The U.S. Securities and Exchange Commission (SEC) has charged three medical technology companies, each of the CEO’s, and the companies’ lawyer for failing to use the proceeds of a securities offering as described in the offering materials.  Specifically, the SEC clams that the companies - all based in California - paid 25% commissions to salespeople who sold stock to the public, when the offering documents provided for only a 12% commission.  The companies and their CEO’s are Intracom Corporation (Alfred Braunberger), Hyperbaric Systems, Inc. (Harry Masuda), and Surgica Corporation ( Louis Matson).  The attorney charged is Paul Marotta.   (more…)

If you did not catch last night’s (April 13, 2008) episode of Dateline NBC, check out the full transcript and video excerpts here.  Every investor should watch it.  When you do, remember that the practices Dateline uncovered are not the exception in the securities industry — they are the rule.  If you or someone you know has been the victim of similar practices, call Investor’s Watchdog for a referral to legal counsel or visit the website of the Public Investors Arbitration Bar Association (PIABA).  They have a feature that can help you find an attorney in your area. 

Times were good for quite awhile.  Every month when you opened your brokerage account statement, you looked at the figure at the bottom and saw that it was more than it had been the previous month.  If you are like most investors, you did little else to evaluate whether your broker had served your interests that month.  (more…)

General Motors announced today that it will be offering buyouts of up to $140,000 to each of its 74,000 North American hourly employees.  Each of those 74,000 will be leaving GM not only with the buyout incentive package, but with the balance of their 401k accounts, making them a target so attractive to unscrupulous stockbrokers and scam artists that I would not be surprised to learn that the economy of Detroit and the other affected communities will get a boost from the influx of those intent on fleecing the GM workers.  (more…)

Today’s Wall Street Journal reports that the GM has begun the first phase of a buyout designed to reduce its workforce by 5200 people.  GM plans to replace those employees with people earning less money per hour.My experience tells me that stockbrokers and investment advisers have already begun crafting their sales presentations to snare the employees leaving GM with the buyout.  Unless they take steps to protect themselves, a significant percentage of these GM employees will find themselves without a retirement nest egg within 7 to 10 years.  (more…)

I am looking at a solicitation from a company that helps stockbrokers sell variable annuities.  It includes the following words:  “Had a member call today and say that November has been the best month of his career.  He actually took my advice and ordered a list of wealthy widows and IRA holders.” 

List of wealthy widows?  Is your mother on that list?  Your grandmother?

List of IRA holders?  If you are a baby boomer or a senior citizen, you are on that list. (more…)

In September New York Times reporter Lynnley Browning quoted me in an article about how emboldened penny stock promoters have begun placing full page ads in national newspapers including the New York Times.  Yesterday we saw something similar in the Wall Street Journal.

In section D of my version (Southeast US) of the paper was a Special Advertising Section.  You’ve seen them before.  They are written to look like anything but an advertising section.  In a full page “article,” the author tells readers How Variable Annuities Work.  He left out many important details.  After you read this, you’ll know why.   (more…)