Finra Takes Aim At MetLife BrokerDealer Unit

Posted on November 13, 2015 by admin

(Bloomberg) — MetLife Inc., the largest U.S. life insurer, said the Financial Industry Regulatory Authority’s staff has indicated the agency will seek a “significant fine” from the company’s broker-dealer unit as part of a probe into possible violations tied to variable annuities.

The company is cooperating in this investigation, MetLife said Thursday in its quarterly regulatory filing. The probe focuses on potential violations “regarding alleged misrepresentations, suitability, and supervision in connection with sales and replacements of variable annuities and certain riders on such annuities,” MetLife said in the filing.

Finra, the brokerage industry’s regulator, is among government watchdogs seeking to guard against abuses in the sale of retirement and savings products in the U.S. The authority told the insurer on Sept. 25 that it would recommend disciplinary action, according to the filing.

“We strongly disagree with the conclusions reached by Finra, and we will defend ourselves vigorously,” John Calagna, a spokesman for the New York-based insurer, said in an e-mailed statement. “MetLife is reserved for this matter.”

The insurer said in the filing that its estimate for reasonably possible legal costs in excess of reserves was as much as $425 million. That compares with an upper range of $410 million at the end of the second quarter.

SEC Chairwoman: Fiduciary View-Do It Right, Not Right Away

Posted on November 10, 2015November 10, 2015 by admin

SEC Chairwoman Mary Jo White says slow pace for instituting new fiduciary mandates for brokerdealers and registered investment advisors is because “the SEC wants to avoid unintended consequences and ‘get it right.’

10 November (InvestmentNews.com)- Securities and Exchange Commission Chairwoman Mary Jo White said Tuesday that agency staff is “full-out” working on a proposal to raise standards for retail investment advice, but that it would take time to “get it right.”

BrokerDealer.com is home to the largest global database/directory of brokerdealers operating in more than 30 countries across the free world.

A primary reason for the slow pace is that the SEC wants to avoid unintended consequences, Ms. White told the audience at the Securities Industry and Financial Markets Association annual conference in Washington.

“If at the end of the day, you are depriving retail investors of reliable, reasonably priced advice, you will not have succeeded, obviously, in your purpose,” she said.

Ms. White’s comments echo those the industry makes when it criticizes the Labor Department best-interests rule for advice on retirement accounts, which is on its way toward finalization.

“It is a reminder that hopefully the DOL will reconsider [its proposal] due to the complexity of the issue,” Ira Hammerman, SIFMA executive vice president and general counsel, said in an interview. “The DOL should re-propose what they’re contemplating so that all interested parties can get one more look at what the DOL thinks the solution is.”

In the five years since the Dodd-Frank financial reform law gave the SEC authority to promulgate a rule that would require all retail investment advice to be given in the best interests of the client, the SEC has not made discernable progress.

“We will move on it as expeditiously as we can,” Ms. White said. “We must get it right and really take into account the complexities and impact. But we’re very full-out focused on it.”

In March, Ms. White told a SIFMA conference she wants the SEC to move ahead on a fiduciary rule. At Tuesday’s SIFMA meeting, she declined to give a timeline, but said crafting a proposal could be a protracted process.

“It’s not a short, quick, uncomplicated rulemaking,” she said.

In addition to a fiduciary duty rule, the SEC is working on a rule that would allow adviser examinations by third-party organizations.

In a meeting with reporters on the sidelines of the conference, Ms. White said the agency is further ahead on the exam rule than the fiduciary rule, but “it’s going to take time to do them right.”

Due in part to the timing of an SEC rule, an advocate for the DOL rule said the agency should proceed independently.

“Nothing that Chair White said today provides any justification for the DOL’s delaying or reconsidering its efforts,” said Barbara Roper, director of investor protection at the Consumer Federation of America. “They need to finalize the rule.”

For the full story from InvestmentNews Daily, please click here

How This Wall Street Firm Salutes Veterans Day

Posted on November 9, 2015 by admin

Broker-Dealer Mischler Financial Group (“Mischler”) (www.mischlerfinancial.com) , the securities industry’s oldest minority investment bank and institutional brokerage owned and operated by Service-Disabled Veterans announced that in connection with the firm’s annual recognition of Veteran’s Day, Mischler has pledged a portion of the firm’s entire November 2015 profits to The Bob Woodruff Foundation (“BWF”), the national non-profit established by the award-winning ABC News journalist Bob Woodruff and his wife, Lee Woodruff. Mischler contributes more than 10% of the firm’s profits to disabled veteran initiatives throughout each year.

Mischler Financial’s pledge to Bob Woodruff Foundation coincides with the firm’s ongoing sponsorship of Veterans on Wall Street (VOWS), the financial industry’s leading advocacy dedicated to mentoring and career development of military veterans who transition to the financial services industry.

