Florida Mortgage Foreclosures Remain High

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Florida courts disposed of 69,513 mortgage foreclosure cases during the time period from July 1 through October 31, 2012, according to a Palm Beach Post article titled “Decline in foreclosure backlog may give false hope.”

While this may sound like good news, underwater homeowners may find two related factors troubling. First, 69,078 new foreclosures were filed in Florida courts during the same time period, for a net decline of only 432 cases. Second, over 40 percent of the mortgage dispositions were dismissals. A mortgage dismissal frequently means that one or both parties are not totally prepared to try the case at the present time, and that the case may simply be refiled at a future date.

Florida courts had 377,272 pending foreclosure cases as of October 31, 2012, according to state courts records and as reported by the Palm Beach Post. That’s a net of just 432 fewer cases than July 1 because of the 69,078 new foreclosures filed in the four-month span.

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.

UBS to Pay $1.5 Billion in Fines for LIBOR Manipulation

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UBS AG recently announced settlements with the U.S. Department of Justice and the Commodity Futures Trading Commission in connection with charges that UBS manipulated LIBOR benchmark interest rates.

LIBOR, short for the London Interbank Offered Rate, is an international daily reference rate intended to reflect interest rates at which banks borrow unsecured funds. LIBOR is based on interest rates self-reported by leading London banks, and is published as an average of the numbers after some adjustments.

Hundreds of trillions of dollars in mortgages, student loans, credit card debt, financial derivatives, and other financial products worldwide are tied to LIBOR, which serves as the premier benchmark for short-term interest rates.

As part of a proposed agreement, UBS Securities Japan Co. Ltd. has agreed to enter a plea to one count of wire fraud relating to the manipulation of certain benchmark interest rates, including Yen LIBOR.

Two former UBS traders, Tom Alexander William Hayes and Roger Darin, were charged in a criminal complaint with conspiracy to manipulate LIBOR. Hayes has also been charged with wire fraud and an antitrust violation. Emails between UBS traders, made public as part of the investigation, provide evidence of market manipulation.

UBS conduct described in the settlements includes the following:

  • Certain UBS personnel engaged in efforts to manipulate submissions for certain benchmark rates to benefit trading positions;
  • Certain employees at the bank colluded with employees at other banks and cash brokers to influence certain benchmark rates to benefit their trading positions; and
  • Certain personnel gave inappropriate directions to UBS submitters that were in part motivated by a desire to avoid unfair and negative market and media perceptions during the financial crisis.

The conduct encompassed by the settlements includes Yen LIBOR, GBP LIBOR, CHF LIBOR, Euro LIBOR, USD LIBOR, Euribor and Euroyen TIBOR, although the nature and extent of the conduct in question varied significantly from one currency to another.

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.

New York Stock Exchange Being Acquired by ICE

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In major Wall Street news, NYSE Eurotext today announced a definitive agreement to be acquired by IntercontinentalExchange (“ICE”), a leading operator of global markets and clearing houses, in a stock-and-cash transaction.

The acquisition combines two leading exchange groups to create a global exchange operator diversified across markets including agricultural and energy commodities, credit derivatives, equities and equity derivatives, foreign exchange and interest rates. The combined company, with leading clearing capabilities, anticipates being well positioned to deliver efficiencies while serving customer demand for clearing and risk management globally.

Under the terms of the agreement, which was unanimously approved by the Boards of both companies, the transaction is currently valued at $33.12 per NYSE Euronext share, or a total of approximately $8.2 billion, based on the closing price of ICE’s stock on December 19, 2012.

NYSE Euronext shareholders will have the option to elect to receive consideration per NYSE Euronext share of (i) $33.12 in cash, (ii) 0.2581 IntercontinentalExchange common shares or (iii) a mix of $11.27 in cash plus 0.1703 ICE common shares, subject to a maximum cash consideration of approximately $2.7 billion and a maximum aggregate number of ICE common shares of approximately 42.5 million.

