Investment News: Next DOL Fiduciary Proposal Generates Opposition Prior to Release

The Department of Labor's (DOL) latest proposal to redefine fiduciary rules is facing fierce opposition from the insurance industry, even before the text has been released. The Department of Labor proposal, which is expected to be released in the next few weeks, would raise the standard of advice for retirement accounts. The insurance industry argues that the proposal would hurt middle- and low-income savers by making it more expensive for them to get financial advice. The Insured Retirement Institute (IRI), a trade group representing the insurance industry, released a statement on Saturday criticizing the Department of Labor proposal. The IRI said that the proposal would "significantly harm lower and middle-income workers and exacerbate the wealth gap for Black and Latino families." The DOL has not yet released the text of its proposal, so it is difficult to say exactly what it would do. However, it is clear that the proposal is generating a lot of opposition from the insurance industry. [...]

By |September 20th, 2023|Blog, Fraud, Legal Matters|

FRANKOWSKI FIRM INVESTIGATING POTENTIAL CLAIMS AGAINST LPL FINANCIAL LLC AND CHARLES FACKRELL

The Frankowski Firm is investigating potential claims against LPL Financial, LLC and its former broker Charles Fackrell, of Yadkinville, North Carolina, following a Financial Industry Regulatory Authority (“FINRA”) arbitration award of $462,000 against the firm based on Mr. Fackrell’s fraudulent Ponzi scheme and unsuitable trading in LPL customers’ accounts. Mr. Fackrell accepted a permanent bar from the securities industry by FINRA in February 2015 based on his failure to cooperate FINRA’s investigation into allegations that Mr. Fackrell converted customer funds and sold private securities offerings away from LPL without the firm’s knowledge or approval. Mr. Fackrell also pled guilty to criminal charges brought against him for securities fraud and was sentenced to more than five years in prison for running a $1.4 million Ponzi scheme while employed at LPL. Mr. Fackrell was also ordered to serve three years under court supervision and pay nearly $820,000 in restitution to former clients. In October, the State of North Carolina fined LPL Financial [...]

By |December 22nd, 2017|Fraud|

SEC ANNOUNCES FINES, CENSURE OF AMERIPRICE FINANCIAL FOR F-SQUARED ALPHASECTOR STRATEGIES

The Securities and Exchange Commission (“SEC”) has censured and fined Ameriprise Financial for its continued use of F-Squared AlphaSector strategies in its marketing to clients, even after learning that the AlphaSector strategies were based on flawed calculations. The F-Squared AlphaSector strategies were a mathematical algorithm which purported to calculate an appropriate buy or sell “signal” for nine exchange traded funds (“ETFs”) for nine industries across the S&P 500 index. The formula, however, miscalculated the historical performance of AlphaSector by incorrectly implementing signals earlier than when the signals could have actually occurred. This miscalculation resulted in highly inflated back-tested historical performance data. In 2014, F-Squared admitted wrongdoing in falsifying performance numbers in its advertising materials and payed a $35 million fine to the SEC. Previously, however, by October 2013, F-Squared had informed Amerprise of the flaw in its system and instructed Ameriprise to remove references to its advertising materials to performance information from F-Squared for periods prior to 2008. Instead, Ameriprise [...]

By |December 15th, 2017|Fraud|

FRANKOWSKI FIRM INVESTIGATING POTENTIAL CLAIMS AGAINST MORGAN STANLEY SMITH BARNEY AND TIMOTHY THOMAS GIBBONS

The Frankowski Firm is investigating potential claims against former Morgan Stanley Smith Barney broker Timothy Thomas Gibbons of New Orleans, based on allegations that in 2014 he made unsuitable recommendations to elderly investors, advising them to place high percentages of their accounts (in one instance 79% of a customer’s portfolio) in a single high-risk energy stock. The Financial Industry Regulatory Authority (“FINRA”) submitted a letter of Acceptance, Waiver and Consent making findings that Mr. Gibbons’ recommendations were unsuitable for his elderly customers based on their age, risk tolerance, investment objectives, and financial circumstances. Gibbons’ recommendations resulted in a collective loss of over $960,000 in the five accounts forming the basis of FINRA’s allegations. As a result of its findings, FINRA imposed an eighteen-month suspension of Mr. Gibbons’ FINRA association, fined Mr. Gibbons $20,000 and ordered that he pay partial restitution to his clients in the amount of $716,749.78. Mr. Gibbons accepted and consented to FINRA’s findings without admitting or denying [...]

By |November 21st, 2017|Fraud|