Prenuptial Agreements: Put Everything in Writing

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A New York State appellate court, in a surprise move, recently rejected a prenuptial agreement. While the family and divorce laws vary from state to state, prenuptial agreements tend to be respected and upheld in most court proceedings when they are properly prepared and executed.

A recent Wall Street Journal article on the topic titled “Shoring Up Your Prenup” contains important reminders when preparing a prenuptial agreement in advance of a wedding:

  • Put everything in writing
  • Give your fiancee plenty of notice
  • Don’t try to keep it all
  • Don’t leave anything out

A prenuptial agreement, entered into before the marriage date, gives each party the comfort of knowing that their wishes are legally binding.

Reaching agreement as to how assets, liabilities, and family obligations will be handled makes it easier for the parties to focus on achieving a mutually supportive marital relationship.

Situations that may cause a prenuptial agreement to be questioned include an execution date very close to the wedding date, or competing claims of verbal agreements not reflected in the legal document. Failure to include significant assets in a prenup also can potentially cause trouble, particularly when there is a disproportionate level of wealth between the two parties.

A family law attorney who is experienced in prenuptial agreements can help a couple avoid common pitfalls that may cause trouble later in the marriage if there is a dispute over asset allocation or care of children.

Click on the link to read our Fact Sheet, Prenuptial Agreements Protect a Second Marriage.

Contact a Florida Prenuptial Agreement Attorney

Every family is different. Fort Lauderdale divorce attorney Marcy Resnik understands the personal and sensitive needs of a person contemplating a second marriage. Contact her to discuss your case.

SEC Charges George Elia of Oakland Park with Fraud

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The Securities and Exchange Commission charged that a South Florida investment manager defrauded investors by making false claims about his investment track record and providing bogus account statements that reflected fictitious profits.

In the complaint filed in the U.S. District Court for the Southern District of Florida, the SEC alleges that since 2005, George Elia and International Consultants & Investment Group Ltd. Corp., pulled in at least $11 million from investors by falsely claiming annual returns as high as 26%, and that Elia transferred more than $2.5 million of investor funds to two entities he controlled, Elia Realty, Inc., and 212 Entertainment Club, Inc.

Elia, age 67, and until recently a resident of Oakland Park, Florida, told investors that he had extensive experience in day trading stocks and exchange-traded funds, but his trading resulted in losses or only marginal gains, and the quarterly account statements he sent to clients overstated their returns, the SEC alleged.

According to the SEC’s complaint, Elia typically met and pitched prospective investors over meals at expensive restaurants in and around Fort Lauderdale. The SEC said his clients typically came to him through word-of-mouth referrals among friends and relatives. A significant number of the victims of his scheme were members of the gay community in Wilton Manors, Florida.

“Elia’s blatant fraud and cruel deceptions have wrecked the lives of investors and their families,” said Eric I. Bustillo, Regional Director of the SEC’s Miami Regional Office. “This is a sad lesson that investors must always be skeptical of claims of high and steady investment returns, even when the manager is recommended by trusted friends or members of one’s own community.”

In a parallel criminal case, the U.S. Attorney for the Southern District of Florida announced that Elia was indicted on April 5 on one count of wire fraud.

The SEC alleges that Elia and ICIG operated through an informal “Investor Funding Club” and through funds including Vision Equities Fund II, LLC and Vision Equities Fund IV, LLC. It alleges that Elia sent one investor a statement for the first three quarters of 2009, showing returns of 3.48%, 3.48%, and 3.52% respectively. The SEC alleges the statement was false and misleading because the returns exceeded Elia’s trading gains for the period. In at least one instance, the SEC alleges Elia reassured an investor by showing him falsified statements that grossly overstated account balances.

The SEC’s complaint charges that Elia and ICIG violated antifraud provisions of U.S. securities laws and that Elia aided and abetted violations by the firms. The SEC is seeking permanent injunctions against Elia and ICIG, disgorgement of ill-gotten gains plus pre-judgment interest, and civil penalties. The complaint also named Elia Realty, Inc. and 212 Club Entertainment, Inc. as relief defendants.

Contact Fort Lauderdale securities litigation attorney Howard N. Kahn, Esq. if you or someone you know did business with George Elia. In addition to being an experienced securities litigation attorney, Mr. Kahn also serves as a FINRA arbitrator for individual investors, brokers, and brokerage firms. You can reach him at 954-321-0176 or online.

Margate Commissioner David McLean Suspended

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Florida Governor Rick Scott suspended Margate Commissioner David McLean from public office, effective today.

McLean allegedly used his influence in exchange for payment to assist a business owner in applying for an occupational license, among other activities.  Cooperating Witnesses in the case included a commercial property owner of a Margate strip shopping center and a general construction contractor.