The overall mix of the $8.2 billion of merger consideration being paid by ICE is approximately 67% shares and 33% cash. The transaction value of $33.12 represents a 37.7% premium over NYSE Euronext’s closing share price on December 19, 2012.

Read the full press release about the NYSE Euronext / ICE merger.

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.

Day Trading Firm Biremis Corp. Loses Broker-Dealer License over Layering

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Biremis Corp., a now defunct Toronto-based brokerage firm, and co-founders Peter Beck and Charles Kim, failed to supervise overseas day traders who used the firm’s order management system to engage repeatedly in a manipulative trading practice known as layering, according to SEC charges.

In layering, a trader places orders with no intention of having them executed but rather to trick others into buying or selling a stock at an artificial price driven by the orders, which the trader later cancels.

The SEC’s investigation found that Biremis – whose worldwide day trading business enabled up to 5,000 traders on as many 200 trading floors in 30 countries to gain access to U.S. markets – failed to address repeated instances of layering by many of the overseas day traders using its system.

The firm’s co-founders Peter Beck and Charles Kim ignored repeated red flags indicating that overseas traders were engaging in layering manipulations. Biremis served as the broker-dealer for an affiliated Canadian day trading firm, Swift Trade Inc.

Biremis and the two executives agreed to a settlement in which the firm’s registration as a U.S. broker-dealer is revoked and permanent industry bars are imposed on Beck and Kim, who also will pay a combined half-million dollars to settle the SEC’s charges.

“Engaged and forceful supervisors are the first line of defense against individual misconduct in financial services companies,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “Beck and Kim were neither, as they saw obvious red flags of market manipulation by their firm’s traders but failed to respond or take any steps to prevent the manipulation. They have learned the painful lesson that supervisors who fail to heed repeated red flags of misconduct will no longer have any place in the securities industry.”

According to the SEC’s order instituting settled administrative proceedings, Biremis, Beck, and Kim exercised substantial control over the overseas day traders. They backed the traders’ trading with capital from Biremis, determined the amount of Biremis capital available to each individual trader to purchase stocks, and set and enforced daily loss limits on each trader. They also wielded authority to reprimand, restrict, suspend, or terminate traders.

The Financial Industry Regulatory Authority (FINRA) imposed penalties against Biremis earlier this year.

The SEC’s order found that many of the Biremis-affiliated overseas day traders engaged in repeated instances of layering from January 2007 to mid-2010. Beck and Kim learned from numerous sources – including three U.S. broker-dealers and a Biremis employee – that layering was occurring, yet they failed to take any steps to prevent it.

For example, in spring 2008, representatives of one U.S. broker-dealer warned Beck and Kim that certain overseas traders were “gaming” U.S. stocks by altering those stocks’ bid and offer prices in order to buy or sell the stock at the altered price. Beck and Kim failed to act on this information.

According to the SEC’s order, Biremis also failed to retain virtually all of its instant messages related to its broker-dealer business, and failed to file any suspicious activity reports (SARs) related to the manipulative trading.

“Broker-dealers must recognize that their supervisory responsibilities over their associated persons don’t end at the U.S. border,” said Antonia Chion, Associate Director of the SEC’s Division of Enforcement. “Broker-dealers face severe consequences if they fail to supervise their traders who engage in manipulative trading, whether those traders are located in the U.S. or abroad.”

The SEC’s order finds that Biremis, Beck, and Kim failed reasonably to supervise the firm’s associated persons (the overseas day traders) with a view to preventing and detecting their layering manipulations. The order also finds that Biremis willfully violated Exchange Act Section 17(a) and Rule 17a-8 by failing to file SARs and Section 17(a) and Rule 17a-4(b)(4) by failing to retain instant messages.

The SEC’s order revokes Biremis’ registration as a broker-dealer and requires the firm to cease and desist from committing or causing violations of Exchange Act Section 17(a) and Rules 17a-4(b)(4) and 17a-8. The SEC imposed permanent industry bars on Beck and Kim, who each agreed to pay penalties of $250,000. Biremis, Beck, and Kim neither admitted nor denied the findings contained in the SEC’s order.

