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Rodman & Renshaw Fined $315,000 by FINRA

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Research analysts solicited investment banking business and attempted to arrange a payment from a public company, according to FINRA charges against Rodman & Renshaw LLC. The firm was fined for supervisory and other violations related to the interaction between the firm’s research and investment banking functions.

Rodman’s former CCO, William A. Iommi Sr., was fined $15,000, suspended from acting in a principal capacity for 90 days and must requalify as a general securities principal. FINRA found the firm’s supervisory system was deficient.

FINRA sanctioned two research analysts involved; Lewis B. Fan was fined $10,000 and suspended for 30 business days for violating NASD Rule 2711 by participating in efforts to solicit investment banking business from two public companies, and Alka Singh was fined $10,000 and suspended for six months after FINRA found that she attempted to arrange a concealed fee from a public company for which she provided research coverage.

Rodman, the New York-based broker-dealer subsidiary of Direct Markets Holdings Corp., provides investment banking services, including Private Investments in Public Entities (PIPEs) and registered direct offerings, to public and private companies. It also provides research, sales and trading services to institutional investors and therefore must have supervisory and compliance procedures to monitor potential conflicts of interest between research and investment banking, given concerns that research analysts could be pressured to tailor their coverage to the interests of a firm’s current or prospective investment banking clients.

FINRA found that from January 2008 to March 2012, Rodman failed to have an adequate supervisory system to monitor interactions between its investment banking and research functions. As a result, Rodman failed to prevent research analysts from soliciting investment banking business. In addition, the firm compensated a research analyst for his contribution to the firm’s investment banking business and failed to prevent Rodman’s CEO, a member of the firm’s Research Analyst Compensation Committee while simultaneously engaged in investment banking activities, from having influence or control over research analysts’ evaluations or compensation.

Brad Bennett, FINRA Executive Vice President and Chief of Enforcement, said, “The deficiencies in Rodman’s supervisory system created an environment in which the conflict of interest between research and investment banking was left unmanaged. FINRA will continue to ensure that firms have adequate supervisory systems tailored to the firm’s business and we will continue to sanction firms that demonstrate a weak culture of compliance and internal controls.”

In concluding this settlement, Rodman, Iommi, Fan and Singh 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.

Ricardo Bonilla Rojas and Firm Shadai Yire Charged in Ponzi Scheme

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Florida and New York investors are among the 200 victims of a $7 million Ponzi scheme perpetrated by Ricardo Bonilla Rojas and his firm Shadai Yire, according to SEC allegations.

Rojas actively solicited investors through personal discussions with individuals both over the phone and in person, and he also marketed the investment opportunity in presentations to evangelical Christian groups and factory workers who were often inexperienced investors.

Rojas falsely assured investors that their principal contributions were “100% guaranteed” and promised returns up to 50 percent, telling them he’d be investing their money in commodities. But Rojas never actually invested any money in commodities and instead used new contributions to repay earlier investors in classic Ponzi scheme fashion. He stole $700,000 for himself.

In a parallel action, the U.S. Attorney’s Office for the District of Puerto Rico today announced criminal charges against Rojas.

“Rojas targeted novice investors who were often evangelical Christians, and he touted a long history of successful trading in commodities,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office. “In reality, he was fleecing the flock.”

According to the SEC’s complaint filed in U.S. District Court for the District of Puerto Rico, Rojas and Shadai Yire conducted the scheme from at least August 2005 to February 2009. Rojas, who resides in Arecibo, Puerto Rico, and his company Shadai Yire have never been registered with the SEC to offer securities.

The SEC alleges that Rojas hired some sales agents to help him solicit investors, and paid commissions based on a percentage of the investor funds they raised. Rojas and his sales agents pitched the investment opportunity to individuals as a risk-free way to earn high returns in a short period of time. Rojas also created phony account statements that were sent to investors to hide his misuse of investor money and lead them to believe their investments were growing.

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.

SEC Pays $50K Whistleblower Reward

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A whistleblower who helped stop a multi-million dollar fraud will receive a $50,000 payment from the SEC. The award represents 30 percent of the amount collected in an SEC enforcement action against the perpetrators of the scheme, the maximum percentage payout allowed by the whistleblower law. The name of the recipient was not disclosed.

The 2010 Dodd-Frank Act authorized the whistleblower program to reward individuals who offer high-quality original information that leads to an SEC enforcement action in which more than $1 million in sanctions is ordered. Awards can range from 10 percent to 30 percent of the money collected. The Dodd-Frank Act included enhanced anti-retaliation employment protections for whistleblowers and provisions to protect their identity. The law specifies that the SEC cannot disclose any information, including information the whistleblower provided to the SEC, which could reasonably be expected to directly or indirectly reveal a whistleblower’s identity.