In a statement by Mischler Financial Chief Executive Dean Chamberlain, a former US Army Captain and a U.S. Military Academy at West Point graduate, “Our continued commitment to Bob Woodruff Foundation, as well as our role at VOWS, is based on our legacy of re-directing firm profits to support what we believe are the most crucial, service-disabled veteran programs. Our giving back strategy targets four discrete objectives; direct financial support that can be truly impactful, career building and mentorship, advancing veteran-centric legislative initiatives, and working with major corporations to help guide their respective internal veteran mentoring and community outreach programs.”

Added Chamberlain, “The fact that our institutional trading desk clients make it a point to support our philanthropic mission serves as inspiration for all of our team members and underscores a shared alignment with causes that are critical to our nation’s veteran community; for that we are greatly appreciative.”

Entire release at http://mischlerfinancial.com/category/news-and-information-mischler-financial-service-disabled-veteran-owned-minority-broker-dealer/giving-back-service-disabled-veterans/

SEC Cites Frmr Wells Fargo Analyst With Insider Trading

Posted on November 3, 2015 by admin

What’s worse than going to a dentist for anything more than a teeth cleaning? Being a broker-dealer and getting hit with insider trading allegations by the SEC in connection with trading activity in American Dental Partners Inc. (NASDAQ:ADPI). What’s worse than that? Finding members of the FBI on your doorstep who really want to pull your teeth out of your head and bring a criminal case against you based on the allegations made by the SEC.

(Reuters) Nov 2 U.S. securities regulators on Monday accused a former Wells Fargo & Co analyst of engaging in an insider trading scheme that enabled her then-boyfriend to make over $220,000.

In a lawsuit filed in federal court in Boston, the U.S. Securities and Exchange Commission said Shirmila Doddi, the analyst, tipped Vlad Spivak off to a deal involving a dental practice management company in 2011.

The SEC said Spivak, 39, had been unemployed and supported himself day trading when he bought shares in American Dental Partners Inc ahead of its $398 million acquisition by private equity firm JLL Partners Inc.

The SEC said Spivak learned that the company was going to be involved in a deal from Doddi, who became his romantic partner after meeting him salsa dancing.

At the time, she was living in Boston and working at Wells Fargo, which had been advising American Dental Partners on potential transactions, the SEC said.

Her tips about American Dental Partners in October 2011 marked an exception for Doddi, the SEC said, who had otherwise rejected repeated requests for tips from Spivak, who the regulator said considered insider trading “not a big deal.”

“Although Doddi did not trade on the information, in tipping Spivak, she conferred a gift upon a romantic partner,” the SEC said in its lawsuit.

After the deal was announced, the price of American Dental Partners’ stock rose by 75 percent, the SEC said, enabling Spivak to realize $222,357 in profits.

Doddi, 27, agreed to a partial settlement without admitting or denying wrongdoing, with financial penalties to be determined at a later date. A lawyer for Doddi, who now lives in San Diego, did not respond to a request for comment.

A lawyer for Spivak, who lived in Medford, Massachusetts, did not respond to requests for comment.

The case is U.S. Securities and Exchange Commission v. Spivak, U.S. District Court, District of Massachusetts, No. 15-cv-13704. (Reporting by Nate Raymond in New York; Editing by Alan Crosby)

Mark Cuban Takes on SEC Again

Posted on November 2, 2015 by admin

Law360, Los Angeles (October 30, 2015, 9:52 PM ET) — The Eleventh Circuit on Thursday allowed billionaire Mark Cuban, a self-described victim of U.S. Securities and Exchange Commission overreach, to file a third-party brief backing real estate developer Charles L. Hill, who is challenging the SEC’s expanded but controversial use of administrative law judges.

Cuban, an entrepreneur and owner of the Dallas Mavericks who beat insider trading allegations brought against him by the SEC in 2013 after a jury trial, argued in an amicus brief filed with the court Thursday that the SEC’s aggressive use of a “defective” in-house tribunal creates unpredictability that harms the public’s best interests.

The SEC is virtually undefeated in in-house administrative proceedings, Cuban said, but is far less successful when it litigates in federal court.

“When the SEC has the ability to significantly influence the outcome of a complex, credibility-based matter such as its insider trading case against Mr. Cuban — or its insider trading case against Mr. Hill — merely by placing it into an administrative proceeding rather than a federal court, investors’ ability to predict the types of conduct that will, or will not, result in sanction is diminished, and the free flow of capital is impeded,” the 39-page brief states.

Cuban said that the SEC’s designation of administrative law judges as employees and not officers creates an “inherently biased proceeding” in which the judges are pressured to favor the SEC’s division of enforcement in administrative proceedings, according to the brief.

“The SEC seeks to force Mr. Hill to litigate similar [insider trading] issues before an ALJ that the SEC states has the status of a low-level functionary, a mere employee, with neither the stature (nor political accountability) of an officer nor the independence of a federal judge,” he said.

For the full story from Law360, please click here