Is there Insurance Coverage for Fraud and Theft Victims?

Stockbroker Law - Monday, March 28, 2011
Is there Insurance Coverage for Fraud and Theft Victims?

In many instances, yes.  Victims of theft and embezzlement schemes often make the mistake of assuming they are not afforded any insurance protection or other financial security when their monies are stolen and embezzled.  Licensed brokerage firms are required to carry broker blanket bond and other types of insurance to cover acts of investor victimization. 

 


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Theft Cases Involving the Theft of Monies and Investments

Stockbroker Law - Monday, March 28, 2011
Theft Cases Involving the Theft of Monies and Investments

The past five years have seen an increase of cases involving the theft of monies from investment accounts.  Most notably, the Bernard Madoff case involved a theft of over 20 billion dollars from unsuspecting investors.  While the rights of theft victims seeking the recovery of their monies under the civil laws are clear, many victimized investors are lulled into a false sense of security, believing that a pending criminal prosecution will result in a return of their monies. 

 


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Churning of Investment Accounts

Stockbroker Law - Monday, March 28, 2011
Churning of Investment Accounts

What is account churning?  Account churning is when a financial advisor engages in the repeated purchase and sale of investments such as stocks and mutual funds for the sole purpose of generating sales commissions.  Churning activity in an investment account can deplete an account’s value due to the payment of excessive commissions, and even margin interest for accounts carrying margin features.   


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Internal Revenue Code Section 72t Early Withdrawal of Monies from a Retirement Account

Stockbroker Law - Thursday, March 03, 2011
Internal Revenue Code Section 72t Early Withdrawal of Monies from a Retirement Account

Internal Revenue Code §72t is a provision which permits retirees under the age of 59½  to withdraw monies from their IRA accounts pursuant to a mathematical formula of scheduled, periodic withdrawals.  Unfortunately, this provision has been used by unscrupulous financial advisors who have implemented excessive levels of withdrawals, which are not only permitted by the IRS, but which can also deplete retirement account assets, leaving retirees in a financial bind.
   


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Variable Annuities? Certainly Not Appropriate For Every Investor

Stockbroker Law - Thursday, March 03, 2011
Variable Annuities? Certainly Not Appropriate For Every Investor

The past ten years has seen an explosion in the sale of variable annuity investments to the investing public.  Variable annuities are an investment vehicle, which includes certain tax deferral benefits invested in any number of sub-accounts oftentimes tied to the performance of the stock market.  These investments include annual fees and charges which often approach 3% a year, as well as sales commissions and surrender penalties.  


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