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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.

Investor Alert on Stock Trading Halts & Suspensions

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“When Trading Stops: What You Need to Know About Halts, Suspensions and Other Interruptions” is the title of a new investor alert published by the Financial Industry Regulatory Authority (FINRA).

While trading in most stocks takes place without interruption, FINRA’s new Alert explains how, when and why interruptions in trading occur, and discusses both what brokers are required to do and what investors should do in these situations.

When a company is listed on a U.S. stock exchange, it agrees to notify the listing exchange about any corporate developments that could affect trading activity in its stock—before announcing them to the public. Stock exchanges have the authority to halt trading based on their evaluation of a given announcement. These regulatory halts tend to be relatively short and are designed to allow prompt and full dissemination of the news to the marketplace at large. While the halt is in effect, brokers are prohibited from publishing quotations or indications of interest, or trading the stock.

In contrast to trading halts, the Securities and Exchange Commission (SEC) is authorized under federal law to suspend trading in any stock for a period of up to 10 business days when it believes that the investing public may be at risk. Many factors influence the SEC’s decision, including a company’s failure to keep up the required filing of periodic reports and whether market manipulation may be taking place.

For the most part, companies subject to trading suspensions have been quoted in the over-the-counter (OTC) market. When a trading suspension ends, a broker that wants to resume quoting the stock immediately must first obtain current information about the company from a reliable source, file a form with that information and obtain approval from FINRA.

“In sharp contrast to trading halts, the trading suspensions the SEC imposes usually aim to help stop fraud. Investors should exercise real caution before purchasing a stock after a trading suspension has ended,” said Gerri Walsh, FINRA’s Vice President for Investor Education.

When Trading Stops also discusses single stock trading pauses, currently triggered when the price moves up or down by specified percentages in a rolling, five-minute period, as well as marketwide circuit breakers that may be activated by specified percentages declines in the Dow Jones Industrial Average.

Click on the link to read the full investor alert, “When Trading Stops: What You Need to Know About Halts, Suspensions and Other Interruptions.”

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.