The name on the door should give you absolutely no comfort. Stockbrokers at big brokerage firms are just as likely to take advantage of you as stockbrokers at no-name firms. A recent case from the SEC illustrates the point. According to the SEC’s press release: (more…)
The SEC has charged Frederick J. Barton, formerly a vice-president and branch manager of A.G. Edwards in Atlanta, with securities fraud. The SEC’s complaint details a number of categories of alleged misconduct, the common denominator of which is Barton’s alleged misappropriation of other peoples’ money to fund his lavish lifestyle. (more…)
The SEC has assembled a subprime working group of about 100 enforcement attorneys to look into whether banks and brokerage firms violated the federal securities laws in how they packaged sub-prime loans, how they valued those securities, and how they disclosed (or not) the risks of such securities to retail investors. Morgan Stanley and Merrill Lynch have disclosed that are among the brokerage firms that the SEC is investigating. (more…)
On December 5, 2007 Massachusetts Secretary of the Commonwealth William Galvin filed an enforcement action against A.G. Edwards & Sons, Inc. that reveals the central flaw in the securities industry’s system of self-regulation. Every brokerage firm is required to have a system of compliance controls designed to detect and prevent violations of the securities laws.
The system assumes that each layer of management will keep an eye out for potential customer abuse and act promptly to stop it. (more…)
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