Broker Rights in Promissory Note and Forgivable Loan Cases

Stockbroker Law - Tuesday, April 26, 2016
Broker Rights in Promissory Note and Forgivable Loan Cases

Brokerage firms have used forgivable loan and promissory note agreements as inducements to either hire new brokers and/or compel their current brokers to keep their book of business with their firms. Notably, these agreements oftentimes include overreaching covenants not to compete and/or covenants not to solicit, with which firms seek to compel, restrain and handcuff brokers from leaving their firms. 


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Follow Up: SEC Issues Report on Definition of Accredited Investor

Stockbroker Law - Thursday, April 21, 2016
Follow Up: SEC Issues Report on Definition of Accredited Investor

On December 18, 2015 the Securities Exchange Commission issued a comprehensive report including the clarification of the definition of Accredited investor. The financial markets have seen an explosion of the sale of Regulation D private placement type investments to unsuspecting investors who are oftentimes tricked into being convinced or otherwise representing that they are in fact accredited investors. Unscrupulous brokers engage in this trickery in order to push speculative and illiquid, private placement type investments, oftentimes including the purchase of an interest in an operating business enterprise or operating company. 


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SEC Division of Enforcement Warns Against Pyramid Schemes

Stockbroker Law - Tuesday, April 12, 2016
SEC Division of Enforcement Warns Against Pyramid Schemes

On March 2, 2016 Andrew Ceresney, Director of the Division of Enforcement of the U.S. Securities and Exchange Commission addressed the public on violations that target retail investors with pyramid schemes noting “we protect the interests of retail investors by bringing bad actors to justice and by returning money to victimized investors.” The presentation noted the proliferation of pyramid schemes often targeting working class and the retirement community and other vulnerable retail investors.  


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FINRA Warns Against High-Yield CD Offers

Stockbroker Law - Tuesday, April 05, 2016
FINRA Warns Against High-Yield CD Offers

In an investment alert dated February 9, 2016, the Financial Industry Regulatory Authority (FINRA) warned investors that high-yield CD offers can be big for high-commission investments. The investor alert warns against sales pitches designed to trick unsuspecting investors into purchasing very costly, potentially risky investments which are not in fact FDIC insured CD like products. 


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