Wednesday, October 17, 2018

Merrill to Continue Pay Plan

According to InvestmentNews, Merrill Lynch will continue to reward its wealth management advisers for bringing in new client accounts.

Last year, Merrill Lynch unveiled a 2018 pay grid that rewarded advisers who brought in a healthy number of net new accounts. Those advisers who fell short of company goals had their compensation reduced. The plan was called the "growth grid."

Merrill's 15,015 financial advisers can expect to see such a compensation plan next year, said a senior Merrill Lynch executive. More at

Thursday, October 11, 2018

SEC Stops Coin Offering That Claimed SEC Approval

The SEC announced that it has obtained an emergency court order halting a planned initial coin offering (ICO), which backers falsely claimed was approved by the SEC. The order also halts ongoing pre-ICO sales by the company, Blockvest LLC and its founder, Reginald Buddy Ringgold, III. 
An SEC complaint unsealed yesterday alleges that Blockvest falsely claimed its ICO and its affiliates received regulatory approval from various agencies, including the SEC. According to the SEC's complaint, Blockvest and Ringgold, who also goes by the name Rasool Abdul Rahim El, were using the SEC seal without permission, a violation of federal law, and falsely claiming their crypto fund was "licensed and regulated." The complaint also alleges Ringgold promoted the ICO with a fake agency he created called the "Blockchain Exchange Commission," using a graphic similar to the SEC's seal and the same address as SEC headquarters.
According to the SEC, Blockvest and Ringgold also allegedly misrepresented Blockvest's connections to a well-known accounting firm, and continued their fraudulent conduct even after the National Futures Association (NFA) sent them a cease-and-desist letter to stop them from using the NFA's seal and from making false claims about their status with that organization.

--- If you need help with a securities litigation, compliance or arbitration issue, email Mark Astarita or call 212-509-6544 to speak to a securities lawyer.

Friday, October 5, 2018

Musk Mocks The SEC

I guess when you have a ton of money and just settled SEC charges you can throw caution to the wind, but I wouldn't recommend doing so. From Musk:

"Just want to [sic] that the Shortseller Enrichment Commission is doing incredible work," he said. "And the name change is so on point!"

The amazing part of the story is that the SEC responded to inquiries, to deny that it had changed its name.

SEC News - Fraud Charges, Failure to Report Suspicious Trading, and Misleading Investors

Elon Musk Settles SEC Fraud Charges; Tesla Charged With and Resolves Securities Law Charge
Elon Musk, CEO and Chairman of Silicon Valley-based Tesla Inc., has agreed to settle the securities fraud charge brought by the SEC against him last week. The SEC also charged Tesla with failing to have required disclosure controls and procedures relating to Musk’s tweets, a charge that Tesla has agreed to settle. The settlements, which are subject to court approval, will result in comprehensive corporate governance and other reforms at Tesla—including Musk’s removal as Chairman of the Tesla board—and the payment by Musk and Tesla of financial penalties.

Brokerage Firm to Exit Penny Stock Deposit Business and Pay Penalty for Repeatedly Failing to Report Suspicious Trading
The SEC announced settled charges against clearing firm COR Clearing LLC for failing to report suspicious sales of penny stock shares totaling millions of dollars. As part of the settlement, COR has agreed to exit a key penny stock clearing business by significantly limiting the sale of penny stocks deposited at COR.

Credit Suisse Agrees to Pay $10 Million to Settle Charges Related to Handling of Retail Customer Orders
Credit Suisse Securities (USA) LLC has agreed to settle charges brought by the SEC and the Office of the New York Attorney General regarding material misrepresentations and omissions made in connection with its now-closed Retail Execution Services (RES) business’ handling of certain customer orders.

SEC Charges LendingClub Asset Management and Former Executives With Misleading Investors and Breaching Fiduciary Duty
San Francisco-based LendingClub Asset Management LLC (formerly known as LendingClub Advisors LLC) and its former president have been charged with fraud for improperly using fund money to benefit LendingClub Corporation, LCA’s parent company.

The attorneys at Sallah Astarita & Cox include veteran securities litigators and former SEC Enforcement Attorneys. We have decades of experience in securities litigation matters, including the defense of enforcement actions. We represent investors, financial professionals and investment firms, nationwide. For more information call 212-509-6544 or send an email to mja@sallahlaw.comThe Securities Law Blog.