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.

Doctors and Disabilities: Three Myths

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Medical professionals who are diagnosed with an unexpected disability are at risk of
losing a significant income stream. Three common misconceptions about disabilities
can jeopardize your financial security.

Fact #1: The truth is that over 1,000,000 Florida residents, age 16 to 64, suffer from a
disability. The tables are turned when a physician becomes disabled. Doctors expect to heal the injured, not be disabled themselves.

Fact #2: Even when you have disability benefits, the insurance company may try to deny
or discredit valid claims.

Fact #3: Medical professionals are trained to heal the injured, not deal with arcane legal
provisions commonly found in insurance plan documents.

Diagnosis: Financial Disability

Our attorneys have helped many health care professionals navigate the confusing claims process. The best time to consult with an experienced disability insurance attorney is while you are still working and just starting to think about making a claim.

Click on the link to download our client alert on Doctors and Disability Claims: Three Myths.

Fort Lauderdale Disability Lawyer for Professionals

If you are a business or medical professional who has suffered an unexpected disability through illness or injury, contact Fort Lauderdale disability lawyer Howard Kahn if your disability benefits are at risk. We can help you understand and protect your legal rights to disability benefits. Contact us online or by phone at 954-321-0176.

Money to Burn and a Boca Raton Home Part of Insider Trading Scheme

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Virginia attorney Matthew Kluger and New York stock trader Garrett D. Bauer were sentenced to 12 years and 9 years, respectively, for a 17-year insider trading scheme. Working together, the two netted $37 million in profits by trading ahead of more than 30 different corporate transactions based on confidential insider trading information that Kluger stole from multiple law firm employers.

Bauer spent more than $7 million of his share of the proceeds to purchase two properties – approximately $6.65 million for an Upper East Side condominium in New York and approximately $875,000 for a home in Boca Raton, Florida. The properties will now be forfeited as part of the settlement.

As law enforcement investigations intensified, Bauer instructed another co-conspirator to burn approximately $175,000 in cash that Bauer had paid him out of concern his fingerprints would be found on the money.

Both Kluger and Bauer had previously pleaded guilty to charges of conspiracy to commit securities fraud, securities fraud, conspiracy to commit money laundering and obstruction of justice.

“The severe sentences imposed today are a warning to anyone trying to game the financial markets for their own enrichment,” U.S. Attorney Fishman said. “Garrett Bauer and Matthew Kluger participated in one of the longest-running insider trading schemes ever prosecuted. Bauer traded on confidential information that Kluger obtained from his position of trust at major law firms and parlayed it into tens of millions of dollars in illicit profits. Today, both of them reap the punishment their conduct deserves.”

“Millions of investors have entrusted their life savings to the integrity of financial markets and the belief of a level playing field,” said Michael B. Ward, Special Agent In Charge of the Newark Division of the FBI. “Insider trading corrupts the process and tilts the playing field in favor of those privileged few with access to information not available to the public, and at the expense of unsuspecting and unknowing investors. It is important that those who manipulate that trust be held accountable in strictest accordance with the law.”

According to documents filed in this case and statements made in court:

Bauer and two co-conspirators – Kluger and Kenneth Robinson, 45, of Long Beach, N.Y. – engaged in an insider trading scheme that began in 1994 and relied on Kluger, a lawyer, to steal information from his employers and their clients.

Bauer admitted that as part of the scheme he traded ahead of more than 30 different corporate transactions based on inside information provided by Kluger.

Over time, Kluger worked at four of the nation’s premier mergers and acquisitions law firms. From 1994 to 1997, he worked first as a summer associate and later as a corporate associate at Cravath Swaine & Moore in New York. From 1998 to 2001, he worked at Skadden, Arps, Slate, Meagher & Flom in New York and Palo Alto, Calif., as an associate in their corporate department. From 2001 to 2002, Kluger worked as a corporate associate at Fried, Frank, Harris, Shriver & Jacobson LLP in New York. From Dec. 5, 2005, to March 11, 2011, Kluger worked at Wilson Sonsini Goodrich & Rosati (“Wilson Sonsini”) as a senior associate in the Mergers & Acquisitions department of the firm’s Washington office.

