New Fraud Charges After Investment Advisor Tries Paying Old Fraud Charges

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Brokerdealer.com blog update is courtesy of InvestmentNews’ Mason Braswell.

Jacob Cooper, investment advisor at Total Wealth Management

Jacob Cooper, investment advisor at Total Wealth Management

Investment Advisor firm, Total Wealth Management, was ordered to pay SEC fraud fines in April. After paying the fine, the firm is now being charged with using clients’ money to pay the initial fraud fines.

Investment adviser Jacob Cooper and his firm, Total Wealth Management, face a fresh set of fraud charges after they attempted to use client funds to settle an earlier fraud case with the Securities and Exchange Commission, according to a new complaint filed Wednesday.

The Securities and Exchange Commission filed the charges against Mr. Cooper and his San Diego-based firm after, according to the complaint, they misused investor money for the original settlement and defrauded clients through unexplained “administrative” fees.

The SEC is now seeking to freeze the firm’s assets, appoint a receiver to oversee remaining funds and assess civil penalties.

Total Wealth Management, which Mr. Cooper founded in 2009 and built up through a weekly radio show on investing, allegedly borrowed $150,000 in client funds to help settle an SEC administrative action from April. In that action, the SEC accused him of fraud for pooling around 75% of clients’ $100 million assets into a private fund, which he then invested in unaffiliated funds that paid an undisclosed revenue-sharing fee back to clients.

In addition, the SEC alleged in its most recent complaint that Mr. Cooper was using investor money to pay for legal fees on a related class action brought by clients, who have not been able to withdraw their money or terminate their relationship.

He allegedly charged several Total Wealth investors between $3,500 and $7,500 per account under the guise of “administrative” fees, the agency said.

Then, in a mass email from Total Wealth Management, the firm purportedly told clients: “Many of you were aware of a class action lawsuit brought on by only a few clients causing fee increases for all.”

“The irony is that [the class action] counsel and a very small group of investors have caused a significant amount of those increased fees they have complained about,” the email added.

The SEC disagreed.

“[Mr.] Cooper has an inherent conflict of interest since he is using investor money to defend himself in a lawsuit brought against him by investors,” the complaint stated.

A lawyer for Mr. Cooper, Charles Field of Chapin Fitzgerald Knaier, declined to comment. A number listed for Total Wealth Management was not in working order.

Mr. Cooper has stated that he is in a period of “deep financial stress,” and that he has “no income” and “no job opportunities,” according to the complaint.

He has been writing fantasy novels, however, including one published last July called “Circle of Reign (The Dying Lands Chronicle Book 1).”

Total Wealth Management had about $103 million in assets under management and 773 client accounts, according to its Form ADV from December. The firm found clients through a weekly radio show Mr. Cooper hosted and through free lunches, the SEC said.

For the original article from InvestmentNews, click here

Opus Bank Expands Into BrokerDealer Services

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Opus BankBrokerdealer.com blog update is courtesy of a press release from Opus Bank and found on MarketWatch

Opus Bank, a California-chartered commercial bank, provides high-value, relationship-based banking products, services, and solutions to its clients through its Retail Bank, Commercial Bank, Merchant Bank, and Correspondent Bank. They recently just expanded to provide brokerdealer services through a subsidiary called Opus Financial Partners.

Opus Bank (“Opus” or the “Bank”) OPB, -0.54% announced today that it has established and received regulatory approval for Opus Financial Partners, LLC (“Opus Financial Partners” or “OFP”), the broker-dealer subsidiary of the Bank. Opus Financial Partners will further enable Opus’ Merchant Bank to help its clients address their financial and advisory needs related to raising equity capital, targeted acquisition and divestiture strategies, general mergers and acquisitions, debt and equity financing, balance sheet restructuring, valuation, strategy, and performance improvement. Dale Cheney, Senior Managing Director, Head of the Merchant Bank, will also lead Opus Financial Partners.

Dale Cheney, Senior Managing Director, stated, “Opus Financial Partners’ capabilities complement Opus’ Merchant Bank by providing a comprehensive and integrated capital and advisory solution to lower middle-market companies, business owners, and private equity groups.” Cheney added, “The traditional investment banking model, with its layers of intermediaries and capital providers, is inefficient and outdated for today’s dynamic business environment where business owners and entrepreneurs are constantly challenged by limited time and resources. We partner with these executives and their companies to provide a sophisticated, one-stop capital and advisory solution that allows them to focus on building a successful business.”

Stephen H. Gordon, Opus Bank’s Founding Chairman, CEO & President, commented, “There is a void in the lower middle-market where access to debt and equity capital is limited and delivered inefficiently. Additionally, even successful companies that want to expand and grow their businesses typically don’t have access to the sophisticated M&A and other advisory services they need in order to capitalize on strategic opportunities and remain competitive. The capabilities provided through Opus’ Merchant Bank and through our broker-dealer, Opus Financial Partners, will help our clients to thoughtfully and strategically grow, capitalize or monetize their business.” Mr. Gordon concluded, “Having begun my career over 30 years ago as an investment banker, I recognize that we have an opportunity to fill a void and address a significant need by building a market-leading West Coast-based merchant bank that adheres to Opus’ entrepreneurial philosophy of partnering with our clients, as opposed to simply serving as transaction advisors.”