Friday, September 28, 2018

SEC: Elon Musk's $420 Price Point Was a Weed Reference

The SEC has filed a complaint against Elon Musk for securities fraud, accusing Musk of making false or misleading statements about taking Tesla private at $420 per share.

The complaint details what the SEC contends are the false and misleading statements, and it also contains this tidbit:

"Musk stated that he rounded the price up to $420 because he had recently learned about the number's significance in marijuana culture and thought his girlfriend 'would find it funny, which admittedly is not a great reason to pick a price.'"

Elon Musk Charged with Securities Fraud

The Securities and Exchange Commission charged Elon Musk, CEO and Chairman of Silicon Valley-based Tesla Inc., with securities fraud for a series of false and misleading tweets about a potential transaction to take Tesla private.

On August 7, 2018, Musk tweeted to his 22 million Twitter followers that he could take Tesla private at $420 per share (a substantial premium to its trading price at the time), that funding for the transaction had been secured, and that the only remaining uncertainty was a shareholder vote. The SEC’s complaint alleges that, in truth, Musk had not discussed specific deal terms with any potential financing partners, and he allegedly knew that the potential transaction was uncertain and subject to numerous contingencies. According to the SEC’s complaint, Musk’s tweets caused Tesla’s stock price to jump by over six percent on August 7, and led to significant market disruption.

The SEC’s complaint, filed in federal district court in the Southern District of New York, alleges that Musk violated antifraud provisions of the federal securities laws, and seeks a permanent injunction, disgorgement, civil penalties, and a bar prohibiting Musk from serving as an officer or director of a public company.

SEC Press Release

--- If you need help with a securities litigation, arbitration or litigation issue, email Mark Astarita or call 212-509-6544 to speak to a securities lawyer.

Tuesday, September 25, 2018

UBS Loses $2 Billion in Assets

AdvisorHub is reporting that UBS Wealth Management USA on Friday lost a big producer to First Republic Bank in Los Angeles.

According to AdvisorHub, the broker moved alone to First Republic’s private wealth management arm, and had generated some $6 million in annual revenue from $2 billion in client assets.

This is part of a continuing departure of brokers from UBS, despite the fact that the firm withdrew from the Protocol for Broker Recruiting, the industry agreement that allows brokers to contact their former clients when moving among member firms.

Mark Astarita is a New York securities lawyer who represents investors and financial professionals across the country in securities arbitrations and investigations, and has been doing so for over 30 years. He has represented brokers transitioning between firms for years. Call him at 212-509-6544 or email him at if you have any questions, comments or concerns regarding such matters.

Monday, September 24, 2018

SiriusXM to buy Pandora for $3.5 billion

According to CNBC, the merger agreement includes a "go-shop" provision, where Pandora "may actively solicit, receive, evaluate and potentially enter negotiations with parties that offer alternative proposals."

SiriusXM expects the deal to close in the first quarter of 2019.

FINRA Investigating Expense Reports

FINRA has started a new series of investigations, this time into broker expense reports. While one would think that an expense report item is a matter between the firm and its employee, FINRA believes it is a significant books and records violation, warranting an investigation, and attempting to bar brokers from the industry.

Given the apparent breathe and scope of this investigation, FINRA is committing significant resources to this issue, and brokers need to protect themselves. FINRA is sending out 8210 Requests, and seeking permanent bars.

Brokers are being barred from the industry over these expense reports issues. If you have an issue with your firm over an expense report, or the accuracy of any document submitted to the firm, call our office before responding to the firm. We may be able to get ahead of a FINRA Request by intervening at the firm level.

If you have received a document request from FINRA, call our office before responding. How you respond to that request can have a significant impact on how the investigation ends. We have significant experience, and success, in representing brokers and managers in FINRA books and records proceedings.

Call 212-509-6544 or email


Mark J. Astarita, Esq. has spent the last thirty years representing investors, financial professionals and firms in litigation, arbitration and regulatory matters across the country. He is a partner in the national securities law firm of Sallah Astarita & Cox, LLC and can be reached by email at or by phone at 212-509-6544.

Saturday, September 15, 2018

Dark Pool Costs Citigroup $12 Million

Citigroup Inc was ordered to pay more than $12 million by U.S. regulators on Friday after it was found that the bank’s investment banking and financial advisory unit misled users of a “dark pool” operated by one of its affiliates.