While at the firms, Kluger regularly stole and disclosed to Robinson material, nonpublic information regarding anticipated corporate mergers and acquisitions on which his firms were working. Early in the scheme, Kluger disclosed information relating to deals on which he personally worked. As the scheme developed, and in an effort to avoid law enforcement detection, Kluger took information which he found primarily by viewing documents on his firms’ computer systems.

Once Kluger provided the inside information to Robinson, Robinson passed it to Bauer, who then purchased shares for himself, Kluger, and Robinson in Bauer’s trading accounts. He sold the shares once the relevant deal was publicly announced and the stock price rose. Bauer gave Robinson and Kluger their shares of the illicit profits in cash – often tens or hundreds of thousands of dollars – that Bauer withdrew in multiple transactions from ATMs.

Bauer admitted that after Kluger joined Wilson Sonsini, the three conspirators took greater efforts to prevent detection of their insider trading scheme. Among other techniques, they used pay phones and prepaid cellular phones that they referred to as “throwaway phones” to discuss the scheme.

Bauer also admitted that after Robinson told him that the FBI and IRS had searched Robinson’s house and had asked questions about the illicit scheme, Bauer destroyed a prepaid phone, discarding the pieces in two separate trash cans at a New York McDonald’s restaurant.

In addition to the prison term, Bauer and Kluger were both sentenced to three years supervised release. As part of his guilty plea, Bauer also agreed to forfeit the contents of numerous trading and bank accounts he used to facilitate the scheme, as well as homes that he purchased with the proceeds. In total, the value of the property Bauer is required to forfeit is $21 million. Kluger agreed to forfeit $415,000.

Robinson pleaded guilty on April 11, 2011, to an Information charging him with one count of conspiracy to commit securities fraud and two counts of securities fraud.

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.

Jade Apartment Complex in Miami Target of $5.6 Million Mortgage Fraud Scheme

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Lilia Casal-Diaz, 42, a real estate attorney, Andres Mendez, 47, and his son, Andy Mendez,  26, who both worked as real estate brokers, Josephine Santana, 57, a mortgage broker, Jose Rafael Martinez, 36, and Basilio Gomez, 52, all of Miami-Dade County, have been sentenced to terms of imprisonment for their participation a multi-million dollar mortgage fraud scheme at the luxury Jade apartment complex, on Brickell Bay Drive, in Miami, Florida. The United States Attorney’s Office for the Southern District of Florida announced the action last week.

According to court documents, the mortgage fraud scheme resulted in more than $5.6 million in mortgage proceeds that were fraudulently obtained from various lending institutions, as well as tax related offenses involving willful failure to declare to the IRS proceeds from such transactions.

According to statements in open court and court documents, the defendants engaged in a multi-million dollar mortgage fraud scheme using straw buyers to purchase residential properties at The Jade apartment complex on Brickell Bay Drive in Miami. As part of the scheme, the defendants submitted mortgage loan applications and supporting documents containing false information to lending institutions. The lending institutions relied on these documents to make mortgage loans to the straw buyers to purchase the residential properties. The defendants then prepared and submitted to the lenders false HUD-1 statements. The defendants created a second version of the HUD-1 statements, listing the actual sales prices, which were provided to the seller.

To conceal and perpetuate the fraud, the defendants made some payments to the condominium association and made some mortgage payments to the lenders to prevent foreclosure and continue to receive rental income for the units. The defendants thereafter diverted the mortgage fraud proceeds into shell companies for their personal use.

On December 7, 2012, Casal-Diaz was sentenced by U.S. District Judge Donald M. Middlebrooks to a year and day in prison, along with one year of home confinement and three years supervised release. Casal-Diaz also was ordered to pay restitution to the IRS of $509,543.36.

