Brokerage Firms In The News - Law Offices of Robert Wayne Pearce

Jan 2, 2014

Puerto Rico Borrowing From Self Is Not A Good Sign For UBS Puerto Rico Investors

The latest news from Puerto Rico is that Government Development Bank (GDB) has borrowed $110 million from the State Insurance Fund (SIF) for its liquidity needs. The GDB President attempted to put a positive spin on the loan as achieving two objectives, “increasing GDB’s liquidity and improving the cash flow of SIF,” but borrowing from Peter to pay Paul is never a good strategy, even for a legitimate government. Puerto Rico is ostensibly seeking short-term deals to raise cash as it waits for conditions to improve in the US municipal bond market but the problem is with the Puerto Rico bond market and its economy. Noteworthy is the fact that the GDP still had to pay 8% annually for the loan and then pay it all back in less than 6 years. If 8% is the going rate within the government intra-agency borrowing what are the lenders on the outside going to charge the territory?

Dec 27, 2013

Michael Barina Fined and Suspended by FINRA for Unsuitable Private Placement Recommendations

Longwood, Florida-based registered representative Michael Anthony Barina, employed by Altamonte Springs, Florida-based Merrimac Corporate Securities, Inc., submitted a Letter of Acceptance, Waiver and Consent in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) sanctions and findings that he recommended an investment in a private placement investment pool without sufficiently understanding the entity’s investment strategy or its parameters. FINRAs findings stated that the entity’s investment strategy included investing up to 25% of its assets in a single security and engaging in options trading. According to FINRA, Mr. Barina allegedly “lacked a reasonable basis to believe that the entity was a suitable investment for the customers,” thereby making an unsuitable recommendation.

Dec 24, 2013

More Downgrades Loom For PREPA and More Losses For UBS Puerto Rico Investors

Standard and Poor’s, Fitch Ratings and Moody’s ratings services have placed Puerto Rico’s general obligation bonds credit rating on negative watch which meant the next step was to downgrade Puerto Rico’s general obligation bonds to junk status. On Friday, Moody’s warned of another possible downgrade; this time of the Puerto Rico Electric Power Authority’s (PREPA) bonds. All three rating agencies have expressed concerns about the Island’s inability to access the market for refinancing and reasonable rates; the extent to which budget targets for the current fiscal year are being met; the instability in the performance of the Puerto Rico economy.

Dec 19, 2013

Oppenheimer Fined By FINRA for Excessive Markups and Failure to Supervise

Oppenheimer & Co., Inc. (Oppenheimer) was fined $675,000 by the Financial Industry Regulatory Authority (FINRA) and ordered to pay over $246,000 in restitution to customers for charging unfair prices in municipal securities transactions and for failing to have an adequate supervisory system. FINRA also fined Oppenheimer’s head municipal securities trader, David Sirianni, $100,000 for his role in the excessive markups.

Dec 13, 2013

Merrill Lynch Settles $131.8 Million Dollar Fraud Claim

The United States Securities and Exchange Commission (SEC) charged Merrill Lynch with false and misleading disclosures relating to two collateralized debt obligations (CDOs) and false records relating to a third CDO. Merrill Lynch settled the case for $131.8 million simultaneous with the filing of the SEC’s charges. According to the SEC, Merrill Lynch hid important facts from investors about a hedge fund known as Magnetar Capital, LLC and its involvement over the selection of collateral for the CDOs Octans I CDO Ltd. and Norma CDO I Ltd. Magnetar had undisclosed conflicts of interest. It bought the equity in the CDOs and hedged that equity position by shorting against the CDOs themselves.

Dec 12, 2013

More Headwinds For UBS Puerto Rico Bond Fund Investors

Three weeks ago, Fitch Ratings placed Puerto Rico’s BBB minus credit rating on negative watch which meant the next step was to downgrade Puerto Rico’s general obligation bonds to junk status. Yesterday, the Moody’s Investors Service joined in Fitch Ratings’ analysis and placed Puerto Rico’s general obligation bonds and related credit on review for possible downgrade to junk bond status as well. Both Moody’s and Fitch, as well as Standard & Poors rate Puerto Rico debt a single level above junk. All three rating agencies have expressed concerns about the Island’s inability to access the market for refinancing at reasonable rates; the extent to which budget targets for the current fiscal year are being met; the instability in the performance of the Puerto Rico economy.

Dec 10, 2013

“2013 Most Effective Lawyer” Finalists For $2.75 Million Award Against Wells Fargo

This week the “Daily Business Review” recognized more than 80 attorneys in 12 practice area categories as the “Most Effective Lawyers” in South Florida. Robert W. Pearce and Adam Kara-Lopez of the Law Offices of Robert Wayne Pearce, P. A. were recognized in the Mediation and Arbitration category.

Dec 9, 2013

J.P. Turner Owes $700,000 For Unsuitable ETFs and Mutual Fund Investments

J.P. Turner & Co., LLC (J.P. Turner) was ordered by the Financial Industry Regulatory Authority (FINRA) to pay over $700,000 in restitution to more than 80 customers for sales of unsuitable leveraged and inverse exchange-traded funds (ETFs) and for excessive mutual fund switches by its registered representatives. This was just the tip of the iceberg and undoubtedly many more J.P. Turner customers have suffered from these unlawful sales practices.

Dec 6, 2013

Martinez-Ayme Securities Sanctioned Again For Securities Law Violations

The Martinez-Ayme Financial Group Inc. D/B/A Martinez-Ayme Securities was recently sanctioned by the Financial Industry Regulatory Authority (FINRA) for alleged violations of Rule 101 of Regulation M of the Securities Exchange Act of 1934 and the self-regulatory agencies rules in connection with a series of private placement offerings, including a company described as CPWV. This company’s business was the development, commercialization and marketing of a series of electric generating power systems designed to produce electrical power with zero omissions or waste byproducts.

Dec 5, 2013

UBS Puerto Rico Bond Fund Investors Continue To Lose

Although there was a blip in the UBS sponsored Puerto Rico closed-end bond fund prices recently, the net asset values (NAVs) of the various funds have continued their move downward. The decline is a reflection of the Puerto Rican economy which has been in recession for nearly 8 years. The most recent NAV’s published on November 27 and 29, 2013, put the value of the funds as follows: