WJB Capital Group, Inc. Expelled by FINRA

/in /by

FINRA has expelled WJB Capital Group, a privately held broker-dealer, for misstating its financial records and for engaging in securities transactions while it was below its required net capital. Chief Executive Officer Craig A. Rothfeld was barred from the securities industry, and Chief Financial Officer Gregory S. Maleski was barred from acting in a principal capacity.

FINRA found that from 2009, when WJB Capital began to experience financial difficulties, through 2011, Rothfeld and Maleski misstated WJB’s financial position on the firm’s balance sheet.

In one example, Rothfeld and Maleski converted $9.8 million in compensation previously paid to 28 employees into forgivable loans. As a result, the firm also failed to provide for the appropriate payment of taxes. Had WJB appropriately recorded these loans and tax obligations, its balance sheet would have reflected substantial losses in addition to those that it was already experiencing.

In addition, Rothfeld and Maleski misclassified certain items as allowable for net capital purposes; as a result, at various times in 2011, WJB engaged in securities transactions when it was below its minimum required net capital.

For example, the firm improperly included receivables related to “non-deal road-shows” when they were not allowable assets under the net capital rule. As a result of the misclassification of these receivables, WJB misstated its FOCUS report and net capital calculations by at least $1 million on a monthly basis for approximately two years. The firm also misclassified a $1.5 million loan it received from its clearing firm as an allowable asset for net capital. Rothfeld, Maleski and WJB also failed to reasonably supervise the firm’s financial and accounting functions.

Brad Bennett, FINRA Executive Vice President and Chief of Enforcement, said, “Both WJB’s CEO and CFO hid the precarious financial condition of the firm, misstating the FOCUS reports and net capital calculations by as much as $4.4 million per month over a two-year period. The firm’s supervision and accounting were seriously flawed.”

In settling this matter, WJB, Rothfeld and Maleski neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.

Fort Lauderdale Securities Litigation Attorney and FINRA Arbitrator

Contact Fort Lauderdale securities litigation attorney Howard N. Kahn, Esq. if you or someone you know has a securities or broker 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.

Polls Open Until 7PM for Florida Primaries

/in /by

Voters can cast their ballots until 7:00 p.m. tonight at their assigned polling location. Candidates for elected office vary by district, and can include judges, school board members, sheriff, and property appraiser. The successful Republican contender for a U.S. Senate seat will face off against incumbent Florida Senator Bill Nelson (D) in the Fall elections.

Listed below are links to the South Florida election websites by county.

Broward County Supervisor of Elections
www.browardsoe.org/

Miami-Dade County Elections
http://www.miamidade.gov/elections/

Palm Beach County Supervisor of Elections
http://www.pbcelections.org/

Mark your calendar for Tuesday, November 6, 2012, date of the U.S. presidential election. Now is a good time to make sure that your voter registration is up-t0-date.

A Public Service Announcement of Kahn & Resnik, P.L.

Contact us online or by phone at 954-321-0176.

NASCAR Stock Fund Adviser David Dube & Peak Wealth Face SEC Charges

/in /by

Peak Wealth Opportunities LLC, a Florida-based investment fund and fund manager David W. Dube face Securities and Exchange Commission charges for failing to provide SEC examiners with records of a mutual fund advisory business that invested in NASCAR-related stocks.

Despite repeated requests by SEC examiners, Dube and Peak Wealth failed to furnish certain records to the SEC about a mutual fund they advised called the Stock Car Stock Index Fund.

According to an SEC order initiating administrative proceedings, Peak Wealth was the adviser to the Stock Car Stock Index fund from 2008 to June 2010. SEC examination staff requested records from Peak Wealth and Dube in 2010 while examining Peak Wealth’s advisory business and the operations of the fund.

The SEC further alleges that Dube and Peak Wealth:

  • Failed to make and keep certain required financial records.
  • Failed to withdraw Peak Wealth’s registration with the SEC and make other required filings.
  • Failed to provide the fund’s board of directors with information reasonably necessary to assess Peak Wealth’s advisory fees.

Simultaneously with the SEC’s examination in 2010, the fund’s board requested information from Peak Wealth and Dube as part of the fund’s required annual evaluation of its advisory agreements. Section 15(c) of the Investment Company Act of 1940, which requires the annual evaluation, also requires advisers to provide their boards with information reasonably necessary to conduct those evaluations. Despite requesting additional time to respond to the board, Peak Wealth and Dube failed to provide any of the requested documents. The board subsequently terminated Peak Wealth’s advisory agreement and liquidated the fund by returning the money to investors.