Casal-Diaz pled guilty on October 4, 2012 to conspiracy to commit tax fraud, in violation of Title 18, United States Code, Section 371, in connection with creating false documents to conceal from the IRS loan proceeds that were derived from the mortgage fraud scheme.

According to court documents, Casal-Diaz, who practiced law in Coral Gables, falsified HUD-1 documents to support the loan fraud scheme, and then failed to report on IRS Form 1099-S the sales proceeds from the transactions, or otherwise intentionally under-reported such proceeds. In addition, when approached by IRS-CI agents, Casal-Diaz provided the agents with a phony Form 1099-S document, falsely indicating that proceeds from one of the real estate closings was properly reported to the IRS.

Previously, on November 28, 2012 before Judge Middlebrooks, Andres Mendez, Sr. was sentenced to 60 months in prison, to be followed by five years of supervised release. Also on November 28th, Andy Mendez Jr. was sentenced to a year and a day in prison, 18 months of home confinement and five years of supervised release. Both were ordered to pay restitution of $4,232,542.67. Both defendants previously pleaded guilty to conspiracy to commit mail fraud in violation of 18 U.S.C. § 1349, on September 6, 2012.

On October 29, 2012 before Judge Middlebrooks, Josephine Santana was sentenced to 21 months in prison, Jose Rafael Martinez was sentenced to 18 months in prison, and Basilio Gomez was sentenced to 15 months in prison. All three defendants were also sentenced to five years of supervised release and ordered to pay $1,202,861.14 in restitution. Previously, all three defendants pled guilty to conspiracy to commit mail fraud in connection with the Jade mortgage fraud scheme, in violation of Title 18, United States Code, Section 1349.

In a related case, Raquel DeJesus Martinez pled guilty to conspiracy to commit mail fraud and money laundering, in violation of Title 18, United States Code, Section 371, in connection with the same mortgage fraud scheme. Sentencing is scheduled for January 22, 2013 before Judge Middlebrooks. At sentencing, the defendant faces a possible statutory maximum sentence of up to five years in prison and a possible fine of up to $250,000.

In another related case, defendant Jose Arnaldo Rosario, 55, of Miami-Dade County, was sentenced on August 5, 2011 for his role in the scheme. Rosario was sentenced to 46 months in prison, to be followed by 3 years of supervised release. Rosario previously pled guilty to conspiracy to commit money laundering and wire fraud, in violation of Title 18, United States Code, Section 371. Rosario provided false information to the lending institution and received two kickbacks from the purchase of two apartments.

To date, eight defendants have been convicted in connection with this mortgage fraud scheme involving the Jade condominiums.

Fort Lauderdale and Miami Mortgage Fraud Attorney

Contact Fort Lauderdale mortgage fraud attorney Howard N. Kahn, Esq. for legal assistance in matters relating to mortgage fraud. His litigation efforts in the area of mortgage fraud have often resulted in the complete recovery of all loan losses, including legal fees and court costs. You can reach him at 954-321-0176 or online.

Claudio Osorio of InnoVida in Miami Beach Charged with Fraud

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Claudio Osorio stole nearly half of the money raised from investors to pay the mortgage on his multi-million dollar mansion and other lavish lifestyle expenses, alleges the Securities and Exchange Commission. The SEC charged Osorio with defrauding investors by grossly exaggerating the financial success of his company that purportedly produced housing materials to withstand fires and hurricanes.

Osorio, who is a former Ernst & Young Entrepreneur of the Year award winner, raised at least $16.8 million from investors by portraying InnoVida Holdings LLC as having millions of dollars more in cash and equity than it actually did, according to the SEC. Osorio sometimes solicited investors one-on-one at political fundraising events.

To add an air of legitimacy to his company, Osorio assembled a high-profile board of directors that included a former governor of Florida, a lobbyist, and a major real estate developer. Osorio falsely told a potential investor he had invested tens of millions of dollars of his own money as InnoVida’s largest stakeholder, and he hyped a Middle Eastern sovereign wealth fund investment as a ruse to solicit additional funds from investors.