Sean McKessy, Chief of the SEC’s Whistleblower Office, said that since the program was established in August 2011, about eight tips a day are flowing into the SEC. “The fact that we made the first payment after just one year of operation shows that we are open for business and ready to pay people who bring us good, timely information.”

For more information about the SEC’s whistleblower program and how to report a tip, visit www.sec.gov/whistleblower.

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.

ZeekRewards.com, Rex Venture Group Ponzi Scheme Shut Down

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Paul Burks of Lexington, N.C. and his company Rex Venture Group have raised $600 million from more than one million Internet customers nationwide and overseas through the website ZeekRewards.com since January 2011, according to SEC allegations.

The SEC recently announced fraud charges and an emergency asset freeze to halt the Ponzi scheme on the verge of collapse. The emergency action assures that victims can recoup more of their money and potentially avoid devastating losses.

Customers were allegedly offered several ways to earn money through the ZeekRewards program, two of which involved purchasing securities in the form of investment contracts, according to the SEC’s complaint filed in federal court in Charlotte, N.C. These securities offerings were not registered with the SEC as required under the federal securities laws.

The SEC alleges that investors were collectively promised up to 50 percent of the company’s daily net profits through a profit sharing system in which they accumulate rewards points that they can use for cash payouts. However, the website fraudulently conveyed the false impression that the company was extremely profitable when, in fact, the payouts to investors bore no relation to the company’s net profits. Most of ZeekRewards’ total revenues and the “net profits” paid to investors have been comprised of funds received from new investors in classic Ponzi scheme fashion.

“The obligations to investors drastically exceed the company’s cash on hand, which is why we need to step in quickly, salvage whatever funds remain and ensure an orderly and fair payout to investors,” said Stephen Cohen, an Associate Director in the SEC’s Division of Enforcement. “ZeekRewards misused the power of the Internet and lured investors by making them believe they were getting an opportunity to cash in on the next big thing. In reality, their cash was just going to the earlier investor.”

The SEC’s complaint alleges that the scheme is teetering on collapse with investor funds at risk of dissipation without its emergency enforcement action. Last month, ZeekRewards brought in approximately $162 million while total investor cash payouts were approximately $160 million. If customers continue to increasingly elect to receive cash payouts rather than reinvesting their money to reach higher levels of rewards points, ZeekRewards’ cash outflows would eventually exceed its total revenue.

Burks has agreed to settle the SEC’s charges against him without admitting or denying the allegations, and agreed to cooperate with a court-appointed receiver.

According to the SEC’s complaint, ZeekRewards has paid out nearly $375 million to investors to date and holds approximately $225 million in investor funds in 15 foreign and domestic financial institutions. Those funds will be frozen under the emergency asset freeze granted by the court at the SEC’s request. Meanwhile, Burks has personally siphoned several million dollars of investors’ funds while operating Rex Venture and ZeekRewards, and he distributed at least $1 million to family members. Burks has agreed to relinquish his interest in the company and its assets plus pay a $4 million penalty. Additionally, the court has appointed a receiver to collect, marshal, manage and distribute remaining assets for return to harmed investors.

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.

College Football Hall of Fame Coach Charged in $80 Million Ponzi Scheme

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Jim Donnan, a College Football Hall of Fame inductee who guided teams at Marshall University and the University of Georgia and later became a television commentator, conducted a Ponzi scheme fraud with his business partner Gregory Crabtree through a West Virginia-based company called GLC Limited, according to SEC allegations. Other college coaches and former players were among its victims.

Donnan and Crabtree told investors that GLC was in the wholesale liquidation business and earning substantial profits by buying leftover merchandise from major retailers and reselling those discontinued, damaged, or returned products to discount retailers. They promised investors exorbitant rates of return ranging from 50 to 380 percent. However, only about $12 million of the $80 million raised from nearly 100 investors was actually used to purchase leftover merchandise, and the remaining funds were used to pay fake returns to earlier investors or stolen for other uses by Donnan and Crabtree.

“Donnan and Crabtree convinced investors to pour millions of dollars into a purportedly unique and profitable business with huge potential and little risk,” said William P. Hicks, Associate Director of the SEC’s Atlanta Regional Office. “But they were merely pulling an old page out of the Ponzi scheme playbook, and the clock eventually ran out.”

According to the SEC’s complaint filed in federal court in Atlanta, the scheme began in August 2007 and collapsed in October 2010. Donnan recruited the majority of investors by approaching contacts he made as a sports commentator and as a coach. For instance, he capitalized on his influence over one former player by telling him, “Your Daddy is going to take care of you” … “if you weren’t my son, I wouldn’t be doing this for you.” The player later invested $800,000.

