In a recent SEC complaint, there were allegations made against The Nutmeg Group, LLC, and others, that Nutmeg has invested fund assets almost entirely in private investments in public equity ("PIPE") transactions. Nutmeg was an investment adviser of 15 funds.  The SEC alleges in it's complaint that Nutmeg improperly commingled investor and fund assets, and misappropriated over $4 million in fund assets, failed to maintain […]

JHS Capital Advisors Inc. and a former broker, Enver R. Alijaj, were fined $1.9 million in a Finra arbitration last week stemming from allegations that the broker traded in a client's account excessively to generate commissions. The broker was also forced to pay $500,000 to settle a previous charge of churning. Churning is illegal and unethical. On the […]

Thomas Edward Kelly (CRD #1386403, Registered Principal, Johnson City, New York) was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Kelly consented to the described sanction and to the entry of findings that he engaged in a scheme to defraud investors, including firm customers, of funds totaling […]

  Kyle Timothy Holland (CRD #2308543, Registered Principal, Austin, Texas)  was barred from association with any FINRA member in any capacity. Without admitting or denying the allegations, Holland consented to the described sanction and to the entry of findings that, acting in the capacity of his member firm’s managing director, he engaged in activities requiring […]

  Randy Craig Hester (CRD #1382578, Registered Representative, Highland Park, Illinois)   was censured, fined $5,000 and suspended from association with any member firm in any capacity for one year. The fine must be paid either immediately upon Hester’s reassociation with a FINRA member firm following his suspension, or prior to the filing of any […]

Thomas Eugene Hendricks (CRD #2622427, Registered Representative, Salem, Ohio) was barred from association with any FINRA member in any capacity. Without admitting or denying thefindings, Hendricks consented to the described sanction and to the entry of findings that he borrowed $3,000 from a customer/personal friend to be repaid by a certain date, but failed to […]

FINRA, the Financial Industry Regulatory Authority Inc., issued an investor alert about the risks of ETNs, exchange-traded notes, after an investigation of Credit Suisse and Barclays ETNs this year. ETNs are often thought of as as ETFs, exchange-traded funds, but in reality, the two are very different.  ETNs are promissory notes written by banks to deliver the returns of an […]

There will be a major revamping of suitability mandates effective July 9, 2012, that has some in the broker-dealer world worried about much broader obligations to oversee customer accounts and investment strategies, writes Dan Jamieson in an article from InvestmentNews.com, July 5, 2012. There will be a rule which requires brokers to perform reasonable diligence on products, understand those […]

In a press-release dated July 2nd, 2012, from their website, The Financial Industry Regulatory Authority (FINRA) announced a pilot program specifically designed for large arbitration cases for claims of $10 million or more. This program enables parties to customize the administrative process to better suit special needs of the larger case and allows them to bypass certain FINRA […]