The SEC also charged InnoVida’s chief financial officer Craig Toll, a certified public accountant living in Pembroke Pines, Fla., who helped Osorio create the false financial picture of InnoVida.

The SEC alleges that besides his Miami Beach mansion, Osorio illegally used investor money to pay for his Maserati, a Colorado mountain retreat home, and country club dues. He stole at least $8.1 million in investor funds.

“From his lap of luxury, Osorio concocted a compelling story about InnoVida by recruiting an impressive board of directors and boasting a bogus financial condition to lure investors into funding his scheme of lies,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office.

In a parallel action, the U.S. Attorney’s Office for the Southern District of Florida today announced criminal charges against Osorio and Toll.

According to the SEC’s complaint filed in U.S. District Court for the Southern District of Florida, the scheme began in 2007 and lasted until 2010. InnoVida was purportedly in the business of manufacturing building panels used to construct houses and other structures resistant to fires and hurricanes. The company entered bankruptcy in 2011.

To induce funds from investors, Osorio and Toll allegedly produced false pro forma financial statements. A pro forma financial statement for March 31, 2009, stated that InnoVida had more than $35 million in cash and cash equivalents and more than $100 million of equity. A pro forma financial statement for Dec. 31, 2009, listed more than $39 million in cash and cash equivalents and $122 million of equity.

In reality, the company’s bank accounts held less than $185,000 on March 31, 2009, and less than $2 million on Dec. 31, 2009. Toll failed to review all of InnoVida’s bank account statements when he drafted financial statements. Instead, he accepted Osorio’s misrepresentations that InnoVida had these assets in an account to which Toll did not have access.

The SEC alleges that Osorio offered bogus share prices to prospective investors based on false valuations. He told one investor that InnoVida was valued at $250 million, and then a week later told a different investor that the company was worth $50 million. The latter investor purchased $100,000 of Osorio’s stake in the company for five cents per share.

The SEC further alleges that Osorio lied to an investor when he said that he had personally invested tens of millions of dollars into InnoVida. He had in fact made no such investment.

Osorio also enticed an investor to increase an investment in InnoVida by touting a supposed $500 million deal he was negotiating with a Middle Eastern sovereign wealth fund that would significantly benefit InnoVida investors. Osorio went so far as to create a document showing the investor how much he would make once the sovereign wealth deal closed and was funded. Based on Osorio’s misrepresentations, the investor was able to raise approximately $700,000 and later borrowed $3 million from a close friend. However, no sovereign wealth buyout deal ever materialized, and InnoVida investors never benefited as promised.

The SEC’s complaint seeks disgorgement of ill-gotten gains, financial penalties, and injunctive relief against InnoVida, Osorio, and Toll to enjoin them from future violations of the federal securities laws. The complaint also seeks an order barring Osorio and Toll from serving as an officer or director of a public company.

Mr. Osorio and and his philanthropist wife Amarilis Osorio filed for Chapter 11 personal bankruptcy in March, 2011, according to the Miami Herald.

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.

SEC and FINRA Issue Year End Investment Alert

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The “fiscal cliff” may be of concern to individual investors as the end of 2012 rapidly approaches, according to a new investor alert. If not resolved, the fiscal cliff could result in increased capital gains and dividend income tax rates. Potential changes in these tax rates could result in year-end sell-offs as some investors may seek to take advantage of current capital gains and dividend income tax rates.

The SEC’s Office of Investor Education and Advocacy and the Financial Industry Regulatory Authority (FINRA) have issued a new Investor Alert called Year-End Investment Considerations for Individual Investors to help investors navigate the fiscal cliff and other end-of-year planning considerations. This new alert provides individual investors with a few suggestions for year-end investment planning as the year draws to a close.

“The end of the year is a great time to take stock of your financial situation and make sure your investment plan is meeting your needs,” said Gerri Walsh, FINRA’s Vice President for Investor Education. “Taking some time to carefully manage your investment portfolio can pay dividends in the coming year.”

Year-End Investment Considerations outlines five key areas investors should focus on when making investment decisions:

Asset Allocation. The end of the year is a reasonable time to review your overall investment portfolio and evaluate your existing asset allocation.