Study Says: BrokerDealers Still In Need of Brand Burnishing

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BrokerDealer.com blog update courtesy of extract from 10 July NY Post, reporter Gregory Bresiger.

New York City - Helicopter tourWall Street’s reputation, despite a 5-year bull market, still stinks.

Indeed, the bankers’ “chronic risk image” remains a huge problem, say many of the mid-level pros who work for its largest firms.

The Street’s regulatory and image problems continue to spook many traders and bankers, who say the risks and dangers of the industry are about the same as before the stock market meltdown of 2008, according to the results of the Makovsky Wall Street Reputation Study.

“The 2014 study findings question how far financial services brands have advanced since the financial crisis,” according to Scott Tangney, executive vice president at Makovsky.

“The industry,” he adds, “is walking on a tightrope, with the combination of negative perception, regulator actions and greater risk sapping reputation and financial performance.”

Financial services continue to be “pummeled by negative perception and regulatory overhaul and action,” according to poll respondents.

The biggest perception problems for the industry, the poll found, were “negative public perception” (64 percent) and “regulatory actions” (55 percent). The latter includes investigations, lawsuits and fines.

Other highlights of the Makovsky study include: (to continue reading, please click here to the NY Post article)

BrokerDealer Icon “Ace” Greenberg; Frmr Bear Stearns Chief is Dead

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Courtesy of AP

Courtesy of AP

BrokerDealer.com blog post courtesy of extract from Bloomberg LP

July 25- Alan C. “Ace” Greenberg, who as chief executive officer of Bear Stearns Cos. transformed a small bond shop into the fifth-largest U.S. securities firm before it collapsed in 2008 in one of the key events of the global credit crisis, has died. He was 86.

He died Friday at Mount Sinai Hospital in New York of complications from cancer, his son, Ted Greenberg, said in an e-mail.

An amateur magician and bridge player, Mr. Greenberg took over New York-based Bear Stearns in 1978, when it was a private partnership with about 1,000 employees and $46 million in capital. He expanded shareholders’ equity to $1.8 billion and headcount reached 6,300 by 1993, when he handed power to James “Jimmy” Cayne, himself a one-time professional bridge player. Mr. Greenberg stayed on with Bear Stearns as an equities trader.

The forced sale of 85-year-old Bear Stearns to JPMorgan Chase & Co. in March 2008 followed a bank run by clients that left Bear Stearns on the brink of bankruptcy. The firm’s troubles traced to 2007, when two of its hedge funds tied to the real estate market collapsed. In a 2010 book, Mr. Greenberg said the run on Bear Stearns in 2008 stemmed from “a groundless rumor” that it had a liquidity problem at a time when it had $18 billion in cash reserves.

Chairman emeritus

On March 16, 2008, JPMorgan Chief Executive Officer Jamie Dimon agreed to buy Bear Stearns for $2 per share, later raised to $10. The stock had traded at $172 in January 2007. After the sale, Mr. Greenberg became vice chairman emeritus of JPMorgan.

“It’s hard to imagine a financial services industry without Ace,” Mr. Dimon and the firm’s head of asset management, Mary Erdoes, said Friday in a memo to employees.

Markit Heads to IPO Market, Wall Street BrokerDealers All Smiles

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wsj logoBelow BrokerDealer.com blog news extract courtesy of the Wall St. Journal.

One of the biggest financial service industry IPOs of the season (as well as any other industry initial public offering of the season) is scheduled to launch on Thursday, and, as noted by the WSJ, Wall Street’s biggest banks are in line for a payday of up to a billion dollars from Markit Ltd.’s share float, as they cash out part of their stakes in the financial-data firm and divvy up the underwriting fees.

The 12 financial institutions that rank among the London company’s top shareholders expect to raise as much as $1.02 billion selling shares Wednesday at as much as $25 apiece, a rare bit of good news at a time of sluggish revenue, soft trading activity and regulatory scrutiny. The largest sellers are expected to be Bank of America Corp. BAC 0.00% , Citigroup Inc. C +0.29% and Deutsche Bank AG DBK.XE +0.49% , with Bank of America selling seven million shares to raise up to $176 million, according to filings.

The firm’s largest holders—an employee-benefits trust, private-equity firm General Atlantic and Singapore state-owned investment company Temasek Holdings Pte Ltd.—aren’t selling their shares, according to regulatory filings. The Canada Pension Plan Investment Board is considering buying $450 million worth of the shares, the filings said.

The offering, which begins trading Thursday, could give the financial-information company a $4.5 billion market value, highlighting Markit’s evolution in the years since the financial crisis and investors’ thirst for data on derivatives, bonds, loans and foreign-exchange markets.

“Markit started with a great idea, which was to create a central pricing service in what were at the time very rapidly growing credit markets,” said Mark Beeston, a former board member and founder of financial-technology venture-capital firm Illuminate Financial Management.

At the same time, the banks that have backed Markit since its founding more than a decade ago have been jockeying for position in selling the offering to the public. The deal is expected to raise as much as $1.1 billion altogether.

The company and the banks are discussing a fee pool of about 4% on the IPO, which would amount to as much as $45 million if the deal is priced at the top of the range, people familiar with the matter said.

The banks skirmished over their roles as the IPO was in its planning stages, according to some of the people familiar with the matter.

For the full story, please click here to visit the WSJ.