Breach of Fiduciary Duty

Financial Elder Abuse – Financial Elder Exploitation – Florida Litigation and FINRA Arbitration Attorney

Published on: November 25, 2013 | By Russell L. Forkey, P.A.

Financial Elder Abuse and Elder Exploitation – Boca Raton, Delray Beach, West Palm Beach and Fort Lauderdale, Florida Litigation and Arbitration Attorney:

Florida Statute Section 415.1111 grants to vulnerable (elder) adults a cause of action as a result of financial and other types of abuse. It provides that a vulnerable adult who has been abused, neglected, or exploited as specified in the law has a cause of action against any perpetrator and may recover actual and punitive damages for such abuse, neglect, or exploitation. The action may be brought by the vulnerable adult, or that person’s guardian, by a person or organization acting on behalf of the vulnerable adult with the consent of that person or that person’s guardian, or by the personal representative of the estate of a deceased victim without regard to whether the cause of death resulted from the abuse, neglect, or exploitation. The action may be brought in any court of competent jurisdiction to enforce such action and to recover actual and punitive damages for any deprivation of or infringement on the rights of a vulnerable adult. A party who prevails in any such action may be entitled to recover reasonable attorney’s fees, costs of the action, and damages. The remedies provided in this section are in addition to and cumulative with other legal and administrative remedies available to a vulnerable adult.

As the elder population in Florida has increased, incidents of financial elder abuse has accelerated at an alarming rate. An area of financial elder abuse that has recently exploded is the twisting (unnecessary sale and purchase of annuities) of variable and fixed annuities.

Annuity Fraud and Misrepresentation and Elder Abuse – Florida Annuity and Insurance Fraud FINRA Arbitration and Litigation Attorney

Published on: November 21, 2013 | By Russell L. Forkey, P.A.

South Florida Elder Abuse Insurance and Annuity Fraud and Misrepresentation Attorney Russell L. Forkey, Esq.

The Securities and Exchange Commission (SEC) recently charged a self-described institutional trader in Colorado with defrauding elderly investors into making purported investments in government-secured bonds as he used their money to pay his mortgage.

The SEC alleges that Gary C. Snisky of Longmont, Colo., primarily targeted retired annuity holders by using insurance agents to sell interests in his company Arete LLC, which posed as a safe and more profitable alternative to an annuity. Investors were told their funds would be used to purchase government-backed agency bonds at a discount, and Snisky as an institutional trader would use the bonds to engage in overnight banking sweeps. However, Snisky did not purchase bonds or conduct any such trading, and he misappropriated approximately $2.8 million of investor funds to pay commissions to his salespeople and make personal mortgage payments.

South Florida Investment Adviser Fraud and Misrepresentation FINRA Arbitration and Litigation Attorney

Published on: November 21, 2013 | By Russell L. Forkey, P.A.

Tampa, Fort Meyers and Naples, Florida Investment Adviser Fraud, Breach of Fiduciary Duty and Misrepresentation FINRA Arbitration and State and Federal Court Litigation Attorney:

The Securities and Exchange Commission recently announced charges against two Tampa-area investment advisers accused of committing fraud by failing to truthfully inform clients about compensation received from offshore funds they were recommending as safe investments despite substantial risks and red flags.

The advisers also are charged with contributing to violations of the “custody rule” that requires investment advisory firms to establish specific procedures to safeguard and account for client assets.

FAQ’s Margin – Fort Lauderdale, Florida Margin Abuse and Negligence FINRA Arbitration and Litigation Attorney

Published on: November 18, 2013 | By Russell L. Forkey, P.A.

Margin Abuse, Margin Miscalculation and Excessive Margin – South Florida FINRA Arbitration and Litigation Attorney:

“Margin” is borrowing money from your broker to buy a stock and using your investment as collateral. Investors generally use margin to increase their purchasing power so that they can own more stock without fully paying for it. But margin exposes investors to the potential for higher losses. Consequently, the use of margin is not appropriate for all investors, especially the unsophisticated or those who are risk adverse.

The Federal Reserve Board and many self-regulatory organizations (SROs), such as the NYSE and FINRA, have rules that govern margin trading. Brokerage firms can establish their own requirements as long as they are at least as restrictive as the Federal Reserve Board and SRO rules. Here are some of the key rules you should know:

Common Stock, Preferred Stock, Corporate Bonds, Municipal Bonds, ETF’s and Mutual Funds – South Florida Securities and Investment Fraud, Negligence and Breach of Fiduciary Duty FINRA Arbitration and Litigation Attorney

Published on: November 6, 2013 | By Russell L. Forkey, P.A.

Common Stocks, Preferred Stocks, Corporate Bonds, Municipal Bonds, Promissory Notes, Exchange-Traded Funds (ETF’s), and Mutual Funds – South Florida Securities and Investment Fraud, Negligence and Breach of Fiduciary Duty FINRA Arbitration and Litigation Attorney:

The elements of a breach of fiduciary duty action are (1) the existence of a fiduciary duty and (2) the breach of that duty that was the proximate cause of the plaintiff’s damages. A fiduciary relationship exists when confidence is reposed by one party and trust accepted by the other. Such a relationship exists where confidence is reposed on one side and there is resulting superiority and influence on the other. When a fiduciary relationship has not been created by an express agreement, the question of whether the relationship exists generally depends upon the specific facts and circumstances surrounding the relationship of the parties in a transaction in which they are involved.