Under the relevant rules, the SEC could seek to permanently bar Dube from association with an SEC registered investment adviser or broker dealer. The SEC alleges that Peak Wealth willfully violated Sections 203A and 204 of the Advisers Act of 1940 and Rules 203A-1(b)(2), 204-1(a)(1), 204-2(a)(1), (2), (4), (5), and (6) thereunder, and Section 15(c) of the Investment Company Act of 1940. The SEC charged Dube with willfully aiding and abetting and causing Peak Wealth’s violations.

Fort Lauderdale Securities Litigation Attorney and FINRA Arbitrator

Contact Fort Lauderdale securities litigation attorney Howard N. Kahn, Esq. if you or someone you know has a securities or broker 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.

Biremis Corp. & CEO Peter Beck Barred by FINRA

/in /by

Biremis, Corp., formerly known as Swift Trade Securities USA, Inc., was recently expelled by The Financial Industry Regulatory Authority (FINRA). Biremis President and Chief Executive Officer, Peter Beck, was barred by FINRA. The disciplinary actions resulted from supervisory violations related to detecting and preventing manipulative trading activities such as “layering,” short sale violations, failure to implement an adequate anti-money laundering program, and financial, operational and numerous other securities law violations.

Thomas Gira, FINRA Executive Vice President and Head of Market Regulation, said, “In creating a business that allowed a significant volume of overseas day trading to pass through its systems on a regular basis, Biremis and Mr. Beck needed to devote the appropriate level of resources and personnel to ensure that this business was properly supervised, yet failed on both accounts. Biremis’ inadequate supervisory system resulted in the firm violating multiple rules designed to protect the integrity of the markets and to ensure that member firms adhere to the high standards required of the brokerage industry.”

FINRA found that during various periods from June 2007 to June 2010, Biremis and Mr. Beck failed to establish a supervisory system reasonably designed to achieve compliance with the applicable laws and regulations prohibiting manipulative trading activity. Among other things, Biremis’ supervisory system failed to include policies and procedures designed to detect and prevent layering on U.S. markets. Layering involves the placement of non-bona-fide orders on one side of the market in order to cause market movement that will result in the execution of an order entered on the opposite side of the market, after which the non-bona-fide orders are then canceled. Biremis also failed to establish policies and procedures reasonably designed to detect and prevent manipulative activity designed to affect the closing price of a security. As a result, Biremis failed to detect and prevent potential layering activity and potential manipulation of the closing price of equity securities on U.S. markets.

FINRA found that despite the fact Biremis’ only business was to execute transactions on behalf of day traders around the world, Biremis and Mr. Beck failed to implement an adequate anti-money laundering (AML) program to comply with the Bank Secrecy Act. Among the violations related to its AML program, Biremis failed to properly detect suspicious activities and file suspicious activity reports (SARs) when appropriate. Also, Mr. Beck appointed an unqualified and untrained individual to supervise Biremis’ AML compliance program and Biremis failed to provide adequate AML training to employees.

Biremis and Mr. Beck also violated a number of additional securities laws and rules. Biremis failed to maintain a margin system and margin accounts, and did not have policies and procedures in place related to the use of margin. The firm also failed to prepare customer reserve computations and failed to maintain a special reserve bank account for the exclusive benefit of customers. In addition, Biremis placed thousands of short sale orders, which was in violation of an emergency order issued by the SEC that temporarily banned short selling in certain securities. Also, between at least April 2008 and May 2009, Biremis improperly calculated its net capital, operating in net capital deficiency by up to $25 million. Additionally, the firm failed to maintain all required emails and instant messages over a five-year period.

In concluding this settlement, Biremis and Mr. Beck neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.

Fort Lauderdale Securities Litigation Attorney and FINRA Arbitrator

Contact Fort Lauderdale securities litigation attorney Howard N. Kahn, Esq. if you or someone you know has a securities or broker 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.

HUD Launches “Homeowner Help” for Mortgage Assistance

/in /by

“Homeowner Help” is a new public service announcement (PSA) and television ad campaign being launched by the department of U.S. Housing and Urban Development.  An accompanying  Homeowner Help website and a Mortgage Assistance Guide are additional resources to educate homeowners at risk of mortgage default learn about potential assistance from the recent $25 billion mortgage servicing settlement.

It is not entirely clear how homeowners in trouble qualify for financial assistance. “There’s no simple, one-sentence explanation,” Shaun Donovan, secretary of the Department of Housing and Urban Development, said in a recent conference call with reporters.

