Archive for November, 2008

Brokers Gone Wild (Part 3)

Friday, November 28th, 2008

The Qualify Pitch, the Take Away Pitch, and the Test Drive  They are only three of the many sales techniques stockbrokers and scam artists will use to take your nest egg, or at least a good portion of it, away from you.  In each of the next three posts in this series, we will examine each of them in turn.  Soon-to-be unemployed and/or desperate brokers who turn to selling financial scams will likely use at least one - and probably all three - of them eventually. (more…)

Brokers Gone Wild (Part 2)

Wednesday, November 26th, 2008

The central feature of the scam that will destroy your nest egg?  Safety.

You will learn about it from someone you trust.  It will promise guaranteed returns.  You will see it work with your own eyes.  And, when all the smoke has cleared, all of your money will be gone. (more…)

It’s A Long Process

Tuesday, November 25th, 2008

The Securities and Exchange Commission (SEC) filed an enforcement action against Jack A. Calvin in March of 2003 and obtained a default judgment in December of 2003.  The Court found Calvin, of Ozark, Missouri, liable for securities fraud and ordered him to pay  $6,114,283.    (more…)

Brokers Gone Wild (Part 1)

Monday, November 24th, 2008

If you haven’t believed me yet, please believe me now.  You are in danger; danger from your stockbroker, danger from a broker you haven’t yet met, danger from friends and family who fall prey to such a broker and convince you to follow them.  Over the next week or so, we will follow the course of how the obliteration of a nest egg begins and how it ends.  (more…)

Unauthorized Trading (Part 3)

Friday, November 21st, 2008

How should you respond when your broker makes a trade without your permission?  There is only one thing to do.  You must report the unauthorized trade immediately to the broker’s branch manager and to the firm’s compliance department, and you must do so in writing.

Be very careful; the broker will ask you to delay reporting the trade.  He will say something like, “Let’s give it a day,” or “Let’s give it a week,” asking you to wait and see whether the unauthorized trade will become profitable.  The broker may even beg you not to report the unauthorized trade, asking you to think of his family.  But any delay in reporting the trade will look like a ratification of the trade.  Do not let the broker convince you to wait. (more…)

It’s Still Going On

Thursday, November 20th, 2008

You may think that the Nigerian e-mail scam is a thing of the past.  Since there’s been so much education around it, surely scamsters would have run out of easy targets.  But according to a recent article from the Associated Press, the opposite is true. (more…)

Unauthorized Trading (Part 2)

Wednesday, November 19th, 2008

Unauthorized trading is rampant.  If a broker gets caught doing it, even once, he’ll likely be fired and maybe barred from the securities industry.  So, why do they get away with it?  Two reasons. (more…)

SEC Accuses Cuban of Insider Trading

Tuesday, November 18th, 2008

The U.S. Securities and Exchange Commission (SEC) has charged Dallas Mavericks owner Mark Cuban with insider trading.  Cuban has responded:

I am disappointed that the Commission chose to bring this case based upon its Enforcement staff’s win-at-any-cost ambitions. The staff’s process was result-oriented, facts be damned. The government’s claims are false and they will be proven to be so. (more…)

Unauthorized Trading (Part 1)

Sunday, November 16th, 2008

With the markets in the tank, and brokers desperate to meet their production targets, expect to see a rise in unauthorized trading.  ‘Unauthorized trading’ is the term for what happens when your broker buys or sells a security in your account without first getting your permission.  It is a violation of industry rules.  If it happens to you, you have a right to recover from the brokerage firm.  In Part 1 of this multi-part article, we’ll address why unauthorized trading is so prevalent and why we can expect to see more of it in the near future. (more…)

Start Smart

Friday, November 14th, 2008

When I was a boy there was a poem framed and hanging on my wall - Rudyard Kipling’s If.  I think of it now and again and believe that it, in some ways, defines honorable manhood.  Two of the stanzas are apropos of where we find ourselves today. (more…)