McLean appeared in court to plead not guilty on Wednesday, and surrendered to the FBI.

The Governor’s Executive Order of Suspension directs that David McLean is prohibited from performing any official act, duty, or function of public office; from receiving any pay or allowance; and from being entitled to any of the emoluments or privileges of public office during the period of suspension, which period shall be from today, until a further Executive Order is issued, or as otherwise provided by law.

Federal bribery charges brought against Mr. McLean are a result of isolated incidents involving one elected official, according to the City’s website. No employees of the City and no other elected officials are involved. No city, state, or federal funds were misappropriated.

McLean is one of five City Commissioners who are elected “at large” by Margate voters. The Commissioners also serve on the Margate Community Redevelopment Agency (“CRA”) Board. McLean was first elected in 2004, and then re-elected in 2008 and 2012. He was elected as Vice Mayor of Margate from March 16, 2011 and served in that capacity until November 21, 2012.

The Fort Lauderdale Law Firm of  Kahn & Resnik, P.L.

The Florida lawyers at Kahn & Resnik, P.L. are available to service your legal needs.

Our concierge approach to the practice of law reflects our philosophy of personalized and confidential attention. When you retain an attorney at Kahn & Resnik, P.L., we work efficiently and effectively to help you achieve your business and personal objectives.

We can assist you in legal matters relating to commercial litigation, divorce, disability law, real estate litigation, securities litigation, and corporate transactions.

We serve business owners, professionals and individual clients across Florida, including Miami, Fort Lauderdale, Boca Raton, West Palm Beach, Naples, Orlando, Tampa, Daytona Beach, Jacksonville, Tallahassee, and other cities throughout the state. Contact Howard N. Kahn, Esq. at 954-321-0176 or online.

SEC Approves Social Media for Financial Disclosure

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Public companies can now use social media outlets like Facebook and Twitter to announce key information in compliance with Regulation Fair Disclosure (Regulation FD), says the SEC, as long as investors are notified of company communication plans.

Regulation FD applies to social media and other emerging means of communication used by public companies the same way it applies to company websites, according to the SEC. The announcement clarifies that company communications made through social media channels could constitute selective disclosures and, therefore, require careful Regulation FD analysis.

“One set of shareholders should not be able to get a jump on other shareholders just because the company is selectively disclosing important information,” said George Canellos, Acting Director of the SEC’s Division of Enforcement. “Most social media are perfectly suitable methods for communicating with investors, but not if the access is restricted or if investors don’t know that’s where they need to turn to get the latest news.”

Regulation FD requires companies to distribute material information in a manner reasonably designed to get that information out to the general public broadly and non-exclusively. It is intended to ensure that all investors have the ability to gain access to material information at the same time.

The SEC’s report of investigation stems from an inquiry the Division of Enforcement launched into a post by Netflix CEO Reed Hastings on his personal Facebook page stating that Netflix’s monthly online viewing had exceeded one billion hours for the first time. Netflix did not report this information to investors through a press release or Form 8-K filing, and a subsequent company press release later that day did not include this information. Neither Hastings nor Netflix had previously used his Facebook page to announce company metrics, and they had never before taken steps to alert investors that Hastings’ personal Facebook page might be used as a medium for communicating information about Netflix. Netflix’s stock price had begun rising before the posting, and increased from $70.45 at the time of the Facebook post to $81.72 at the close of the following trading day.

The SEC did not initiate an enforcement action or allege wrongdoing by Hastings or Netflix. Recognizing that there has been market uncertainty about the application of Regulation FD to social media, the SEC issued the report of investigation pursuant to Section 21(a) of the Securities Exchange Act of 1934.

The report of investigation explains that although every case must be evaluated on its own facts, disclosure of material, nonpublic information on the personal social media site of an individual corporate officer — without advance notice to investors that the site may be used for this purpose — is unlikely to qualify as an acceptable method of disclosure under the securities laws. Personal social media sites of individuals employed by a public company would not ordinarily be assumed to be channels through which the company would disclose material corporate information.

Fort Lauderdale Securities Litigation and Arbitration Attorney

Contact Fort Lauderdale securities litigation and arbitration attorney Howard N. Kahn, Esq. if you or someone you know has a securities or broker dispute. He is an experienced securities litigation and arbitration attorney, and is available to assist individual investors, brokers, and brokerage firms involved in securities matters. You can reach him at 954-321-0176 or online.

FINRA Fines David Lerner Associates $2.3 Million

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David Lerner Associates, Inc. (DLA) of Long Island was fined $2.3 million by FINRA, the Financial Industry Regulatory Authority, for selling municipal bonds and collateralized mortgage obligations (CMOs) to retail customers at unfair prices, and for supervisory violations. In addition to providing restitution to customers, the firm’s head trader, William Mason is suspended and fined $200,000. The ruling resolves charges brought by FINRA’s Department of Enforcement in May 2010.