The law is clear that a broker owes a fiduciary duty of care and loyalty to a securities investor. The type and extent of this duty is fact specific. In other words, your relationship with, in the case, your broker/dealer and/or account executive will be determinative of the type of duty that you are owed. However, please keep in mind that the extent of this duty is organic. It is constantly changing. It is for this reason that your specific circumstances need to be reviewed by a qualified professional.

Charlotte Bredal Oliver – Florida Variable and Fixed Annuity, Life and Health Insurance Fraud and Misrepresentation Litigation and Arbitration Attorney

Published on: October 27, 2013 | By Russell L. Forkey, P.A.

Florida Variable and Fixed Annuity, Life and Health Insurance Fraud and Misrepresentation Attorney:

In the Matter of: Charlotte Bredal Oliver, Case No.: 140535-13-AG:

On September 20, 2013, the Florida Department of Financial Services (“Department”) issued a Consent Order against Charlotte Bredal Oliver, which, in part, required the Respondent to surrender to the Department all licenses issued to the Respondent pursuant to the Florida Insurance Code.

Matthew Watson Shaw Consent Order – South Florida Insurance and Variable Annuity Consumer Advocate Litigation and Arbitration Attorney

Published on: October 26, 2013 | By Russell L. Forkey, P.A.

Variable Annuity Misrepresentation – Florida Litigation and Arbitration Attorney:

In the Matter of: Matthew Watson Shaw, Administrative Case No: 139968-13-AG:

On September 4, 2013, the Florida Department of Financial Services entered a Consent Order against Matthew Watson Shaw, which was based upon a Settlement Agreement for Consent Order dated August 9, 2013. In the Consent Order, the Respondent’s licensure and eligibility for licensure as an insurance agent within the State of Florida was surrendered to the Department.

OX Trading, LLC, optionsXpress, Inc. and Thomas E. Stern – South Florida Option Fraud and Breach of Fiduciary Duty FINRA Arbitration and Litigation Attorney

Published on: October 23, 2013 | By Russell L. Forkey, P.A.

In the Matter of OX Trading, LLC, optionsXpress, Inc., and Thomas E. Stern

The Commission issued an Order Making Findings and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 as to OX Trading, LLC and optionsXpress, Inc. (OX Order). The OX Order finds that OX Trading, LLC (OX Trading) willfully violated Sections 15(a) and 15(b)(8) of the Securities Exchange Act of 1934 by operating as an unregistered dealer from October 2009 to November 2010 and transacting in securities while not a member of a national securities association or a national exchange from March 2009 to November 2010, respectively. The OX Order also finds that optionsXpress, Inc. caused OX Trading’s violations. The OX Order ordered OX Trading and optionsXpress to cease and desist and ordered OX Trading to pay $2,750,000 in disgorgement, prejudgment interest of $253,094.39, and a civil money penalty of $750,000. (Rel. 34-70739).

The Commission also issued an Order Making Findings and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 and Section 9(b) of the Investment Company Act of 1940 as to Thomas E. Stern (Stern Order). The Stern Order finds that Thomas E. Stern (Stern), OX Trading’s Chief Financial Officer and Chief Compliance Officer during the relevant time period, willfully aided and abetted and caused OX Trading’s violations of Sections 15(a) and 15(b)(8) of the Exchange Act. The Stern Order ordered Stern to cease and desist and to pay a civil money penalty of $50,000. (Rel. 34-70740) Respondents consented to the issuance of the Orders. These proceedings were instituted on April 19, 2012. (Rel. 34-66831).

Equity Indexed Annuity – South Florida Insurance and Securities Fraud FINRA Arbitration and Litigation Attorney

Published on: October 16, 2013 | By Russell L. Forkey, P.A.

Equity Indexed Annuity (Elder Abuse) – Fort Lauderdale, Boca Raton, Delray Beach, Lake Worth and West Palm Beach, Florida Insurance (fixed and variable annuity) and Securities Fraud and Misrepresentation FINRA Arbitration and Litigation Attorney:

An Equity Indexed Annuity is an annuity whose interest or other types of earnings, during the accumulation period, are linked to rises in a stock index. Such contracts have a minimum annual return that guarantees principal, so they can offer upside potential and downside protection. They sometimes come with a cap and usually have early withdrawal (surrender) penalties.

Recently, we have seen an increase in the twisting of fixed and variable annuity and other types of insurance products. Twisting is the unethical practice of convincing a customer to trade and insurance product unnecessarily, thereby generating a commission for the broker or salesperson. An example of twisting in the insurance arena arises when an insurance salesperson persuades a policyholder to cancel his or her policy or allow it to lapse, in order to sell the insured a new policy, which would be more costly but which would produce sizable commissions for the salesperson. The damage associated with this unethical practice is particularly devastating to the elderly.

Broker – Dealers (How to Identify One) – Florida Securities and Investment Fraud and Mismanagement FINRA Arbitration and Litigation Attorney

Published on: October 12, 2013 | By Russell L. Forkey, P.A.

Miami, Fort Lauderdale, Boca Raton and West Palm Beach Florida Investment Fraud and Misrepresentation FINRA Arbitration, AAA Arbitration, JAMS Arbitration, State and Federal Court Litigation Attorney, Russell L. Forkey, Esq.

Who can be classified as a “Broker”.

Before considering if you were impacted by broker/dealer fraud, misrepresentation, mismanagement, breach of fiduciary duty or negligence, it is necessary for the reader to understand what constitutes a broker/dealer and what the difference is between the two. Section 3(a)(4)(A) of the Act generally defines a “broker” broadly as any person engaged in the business of effecting transactions in securities for the account of others.