The SEC’s complaint alleges that Donnan touted GLC’s success and profitability and told investors that the company could enter into even more merchandise deals with more capital. Donnan and Crabtree offered and sold investments that were short-term (2 to 12 months) and purportedly high-yield, with returns paid to investors in monthly or quarterly installments or in a one-time payment. Donnan told investors their money was being used to purchase specific items of merchandise that was often presold, so there was little to no risk to investing in any deal. However, much of the merchandise that GLC actually purchased was merely left unsold and abandoned in warehouses in West Virginia and Ohio.

The SEC alleges that Donnan typically assured investors that he was investing along with them in any merchandise deal that he offered. He touted that he and other prominent college football coaches had successfully and profitably invested in GLC. But by the time the scheme collapsed, Donnan had actually siphoned more than $7 million away from GLC, and Crabtree misappropriated approximately $1.08 million in investor funds.

The SEC’s complaint charges Donnan, who lives in Athens, Ga., and Crabtree, who resides in Proctorville, Ohio, with violations of the antifraud and registration provisions of the federal securities laws. The complaint also names two of Donnan’s children and his son-in-law as relief defendants for the purpose of recovering illicit funds that Donnan steered to them.

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.

Edward M. Laborio of Boca Charged in $5 Million Boiler Room Scheme

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A boiler room scheme that used high-pressure sales tactics to raise up to $5.7 million from 150 investors through the fraudulent sale of five unregistered securities offerings involving a group of related entities triggered SEC charges against Edward M. Laborio and others. The scheme ran from approximately December 2006 to August 2009.

Laborio, formerly of Boston, Massachusetts, is now a resident of Boca Raton, Florida. The SEC also charged Jonathan Fraiman of Lantana, Florida; Matthew K. Lazar of Westerville, Ohio; and seven entities controlled by Laborio: Envit Capital Group, Inc. (Envit Group); Envit Capital, LLC (Envit LLC); Envit Capital Holdings, Inc. (Envit Holdings); Envit Capital Private Wealth Management, LLC (Envit Wealth); Envit Capital Multi Strategy Mixed Investment Fund I LP (Envit Fund); Aetius Group PLC (Aetius PLC); and Aetius Group LLC (Aetius LLC) (collectively, the Envit Companies).

According to the Commission’s complaint, filed in the U.S. District Court for the District of Massachusetts, Laborio and Fraiman made multiple misrepresentations and misleading statements to investors about the Envit Companies’ businesses, revenues, financial projections, uses of investor funds, and historical returns generated by Envit Fund, a purported hedge fund that in reality never conducted any operations.

According to the complaint, Laborio also created scripts with sales pitches containing fabricated information. For example, one of Laborio’s scripts allegedly included unfounded claims that investors would receive quarterly dividends and “2-3x return on money.” Laborio also allegedly used investor proceeds to cover gambling losses, to make direct payments to himself, and to cover personal expenses. Fraiman allegedly represented to an investor that Envit Fund, the purported hedge fund, returned 42.9% in 2006 and 43.7% in 2007, even though the hedge fund was not launched until mid-2007 and never conducted any operations.

The complaint further alleges that Lazar raised $585,000 from approximately 10 investors through the sale of a PIPE (private investment in public equity) in Envit Group (one of the five unregistered securities offerings) by misrepresenting that the PIPE guaranteed an annual 8.5% dividend, and that it was safe, like a fixed annuity or a CD.

As a result of the conduct described in the complaint, the Commission alleges that all defendants violated Section 17(a) of the Securities Act of 1933 (Securities Act) and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder; that Laborio, Fraiman, Lazar and Envit Wealth violated Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 (Advisers Act); that Laborio, Fraiman, and Envit Wealth violated Advisers Act Section 206(4) and Rule 206(4)-8 thereunder; that Laborio, Fraiman, and Lazar violated Exchange Act Section 15(a)(1); that Laborio, Envit LLC, Envit Group, Envit Holdings, and Aetius PLC violated Securities Act Sections 5(a) and 5(c); that Laborio violated Exchange Act Section 16(a) and Rule 16a-3 thereunder; and that Envit Fund and Aetius LLC violated Section 7(a) of the Investment Company Act of 1940. The SEC seeks in its action permanent injunctions, disgorgement plus prejudgment interest, civil penalties, penny stock bars against Laborio, Fraiman, and Lazar, and an officer and director bar against Laborio.

The Commission previously suspended trading in the securities of Envit Group in May 2009 and subsequently revoked the registration of the securities of Envit Group in September 2009.

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.

WJB Capital Group, Inc. Expelled by FINRA

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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.

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

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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

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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.

Municipal Securities Report Issued by SEC

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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.