The panel found that from January 2005 through January 2007, DLA and Mason charged retail customers excessive markups in more than 1,500 municipal bond transactions and charged excessive markups in more than 1,700 CMO transactions from January 2005 through August 2007. FINRA rules require that the amount of a markup must be fair and reasonable, taking into account all relevant factors and circumstances, including the type of security involved, the availability of the security in the market and the amount of money involved in a transaction.

The hearing panel decision notes that DLA’s municipal bond and CMO trades reflected a pattern of intentional excessive markups. The municipal bonds and CMOs in the transactions were all rated investment grade or above, and were readily available in the market at significantly lower prices than DLA charged.

The panel noted that DLA charged markups on the municipal bonds ranging from 3.01 percent to 5.78 percent and charged markups on the CMOs ranging from 4.02 percent to 12.39 percent. Regardless of whether a DLA customer bought as much as $225,000 or as little as $8,000 of a CMO, the price was marked up “without consideration for the amount of money involved in the transaction.” The hearing panel concluded that as a result of the unfair markups, the customers received lower yields than they would have received if the markups had been fair and reasonable.

The panel also found that DLA’s supervisory system for its municipal bonds and CMOs was inadequate on several levels. DLA failed to establish and maintain adequate procedures to monitor the fairness of pricing for municipal bonds and CMOs, and failed to have adequate procedures in place to ensure that it recorded the time that the municipal bond orders were received from customers. DLA also failed to record the order receipt time of municipal order tickets.

In determining the sanctions, the panel took into consideration DLA’s relevant disciplinary history. Despite having received a Letter of Caution raising FINRA’s concerns about DLA’s markup practices after a 2004 exam, and after having received a Wells Notices concerning the matter in July 2009, DLA continued its unfair pricing practice. The panel’s decision notes that “in keeping with their unwillingness to accept responsibility, DLA has not taken any corrective measures to improve their fixed income markups policies and practices.”

Unless the hearing panel’s decision is appealed to FINRA’s National Adjudicatory Council (NAC), or is called for review by the NAC, the hearing panel’s decision becomes final after 45 days.

Contact Fort Lauderdale securities litigation attorney Howard N. Kahn, Esq. if you or someone you know has a securities dispute. In addition to being an experienced securities litigation attorney, Mr. Kahn also serves as a FINRA arbitrator for individual investors, brokers, and brokerage firms. You can reach him at 954-321-0176 or online.

Schwab Reviews Risky Exchange-Traded Products

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Discount brokerage Charles Schwab is reviewing whether to add a warning when a customer is about to trade certain exchange-traded products, according to a Reuters story titled “Schwab considers warnings on controversial exchange-traded products.” Schwab’s position indicates the need for retail investors to be cautious when considering an investment in “esoteric” securities.

According to the Reuters report:

“The move follows the sudden plunge in an exchange-traded note called VelocityShares Daily 2X VIX Short-Term ETN, or TVIX, which lost 60 percent of its value last week.

‘It is under review, primarily because of the risk we saw in things like the TVIX. No one knew that those kind of things were going to happen,’ said Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research in Austin, Texas.

The warning would be similar to one that pops up when investors trade options related to volatility, which are more complex than stocks.”

Contact Fort Lauderdale securities litigation attorney Howard N. Kahn, Esq. if you or someone you know has a securities dispute. In addition to being an experienced securities litigation attorney, Mr. Kahn also serves as a FINRA arbitrator for individual investors, brokers, and brokerage firms. You can reach him at 954-321-0176 or online.

Fort Lauderdale Investment Advisor Arrested in Las Vegas

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George Elia was arrested by the FBI on a criminal complaint alleging that the defendant committed wire fraud. If convicted, Elia faces a maximum of twenty years in prison, to be followed by three years of supervised release, and a potential fine. Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced the arrest of defendant Elia.

According to the criminal complaint, starting in 2000, Elia owned and operated various companies, including International Consultants, based out of Fort Lauderdale, Florida. From at least 2005 through 2011, Elia claimed to invest in publicly-traded stocks on behalf of investors. As a result of these claims, investors gave Elia money to invest in common stocks that investors believed were trading on the New York Stock Exchange, NASDAQ, and others.

The complaint describes how, in August 2010, Elia met with an investor at the Ritz Carlton in Fort Lauderdale, Florida. At this meeting, Elia showed the investor a three-ring binder, which purported to contain Fidelity account statements and a summary sheet for Elia’s various investment accounts. Elia assured the investor that the investor would recover money in about a year through Elia’s investments. The investor agreed to wire money to Elia. During the meeting, the investor used a telephone to photograph the Fidelity statements that Elia showed the investor.

