September 2009 Archives

September 30, 2009

California Stockbroker Discipline Report for September 2009

The following information regarding broker misconduct and disciplinary activities taken against California stockbrokers was released by the Financial Industry Regulatory Authority (FINRA) in September 2009:

William David Brusseau formerly of Independent Financial Group in Pasadena, California, and Omni Brokerage of Pasadena, California, was barred from association with any FINRA member in any capacity for allegedly borrowing money from customers.

Stephen Timothy Crawford formerly of Unionbanc Investment Services, LLC in San Diego, California, was fined and barred from association with any FINRA member in any capacity for two years for allegedly borrowing money from customers.

Jacob Karamian formerly of Crowell, Weedon & Co. in Pasadena, California, was barred from association with any FINRA member in any capacity for allegedly transferring funds from a customer's account without their authorization.

Joaquinitio See Soliman (aka Jack Soliman) formerly of KMS Financial Services Inc., in Chino Hills, California, was barred from association with any FINRA member in any capacity for allegedly effecting discretionary transactions in customer accounts without written discretionary authority.

Donald Raymond Dunakin III formerly with Gunnallen Financial, Inc. of El Dorado Hills, California, is the subject of a FINRA disciplinary complaint alleging that he made unsuitable investment recommendations, including the purchase of securities on margin and providing false testimony to FINRA investigators.

September 21, 2009

Medical Capital Class Action or Arbitration: Investors Should Consider Their Options

Investors Have Choice to Make Regarding Medical Capital Corporation Fraud Recovery

Thumbnail image for Thumbnail image for Thumbnail image for medcap.jpgA class action lawsuit was filed in the Central District of California on September 18, 2009, against brokerage firms Cullum & Burks Securities, Inc., Securities America, Inc., Ameriprise Financial, Inc., and CapWest Securities, Inc., on behalf of investors who purchased so called "Medical Capital Notes" issued by Medical Provider Financial Corp. III, IV, V and/or VI on or after September 18, 2006.

The class action alleges that the defendant brokerage firms made materially false and misleading representations in the sale of the sale of the Medical Capital Notes. This class action has not yet been certified by the court. If the class is certified, the parties will be required to submit a proposed timeline for class members that want to opt out of the class action. Class members that elect to opt out can file a claim for their Medical Capital losses with FINRA. For more information about opting out of a class action and submitting an arbitration claim, please see our blog posting: Securities Arbitration vs. Class Actions: Consider Your Options. Investors who purchased Medical Capital Notes from brokerage firms that were not named as defendants are currently not included in the class action. If you believe you have a meritorious securities claim, speak with a securities attorney to discuss your rights and the advisability of opting out based on your individual circumstances.

Related Blog Post:

Is Mass-Arbitration in the Client's Best Interest?

Are Securities Arbitration Cases More Financially Rewarding for Investors than Class Actions?

September 10, 2009

California Court Certifies Schwab YieldPlus Class Action

A San Francisco federal judge has issued an order certifying a class action lawsuit against Charles Schwab & Co. alleging securities law violations in connection with Schwab's beleaguered YieldPlus Fund. The parties are required to submit to the court by September 10, 2009, a proposed timeline for class members that want to opt out of the class action. An updated blog posting will be issued once the opt out deadline is known. Click here to view all YieldPlus blog postings.

Three Classes of Investors Are Included in the Class Action

The court's order creates three different classes of plaintiffs. The three classes are:

  1. Yield Plus investors that acquired shares between November 15, 2006, and March 17, 2008.
  2. YieldPlus investors that acquired shares between May 31, 2006, and March 17, 2008.
  3. California residents who held shares in the YieldPlus fund on September 1, 2006.
YieldPlus investors not included in the above categories are excluded from the class action. However, investors omitted from the class still have the option of filing their own securities arbitration claim against Schwab to recover their YieldPlus losses. Unlike class actions, which must be pursued in court, individual claims must be submitted to arbitration before the Financial Industry Regulatory Authority (FINRA).

Class Members Can Opt Out of the Class Action

Members included the class action also have the right to opt out of the class. Class members that elect to opt out can file a claim for their YieldPlus losses with FINRA.. For more information about opting out of a class action and submitting an arbitration claim, please see our blog posting: Securities Arbitration vs. Class Actions: Consider Your Options

Click here to view all YieldPlus blog postings.

September 3, 2009

Expedited Arbitration Procedures for Senior Citizens and Seriously Ill Investors

At the University of San Francisco Law School's Investor Justice Clinic, where I am an adjunct professor and supervising attorney, I am seeing a disproportionately large number of senior citizens who are victims of securities fraud and account mismanagement. The oldest client at the clinic is in her 90's. Elderly clients and those who are seriously ill have unique needs that require swift justice.

The typical securities arbitration claim filed with the Financial Industry Regulatory Authority (FINRA) takes about 1.25 years to complete. Fortunately, investors who are 65 years or older or seriously ill can request an expedited hearing under a program that was established in June 2004. So far, 701 customers have participated in FINRA's expedited program and, according to FINRA, their cases have been resolved 31% sooner.

For eligible cases, FINRA assures investors that its staff will administer the hearing in an expeditious manner. This program is not specifically covered in the arbitration rules; however, FINRA has amended the Arbitrator's Reference Guide to remind the arbitrators that they should avoid unnecessary postponements or do anything to delay the proceedings. In my experience, the program has been helpful but the expedited procedures should be included in the arbitration code. As it now stands, the burden rests on the investor's attorney to insist on getting the earliest possible hearing dates while allowing enough time to adequately prepare the case.

September 1, 2009

Sales Assistant in Smith Barney's Palo Alto, California, Branch Office Barred for Securities Fraud Law Violations

The Financial Industry Regulatory Authority (FINRA) recently announced that a former Smith Barney sales assistant working out of the firm's Palo Alto, California, branch office was barred from the industry for securities fraud law violations that included bilking customers out of more than $850,000. Under the agreement reached with FINRA, the firm agreed to reimburse customers that were victimized by the actions of their former employee, Tamara Lanz Moon of Redwood City, California.

The improper activities went undetected for more than 8 years ending in March 2008. Moon's victims were mostly elderly individuals that were less likely to monitor their accounts. Moon allegedly forged customer's signatures so that she could make transfers between accounts that she controlled. Click here to view FINRA's Press Release.