.

Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors' rights and interests as their lowest priority.

The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor's compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these independent broker-dealers.

There is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to excessive purchases and sales of securities and securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. Generally, no manager is onsite to detect the placement of inaccurate information about a client's investment objectives and financial condition to document the suitability of a particular investment recommendation. There is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, there may be only one compliance audit visit per year at many of these offices. These independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms.

Have you suffered losses in your Woodbury Financial Services brokerage account? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Woodbury Financial Services stockbrokers who engaged in churning, recommended unsuitable investments and unsuitable investment strategies that caused investors losses.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call [phone], or email Mr. Pearce at [email protected] for answers to any of your questions about this blog post and/or any related matter.