Mortgage assistance will vary with each homeowner’s situation and may include:

  • Mortgage payment assistance for unemployed or underemployed homeowners.
  • Principal reduction to help homeowners get into more affordable mortgages.
  • Funding to reduce or eliminate homeowners’ second lien loans.
  • Help for homeowners who are transitioning out of their homes and into more affordable  places of residence.

In April of 2012, a Federal District Court approved the landmark $25 billion agreement between the Justice Department, the Department of Housing and Urban Development, 49 state attorneys general and the nation’s five largest mortgage servicers – Ally/GMAC, Bank of America, Citi, JP Morgan Chase, and Wells Fargo – to address mortgage loan servicing and foreclosure abuses. The settlement will provide up to $25 billion in relief to borrowers and direct payments to the states and federal government. It is the largest multi-state settlement since the Tobacco Settlement in 1998.

The PSA can be viewed at www.hud.gov and www.nationalmortgagesettlement.com.

Fort Lauderdale Foreclosure Defense Attorney

If you are at risk of losing your home to mortgage foreclosure, there is action you can take. 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.

Municipal Securities Report Issued by SEC

/in /by

Enhanced disclosure requirements for municipal securities investors are suggested in a new comprehensive report issued by the Securities and Exchange Commission.

State and local governments issue municipal securities to finance a wide variety of projects that are critical to building and maintaining the nation’s infrastructure.

At the start of 2012, there were more than one million different municipal bonds outstanding totaling $3.7 trillion, with 75 percent held by individual “retail” investors.

Despite its size and importance, the municipal securities market has not been subject to the same level of regulation as other sectors of the U.S. capital markets due to broad exemptions under federal securities laws for municipal securities.

Without a statutory regime for municipal securities regulation, the SEC’s investor protection efforts in the municipal securities market have been limited. The SEC’s report discusses potential legislative changes that could help improve disclosures to investors. For instance, the report recommends that Congress consider authorizing the SEC to set baseline disclosure standards and require municipal issuers to have audited financial statements.

Other potential legislative changes recommended in the report to help improve disclosures and practices in the municipal securities market include:

  • Eliminating the availability of Securities Act and Exchange Act exemptions for conduit borrowers who are not municipal entities.
  • Authorizing the Commission to establish the form and content of financial statements for municipal issuers who issue municipal securities, and to recognize a designated private-sector body as the standard setter for generally accepted for federal securities law purposes.
  • Providing a safe harbor from private liability for forward-looking statements of repeat municipal issuers that satisfy certain conditions.
  • Permitting the Internal Revenue Service to share information with the SEC that it obtains from returns, audits, and examinations related to municipal securities offerings, particularly in instances of suspected securities fraud.
  • Providing a mechanism, through trustees or other entities, to enforce compliance with continuing disclosure agreements and other obligations of municipal issuers to protect municipal securities bondholders.

In addition to potential legislation, the SEC’s report identifies potential rulemaking by the Commission or the Municipal Securities Rulemaking Board and enhancement of best practices by the municipal securities industry.

Click on the link for the SEC Report on the Municipal Securities Market.

Fort Lauderdale Securities Litigation Attorney and FINRA Arbitrator

Contact Fort Lauderdale securities litigation attorney Howard N. Kahn, Esq. if you or someone you know has a securities or broker 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.

Federal Housing Agency Rules Against Principal Reduction

/in /by

Edward DeMarco, Acting Director of the Federal Housing Finance Agency (FHFA), provided a response today to numerous congressional inquiries as to whether the FHFA would direct Fannie Mae and Freddie Mac to implement the Home Affordable Modification Program Principal Reduction Alternative (HAMP PRA).

After extensive analysis of the revised HAMP PRA, including the determination by the Treasury Department to begin using Troubled Asset Relief Program (TARP) monies to make incentive payments to Fannie Mae and Freddie Mac, FHFA has concluded that the anticipated benefits do not outweigh the costs and risks. Given FHFA’s multiple responsibilities to conserve the assets of Fannie Mae and Freddie Mac, maximize assistance to homeowners to avoid foreclosures, and minimize the expense of such assistance to taxpayers, FHFA concluded that HAMP PRA did not clearly improve foreclosure avoidance while reducing costs to taxpayers relative to the approaches in place today.

Mr. DeMarco also previewed for Congress several housing-related initiatives to strengthen the loss mitigation and borrower assistance efforts of Fannie Mae and Freddie Mac as well as improve the operation of the housing finance market. These initiatives include:

  • New and consistent policies for lender representations and warranties
  • Alignment and simplification of the Enterprise short sales programs, and
  • Further enhancements for borrowers looking to refinance their mortgages

Fort Lauderdale Foreclosure Defense Attorney

If you are at risk of losing your home to mortgage foreclosure, there is action you can take. 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.

