Yearly Archives: 2012
FINRA Fines Citigroup, Morgan Stanley, UBS and Wells Fargo $9.1 Million
The Financial Industry Regulatory Authority (“FINRA”) has fined Citigroup Global Markets, Inc. (“Citigroup”), Morgan Stanley, UBS Financial Services, Inc. (“UBS”) and Wells Fargo Advisors, LLC (“Wells Fargo”) a total of $9.1 million for selling more than $27 billion of complex, non-traditional exchange traded funds (“ETFs”) to investors for whom the exotic ETFs were unsuitable…. Read More »
Contractor Settles Whistleblower Suit for $6.4 Million
Walsh Construction (“Walsh”), a large general contracting company founded in 1898, has agreed to settle a whistleblower lawsuit related to multiple construction projects it completed in Chicago. The whistleblower, Gregory Hudalla (“Hudalla”), filed the lawsuit under the qui tam provisions of the False Claims Act nearly 7 years ago. Hudalla, a former construction manager… Read More »
Costa Rican Citizen Convicted in a Half-Billion Dollar Fraud Scheme
Minor Vargas Calvo (“Calvo”), a citizen of Costa Rica and president and majority owner of Provident Capital Indemnity, Ltd. (“PCI”), was convicted for carrying out a half-billion dollar fraud scheme, with more than 2,000 victims in the United States and abroad, during the period from 2004 to 2010. Calvo was convicted by a federal… Read More »
FINRA Panel Awards $4.1 Million to Family Trusts for Losses in CMOs and CDOs
A Newark, New Jersey Financial Industry Regulatory Authority (“FINRA”) Panel has awarded the Graham Jones Family Trust and the Graham Jones Charitable Remainder Trust a total of $4.1 million for losses sustained by the two trusts in bonds consisting largely of collateralized mortgage obligations (“CMOs”) and collateralized debt obligations (“CDOs”). As typical of FINRA… Read More »
FINRA Censures and Fines CapWest Securities
The Financial Industry Regulatory Authority (“FINRA”) has censured and fined CapWest Securities, Inc. (“CapWest”) $175,000 in connection with the firm’s communications to the public regarding tenants-in-common interests (“TICs”). According to FINRA, it found that CapWest failed to disclose the risks involved with investments in TICs, such as the lack of liquidity and the potential… Read More »
SEC Approves FINRA Rule Amendment Invalidating Predispute Arbitration Agreements for Whistleblower Disputes
The Securities and Exchange Commission (“SEC”) has approved amendments to Rule 13201 of the Financial Industry Regulatory Authority (“FINRA”) Code of Arbitration Procedure for Industry Disputes (“Industry Code”). Amended Rule 13201 states that parties are no longer required to arbitrate whistleblower claims arising under the Sarbanes-Oxley Act of 2002 (“SOX”) or any other statute… Read More »
Defense Contractor Settles Whistleblower Case For $36.9 Million
Defense contractor ATK Launch Systems, Inc. (“ATK”) has agreed to settle a whistleblower case for $36.9 million. The lawsuit was initially brought by whistleblower Kendall Dye, an ATK program manager, under the qui tam provisions of the False Claims Act. The whistleblower alleged that, from 2000 to 2006, ATK sold dangerous and defective combat… Read More »
FINRA Charges Florida Broker With Violations of Securities Rules
The Financial Industry Regulatory Authority, Department of Enforcement (“FINRA”) has filed a Complaint against Clyde Thornburg (“Thornburg”), a broker employed by NEXT Financial Group, Inc. in Sarasota, Florida. FINRA’s Complaint charges Thornburg with engaging in a pattern of unsuitable transactions for elderly and unsophisticated investors, including a mentally incapacitated 91-year old widow and an… Read More »
Florida Panel Awards Former U.S. Congressman $852,000 For Losses In Alleged Ponzi Scheme
After 42 days of hearings spanning the period from January 2011 to March 2012, a Financial Industry Regulatory Authority (“FINRA”) arbitration panel has awarded former U.S. Congressman Alan Grayson (“Grayson”) $852,000 for losses sustained in an alleged Ponzi scheme. The Award against Wachovia Securities, Inc., now known as Wells Fargo Advisors (“Wachovia”), was for… Read More »
Walgreens Settles Whistleblower Cases For $7.9 Million
Walgreens, a retail pharmacy chain based in Illinois, has agreed to pay the United States and participating states $7.9 million to resolve allegations that it violated the False Claims Act. The settlement resolves allegations initially brought by whistleblowers Cassie Bass, a former Walgreens pharmacy technician, and Jack Chin, an independent pharmacist. The whistleblowers brought… Read More »