FBI agents reviewed the Fidelity records for Elia’s companies, which revealed that the actual balances in the Fidelity brokerage accounts that Elia controlled did not match the balances on the statements that Elia showed to the investor in August 2010. According to Fidelity records, the total value of the trading accounts for the respective period was approximately $111,432.27, not the $8,241,923.38 that was set out in the documents that Elia showed the investor.

By the summer of 2011, Elia stopped sending investors quarterly statements, returning calls and emails to investors, and paying regular payments to investors. Elia was arrested in Las Vegas on March 27, 2012, after arriving on a flight from London.

A criminal complaint is only an accusation and a defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

Contact Fort Lauderdale securities litigation attorney Howard N. Kahn, Esq. if you or someone you know has a securities dispute. In addition to being an experienced securities litigation attorney, Mr. Kahn also serves as a FINRA arbitrator for individual investors, brokers, and brokerage firms. You can reach him at 954-321-0176 or online.

MF Global General Counsel to Testify

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A $1.6 billion shortfall in customer funds at MF Global Holdings Ltd. is the subject of a fifth investigatory hearing by the House Financial Services Committee scheduled for Wednesday, March 28th.

Laurie Ferber, MF Global’s general counsel, is expected to break her silence on the situation. “My impression throughout the afternoon and late into the evening was that the apparent deficit was a reconciliation issue and did not represent an actual shortfall in customer funds,” she plans to tell the oversight panel, according to the New York Times.

Edith O’Brien, an assistant treasurer in MF Global’s Chicago office, will also appear before the House panel but is expected to invoke her constitutional right against self-incrimination. Other expected witnesses include MF Global financial executives Christine Serwinski and Henri Steenkamp.

Congressional investigators published an email recently indicating that MF Global CEO Jon S. Corzine gave “direct instructions” to move $200 million from an MF Global account containing customer funds three days before the securities firm collapsed, despite his claims to the contrary.

At issue is MF Global’s alleged violation of rules prohibiting the mingling of customer and firm money.

Contact Fort Lauderdale securities litigation attorney Howard N. Kahn, Esq. if you or someone you know invested funds at MF Global. In addition to being an experienced securities litigation attorney, Mr. Kahn also serves as a FINRA arbitrator for individual investors, brokers, and brokerage firms. You can reach him at 954-321-0176 or online.

CFTC Studies High Frequency Trading

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The Commodity Futures Trading Commission (CFTC) will hold a meeting of its Technology Advisory Committee on Thursday, March 29, 2012, in Washington, DC.

The meeting will focus on three significant issues facing the futures and swaps industries as the Commission continues to finalize rules under the Dodd-Frank Act:

(1) automated and high frequency trading (HFT): exchange oversight and definitions;
(2) final recommendations from the Subcommittee on Data Standardization; and
(3) credit limit checks: market structure and technology issues.

This meeting serves as the inaugural meeting of the new Subcommittee on Automated and High Frequency Trading, which will focus on developing recommendations regarding the definition of high frequency trading (“HFT”) in the context of the larger universe of automated trading.

Read the full press release here, including details on how to participate. Audio of the meeting will be available via listen-only conference call. Additionally, a video recording of the meeting will be published through a link on the CFTC’s website.

Home Prices Increase in South Florida

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The median home sale price jumped to $235,000 in Palm Beach County in February 2013, up 27% from a median price of $185,00 for the same time period last year. Home prices in Broward County are also increasing, as shown in the chart below.

The news is especially good for sellers of upscale Palm Beach County homes, with an average sales price of $761,754 in February 2013 compared with less than half that amount – $307,806 – in February of 2012.

South Florida Home Prices

As reported by the Sun-Sentinel.

Data from Florida REALTORS® indicates the average number of days a home sits on the market is dropping, due in part to a decrease in the number of homes that are actively listed for sale.

The single family home inventory in Palm Beach County now stands at 5.8 months, down 47% from 11 months in February 2012.

All of this is good news for home sellers, who are finding a higher number of motivated home buyers. Some buyers are reportedly bringing their checkbook when they view a property, ready to put down an immediate deposit on the home of their dreams. Sellers are receiving an average of 91.4% of their original listing price on recent home sales, up from 88.4% last year.

Fort Lauderdale Foreclosure Defense Attorney

Choosing the best approach to protecting yourself and your family from a mortgage foreclosure involves many legal considerations. Contact Fort Lauderdale mortgage foreclosure attorney Marcy Resnik to discuss how you can defend your legal rights in a foreclosure. You can contact Ms. Resnik online or call her at 954-321-0176.