International Investing Issues and Risks

/in /by

Investing in any security requires careful consideration, and investor risk increases considerably with international investing. Special issues and risks when making investments overseas include:

Legal remedies. Where you purchase a security can impact whether you have, and where you can pursue, legal remedies against the foreign company or any other foreign-based entities involved in your transaction, such as a foreign broker. Even if you sue successfully in a U.S. court, you may not be able to collect on a U.S. judgment against a foreign company, entity or person. You may have to rely on legal remedies that are available in the home country, if any.

Working with a broker or investment adviser. If you are working with a broker, make sure the broker is registered with the SEC. It is against the law for a broker, foreign or domestic, to contact you and solicit your investment unless it is registered with the SEC. If you directly contact and work with a foreign broker not registered with the SEC, you may not have all the protections under the laws of the United States as would be the case if the broker were registered with the SEC.

Costs of international investments. International investing can be more expensive than investing in U.S. companies. In some countries there may be unexpected taxes, such as withholding taxes on dividends. In addition, transaction costs such as fees, broker’s commissions and taxes may be higher than in U.S. markets. You also should be aware of the potential effects of currency conversion costs on your investment. Mutual funds that invest abroad may have higher fees and expenses than funds that invest in U.S. securities, in part because of the extra expense of trading in foreign markets.

Fort Lauderdale Securities Litigation Attorney and FINRA Arbitrator

Contact Fort Lauderdale securities litigation attorney Howard N. Kahn, Esq. if you or someone you know has a securities or broker 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.

Residential Condo Boom in Sunny Isles, FL

/in /by

A major real estate redevelopment campaign is taking place on the east side of Collins Avenue, the main thoroughfare in Sunny Isles, FL. Zoning laws now ensure that view corridors and beach access pathways will always offer residents a life with a view. To the west of Collins Avenue, the City is building parks, improving the infrastructure and laying the groundwork for future redevelopment.

According to the Miami Herald, “Developers are proceeding with at least six condo towers — nearly 15 percent of the more than 45 towers proposed for the tri-county South Florida region through July 2012 — with at least 530 luxury units to be constructed in a community that stretches less than 40 blocks along Collins Avenue.”

The 43-story Regalia project, featuring 39 units priced in the range of $6 to $7 million each, is the only condominium tower currently under construction. Other planned projects include the Chateau Beach and the Mansions at Acqualina.

The Sunny Isles strategy is to steadily replace outdated motels with luxury residential oceanfront development. Much of the residential construction is not for year-round occupancy, although statistics show a steady growth in young families who desire to be near the ocean.

This “City of Sun and Sea,” is located on a barrier island in the northeast corner of Miami-Dade County, bounded by the Atlantic Ocean on the east and the Intracoastal Waterway on the west. Almost one million vacationers visit Sunny Isles Beach annually.

South Florida Condominium and Real Estate Attorney

Contact South Florida condominium attorney Marcy Resnik to discuss your need for legal services with a condominium purchase, sale, or business dispute. You can contact Ms. Resnik online or call her at 954-321-0176.

 

Royal Palm Bank of Florida, Naples, FL, in FDIC Receivership

/in /by

On Friday, July 20, 2012, The Royal Palm Bank of Florida, Naples, FL was closed by the Florida Office of Financial Regulation, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

All deposit accounts, including brokered deposits, have been transferred to First National Bank of the Gulf Coast, Naples, FL (“assuming institution”) and will be available immediately. The former The Royal Palm Bank of Florida locations will reopen as branches of First National Bank of the Gulf Coast during regular business hours.

Transferred deposits will be separately insured from any accounts that a customer may already have at First National Bank of the Gulf Coast for six months after the failure of The Royal Palm Bank of Florida. Checks that were drawn on The Royal Palm Bank of Florida that did not clear before the institution closed will be honored as long as there are sufficient funds in the account.

Vendors that provided a service or product, leased space, furniture, or equipment to The Royal Palm Bank of Florida prior to Friday, July 20, 2012 and have not been paid, may be entitled to a claim against the bank.

Details on the closure are available at Failed Bank Information for The Royal Palm Bank of Florida, Naples, FL.

Fort Lauderdale Banking Attorney

Banking attorney Howard Kahn, Esq., represents lenders and creditors in connection with commercial and residential financing and loan transactions, title claims, mortgage fraud, and related litigation. Bringing a concierge service approach to banks and other lenders, he is available as needed to provide trusted legal counsel both during business hours and as emergencies arise at other times. Read more about our Florida banking law services. Contact Mr. Kahn online or at 954-321-0176.