Consider Rebalancing. Some of your investments will grow faster than others. Rebalancing allows you to adjust your investment portfolio so as not to overemphasize one or more asset categories.

Tax Considerations. Investors who are interested in learning what impact tax rates, including potential changes in the tax laws, may have on their investments under different financial scenarios should consult their tax adviser or visit the IRS website for more information.

Check Out Your Investment Professional. Many investors do not realize that they can check the background of a broker or investment adviser by using FINRA Broker Check or the Investment Adviser Public Disclosure (IAPD) website.

Locate Your Financial Records. Consider preparing a list identifying your financial records, including a list of financial accounts and all user names and passwords.

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.

Brazilian Igor Cornelsen to Pay $5.1 Million for Burger King Insider Trading

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Brazilian ex-banker Igor Cornelsen and his firm through which he made trades – Bainbridge Group – reaped illicit profits of more than $1.68 million by trading Burger King options based on confidential information ahead of the company’s September 2010 announcement that it was being acquired by a New York private equity firm, according to the Securities and Exchange Commission (“SEC”).

Cornelsen is now a resident of the Bahamas with a home in South Florida after holding high-ranking positions at several banks in Brazil before his retirement. He sought inside information from his broker Waldyr Da Silva Prado Neto by sending him e-mails with such masked references as, “Is the sandwich deal going to happen?” Prado was stealing the inside information from another Wells Fargo brokerage customer involved in the Burger King deal.

Cornelsen and Bainbridge Group agreed to pay more than $5.1 million to settle the SEC’s charges. The settlement is subject to court approval. The litigation continues against Prado, whose assets have been frozen by the court.

“Cornelsen shamelessly prodded Prado for details on ‘the sandwich deal’ and Prado happily obliged to satisfy his customer’s appetite for inside information,” said Daniel M. Hawke, Chief of the SEC Enforcement Division’s Market Abuse Unit and Director of the Philadelphia Regional Office.

Sanjay Wadhwa, Deputy Chief of the Market Abuse Unit and Associate Director of the New York Regional Office, added, “Foreign investors who access the U.S. capital markets must play by the rules and not rig the market in their favor, otherwise they face getting caught by the SEC and paying a hefty price as Cornelsen is here.”

According to the SEC’s complaint filed last week in federal court in Manhattan, Cornelsen became Prado’s customer in 2008. On May 17, 2010, Prado sent Cornelsen an e-mail written in Portuguese that translates to, “Igor, if you are around call me at the hotel … I have some info … You have to hear this.”

Cornelsen called Prado at his hotel and they had a 10-minute conversation. Earlier that same day, Prado told a friend that he had knowledge of the impending Burger King deal. After talking with Prado, Cornelsen began trading out-of-the-money Burger King call options the very next day. Cornelsen had never previously traded Burger King securities.

The SEC alleges that Cornelsen continued trading Burger King options over that summer despite losing money in some instances. In August, Cornelsen sent Prado e-mails seeking assurances that ‘the sandwich deal’ was going to happen, and Prado responded with such statements as “Yes it’s going to happen” and “Everything is 100% under control.” Cornelsen then purchased additional Burger King call options.

Cornelsen took steps to minimize his connection to Prado by purchasing the Burger King call options in accounts held at brokerage firms other than where Prado worked.

The SEC alleges that after the public announcement of the Burger King deal, Cornelsen e-mailed Prado to inquire about the acquisition price. Upon learning the new per share price that would yield him substantial illegal profits, Cornelsen e-mailed back, “Wow! What a day!”

The SEC’s complaint charges Cornelsen and Bainbridge Group with violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3. The proposed final judgment orders them to jointly and severally pay $1,681,090 in disgorgement and $136,620.96 in prejudgment interest. Cornelsen is ordered to pay a $3,362,180 penalty. They neither admit nor deny the SEC charges. The proposed final judgment also enjoins them from future violations of these provisions of the federal securities laws.

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.